1
Exhibit 1
2,100,000 Shares
FIRST BANCORP
[___%] Noncumulative Monthly Income Preferred Stock, Series B
UNDERWRITING AGREEMENT
September [__], 2000
PAINEWEBBER INCORPORATED OF PUERTO RICO
As lead underwriter of the several Underwriters
named in Schedule 0
Xxxxxxxx Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
FIRST BANCORP, a Puerto Rico corporation (the "Company"), proposes to
sell an aggregate of 2,100,000 shares (the "Firm Shares") of the Company's
[___]% Noncumulative Monthly Income Preferred Stock, Series B (the "Preferred
Stock"), which are to be issued and sold by the Company to you and the other
underwriters named in Schedule 1 hereto (collectively, the "Underwriters"), for
whom you are acting as representative (the "Representative"). The Company also
has agreed to grant to you and the other Underwriters an option (the "Option")
to purchase up to an additional 300,000 shares of Preferred Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b) hereto. The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company hereby confirms as follows its agreements with the
Representative and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties, and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the
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Company agrees to sell to each Underwriter and each Underwriter, severally and
not jointly, agrees to purchase from the Company at a purchase price of $24.2125
per share, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule 1 hereto, plus such additional number of Firm Shares
which such Underwriter may become obligated to purchase pursuant to Section 9
hereof.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, the Option Shares at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover overallotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time and from time
to time on or before the thirtieth (30th) day after the date of this Agreement
(or on the next business day if the thirtieth (30th) day is not a business day),
upon notice (the "Option Shares Notice") in writing or by telephone (confirmed
in writing) by the Representative to the Company no later than 5:00 p.m., New
York City time, at least two (2) and no more than five (5) business days before
the date specified for closing in the Option Shares Notice (the "Option Closing
Date") setting forth the aggregate number of Option Shares to be purchased and
the time and date for such purchase. On the Option Closing Date, the Company
will issue and sell to the Underwriters the number of Option Shares set forth in
the Option Shares Notice and each Underwriter will purchase such percentage of
the Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing hereunder, as adjusted by the Representative in such
manner as it deems advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representative for the accounts of the Underwriters at the office of
Axtmayer Xxxxx Xxxxxxx & Xxxxxxxx, P.S.C., counsel to the Underwriters, American
Airlines Building, Penthouse Floor, 1509 Xxxxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx
Xxxx 00000, against payment of the purchase price by wire transfer of
immediately available funds to the bank account designated by the Company. Such
payment shall be made at 10:00 a.m., New York City time, on the third full
business day following the date of this Agreement, or at such other time on such
other date, not later than seven (7) business days after the date of this
Agreement, as may be agreed upon by the Company and the Representative (such
date is hereinafter referred to as the "Closing Date"). Time shall be of the
essence and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder.
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representative shall request at least two (2) business days prior to the Closing
Date or the Option Closing Date, as the case may be, by
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written notice to the Company. For the purpose of expediting the checking and
packaging of certificates for the Shares, the Company agrees to make such
certificates available for inspection at least twenty-four (24) hours prior to
the Closing Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance, sale, and delivery of the Firm Shares and Option Shares by the Company
to the respective Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter and any subsequent holder of the Shares harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying federal, state, or Commonwealth of Puerto Rico stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance, sale, or delivery to such Underwriter of
the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants, and covenants to each Underwriter that:
(a) A registration statement on Form S-3 (Registration
No. [333-____]) relating to the Shares, including a preliminary prospectus
relating to the Shares and such amendments to such registration statement as may
have been required to the date of this Agreement, has been prepared by the
Company under the provisions of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (collectively referred to as the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Commission has not
issued any order preventing or suspending the use of the Prospectus (as defined
below) or any Preliminary Prospectus (as defined below) or instituted or, to the
knowledge of the Company, threatened any proceeding for that purpose. The term
"Preliminary Prospectus" as used herein means a preliminary prospectus relating
to the Shares included at any time as part of the foregoing registration
statement or any amendment thereto before it became effective under the Act and
any prospectus filed with the Commission by the Company pursuant to Rule 424(a)
of the Rules and Regulations. Copies of such registration statement and
amendments and of each related Preliminary Prospectus have been delivered to the
Representative. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus relating to the Shares
containing information permitted to be omitted at the time of effectiveness by
Rule 430A will be filed by the Company with the Commission in accordance with
Rule 424(b) of the Rules and Regulations promptly after execution and delivery
of this Agreement. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including all financial statements and schedules and all exhibits,
documents incorporated therein by reference, and all information contained in
any final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or in a term sheet described in Rule 434 of the Rules and
Regulations in accordance with Section 4 hereof and deemed to be included
therein as of the Effective Date by
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Rule 430A of the Rules and Regulations and including any registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations (a "Rule 462
Registration Statement") increasing the size of the offering. The term
"Prospectus" means the prospectus relating to the Shares as first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such
filing is required, the form of final prospectus relating to the Shares included
in the Registration Statement at the Effective Date. References herein to any
document or other information incorporated by reference in the Registration
Statement shall include documents or other information incorporated by reference
in the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus). References herein to any Preliminary Prospectus or the
Prospectus shall be deemed to include all documents and information incorporated
by reference therein and shall be deemed to refer to and include any documents
and information filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, and so incorporated by reference, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) On the date that any Preliminary Prospectus was filed
with the Commission, the date the Prospectus is first filed with the Commission
pursuant to Rule 424(b) (if required), at all times subsequent to and including
the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement, each Preliminary Prospectus, and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included in the Prospectus, did or will comply with all applicable provisions of
the Act and the Rules and Regulations and did or will contain all statements
required to be stated therein in accordance with the Act and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement
or any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. At the Effective Date,
the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not or will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Company by the Representative specifically for inclusion in the
Registration Statement, each Preliminary Prospectus or Prospectus or any
amendment or supplement thereto. There are no contracts or other documents
required to be filed as exhibits to the Registration Statement by the Act or the
Rules and Regulations that have not been so filed. The documents which are
incorporated by reference in any Preliminary Prospectus or the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied in all
material respects with the requirements of the Act and the Rules and
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Regulations or the Exchange Act and the rules and regulations thereunder, as
applicable, and did not, when such documents were so filed, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, and any documents
so filed and incorporated by reference subsequent to the effective date of the
Registration Statement shall, when they are filed with the Commission, conform
in all material respects with the requirements of the Act, the Rules and
Regulations, and the Exchange Act and the rules and regulations thereunder, as
applicable.
(c) The only directly or indirectly controlled
subsidiaries of the Company (each, a "Subsidiary" and collectively, the
"Subsidiaries") are those listed on Exhibit A hereto. Except as set forth in the
Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus) or as acquired in connection with the exercise of its
rights as a creditor, or pursuant to a bona fide collateral pledge arrangement,
neither the Company nor any Subsidiary owns, nor at the Closing Date and the
Option Closing Date, will own an interest in any corporation, partnership,
trust, joint venture, or other business entity. The Company has been and, at the
Closing Date and Option Closing Date, will be duly organized and validly
existing as a corporation under the laws of the Commonwealth of Puerto Rico and
is and, at the Closing Date and Option Closing Date, will be in good standing
with the Commonwealth of Puerto Rico. The Company is registered as a financial
holding company under the Bank Holding company Act of 1956 and is and, at the
Closing Date and Option Closing Date will be in good standing with the Board of
Governors of the Federal Reserve System (the "Federal Reserve"). Each of the
Subsidiaries is and, at the Closing Date and Option Closing Date, will be a
corporation duly organized, validly existing, and in good standing under the
laws of its respective jurisdiction of incorporation. Each of the Company and
its Subsidiaries is and, at the Closing Date and the Option Closing Date, will
be duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased, or licensed) or the nature or conduct of its business or use of its
property and assets makes such qualification necessary, except where the failure
to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, prospects, or business affairs of the
Company and its Subsidiaries taken as a whole.
(d) The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights. The
Shares to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, validly issued, fully paid, and nonassessable
and will not be subject to any preemptive or similar rights. The Company has,
and, upon completion of the sale of the Shares, will have, an authorized,
issued, and outstanding capitalization as set forth in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, in the
most recent Preliminary Prospectus). The description of the securities of the
Company in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) is, and at the
Closing Date and Option Closing Date, will be complete and accurate in all
respects. No holders of securities of the
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Company are entitled to have such securities registered under the Registration
Statement, except where such rights have been waived.
(e) The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated
therein by reference and the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) present fairly the
financial condition of the Company and its Subsidiaries as of the dates
indicated and the consolidated results of operations, and cash flows of the
Company and its Subsidiaries for the periods covered thereby, all in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the entire periods involved. PricewaterhouseCoopers LLP (the
"Accountants"), who have reported on those of such financial statements and
related notes which are audited, are independent accountants with respect to the
Company and its Subsidiaries within the meaning of the Act and the applicable
and published rules and regulations.
(f) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(g) Except as set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and Option Closing Date, (i) there has not been, and will
not have been, any material adverse change in the business, properties,
financial condition, net worth, or results of operations of the Company and its
Subsidiaries considered as one enterprise; (ii) neither the Company nor any of
its Subsidiaries has entered into, or will have entered into, any material
transactions other than pursuant to this Agreement; and (iii) the Company has
not, and will not have, paid or declared any dividends or other distributions of
any kind on any class of its capital stock, except for the payment or
declaration of quarterly dividends on the Company's common stock (the "Common
Stock") in the ordinary course of its business.
(h) The Company and each of its Subsidiaries have good
and marketable title to all properties and assets described in the Registration
Statement, including the documents incorporated by reference therein, and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), as owned by it, free and clear of all liens, security
interests, restrictions, pledges, encumbrances, charges, equities, claims,
easements, leases, and tenancies (collectively, "Encumbrances") other than those
described in the Registration Statement, including the documents incorporated by
reference therein, and the Prospectus (or, if the
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Prospectus is not in existence, the most recent Preliminary Prospectus) or those
that will not materially affect the value of such properties and assets or will
not interfere with the use made and proposed to be made of such properties and
assets. The Company and each of its Subsidiaries have valid, subsisting, and
enforceable leases for the properties and assets described in the Registration
Statement, including the documents incorporated by reference therein, and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) as leased by them, free and clear of all Encumbrances,
other than those described in the Registration Statement, including the
documents incorporated by reference therein, and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), or
those that will not materially affect the value of such properties and assets or
will not interfere with the use made and proposed to be made of such properties
and assets.
(i) The Company is not required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company Act").
(j) Except as set forth in the Registration Statement,
including the documents incorporated by reference therein, and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no actions, suits, arbitrations, claims, governmental or
other proceedings (formal or informal), or investigations pending or threatened
against or affecting the Company or any of its Subsidiaries or any directors,
officers, or shareholders of the Company or any of its Subsidiaries in their
respective capacities as such or any of the properties or assets owned or leased
by the Company or any of its Subsidiaries, before or by any federal, state, or
Commonwealth of Puerto Rico court, commission, regulatory body, administrative
agency, or other governmental body, domestic or foreign (collectively, a
"Governmental Body"), wherein an unfavorable ruling, decision, or finding would
adversely affect the business, prospects, financial condition, net worth, or
results of operations of the Company and its Subsidiaries taken as a whole and
would be required to be disclosed in the Registration Statement, including the
documents incorporated be reference therein, and the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
Neither the Company nor any Subsidiary is in violation of, or in default with
respect to, any law, rule, regulation, order, judgment, or decree, except as
described in the Prospectus (or, if the Prospectus is not in existence, in the
most recent Preliminary Prospectus) or such as in the aggregate do not now have
and can reasonably be expected in the future not to have a material adverse
effect upon the operations, business, properties, or assets of the Company and
its Subsidiaries taken as a whole; nor is the Company or any Subsidiary
presently required under any order, judgment, or decree to take any action in
order to avoid any such violation or default.
(k) The Company and each of its Subsidiaries have and, at
the Closing Date and Option Closing Date, will have all governmental licenses,
permits, consents, orders, approvals, franchises, certificates, and other
authorizations (collectively, "Licenses") necessary to carry on their respective
businesses and own or lease their respective properties as contemplated in the
Registration Statement, including the documents incorporated be reference
therein, and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
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The Company and each of its Subsidiaries have and, at the Closing Date and
Option Closing Date, will have complied in all material respects with all laws,
regulations, and orders applicable to it or its business, assets, and
properties. Neither the Company nor any of its Subsidiaries is, nor, at the
Closing Date and Option Closing Date, will be in default (nor has any event
occurred which, with notice or lapse of time or both, would constitute a
default) in the due performance and observation of any term, covenant, or
condition of 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 (collectively, a
"contract or other agreement") to which they are a party or by which their
respective properties are bound or affected, the violation of which would
individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects, or business
affairs of the Company and its Subsidiaries taken as a whole. There are no
governmental proceedings or actions pending or threatened for the purpose of
suspending, modifying, or revoking any License held by the Company and its
Subsidiaries.
(l) No consent, approval, authorization or order of, or
any filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in connection
with the issuance and sale of the Shares by the Company, except such as have
been obtained and such as may be required under state or Commonwealth of Puerto
Rico securities or blue sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares to be sold hereby.
(m) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed, and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and contribution
may be limited by federal, state, or Commonwealth of Puerto Rico securities laws
or the public policy underlying such laws. Except as disclosed in the
Registration Statement, including the documents incorporated be reference
therein, and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), the execution, delivery, and the performance of
this Agreement and the consummation of the transactions contemplated hereby will
not result in the creation or imposition of any Encumbrance upon any of the
properties or assets of the Company or any of the Subsidiaries pursuant to the
terms or provisions of, or result in a breach or violation of, or conflict with
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, (i) the Certificate of Incorporation or
By-laws of the Company, in each case as amended; (ii) any contract or other
agreement to which the Company or any of the Subsidiaries is a party or by which
it or any of the respective assets or properties are bound or affected, the
violation of which would individually or in the aggregate have a material
adverse effect on the condition, financial or otherwise, or the earnings,
prospects, or business affairs of the Company and its Subsidiaries; or (iii) any
judgment, ruling, decree, order, law, statute, rule,
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or regulation of any Governmental Body applicable to the Company or any of the
Subsidiaries or their respective businesses or properties, the violation of
which would individually or in the aggregate have a material adverse effect on
the financial condition, earnings, prospects, or business affairs of the Company
and its Subsidiaries.
(n) No statement, representation, or warranty made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representative was or will be when made,
inaccurate, untrue, or incorrect in any material respect. Each certificate
signed by an officer of the Company and delivered to the Representative or
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters covered thereby.
(o) Neither the Company nor any of its directors,
officers, or affiliates has taken, nor will he, she, or it take, directly or
indirectly, any action designed, or which might reasonably be expected in the
future, to cause or result in, under the Act or otherwise, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise.
(p) The Shares have been approved for listing on the New
York Stock Exchange ("NYSE"), subject only to notice of issuance.
(q) Neither the Company nor any of its Subsidiaries is
involved in any collective labor dispute with its employees nor is any such
dispute threatened or imminent.
(r) Neither the Company nor any of its Subsidiaries nor,
to the Company's best knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds of the Company or any Subsidiary in violation of
any law, rule, or regulation which payment, receipt, or retention of funds is of
a character required to be disclosed in the Prospectus (or, if the Prospectus is
not in existence, in the most recent Preliminary Prospectus).
(s) The business, operations, and facilities of the
Company and its Subsidiaries have been and are being conducted in compliance
with all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations, or requirements relating to occupational
safety and health, pollution, or protection of health or the environment
(including, without limitation, those relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic substances, materials, or wastes into ambient air, surface water,
groundwater, or land, or relating to the manufacture, processing, distribution,
use, treatment storage, disposal, transport, or handling of chemical substances,
pollutants, contaminants, or hazardous or toxic substances, materials, or
wastes, whether solid, gaseous, or liquid in nature) of any governmental
department, commission, board, bureau, agency, or instrumentality of the United
States, any state, the Commonwealth of Puerto Rico, or political subdivision
thereof, and all applicable judicial or administrative agency or regulatory
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decrees, awards, judgments, and orders relating thereto; and neither the Company
nor any of its Subsidiaries has received any notice from any governmental
instrumentality or any third party alleging any violation thereof or liability
thereunder (including, without limitation, liability for costs of investigating
or remediating sites containing hazardous substances and/or damages to natural
resources), except where failure to so comply would not have a material adverse
effect on the financial condition, earnings, or business affairs of the Company
and its Subsidiaries taken as a whole. The intended use and occupancy of each of
the facilities owned or operated by the Company and its Subsidiaries complies in
all material respects with all applicable codes and zoning laws and regulations,
and there is no pending or threatened condemnation, zoning change,
environmental, or other proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction on, or
access to such facilities.
(t) The Company filed all foreign, federal, state, and
local tax returns that are required to be filed or has requested extensions
thereof and has paid all taxes required to be paid by it and any other
assessment, fine, or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any failure to file that would not have
a material adverse effect on the financial condition of the Company.
(u) The Company meets the requirements for use of Form
S-3 under the Rules and Regulations.
(v) The deposit accounts of FirstBank Puerto Rico, a
Subsidiary of the Company ("FirstBank") are insured by the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC") to
the legal maximum, and no proceeding for the termination or revocation of such
insurance is pending or threatened. First Bank is a member in good standing of
the Federal Home Loan Bank of New York.
(w) None of the Company, FirstBank, their affiliates, or
any of their respective directors or officers is subject to any order or
directive of, or party to any agreement with, any regulatory agency having
jurisdiction with respect to its business or operations except as disclosed in
the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus).
4. Agreements of the Company. The Company covenants and agrees
with each of the several Underwriters as follows:
(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representative within a reasonable period of time prior to the filing thereof
and the Representative shall not have objected thereto in good faith.
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(b) If the Registration Statement is not yet effective,
the Company will use its best efforts to cause the Registration Statement to
become effective not later than the time indicated in Section 6(a) hereof. The
Company will notify the Representative promptly, and will confirm such advice in
writing, (i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective; (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event during the period mentioned in the
first sentence of Section 4(g) that in the judgment of the Company makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading; and (v) of receipt by
the Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any Preliminary Prospectus, or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
prepare the Prospectus in a form approved by the Representative and will file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Act. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A, the Company
will use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to said Rule 430A and to notify
the Representative promptly of all such filings.
(c) If the Company elects to rely upon Rule 462(b) of the
Rules and Regulations, the Company shall file the Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing, either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) of the Rules
and Regulations.
(d) If, at any time when a Prospectus relating to the
Shares is required to be delivered under the Act, any event occurs as a result
of which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, the Registration Statement or the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with the Act or the Rules and
Regulations, the Company will promptly notify the
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Representative thereof and, subject to Section 4(b) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will furnish to the Representative,
without charge, two (2) signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representative, without charge,
for transmittal to each of the other Underwriters, copies of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(f) The Company will comply with all the provisions of
all undertakings contained in the Registration Statement.
(g) On the Effective Date, and thereafter from time to
time for such period as the Prospectus is required by the Act to be delivered,
the Company will deliver to each of the Underwriters, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as the
Representative may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Registration
Statement or the Prospectus in order to make any statement therein, in the light
of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Registration Statement or the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and deliver to each
of the Underwriters, without charge, such number of copies thereof as the
Representative may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representative and its counsel
in connection with the registration or qualification of the Shares for offer and
sale under the securities or blue sky laws of such jurisdictions as the
Representative may reasonably request; provided, however, that in no event shall
the Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(i) During the period of five (5) years commencing on the
Effective Date, the Company will furnish to the Representative and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will
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furnish to the Representative and each other Underwriter who may so request a
copy of each annual or other report it shall be required to file with the
Commission.
(j) The Company will make generally available to holders
of its securities, as soon as may be practicable, but in no event later than the
last day of the fifteenth (15th) full calendar month following the calendar
quarter in which the Effective Date falls, a consolidated earnings statement
(which need not be audited but shall be in reasonable detail) for a period of
twelve (12) months commencing after the Effective Date, and satisfying the
provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(k) The Company will apply the net proceeds from the
offering and sale of the Shares in the manner set forth in the Prospectus under
"Use of Proceeds."
(l) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
5. Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Representative, all costs and expenses incidental to
the performance of the obligations of the Company under this Agreement,
including, but not limited to, costs and expenses of or relating to (i) the
preparation, printing, and filing by the Company of the Registration Statement
and amendments and exhibits thereto, each Preliminary Prospectus prior to or
during the period specified in the first sentence of Section 4(g) but not
exceeding nine (9) months after the Effective Date, the Prospectus and
amendments or supplements; (ii) the preparation and delivery of certificates
representing the Shares; (iii) the furnishing (including costs of shipping and
mailing) of such copies of the Registration Statement, the Prospectus, and any
Preliminary Prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (iv) the listing of the
Shares on the NYSE; (v) any filings required to be made by the Underwriters with
the NASD; (vi) the registration or qualification of the Shares for offer and
sale under the securities or blue sky laws of such jurisdictions designated
pursuant to Section 4(h) and the preparation and printing of preliminary,
supplemental, and final blue sky memoranda; (vii) counsel and accountants to the
Company; and (viii) the transfer agent for the Shares.
(b) If the transactions contemplated by this Agreement
are not consummated or if this Agreement is terminated by the Company pursuant
to any of the provisions hereof, the Company will reimburse the Representative
for all of their accountable out-of-pocket fees and
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expenses (including the fees, disbursements, and other charges of their counsel)
incurred by them in connection herewith.
6. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Representative not later than 3:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representative and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A shall
have been made. If the Company has elected to rely upon Rule 462(b) of the Rules
and Regulations, the Company has filed the Rule 462(b) Registration Statement by
10:00 p.m., Washington D.C. time, on the date of this Agreement.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission; (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or blue sky laws of any
jurisdiction shall be in effect, and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction; (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities; and (iv) after the date hereof no amendment or supplement
to the Registration Statement or the Prospectus shall have been filed unless a
copy thereof was first submitted to the Representative and the Representative
did not object thereto in good faith, and the Representative shall have received
certificates, dated the Closing Date and Option Closing Date and signed by the
Chief Executive Officer of the Company and the Chief Financial Officer of the
Company (who may, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of the foregoing clauses (i), (ii) and
(iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, properties,
management, financial condition, or results of operations of the Company whether
or not arising from transactions in the ordinary course of business, and (ii)
the Company shall not have sustained any material loss or interference with its
business, assets, or properties from fire, explosion, flood, or other casualty,
or from any labor dispute or any court or legislative or other governmental
action, order, or decree, which is not set forth in the Registration Statement,
including the documents incorporated be reference therein, and the Prospectus.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers, directors, or shareholders in their capacities
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as such, or any of its assets or properties, before or by any Governmental Body
in which litigation or proceeding an unfavorable ruling, decision, or finding
would materially and adversely affect the business, properties, financial
condition, net worth, or results of operations of the Company.
(e) Each of the representations and warranties of the
Company contained herein shall be true and correct at the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, as if made on such
date, and all covenants and agreements herein contained to be performed on the
part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date and, with respect
to the Option Shares, at or prior to the Option Closing Date, shall have been
fully performed, fulfilled, or complied with.
(f) The Representative shall have received an opinion,
dated the Closing Date and Option Closing Date, from Fiddler Xxxxxxxx &
Xxxxxxxxx, LLP, Puerto Rico counsel for the Company to the following effect:
(i) The Company has been duly organized and
validly existing as a corporation under the laws of the Commonwealth of Puerto
Rico and is in good standing in the Commonwealth of Puerto Rico. Each of First
Federal Finance Corporation ("First Federal"), First Leasing & Rental
Corporation ("First Leasing"), and FirstBank, each a Subsidiary, is a
corporation duly organized, validly existing, and in good standing under the
laws of its respective jurisdiction of incorporation. Each of the Company, First
Federal, First Leasing, and FirstBank is duly qualified and in good standing as
a foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased, or licensed) or the nature or conduct of its
business or use of its property and assets makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on the financial condition, earnings, or business affairs of the Company and its
Subsidiaries taken as a whole;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus; the Company has duly authorized the issuance and
sale of the Shares to be sold by it hereunder; such Shares, when issued by the
Company and paid for in accordance with the terms hereof, will be validly
issued, fully paid, and nonassessable and will conform in all material respects
to the description thereof contained in the Prospectus and will not be subject
to any preemptive, subscription, or other similar rights; the Shares have been
duly authorized for listing on the NYSE; and no holders of securities of the
Company are entitled to have such securities registered under the Registration
Statement, except for holders who have waived any such registration rights;
(iii) The Registration Statement, including any
Rule 462(b) Registration Statement, is effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and to the best knowledge of
such counsel, no stop order suspending the effectiveness of the
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Registration Statement or any amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement or of the Rule
462(b) Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or are pending or are
threatened or contemplated under the Act;
(iv) The Registration Statement and the
Prospectus as of its date, appeared on their face to be appropriately
responsive, in all material respects (other than the documents incorporated
therein by reference and not including the financial statements, schedules, and
other financial data contained therein, as to which such counsel need not
express any opinion), with the requirements of the Act and the related rules and
regulations thereunder;
(v) The descriptions contained and summarized in
the Registration Statement, or incorporated therein by reference, and the
Prospectus are accurate and fairly represent in all material respects the
information required to be shown by the Act and the Rules and Regulations; and
the statements set forth under the headings "Risk Factors - Banking Regulations
May Restrict First BanCorp's Ability to Pay Dividends," "Description of Capital
Stock," and "Taxation" in the Prospectus, insofar as such statements constitute
a summary of the legal matters, documents, or proceedings referred to therein,
provide an accurate summary of such legal matters, documents, and proceedings;
(vi) To the knowledge of such counsel, there are
no contracts or documents which are required by the Act to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not filed or incorporated therein by reference
as required by the Act and the Rules and Regulations;
(vii) To the knowledge of such counsel after
reasonable investigation, there is not pending or threatened against the Company
or any of the Subsidiaries, or any of the assets or properties of the Company or
any of the Subsidiaries, any action, suit, arbitration, claim, governmental or
other proceeding (informal or formal), or investigation before or by any
Governmental Body of a character required to be disclosed in the Registration
Statement or the Prospectus which is not so disclosed therein. To the knowledge
of such counsel after reasonable investigation, neither the Company nor any
Subsidiary is in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree, except as described in the Registration
Statement or the Prospectus or such as in the aggregate do not now have and can
reasonably be expected in the future not to have a material adverse effect upon
the operations, business, properties, or assets of the Company and its
Subsidiaries taken as a whole; nor is the Company or any Subsidiary presently
required under any order, judgment, or decree to take any action in order to
avoid any such violation or default;
(viii) The Company has full legal right, power, and
authority to enter into this Agreement and to consummate the transactions
provided for herein; this Agreement has been duly authorized, executed, and
delivered by the Company; this Agreement, assuming due authorization, execution,
and delivery by each other party hereto, is a valid and binding
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agreement of the Company, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws now or hereafter in effect
relating to or affecting creditors' rights generally or by general principles of
equity relating to the availability of remedies and except as rights to
indemnity and contribution may be limited by federal, state, or Commonwealth of
Puerto Rico securities laws or the public policy underlying such laws;
(ix) None of the Company's execution or delivery
of this Agreement, its performance hereof, its consummation of the transactions
contemplated herein or its application of the net proceeds of the offering in
the manner set forth under the caption "Use of Proceeds," conflicts or will
conflict with or results or will result in any breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any Encumbrance upon, any property or assets of the Company
pursuant to (A) the terms of the Certificate of Incorporation or By-laws of the
Company, in each case as amended; (B) the terms of any contract or other
agreement to which the Company is a party or by which it is or may be bound or
to which any of its properties is or may be subject and of which such counsel
has knowledge; (C) any statute, rule, or regulation of any Governmental Body
having jurisdiction over the Company or any of its activities or properties; or
(D) the terms of any judgment, decree, or order of any arbitrator or
Governmental Body having such jurisdiction and of which such counsel has
knowledge; and no consent, approval, authorization, or order of any Governmental
Body has been or is required for the Company's performance of this Agreement or
the consummation of the transactions contemplated hereby, except such as have
been obtained under the Act or may be required under state or Commonwealth of
Puerto Rico securities or blue sky laws in connection with the purchase and
distribution by the Underwriters of the Shares;
(x) To such counsel's knowledge, the conduct of
the respective businesses of the Company and its Subsidiaries is not in
violation of any federal, state, or local statute, administrative regulation, or
other law, which violation is likely to have a material adverse effect on the
Company and its Subsidiaries taken as a whole; and the Company and its
Subsidiaries have obtained all material licenses as are necessary or required
for the conduct of their businesses as presently conducted;
(xi) The Company is not required to be registered
as an investment company under the Investment Company Act;
(xii) To the knowledge of such counsel, the
Company is not in any breach or violation of any of the terms or provisions of,
or in default under (nor has an event occurred which with notice or lapse of
time or both would constitute a default or acceleration under), (A) the terms of
its Certificate of Incorporation or By-laws, in each case as amended; (B) the
terms of any contract or other agreement known to such counsel after reasonable
investigation to which the Company is a party or by which the Company is or may
be bound or to which any of its properties or assets is or may be subject; (C)
any statute, rule, or regulation of any Governmental Body having jurisdiction
over the Company or any of its activities, assets, or properties, which breach,
violation, or default could have a material adverse effect on the
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Company and its Subsidiaries taken as a whole; or (D) the terms of any judgment,
decree, or order, known to such counsel after reasonable investigation, of any
arbitrator or Governmental Body having such jurisdiction, which breach,
violation, or default could have a material adverse effect on the Company and
its Subsidiaries taken as a whole;
(xiii) The deposit accounts of FirstBank are
insured by the SAIF or the FDIC to the legal maximum, and to such counsel's
knowledge no proceeding for the termination or revocation of such insurance is
pending or threatened. FirstBank is a member in good standing of the Federal
Home Loan Bank of New York; and
(xiv) To such counsel's knowledge, none of the
Company, FirstBank, their affiliates, or any of their respective directors or
officers is subject to any order or directive of, or party to any agreement
with, any regulatory agency having jurisdiction with respect to its business or
operations except as disclosed in the Registration Statement or the Prospectus.
In addition, such counsel shall state that, in the course of the
preparation of the Registration Statement and the Prospectus, such counsel has
participated in conferences with officers and representatives of the Company and
with the Accountants, at which conferences such counsel made inquiries of such
officers, representatives, and Accountants and discussed the contents of the
Registration Statement and the Prospectus and, on the basis of the foregoing,
nothing has come to such counsels attention that causes such counsel to believe
that the Registration Statement as of the date it was declared effective and as
of the Closing Date contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of the date thereof
and as of the Closing Date, contained any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need not express any opinion with respect to the financial statements,
schedules, and other financial data included in the Registration Statement or
the Prospectus). Such counsel may state that it makes no representation as to
its independent verification of the accuracy or completeness of the statements
contained in the Registration Statement and the Prospectus.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any other jurisdiction than the Commonwealth of Puerto
Rico and the United States (to the extent satisfactory in form and scope to
counsel for the Underwriters), such counsel may rely upon the opinion of local
(including in-house) counsel to the Company. The foregoing opinion shall also
state that such counsel has no reason to believe that the Underwriters are not
justified in relying upon such opinion of local counsel, and copies of such
opinion shall be delivered to the Representative and its counsel.
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References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.
(g) The Representative shall have received an opinion,
dated the Closing Date and Option Closing Date, from Axtmayer Xxxxx Xxxxxxx &
Xxxxxxxx, P.S.C., counsel to the Underwriters, which opinion shall be
satisfactory in all respects to the Representative.
(h) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date of the
Prospectus, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery (the "Original Letter"), addressed to the
Representative and in form and substance satisfactory to the Representative to
the following effect:
(i) They are independent accountants within the
meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the consolidated financial
statements of the Company and its Subsidiaries audited by them and incorporated
by reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act, the Exchange
Act, and the published rules and regulations thereunder with respect to
registration statements on Form S-3;
(iii) On the basis of procedures (but not an audit
in accordance with generally accepted auditing standards) consisting of (A)
reading the minutes of meetings of the stockholders and the Board of Directors
of the Company and its Subsidiaries since December 31, 1999 as set forth in the
minute books through a specified date not more than five (5) business days prior
to the date of delivery of the Original Letter; (B) performing the procedures
specified by the American Institute of Certified Public Accountants for a review
of interim financial information as described in SAS No. 71, "Interim Financial
Information," on the unaudited consolidated interim financial statements of the
Company and its Subsidiaries included in the Registration Statement and reading
the unaudited interim financial data for the period from the date of the latest
balance sheet incorporated by reference in the Registration Statement to the
date of the latest available interim financial data; and (C) making inquiries of
certain officials of the Company who have responsibility for financial and
accounting matters regarding the specific items for which representations are
requested below; nothing has come to their attention (as of a date not more than
five (5) business days prior to the date of the delivery of such letter) as a
result of the foregoing procedures that caused them to believe that: (1) the
unaudited consolidated interim financial statements, if any, incorporated be
reference in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act and the
published rules and regulations thereunder; (2) any material modifications
should be made to the unaudited consolidated interim financial statements, if
any, incorporated by reference in the Registration Statement for them to be in
conformity with generally accepted accounting principles; (3) (i) at the date of
the latest available
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interim financial data and at a specified date not more than five (5) business
days prior to the date of delivery of the Original Letter there was any change
in the capital stock, loans payable, or securities sold under agreements to
repurchase or any decreases in the consolidated stockholders' equity (only as to
the latest interim financial data) of the Company and its Subsidiaries as
compared with amounts shown in the December 31, 1999 balance sheet incorporated
by reference in the Registration Statement and (ii) for the period from January
1, 2000, to the latest interim financial data available which should be no later
than forty (40) days prior to the date of delivery of the Original Letter, there
were any decreases, as compared with the corresponding period in the preceding
year, in consolidated net interest income, non-interest income, income before
taxes, or in the total or per share amounts of net income, except in all
instances for changes or decreases which the Registration Statement discloses
have occurred or may occur, or they shall state any specific changes or
decreases; and
(iv) The information set forth under the captions
"Prospectus Summary - Summary Financial Data," "Prospectus Summary -
Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends," "Recent Developments," "Capitalization," "Selected Financial Data,"
and "Description of Capital Stock," which is expressed in dollars (or
percentages derived from such dollar amounts) and has been obtained from
accounting records which are subject to the internal controls of the Company's
accounting system or which has been derived directly from such accounting
records and analysis or computations, is in agreement with such records or
computations made therefrom.
At the Closing Date and, as to the Option Shares, the Option Closing
Date, the Accountants shall have furnished to the Representative a letter, dated
the date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the Original Letter, that nothing
has come to their attention during the period from the date of the Original
Letter referred to in the prior sentence to a date (specified in the letter) not
more than five (5) business days prior to the Closing Date or Option Closing
Date, as the case may be, which would require any change in the Original Letter
if it were required to be dated and delivered at the Closing Date or the Option
Closing Date, as the case may be.
In the event that the letters referred to above set forth any such
changes, decreases, or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representative deems such explanation unnecessary, and (B) such changes,
decreases, or increases do not, in the sole judgment of the Representative, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement, as amended as of the date
hereof.
(i) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to the Representative an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the
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Company, in form and substance satisfactory to the Representative, to the effect
that to the best of their knowledge:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (y) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (B) since the
Effective Date no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein not
untrue or misleading, in any material respect;
(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct in all respects;
each of the covenants required herein to be performed by the Company on or prior
to the date of such certificate has been duly, timely, and fully performed and
each condition herein required to be complied with by the Company on or prior to
the delivery of such certificate has been duly, timely, and fully complied with;
and
(iii) No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement or any amendment thereto or the Prospectus has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
of the Company's knowledge, are contemplated by the Commission.
(j) The Shares shall be qualified for sale in such states
and jurisdictions as the Representative may reasonably request, each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have been
accepted for listing on the NYSE.
(1) All filings required to be made with the NASD shall
have been made and the NASD shall have raised no objections to the terms and
arrangements presented in such filings.
(m) The Company shall have furnished to the
Representative such certificates, letters, and other documents, in addition to
those specifically mentioned herein, as the Representative may have reasonably
requested as to the accuracy and completeness at the Closing Date and Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and Option Closing Date of the
representations
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and warranties of the Company, as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Underwriters.
All such opinions, certificates, letters, and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters, and other documents as you shall
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees, and agents of each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, or liabilities, joint or several
(and actions in respect thereof), to which they, or any of them, may become
subject under the Act or other federal, state, or Commonwealth of Puerto Rico
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement; (ii) any untrue statement or alleged
untrue statement of any material fact contained in (A) any Preliminary
Prospectus, the Registration Statement, the Prospectus, or any amendment or
supplement to the Registration Statement or the Prospectus, or (B) any
application or other document, or any amendment or supplement thereto, executed
by the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each, an "Application"); or (iii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus, or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating defending or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability, or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability based solely upon an untrue statement or omission or alleged untrue
statement or omission in any of such documents made in reliance upon and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representative on behalf of any Underwriter expressly for
inclusion therein; and provided, further, that such indemnity with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter (or
any such other person) from whom the person asserting any such loss, claim,
damage, liability, or action purchased Shares which are the subject thereof to
the extent that any such loss, claim, damage, or liability (A) results from the
fact that such Underwriter failed to send or give a copy of the Prospectus (as
amended or supplemented) to
23
-23-
such person at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act, and (B) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(or any amendment or supplement thereto), unless such failure to deliver the
Prospectus (as amended or supplemented) was the result of noncompliance by the
Company with Section 4(g). This indemnity agreement will be in addition to any
liability that the Company might otherwise have. The Company will not, without
the prior written consent of each Underwriter, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit,
or proceeding in respect of which indemnification may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to each claim, action, suit, or proceeding), unless such settlement,
compromise, or consent includes an unconditional release of each Underwriter and
each such other person from all liability arising out of such claim, action,
suit, or proceeding.
(b) Each Underwriter will indemnify and hold harmless the
Company, and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company, and each officer of the Company who signed the Registration Statement
against any losses, claims, damages, or liabilities (or actions in respect
thereof) to which the Company and any such director, officer, or controlling
person may become subject under the Act or other federal, state, or Commonwealth
of Puerto Rico statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus, or any Application, or material fact
required to be stated therein, or (ii) the omission or the alleged omission to
state in the Registration Statement, any Preliminary Prospectus, the Prospectus,
any amendment or supplement to the Registration Statement or the Prospectus, or
any Application, a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representative expressly for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company and any such director,
officer, or controlling person in connection with investigating or defending any
such loss, claim, damage, liability, or any action in respect thereof. The
Company acknowledges that, for all purposes under this Agreement, the statements
set forth under the heading "Underwriting" constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representative on behalf of the Underwriters expressly for inclusion in the
Registration Statement, any Preliminary Prospectus, or the Prospectus. This
indemnity agreement will be in addition to any liability that each Underwriter
might otherwise have.
24
-24-
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party or parties under this Section 7, notify such indemnifying party or parties
of the commencement thereof, but the omission so to notify the indemnifying
party or parties will not relieve it or them from any liability which it or they
may have to any indemnified party under the foregoing provisions of this Section
7 or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party and it notifies an
indemnifying party or parties of its commencement, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses other than reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
preceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the reasonable fees and
expenses of more than one separate counsel (in addition to the fees and expenses
of local counsel necessary in connection with any such proceedings) in any one
action or separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations or circumstances, designated by the
Representative in the case of paragraph (a) of this Section 7, representing the
indemnified parties under paragraph (a) who are parties to such action or
actions), or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the written consent of the indemnifying party, unless such indemnified
party waived its rights under this Section 7 in which case the indemnified party
may effect such a settlement without such consent.
(d) If the indemnification provided for in the foregoing
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
or liabilities (or actions in
25
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respect thereof) (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties, on the one
hand, and the indemnified party, on the other, from the offering of the Shares,
or (ii) if, but only 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 clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand, and the
indemnified party, on the other, in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages, or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the other, shall be deemed to
be in the same proportion as the total proceeds from the offering of the Shares
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. Relative
fault shall be determined by reference to 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 Company or the
Representative on behalf of the Underwriters, the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 7(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, and liabilities (or actions in respect thereof) referred to above in
this Section 7(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), no Underwriter shall be required to contribute any amount in
excess of the total underwriting discounts received by it with respect to the
Shares purchased by such Underwriter under this Agreement, less the aggregate
amount of any damages that such Underwriter has otherwise been required to pay
in respect of the same or any substantially similar claim. No person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
as provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(d), each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act will have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, will have the same rights to contribution as the
Company, subject in each case to the provisions of this paragraph (d). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit, or proceeding against such party in respect of which a
claim for contribution may be made under this Section 7(d), notify any such
party or parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may be
sought
26
-26-
from any other obligation(s) it or they may have hereunder or otherwise than
under this paragraph (d) or to the extent that such party or parties were not
adversely affected by such omission. The contribution agreement set forth above
shall be in addition to any liabilities which any indemnifying party may
otherwise have. No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriters,
(ii) acceptance of any of the Shares and payment therefor, or (iii) any
termination of this Agreement.
8. Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from the Representative, without liability on the part of any
Underwriter to the Company if, prior to delivery and payment for the Firm Shares
(or the Option Shares, as the case may be), in the sole judgment of the
Representative, (i) trading in the Common Stock or the Preferred Stock or
securities generally shall have been suspended by the Commission or by the NYSE;
(ii) minimum or maximum prices shall have been established for the Common Stock
or the Preferred Stock or securities generally on the NYSE, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by any of such
market or exchange or by order of the Commission or any court or other
Governmental Body; (iii) a general banking moratorium shall have been declared
by the United States, State of New York, or Commonwealth of Puerto Rico
authorities; or (iv) any material adverse change in the financial or securities
markets in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred, the effect of any of which is
such as to make it, in the sole judgment of the Representative, impracticable or
inadvisable to market the Shares on the terms and in the manner contemplated by
the Prospectus. Any termination pursuant to Section 8 shall be without liability
of any party to any other party except as provided in Sections 5(a) and 7.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Shares or Option Shares hereunder and the
aggregate number of such Shares that such defaulting Underwriter or Underwriters
agreed but failed to purchase is ten percent (10%) or less of the aggregate
number of Firm Shares or Option Shares to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representative for the purchase of such Shares
by other persons (who may include one or more of the nondefaulting Underwriters,
including the Representative), but if no such arrangements are made by the
Closing Date or the related Option Closing Date, as the case may be, the other
Underwriters shall be obligated severally in proportion to their respective
commitments hereunder to purchase the Firm Shares or Option Shares that such
defaulting
27
-27-
Underwriter or Underwriters agreed but failed to purchase. If one or more
Underwriters so default with respect to an aggregate number of Shares that is
more than ten percent (10%) of the aggregate number of Firm Shares or Option
Shares, as the case may be, to be purchased by all of the Underwriters at such
time hereunder, and if arrangements satisfactory to the Representative are not
made within thirty-six (36) hours after such default for the purchase by other
persons (who may include one or more of the nondefaulting Underwriters,
including the Representative) of the Shares with respect to which such default
occurs, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter and the Company other than as provided in Section 10
hereof. In the event of any default by one or more Underwriters as described in
this Section 9, the Representative shall have the right to postpone the Closing
Date or Option Closing Date, as the case may be, established as provided in
Section 9 hereof for not more than seven (7) business days in order that any
necessary changes may be made in the arrangements or documents for the purchase
and delivery of the Firm Shares or Option Shares, as the case may be. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 9. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities, and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Underwriter, or any controlling
person referred to in Section 7 hereof, and (ii) delivery of and payment for the
Shares. The respective agreements, covenants, indemnities, and other statements
set forth in Sections 5 and 7 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. Notices. Notices given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered:
(a) if to the Company, to:
First BanCorp
Penthouse Floor
0000 Xxxxx xx Xxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxx Xxxxx xx Xxxxxxxxx, Senior Executive
Vice President and Chief Financial Officer
(b) if to the Underwriters, to:
Xxxxx Xxxxxx Incorporated of Puerto Rico
American International Plaza, Penthouse Floor
250 Xxxxx Xxxxxx Xxxxxx
00
-00-
Xxxx Xxx, Xxxxxx Xxxx 00000
Attention: Xxxx X. Xxxxx, First Vice President.
Any such notice shall be effective only upon receipt. Any notice under
Section 7 or 8 may be made by telex or telephone, but if so made shall be
subsequently confirmed in writing.
12. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy, or claim under or in respect of
this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (a) the indemnities of the Company contained in Section 7 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and (b) the indemnities of the Underwriters contained in Section 7
of this Agreement shall also be for the benefit of the directors of the Company,
the officers of the Company who have signed the Registration Statement, and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Shares from any
Underwriter shall be deemed a successor because of such purchase. This Agreement
shall not be assignable by either party hereto without the prior written consent
of the other party.
13. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
14. Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
FIRST BANCORP
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED OF
PUERTO RICO
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
Acting on its behalf and as lead
underwriter of the several Underwriters
named in Schedule 1 hereof.
30
SCHEDULE 1
UNDERWRITERS
Aggregate Number
of Shares to be
Purchased
PaineWebber Incorporated of Puerto Rico............
[OTHER]............................................
[OTHER]............................................
Total
================
31
EXHIBIT A
LIST OF SUBSIDIARIES
1. FirstBank Puerto Rico
2. First Federal Finance Corporation
3. First Leasing & Rental Corporation
