1
EXHIBIT 1.1
PUERTO RICO INDUSTRIAL, TOURIST, EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL CONTROL
FACILITIES FINANCING AUTHORITY
INDUSTRIAL REVENUE BONDS
1999 SERIES A
(Doral Financial Corporation Center Project)
BOND PURCHASE AGREEMENT
__________, 1999
Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental
Control Facilities Financing Authority
Minillas Government Center
Santurce, Puerto Rico
Attention: Executive Director
Doral Financial Corporation
Doral Properties, Inc.
0000 Xxxxxxxx X. Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: President
Ladies and Gentlemen:
The undersigned (hereinafter called the "Underwriters") hereby offer to enter
into this Agreement with Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority (hereinafter called the
"Authority"), a body corporate and politic constituting a public corporation and
governmental instrumentality of the Commonwealth of Puerto Rico (the
"Commonwealth"), created under Act No. 121 of the Legislature of Puerto Rico,
approved June 27, 1977, as amended (the "Act"), and with Doral Financial
Corporation, a corporation organized under the
2
laws of the Commonwealth ("Doral Financial") and Doral Properties, Inc., a
corporation organized under the laws of the Commonwealth and a wholly-owned
subsidiary of Doral Financial (the "Borrower"), which upon your acceptance of
this offer and of this Agreement will be binding on the Authority, Doral
Financial, the Borrower and the Underwriters. This offer is made subject to the
acceptance of this Agreement by the Authority, Doral Financial and the Borrower
on or before 6:00 P.M., Atlantic Standard time, on ___________, 1999, and if not
so accepted will be subject to withdrawal by the Underwriters upon notice
delivered to the Authority, Doral Financial and the Borrower at any time prior
to such acceptance.
1. Purchase and Sale. Upon the terms and conditions and upon the basis of the
representations, warranties and agreements set forth herein, the Underwriters
hereby agree to purchase from the Authority and the Authority hereby agrees to
sell and to deliver to the Underwriters all but not less than all of the
$44,425,000 principal amount of the Authority's Industrial Revenue Bonds, 1999
Series A (Doral Financial Corporation Center Project) (hereinafter called the
"Bonds"), at an aggregate purchase price of $ consisting of the respective
public offering prices of the Bonds, as set forth or derived from information
set forth in the Official Statement and Prospectus (hereinafter mentioned)
(expressed in dollars), less underwriters' discount in an amount equal to $ ),
[plus] [minus] original issue [premium] [discount] of $______. The Bonds shall
be dated the date of delivery thereof, shall bear interest at such rates,
payable on the first day of each month in each year, commencing ______________,
1999, until maturity or prior redemption, all as described in the Official
Statement and Prospectus.
2
3
2. The Bonds and the Official Statement and Prospectus.
(a) The Bonds shall be as described in the Official Statement
and Prospectus of the Authority, dated 1999. Such Official Statement and
Prospectus (including the cover page and all appendices included therein and all
information incorporated by reference therein), as amended or supplemented from
time to time, is hereinafter referred to as the "Official Statement and
Prospectus." The Bonds shall be issued and secured under and pursuant to a Trust
Agreement, to be dated as of , 1999 (the "Trust Agreement"), between the
Authority and Citibank, N.A., as trustee (the "Bond Trustee"). The Bonds shall
be payable and shall be subject to redemption as provided in the Trust
Agreement.
(b) The proceeds from the sale of the Bonds will be loaned by
the Authority to the Borrower pursuant to a Loan and Guaranty Agreement, to be
dated as of __________, 1999 (the "Loan and Guaranty Agreement"), between the
Authority, the Borrower, and Doral Financial, for the purpose, among other
things, of:
(i) financing, in part, the development,
construction and equipping of the Doral Financial Corporation Center (the
"Project"); and
(ii) paying certain expenses incurred in connection
with the issuance and sale of the Bonds.
(c) The obligations of the Borrower under the Loan and
Guaranty Agreement will be guaranteed by Doral Financial.
(d) Concurrently with its acceptance hereof, the Authority
shall deliver to the Representative (hereinafter referred to):
(i) a certified copy of the resolution or
3
4
resolutions of the Authority (collectively, the "Bond Resolution") approved and
adopted by the Board of Directors of the Authority on ___________, 1999
authorizing the issuance and sale of the Bonds; and
(ii) a copy of the Official Statement and
Prospectus manually signed on behalf of the Authority by the Executive Director
or the Assistant Executive Director of the Authority, or any person authorized
to act on his behalf pursuant to the by-laws of the Authority, and approved by
the Borrower.
The Authority will provide to the Representative such additional copies of the
Bond Resolution and the Official Statement and Prospectus as the Representative
may reasonably request. As soon as practicable (but not later than two days)
after the date hereof, the Authority shall deliver to the Underwriters a
sufficient number of copies of the Official Statement and Prospectus as the
Underwriters may reasonably request so as to enable the Underwriters to comply
with the provisions of Paragraph (b)(4) of Rule 15c2-12 of the Securities
Exchange Act of 1934, as amended (the "Rule"). The Authority shall be under no
obligation to determine what number of copies of the Official Statement and
Prospectus requested by the Underwriters pursuant to the preceding sentence
shall be sufficient to enable the Underwriters to comply with the requirements
of the Rule.
The Authority has previously delivered to the Underwriters a
Preliminary Official Statement and Prospectus of the Authority, dated July __,
1999, relating to the Bonds (such Preliminary Official Statement and Prospectus,
including all appendices thereto, and all information included or incorporated
by reference therein, being herein called the "Preliminary Official Statement
and Prospectus").
4
5
(e) Concurrently with its acceptance hereof, the Borrower
shall deliver to the Representative a letter signed and dated the date hereof
and addressed to the Underwriters from Pricewaterhouse Coopers LLP, independent
certified public accountants, to the effect that such accounting firm confirms
that it is an independent certified public accountant with respect to Doral
Financial and the Borrower within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountant
and stating that on the basis of a reading of the latest available interim
unaudited financial statements made available to them, inquiries of officers of
Doral Financial and the Borrower responsible for financial and accounting
matters and other specified procedures set forth in such letter, nothing came to
their attention that caused them to believe that (A) at the date of the latest
available interim financial statements of Doral Financial and the Borrower read
by such accountants and at a subsequent specified date not more than five
business days prior to the date of such letter, there was, with respect to Doral
Financial and the Borrower, any change in the capital stock, deposits,
securities sold under agreements to repurchase, notes payable, loans payable or
any decrease in stockholders' equity of the Borrower, Doral Financial and its
subsidiaries consolidated with amounts shown as of the dates of the financial
statements of Doral Financial and the Borrower included in the Official
Statement and Prospectus or (B) for the period from December 31, 1998, to the
date of the latest available interim financial statements of Doral Financial and
the Borrower read by such accountants and the period from the date of such
interim financial statements to a specified date not more than five business
days prior to the date of such letter, there was any decrease, as compared with
the corresponding periods of the previous year, in net income, except in all
cases set forth in clauses (A) and (B) above for changes, increases or decreases
which the Official Statement and Prospectus discloses
5
6
have occurred, and they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Official Statement and Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are derived from the
general accounting records of Doral Financial and the Borrower subject to the
internal controls of the accounting system of Doral Financial and the Borrower
or are derived directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement with
such results.
(f) In order to allow the Underwriters to comply with the
Rule, the Borrower will enter into a Continuing Disclosure Agreement (the
"Continuing Disclosure Agreement") with the Trustee no later than the Closing
Date.
3. Authority of the Representative. The Underwriters represent that
Popular Securities, Inc. (the "Representative") has been duly authorized by the
Underwriters to act hereunder on behalf of the other Underwriters and shall have
full authority to execute this Agreement and to take such actions as it may deem
advisable in respect of all matters pertaining to this Agreement. Any action
taken under this Agreement by the Representative will be binding upon all the
Underwriters.
4. Public Offering. The Underwriters agree to make a bona fide public
offering of the Bonds at the offering prices set forth in the Official Statement
and Prospectus. The Underwriters may offer to sell the Bonds to certain dealers
and others at prices lower
6
7
than the initial public offering prices, and such offering prices may be
changed, from time to time, by the Underwriters. The Authority, Doral Financial
and the Borrower authorize the Underwriters to use copies of the Official
Statement and Prospectus and any amendments or supplements thereto and the
information contained therein and copies of the Bond Resolution, the Loan and
Guaranty Agreement and the Trust Agreement in connection with the public
offering and sale of the Bonds, and Doral Financial, the Borrower and the
Authority agree not to supplement or amend, or cause to be supplemented or
amended, the Official Statement and Prospectus, the Bond Resolution, the Loan
and Guaranty Agreement or the Trust Agreement at any time prior to the date of
delivery and payment of the Bonds pursuant to Paragraph 8 hereof (such payment
and delivery and the other actions contemplated hereby to take place at the time
of such payment and delivery being hereafter sometimes called the "Closing")
without the prior written consent of the Underwriters.
5. Representations, Warranties and Agreements of the Authority. The
Authority hereby represents, warrants and agrees as follows:
(a) the Authority is a body corporate and politic constituting
a public corporation and governmental instrumentality of the Commonwealth duly
constituted and existing under the laws of the Commonwealth and has, and at the
date of the Closing will have, full right, power and authority (i) to enter into
this Agreement, the Trust Agreement, the Loan and Guaranty Agreement and the
Letter of Representations relating to the Bonds (the "DTC Agreement") from the
Authority and the Trustee to The Depository Trust Company, New York, New York
("DTC"), (ii) to adopt the Bond Resolution, (iii) to issue and sell the Bonds
pursuant to the Trust Agreement and to
7
8
deliver or cause to be delivered the Bonds to or for the account of the
Underwriters as provided herein, (iv) to perform all of the transactions
contemplated by the Official Statement and Prospectus, the Trust Agreement, the
Loan and Guaranty Agreement, the Bond Resolution, the DTC Agreement and this
Agreement and (v) to approve, execute and deliver the Official Statement and
Prospectus;
(b) the Authority has duly adopted the Bond Resolution, has
duly authorized the execution and delivery of the Bonds, the Official Statement
and Prospectus, the Trust Agreement, the Loan and Guaranty Agreement, the DTC
Agreement and this Agreement and is duly authorized to perform the obligations
to be performed by the Authority under the Bond Resolution, the Bonds, the Trust
Agreement, the Loan and Guaranty Agreement, the Official Statement and
Prospectus, the DTC Agreement and this Agreement;
(c) the Authority is not, and at the time of the Closing will
not be, in breach of or in default under any applicable law (including, without
limitation, any administrative rulemaking law) or administrative regulation of
the Commonwealth, any applicable judgement or decree or any indenture, Loan and
Guaranty Agreement, note, resolution, agreement or other instrument to which the
Authority is a party or otherwise subject, which breach or default would in any
way materially adversely affect the Bond Resolution, this Agreement, the Trust
Agreement, the Loan and Guaranty Agreement, the DTC Agreement, the Official
Statement and Prospectus or the issuance of the Bonds, and no event has occurred
and is continuing which with the passage of time or giving of notice, or both,
would constitute such a breach or default; and the due authorization, execution
and delivery by the Authority of this Agreement, the Loan and Guaranty
Agreement, the Trust Agreement, the DTC Agreement, the Official Statement and
Prospectus and the issuance, sale and delivery of the Bonds, the adoption of the
Bond
8
9
Resolution by the Authority and compliance with the provisions hereof and
thereof will not conflict with or constitute a breach of or default under any
law (including, without limitation, any administrative rulemaking law),
administrative regulation, judgement, decree or any agreement or other
instrument to which the Authority is a party or otherwise subject; nor will any
such execution, delivery, issuance, sale, adoption or compliance result in the
creation or imposition of any lien, charge, encumbrance or security interest of
any nature whatsoever upon any of the revenues, property or assets of the
Authority except as expressly provided or permitted hereby and by the Trust
Agreement, the Loan and Guaranty Agreement, the Bond Resolution, the DTC
Agreement, the Official Statement and Prospectus and the Bonds;
(d) all authorizations, approvals, licenses, consents and
orders of any governmental authority or agency having jurisdiction of the matter
which would constitute a condition precedent to, or the absence of which would
materially adversely affect, the performance by the Authority of its obligations
hereunder have been or will by the Closing be obtained;
(e) at the Closing Date (hereinafter mentioned), the Bonds,
the Bond Resolution, the Loan and Guaranty Agreement, the Trust Agreement, the
DTC Agreement and this Agreement will constitute the legal, valid and binding
obligations of the Authority enforceable in accordance with their respective
terms, except to the extent enforcement thereof may be limited by bankruptcy,
insolvency, or other similar laws affecting creditors' rights generally or may
be subject to general principles of equity (regardless of whether such
enforceability shall be considered in a proceeding in equity or at law);
(f) there is no action, suit, proceeding, inquiry or
9
10
investigation, at law or in equity, before or by any court, public board or
body, pending or, to the knowledge of the Authority, threatened against the
Authority affecting the existence or powers of the Authority or the titles of
its officers to their respective offices or seeking to prohibit, restrain or
enjoin the issuance, sale or delivery of the Bonds, or in any way contesting or
affecting the validity or enforceability of the Bonds, the Bond Resolution, this
Agreement, the Trust Agreement, the Loan and Guaranty Agreement, the DTC
Agreement or contesting the powers of the Authority with respect to or any
authority for the issuance of the Bonds, the adoption of the Bond Resolution,
the execution, delivery or performance of this Agreement, the Trust Agreement,
the Loan and Guaranty Agreement, or the DTC Agreement, or, to the knowledge of
the Authority, is there any basis therefor, wherein an unfavorable decision,
ruling or finding would materially adversely affect the transactions
contemplated hereby or by the Official Statement and Prospectus or the validity
or enforceability of the Bonds, the Bond Resolution, this Agreement, the Trust
Agreement, the Loan and Guaranty Agreement, or the DTC Agreement;
(g) the Bonds, when sold to the Underwriters as provided
herein and issued and delivered in accordance with the Trust Agreement, will be
validly issued and outstanding obligations of the Authority entitled to the
benefits of the Trust Agreement;
(h) the information in the Official Statement and Prospectus
under the captions "AFICA," "Government Development Bank for Puerto Rico" and
"Legal Investment" does not contain any untrue or misleading statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading;
10
11
(i) the Authority agrees to cooperate with the Underwriters
and their counsel in any endeavor to qualify the Bonds for offering and sale
under the securities or blue sky laws of such jurisdictions of the United States
as the Underwriters may request, provided that the Authority shall not be
required to execute a general consent to service of process or qualify to do
business in connection with any such qualification in any such jurisdiction, and
the Authority consents to the lawful use of the Preliminary Official Statement
and Prospectus and the Official Statement and Prospectus by the Underwriters in
obtaining such qualifications;
(j) if between the date of this Agreement and the date that is
twenty-five days after the end of the "underwriting period" (as defined in the
Rule) the Authority becomes aware of the existence or occurrence of any event
which would or might cause the Official Statement and Prospectus, as then
supplemented or amended, to contain any untrue statement of a material fact or
to omit 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, the Authority shall promptly notify the Underwriters
thereof;
(k) as of its date, the Preliminary Official Statement and
Prospectus was deemed "final" by the Authority for purposes of paragraph (b)(1)
of the Rule and omitted therefrom only such information permitted to be omitted
therefrom by the Rule; and
(l) the Authority will provide, or direct the provision of,
all information that may be required by the Securities and Exchange Commission
pursuant to the Rule and any future amendments thereto to the extent such
amendments are deemed applicable to the Authority and/or the Bonds.
11
12
6. Representations, Warranties and Agreements of Doral Financial and
the Borrower. Doral Financial and the Borrower, jointly and severally, hereby
represent and warrant to, and agree with, the Authority and the Underwriters as
follows:
(a) Each of the Borrower and Doral Financial confirms its
representations, warranties and agreements set forth in the Loan and Guaranty
Agreement.
(b) A fully executed counterpart of the Loan and Guaranty
Agreement, duly executed by Xxxxx Financial and the Borrower, shall be delivered
by Doral Financial and the Borrower at the Closing, in the form theretofore
submitted to the Underwriters and the Authority and approved by the Underwriters
and the Authority, with only such changes or modifications thereof as the
Underwriters, the Authority, Doral Financial and the Borrower shall agree upon.
(c) Doral Financial is a bank holding company registered under
the Bank Holding Company Act of 1956 and duly organized, validly existing and in
good standing under the laws of the Commonwealth, and the Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth, each with power and authority to conduct their businesses
as described in the Official Statement and Prospectus and to consummate the
transactions contemplated by the Loan and Guaranty Agreement, the Continuing
Disclosure Agreement and this Agreement.
(d) By official action of the Borrower prior to or
concurrently with the acceptance hereof, the Borrower has ratified the
distribution of the Preliminary Official Statement and
12
13
Prospectus and approved the distribution of the Official Statement and
Prospectus.
(e) Doral Financial meets the requirements for the use of Form
S-3 under the Securities Act of 1933, as amended (the "Securities 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
filed with the Commission a registration statement on such Form for registration
under the Securities Act of the offering and sale of the Bonds, including the
Official Statement and Prospectus, and has filed those amendments to such
registration statement as may have been required to the date of this Agreement.
Such registration statement has been declared effective by the Commission. The
Commission has not issued any order preventing or suspending the use of the
Official Statement and Prospectus or instituted or, to the knowledge of Doral
Financial or the Borrower, threatened any proceeding for that purpose. Copies of
such registration statement and amendments and of the Official Statement and
Prospectus have been delivered to the Representative. A final Official Statement
and Prospectus relating to the Bonds containing information permitted to be
omitted at the time of effectiveness by Rule 430A will be filed by Doral
Financial 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 became effective (the "Effective Date"), including all financial statements
and schedules and all exhibits and documents incorporated therein by reference
and all information contained in the Official Statement and Prospectus filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations and
deemed to be included therein as of the Effective Date by Rule 430A of the Rules
and Regulations and including any registration statement
13
14
filed pursuant to Rule 462(b) of the Rules and Regulations (a "Rule 462
Registration Statement") increasing the size of the offering. 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 Official Statement and Prospectus. References herein to the
Preliminary Official Statement and Prospectus or the Official Statement and
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 Official Statement and
Prospectus or such Official Statement and Prospectus, as the case may be, and so
incorporated by reference under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(f) On the date that the Registration Statement containing the
Preliminary Official Statement and Prospectus was filed with the Commission, on
the date that the Official Statement and Prospectus is first filed with the
Commission pursuant to Rule 424(b), at all-times subsequent to and including the
day of the Closing and when any post-effective amendment to the Registration
Statement becomes effective or any amendment or supplement to the Official
Statement and Prospectus is filed with the Commission, the Registration
Statement, the Preliminary Official Statement and Prospectus and the Official
Statement and Prospectus (as amended or as supplemented if Doral Financial shall
have filed with the Commission any amendment or supplement thereto), including
the financial statements included or incorporated by reference in the Official
Statement and Prospectus, did or will comply with all applicable provisions of
the Securities Act and the Rules and Regulations and did or will contain all
statements required to be stated therein in accordance with the Securities Act
and the Rules and Regulations. On the Effective Date and when any post-effective
14
15
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, at the date the Official Statement and
Prospectus or any amendment or supplement to the Official Statement and
Prospectus is filed with the Commission, and at the day of the Closing, the
Official Statement and 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 6(f) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to the Underwriters furnished in writing
to Doral Financial by the Representative specifically for inclusion in the
Preliminary Official Statement and Prospectus or the Official Statement and
Prospectus under the heading "Plan of Distribution". There are no contracts or
other documents required to be filed as exhibits to the Registration Statement
by the Securities Act or the Rules and Regulations that have not been so filed.
The documents which are incorporated by reference in any Preliminary Official
Statement and Prospectus or the Official Statement and 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 Securities Act and the Rules and 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
15
16
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 Securities Act and the
Rules and Regulations and the Exchange Act and the rules and regulations
thereunder, as applicable.
(g) Except as described in the Registration Statement and the
Official Statement and Prospectus, there is no action, suit, proceeding, inquiry
or investigation at law or in equity or before or by any court, public board or
body pending or, to the knowledge of Doral Financial or of the Borrower,
threatened (A) to restrain or enjoin the issuance or delivery of any of the
Bonds, the application of the proceeds thereof, or the execution, delivery or
performance of the Loan and Guaranty Agreement, the Continuing Disclosure
Agreement or this Agreement; (B) in any way contesting the corporate existence
or powers of Doral Financial or the Borrower; (C) in any way contesting or
affecting the payment, collection or application of the revenues pursuant to the
Loan and Guaranty Agreement; or (D) except as described in the Registration
Statement and the Official Statement and Prospectus, against or affecting Doral
Financial or the Borrower, wherein an unfavorable decision, ruling or finding
would materially adversely affect the transactions contemplated by this
Agreement, or the Official Statement and Prospectus, or which, in any way, would
materially adversely affect the validity or enforceability of the Bonds, the
Loan and Guaranty Agreement, the Continuing Disclosure Agreement or this
Agreement, or any other agreement or instrument to which Doral Financial or the
Borrower is a party and which is used or contemplated for use in connection with
the transactions contemplated hereby or by the Official Statement and Prospectus
or would have a material adverse effect on the condition, business, financial or
otherwise, of Doral Financial or the Borrower.
16
17
(h) The Loan and Guaranty Agreement, the Continuing Disclosure
Agreement and this Agreement, when executed and delivered by Doral Financial and
the Borrower, will be legal, valid and binding obligations of Doral Financial
and the Borrower enforceable in accordance with their terms, except to the
extent enforcement thereof may be limited by bankruptcy, insolvency, or other
similar laws affecting creditors' rights generally or by general principles of
equity (regardless of whether such enforceability shall be considered in a
proceeding in equity or at law).
(i) (i) The execution, delivery and performance by Xxxxx
Financial and the Borrower of this Agreement, the Registration Statement, the
Official Statement and Prospectus, the Loan and Guaranty Agreement, the
Continuing Disclosure Agreement and the borrowings under the Loan and Guaranty
Agreement:
(A) have been duly authorized by all
requisite corporate action;
(B) will not violate (1) any provision of
law or any order of any court or any rule, regulation or order of any
other agency of government, (2) the Certificate of Incorporation or
by-laws of Doral Financial or of the Borrower, or (3) any indenture,
agreement or other instrument to which Doral Financial or the Borrower
is a party, or by which it or any of its properties are or may be
bound;
(C) will not be in conflict with, result in
a breach of or constitute (alone or with notice or lapse of time or
both) a default under any indenture, agreement or other instrument
referred to in clause (B)(3) above; and
(D) will not result in the creation or
17
18
imposition of any lien, charge or encumbrance of any nature whatsoever
upon any of the property or assets of Doral Financial or the Borrower,
except as contemplated by the Registration Statement and the Official
Statement and Prospectus; and
(ii) no registration with or consent or approval of,
or other action by, any Federal, state, Commonwealth or other governmental
authority or regulatory body, foreign or domestic, is required in connection
with the execution, delivery and performance by Doral Financial or the Borrower
of this Agreement, the Loan and Guaranty Agreement or the Continuing Disclosure
Agreement.
(j) The Borrower and Doral Financial agree and consent that
the Bond Trustee shall have, pursuant to the provisions of the Trust Agreement,
a valid assignment of all payments due to, and certain other rights of, the
Authority under the Loan and Guaranty Agreement, subject to no prior rights of
other creditors.
(k) Doral Financial and the Borrower have received and there
remain currently in full force and effect all governmental consents and
approvals necessary at this time which would constitute a condition precedent
to, or the failure to obtain which would materially adversely affect, the
performance by the Borrower of its obligations under the Loan and Guaranty
Agreement, the Continuing Disclosure Agreement or this Agreement.
(l) Doral Financial and the Borrower have received and there
remain currently in full force and effect all permits, licenses, accreditations
and certifications necessary to conduct their businesses as presently being
conducted. No consent, approval, authorization or order of, or any filing or
declaration with, any governmental body is required for the consummation of the
18
19
transactions contemplated by this Agreement or in connection with the issuance
and sale of the Bonds, except such as have been obtained and such as may be
required under the securities laws of the Commonwealth or the various states of
the United States or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the Underwriters of the Bonds.
(m) Neither Doral Financial nor the Borrower is a party to any
contract or agreement or subject to any charter or other restriction not
disclosed in the Official Statement and Prospectus, the performance of or
compliance with which may have a material adverse effect on the condition or
business, financial or otherwise, of Doral Financial or of the Borrower.
(n) Doral Financial and the Borrower have deemed the
Preliminary Official Statement and Prospectus "final" as of its date within the
meaning of paragraph (b)(4) of the Rule and omitted therefrom only information
permitted to be omitted therefrom by the Rule.
(o) Any certificate signed by an authorized representative of
Doral Financial or of the Borrower delivered to the Authority or the
Underwriters shall be deemed a representation and warranty by Doral Financial or
the Borrower to such parties as to the statements made therein.
(p) The Borrower and Doral Financial will provide, or direct
the provision of, all information that may be required by the Commission
pursuant to the Rule and any future amendments thereto to the extent such
amendments are deemed applicable to the Borrower, Doral Financial and/or the
Bonds.
19
20
7. Covenants of Doral Financial and the Borrower. Doral Financial and
the Borrower, jointly and severally, agree to the following:
(a) No amendment or supplement to the Registration Statement
or the Official Statement and Prospectus will be filed, either prior to the
Effective Date or thereafter, during such period as the Official Statement and
Prospectus is required by law to be delivered in connection with the sale of the
Bonds, 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.
(b) Doral Financial will notify the Representative promptly,
and will confirm such advice in writing, (i) when any post-effective amendment
to the Registration Statement becomes effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Official Statement and 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 that in the judgment of
the Doral Financial makes any statement of a material fact made in the
Registration Statement or the Official Statement and Prospectus untrue or that
requires the making of any changes in the Registration Statement or the Official
Statement and 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
Xxxxx Financial or the Borrower of any other communication from the Commission
relating to the Borrower, Doral Financial, the Registration Statement, any
Preliminary Official Statement and Prospectus or the Official
20
21
Statement and Prospectus. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statement, Doral Financial will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment.
Doral Financial and the Borrower will prepare the Official Statement
and Prospectus in a form approved by the Representative and will file such
Official Statement and Prospectus pursuant to Rule 424(b) under the Securities
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 Securities Act. If
Doral Financial has omitted any information from the Registration Statement
pursuant to Rule 430A, Doral Financial 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 Representatives promptly of all such filings.
(c) If Doral Financial 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 Doral Financial 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 the Official Statement and Prospectus
relating to the Bonds is required to be delivered under the Securities Act or
the Rule, any event occurs as a result of
21
22
which, in the judgment of Doral Financial or the Borrower or in the opinion of
counsel for the Underwriters, the Official Statement and 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 the Registration Statement, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading, or if for
any other reason it is necessary at any time to amend or supplement the Official
Statement and Prospectus or the Registration Statement to comply with the
Securities Act or the Rules and Regulations, Doral Financial will promptly
notify the Representative thereof and, subject to Section 7(a) hereof, will
prepare and file with the Commission, at Doral Financial's expense, an amendment
to the Registration Statement or an amendment or supplement to the Official
Statement and Prospectus that corrects such statement or omission or effects
such compliance.
(e) Doral Financial and the Borrower will comply with all the
provisions of all undertakings contained in the Registration Statement.
(f) The Borrower will apply the proceeds from the sale of the
Bonds as provided in and subject to all of the terms and provisions of the Loan
and Guaranty Agreement and the Official Statement and Prospectus.
(g) Between the date of this Agreement and the date of the
Closing, not, without the prior written consent of the Underwriters, to offer or
issue any industrial revenue bonds exempted to Puerto Rico residents, direct or
contingent, nor to
22
23
cause any adverse change of a material nature in the financial position, results
of operations or condition, in either case, other than in the ordinary course of
business and except as disclosed in the Official Statement and Prospectus.
(h) Doral Financial and the Borrower will provide the
Underwriters with sufficient copies of any supplement or amendment to the
Official Statement and Prospectus as the Representative reasonably requests so
as to enable the Underwriters to comply with the provisions of paragraph (b)(4)
of the Rule. The Borrower shall be under no obligation to determine whether the
number of copies requested by the Representative of any amendment or supplement
to the Official Statement and Prospectus pursuant to the preceding sentence
shall be sufficient to enable the Underwriters to comply with the requirements
of the Rule. The Representative shall promptly notify the Borrower of the end of
the underwriting period (as defined in the Rule).
(i) The Borrower and Doral Financial will furnish such
information and execute such instruments as the Underwriters may reasonably
request (i) to (A) qualify the Bonds for offer and sale under the Blue Sky or
other securities laws and regulations of such states and other jurisdictions in
the United States as the Underwriters may designate and (B) determine the
eligibility of the Bonds for investment under the laws of such states and other
jurisdictions and (ii) to continue such qualifications in effect so long as
required for the distribution of the Bonds, provided that Doral Financial or the
Borrower shall not be required to execute a general consent to service of
process or qualify to do business in connection with any such qualification or
determination in any such jurisdiction.
(j) The Borrower and Doral Financial will advise the
23
24
Underwriters immediately of receipt by Doral Financial of the Borrower of any
notification with respect to the suspension of the qualification of the Bonds
for sale in any jurisdiction or the initiation or threat of any proceeding for
that purpose.
(k) The Borrower and Doral Financial will use their best
efforts to obtain when needed all consents, approvals, authorizations and orders
of governmental or regulatory authorities that are required for the performance
of their obligations under the Loan and Guaranty Agreement.
8. The Closing. At 10:00 a.m., Atlantic standard time, on ___________,
1999, or at such later time or date as may be mutually agreed upon by the
Authority, the Borrower and the Underwriters (such date being herein sometimes
called the "Closing Date"), the Authority will cause the Bond Trustee to deliver
the Bonds to or for the account of the Underwriters in definitive form and duly
executed and authenticated, and, subject to the terms and conditions hereof, the
Underwriters will accept such delivery and pay the purchase price for the Bonds
in immediately available funds as set forth in Paragraph 1 hereof to the Bond
Trustee. Delivery of the Bonds shall be made to DTC in such manner as shall be
mutually agreed upon by the Authority, the Borrower and the Representative.
Delivery of the other documents provided for herein to be made at the Closing
and payment for the Bonds as aforesaid shall take place at the office of
Xxxxxxxxxxx, Xxxxxx & Xxxxxxx, San Xxxx, Puerto Rico, or at such other place as
shall have been mutually agreed upon by the Authority, the Borrower and the
Underwriters.
9. Conditions of Underwriters' Obligation to Purchase. The obligation
of the Underwriters to purchase and accept delivery of the Bonds is subject to
the accuracy of the representations and
24
25
warranties of the Authority, Doral Financial and the Borrower herein and in the
Loan and Guaranty Agreement, to the accuracy of the statements of officers or
representatives of the Authority, Doral Financial and the Borrower made pursuant
to the provisions hereof, to the performance by the Authority, Doral Financial
and the Borrower of their respective obligations hereunder to be performed at or
prior to the Closing, and to the following additional conditions precedent:
(a) The Official Statement and Prospectus, the Loan and
Guaranty Agreement, this Agreement, the Trust Agreement, the Continuing
Disclosure Agreement, the DTC Agreement and the Bonds shall have been duly
authorized, executed and delivered, all in form satisfactory to the Underwriters
and shall constitute valid and binding agreements of the parties thereto.
(b) The Representative shall have received (i) evidence,
reasonably satisfactory to the Representative, of the due authorization,
execution and delivery of, and executed copies of, the documents mentioned in
clause (a) of this Paragraph 9 by the parties thereto, (ii) an opinion of
counsel for Doral Financial and the Borrower acceptable in form and substance to
the Underwriters, (iii) appropriate certificates reasonably satisfactory to the
Representative covering litigation and compliance with laws and prior
agreements, and with respect to the status of all necessary permits and
requirements, and (iv) evidence that the Registration Statement has become
effective and is effective as of the date of the Closing.
(c) The Representative shall have received a copy, duly
certified by the Secretary or an Assistant Secretary of the Authority, of the
Bond Resolution and shall also have received certified copies of any required
approvals referred to in Paragraph
25
26
5(d) hereof.
(d) The Representative shall have received copies, duly
certified by the Secretary or an Assistant Secretary of Doral Financial and the
Borrower of the resolutions or other corporate action referred in Paragraph 6(i)
hereof.
(e) The Representative shall have received an opinion of
counsel for the Authority acceptable in form and substance to the Underwriters,
acceptable in form and substance to the Underwriters.
(f) The Representative shall have received the approving
opinion on the Bonds of Xxxxxxx, Xxxxxxxx & Xxxxxxxxx, LLP, Bond Counsel,
substantially in the form attached as Appendix IV to the Official Statement and
Prospectus and a supplemental opinion of Xxxxxxx, Xxxxxxxx & Xxxxxxxxx, LLP,
Bond Counsel, acceptable in form and substance to the Underwriters.
(g) The Representative shall have received a manually signed
copy of the letter, addressed to the Underwriters, dated the Closing Date, of
Pricewaterhouse Coopers LLP to the effect that such accounting firm reaffirms as
of such Closing Date and as though made at such date, the statements made in the
letter furnished to the Underwriters by such accountants pursuant to paragraph
2(e) hereof, except that references to the date referred to in such letter as
the most recent date through which such accountants have performed their work
will be a date not more than five (5) business days prior to the Closing Date.
(h) The Representative shall have received a certificate,
dated the Closing Date, of the Executive Director or the Assistant Executive
Director of the Authority to the effect that: (i) the Authority has duly
performed and complied with all agreements and
26
27
conditions and all of its obligations required to be performed at or prior to
the Closing Date, each of its representations and warranties contained herein
and in the Loan and Guaranty Agreement are true and correct as of the Closing
Date and at the time of Closing no event of default or default shall have
occurred and be continuing with respect to the Bonds; (ii) the Authority has
duly adopted the Bond Resolution and has authorized, by all necessary action,
the execution, delivery, receipt and due performance of this Agreement, the
Bonds, the Official Statement and Prospectus, the Trust Agreement, the Loan and
Guaranty Agreement, the DTC Agreement and any and all such other agreements and
documents as may be required to be executed, delivered and received by it in
order carry out, give effect to and consummate the transactions contemplated
hereby and thereby; (iii) no litigation is pending, or to his knowledge
threatened, to restrain or enjoin the issuance or sale of the Bonds or in any
way affecting as to the Authority any authority for or the validity of the
Bonds, the Official Statement and Prospectus, the Trust Agreement, the Loan and
Guaranty Agreement, this Agreement, the Bond Resolution, the DTC Agreement or in
any way contesting the Authority's existence or powers; and (iv) the adoption
and performance by the Authority of the Bond Resolution and the execution,
delivery, receipt and due performance of the Bonds, the Official Statement and
Prospectus, the Trust Agreement, the Loan and Guaranty Agreement, this
Agreement, the DTC Agreement and the other agreements contemplated hereby and
the Authority's compliance with the provisions hereof and thereof will not
conflict with or constitute on the Authority's part a breach of or a default
under any existing law, court or administrative regulation, decree or order or
any agreement, indenture, mortgage, lease or other instrument to which the
Authority is subject or by which it is or may be bound.
(i) The Representative shall have received a
27
28
certificate, dated the Closing Date, of an authorized representative of Doral
Financial and of the Borrower to the effect that (i) each of the representations
and warranties of the Borrower contained in this Agreement, the Loan and
Guaranty Agreement and the Continuing Disclosure Agreement is true and correct
as of the Closing Date, (ii) each of the agreements of the Borrower to be
complied with and each of the obligations to be performed by Doral Financial and
the Borrower under this Agreement, the Loan and Guaranty Agreement or the
Continuing Disclosure Agreement on or prior to the Closing Date have been
complied with and performed, (iii) the conditions or acts that are disclosed in
the Official Statement and Prospectus as occurring prior to the Closing Date
have occurred, (iv) as of the Closing Date and except as may be disclosed in the
Official Statement and Prospectus, there has been no material adverse change in
the financial position of Doral Financial or the Borrower since the date of the
financial statements incorporated by reference in the Official Statement and
Prospectus, (v) no event of default under this Agreement or the Loan and
Guaranty Agreement, or event which with giving of notice or lapse of time or
both would constitute an event of default under any such document, has occurred
and is continuing or will occur as a result of the transactions to take place at
Closing, and (vi) no event affecting Doral Financial or the Borrower has
occurred since the date of the Official Statement and Prospectus that either
makes untrue or incorrect in any material respect any statement or information
concerning Doral Financial or the Borrower contained in the Official Statement
and Prospectus or is not reflected in the Official Statement and Prospectus but
should be reflected therein or that is necessary to make the statements and
information therein concerning the Borrower not misleading.
(j) The Representative shall have received an opinion of
X'Xxxxx & Xxxxxx, counsel to the Underwriters, acceptable in form
28
29
and substance to the Underwriters.
(k) The Representative shall have received a copy of the
certificate of incorporation of Doral Financial and of the Borrower, as amended,
certified as of a recent date by the appropriate officer of the Commonwealth,
together with certificates dated as of a recent date from the Secretary of State
of the Commonwealth as to the existence and good standing of Doral Financial and
of the Borrower under the laws of the Commonwealth and copies of the by-laws of
Doral Financial and of the Borrower certified by the Secretary or an Assistant
Secretary of Xxxxx Financial and the Borrower.
(l) The Representative shall have received written evidence
that the Bonds have been issued a rating of "BBB-" by Standard & Poor's Ratings
Services ("S&P"), of "BBB" by Xxxx & Xxxxxx ("D&P") and of "Baa3" by Xxxxx'x
Investors Service ("Moody's").
(m) The Representative shall have received evidence as to the
good standing of Doral Financial and its banking, mortgage banking and
securities subsidiaries from the Commissioner of Financial Institutions of
Puerto Rico.
(n) The Underwriters shall have received such other
documentation, certificates and opinions as may be reasonably required by the
Underwriters.
10. Indemnification and Contribution.
(a) Doral Financial and the Borrower agree to indemnify and
hold harmless the Authority, the Underwriters, any member,
29
30
officer, official, employee or agent of the Authority or the Underwriters, and
each person, if any, who controls the Authority or Underwriters within the
meaning of the Securities Act or the Exchange Act (collectively, for purposes of
this Section 10(a), the "Indemnified Parties"), against any and all losses,
claims, damages, liabilities or expenses, joint or several, to which any of the
Indemnified Parties may become subject, under either of said Acts 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 or misleading statement
of a material fact contained in Section 6 of this Agreement, (ii) any untrue
statement or alleged untrue statement of any material fact contained in (A) any
Preliminary Official Statement and Prospectus, the Registration Statement or the
Official Statement and Prospectus, or any amendment or supplement to the
Registration Statement or the Official Statement and Prospectus or (B) any
application or other document, or any amendment or supplement thereto, executed
by Doral Financial or the Borrower or based upon written information furnished
by or on behalf of Doral Financial or the Borrower filed in any jurisdiction in
order to qualify the Bonds 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 Official Statement and Prospectus, the Registration Statement or
the Official Statement and Prospectus, or any amendment or supplement to the
Registration Statement or the Official Statement and Prospectus or any
Application a material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading, including the aggregate amount paid in
settlement of any litigation commenced or threatened arising from a claim based
upon any such untrue statement or omission if such settlement is effected with
the written consent of
30
31
Doral Financial and the Borrower, and will reimburse each such Indemnified Party
for any legal or other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (1) Doral Financial or the Borrower will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or omission or alleged untrue
statement or omission made in any of such documents in reliance upon and in
conformity with written information furnished to Doral Financial or the Borrower
by the Authority or the Underwriters specifically for use therein; and (2) this
indemnity shall not apply to any losses, claims, damages, liabilities or
expenses arising out of or based upon any such untrue statement or any such
omission if such statement or omission was corrected by a supplement or
amendment to the Official Statement and Prospectus delivered to the Underwriters
prior to the sale of the Bonds to the person asserting the loss. This indemnity
agreement will be in addition to any liability which Doral Financial or the
Borrower may otherwise have. Doral Financial or the Borrower will not, without
the prior written consent of each of the Underwriters, 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 is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Underwriter and each member, officer, official,
employee, agent and controlling person of such Underwriter from all liability
arising out of such claim, action, suit or proceeding.
Doral Financial and the Borrower acknowledge that the
information set forth in the Official Statement and Prospectus under the caption
"Plan of Distribution" related to stabilization
31
32
and passive market making legends constitutes the only information furnished in
writing by or on behalf of the Underwriters specifically for use in the Official
Statement and Prospectus. In addition, Doral Financial and the Borrower
acknowledge that the information set forth in the Official Statement and
Prospectus under the captions "AFICA," "GOVERNMENT DEVELOPMENT BANK FOR PUERTO
RICO" and "LEGAL INVESTMENT" constitutes the only information furnished in
writing by or on behalf of the Authority specifically for use in the Official
Statement and Prospectus.
(b) The Underwriters agree to indemnify and hold harmless the
Authority, Doral Financial, the Borrower, any member, director, officer,
official, employee or agent of the Authority, Doral Financial or the Borrower,
and each person, if any, who controls the Authority, Doral Financial or the
Borrower within the meaning of the Securities Act or the Exchange Act
(collectively, for purposes of this Section 10(b), the "Indemnified Parties"),
against any and all losses, claims, damages, liabilities or expenses, joint or
several, to which the Indemnified Parties may become subject, under either of
said Acts or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue or
misleading statement of a material fact contained in the Preliminary Official
Statement and Prospectus, the Registration Statement or the Official Statement
and Prospectus, or any omission or alleged omission from the Preliminary
Official Statement and Prospectus, the Registration Statement or the Official
Statement and Prospectus, or any amendment or supplement to the Registration
Statement or the Official Statement and Prospectus of a material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading,
but only so far as any such statement or omission was made in reliance upon and
in conformity with written
32
33
information, if any, as was furnished in writing by the Underwriters for use
therein.
(c) The Authority agrees to indemnify and hold harmless the
Underwriters, Doral Financial, the Borrower, any member, officer, official,
employee or agent of the Underwriters, Doral Financial or the Borrower, and each
person, if any, who controls the Underwriters, Doral Financial or the Borrower
within the meaning of the Securities Act of the Exchange Act (collectively, for
purposes of this Section 10(c), the "Indemnified Parties"), against any and all
losses, claims, damages, liabilities or expenses, joint or several, to which any
such Indemnified Party may become subject, under either of said Acts or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or misleading
statement of a material fact contained in any Preliminary Official Statement and
Prospectus, the Registration Statement or the Official Statement and Prospectus,
or caused by any omission or alleged omission from any Preliminary Official
Statement and Prospectus, the Registration Statement or the Official Statement
and Prospectus, or any amendment or supplement to the Registration Statement or
the Official Statement and Prospectus of a material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading, but only to the
extent that any such statement or omission relates to the information appearing
under the captions "AFICA," "GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO" and
"LEGAL INVESTMENT".
(d) If the indemnification provided for in the above
subsections (a), (b) and (c) of this Section 10 is for any reason unavailable
(other than for a reason specified in this Section 10) or insufficient to hold
harmless an Indemnified Party under
33
34
sections (a), (b) or (c) above with respect to losses covered by such
subsection, then each indemnifying party shall contribute to the damages paid by
such Indemnified Party (A) in such proportion as is appropriate to reflect the
relative benefits received by the Borrower and Doral Financial (collectively),
the Authority and the Underwriters from the offering of the Bonds or (B) if the
allocation provided by clause (A) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (A) above, but also the relative liability of the Borrower
and Doral Financial (collectively), the Authority and the Underwriters in
connection with the statements or omissions which resulted in such damages, as
well as any other relevant equitable considerations. The relative benefits
received by the Borrower and Doral Financial (collectively), the Authority and
the Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by each one bear
to each other. The relative benefits received by the Borrower and Doral
Financial shall be deemed to be equal to the total net proceeds from the
offering of the Bonds (after deducting only the underwriting discount and the
Authority's Administrative Fee). The relative benefits received by the Authority
shall be deemed to be equal to its Administrative Fee and the relative benefits
received by the Underwriters shall be deemed to be equal to their total
underwriting discount or commissions, as set forth in this Bond Purchase
Agreement. The relative liability of each Indemnified Party shall be determined
by reference to, among other things, whether the untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Borrower or Doral Financial (collectively), the Authority or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Authority, the Borrower, Doral
34
35
Financial and the Underwriters agree that it would not be just and equitable if
their respective obligations to contribute pursuant to this subsection (d) were
to be determined by pro rata allocation of the aggregate damages or by any other
method of allocation which does not take into account the equitable
considerations referred to above. For purposes of this subsection (d) the term
"damages" shall include any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending against any
action or claim which is the subject of the contribution provisions of this
subsection (d). Notwithstanding the provisions of this subsection (d), the
Underwriters shall not be required to contribute any amount in excess of the
total underwriting discount received by them and the Authority shall not be
required to contribute any amounts in excess of the Administrative Fee payable
to the Authority. No person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation in connection with the issuance of the Bonds.
(e) In case any action shall be brought against one or more of
the Indemnified Parties based upon the Official Statement and Prospectus and in
respect of which indemnity may be sought against the indemnifying party, the
Indemnified Parties shall promptly notify the indemnifying party in writing, and
the indemnifying party may assume the defense thereof, including the employment
of counsel, the payment of all expenses and the right to negotiate and consent
to settlement, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to an Indemnified Party
otherwise than under this Section 10, unless, and only to the extent that, such
omission results in the forfeiture of substantial rights or defenses by the
35
36
indemnifying parties. Any one or more of the Indemnified Parties shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Indemnified Parties unless the employment
of such counsel has been specifically authorized in writing by the indemnifying
or contributing party or parties or the indemnifying or contributing party or
parties shall not have employed counsel to assume the defense of such action
promptly after receiving notice thereof, or such Indemnified Party or
Indemnified Parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the indemnifying or contributing party or parties (in which case
the indemnifying or contributing party or parties shall not have the right to
direct the defense of such action on behalf of the Indemnified Party), in any of
which events such fees and expenses of separate counsel for the Indemnified
Party shall be borne by the indemnifying or contributing party or parties. The
indemnifying party shall not be liable for any settlement of any such action
effected without its consent by any of the Indemnified Parties.
11. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. The respective
agreements, representations, warranties and other statements of the Authority,
Doral Financial, the Borrower and the Underwriters and their respective officers
set forth in or made pursuant hereto will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of the Underwriters, the Borrower, Doral Financial or the
Authority, and will survive delivery of and payment for the Bonds.
36
37
12. TERMINATION OF BOND PURCHASE AGREEMENT. The Representative may
terminate this Agreement, in its absolute discretion, without liability
therefor, by notice given to the Authority, Doral Financial and the Borrower
prior to the Closing if, at any time prior to the Closing:
(a) Any fact shall exist or any event shall have occurred
that, in the opinion of the Representative, makes the Registration Statement or
the Official Statement and Prospectus contain an 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;
(b) Any extraordinary event shall have occurred or shall exist
affecting current Commonwealth, national or international economic, financial or
other conditions or affecting Doral Financial or the Borrower which, in the
reasonable opinion of the Representative, materially adversely affects the
market for the Bonds or the sale, at the contemplated offering prices, by the
Underwriters of the Bonds;
(c) A war or other similar hostilities directly involving the
United States shall have occurred, which in the reasonable opinion of the
Representative, materially adversely affects the market for the Bonds or the
sale, at the contemplated offering prices, by the Underwriters of the Bonds;
(d) A general banking moratorium shall have been declared by
authorities of the United States or the Commonwealth;
(e) Any rating of the Bonds shall have been downgraded or
withdrawn by S&P, D&P or Moody's;
37
38
(f) The New York Stock Exchange or other national securities
exchange, or any governmental authority, shall impose any material restrictions
not now in force or being enforced with respect to the Bonds or obligations of
the general character of the Bonds or securities generally, or shall materially
increase restrictions now in force, including those relating to the extension of
credit by, or charges to the net capital requirements of, underwriters;
(g) Any legislation, ordinance, rule or regulation shall be
introduced in, or be enacted by, any governmental body, department or agency in
the Commonwealth, or decision by any court of competent jurisdiction within the
Commonwealth shall be rendered which, in the reasonable opinion of the
Representative, materially adversely affects the market for the Bonds or the
sale, at the contemplated offering prices, by the Underwriters of the Bonds;
(h) Any amendment to the Official Statement and Prospectus is
proposed by the Borrower or Doral Financial or deemed necessary by Bond Counsel
or counsel to the Underwriters pursuant to Paragraph [ ] hereof which, in the
reasonable opinion of the Representative, materially adversely affects the
market for the Bonds or the sale, at the contemplated offering prices, by the
Underwriters of the Bonds; or
(k) The Authority, Doral Financial or the Borrower shall be
unable to satisfy the conditions to the obligations of the Underwriters to
purchase, to accept delivery of and to pay for the Bonds contained in this
Agreement.
13. EXPENSES OF THE AUTHORITY, DORAL FINANCIAL AND THE BORROWER.
Whether or not the transactions contemplated hereby
38
39
shall be consummated, the Underwriters and the Authority shall be under no
obligation to pay, and Doral Financial and the Borrower shall pay, any and all
reasonable expenses incident to the performance of the obligations of the
Authority, the Underwriters, Doral Financial or the Borrower under this
Agreement and the fulfillment of the conditions imposed hereunder including but
not limited to: (i) the cost of preparing, printing and delivering the Bonds,
the Preliminary Official Statement and Prospectus, the Registration Statement
and the Official Statement and Prospectus, the Trust Agreement and the Loan and
Guaranty Agreement and any amendments or supplements thereto; (ii) the fees and
disbursements of Bond Counsel; (iii) the fees and disbursements of any counsel,
auditors, engineers, consultants or other retained by the Authority, Doral
Financial or the Borrower in connection with the transactions contemplated
herein; (iv) the fees and disbursements of the Bond Trustee and its counsel; (v)
the charges made by rating agencies for the rating of the Bonds; (vi) the
expenses incurred by the Underwriters in connection with the purchase of the
Bonds and the transactions contemplated herein, including the fees and
disbursements of legal counsel retained by or on behalf of the Underwriters; and
(vii) any and all liability with respect to amounts payable as a result of (A)
any issuance, stamp, documentary, transfer or similar taxes which may be
determined to be payable in connection with the execution and delivery of the
Bonds, this Agreement, the Registration Statement, the Official Statement and
Prospectus, the Trust Agreement, the Loan and Guaranty Agreement or any other
ancillary agreement, or any modification, amendment or alteration, of the terms
or provisions of any of the foregoing, and (B) any interest or penalties
resulting from any delays in paying any of such expenses, charges, disbursement,
liabilities or taxes. The obligations of the Borrower under this Paragraph 13
shall survive the delivery of and payment for the Bonds.
39
40
14. NOTICES. Any notice or other communication to be given to the
Authority, Doral Financial or the Borrower under this Agreement may be given by
delivering the same in writing at the address set forth above, and any notice or
other communication to be given to the Underwriters under this Agreement may be
given by delivering the same in writing to Popular Securities, Inc., Popular
Center Building, Suite 0000, Xxx Xxxx, Xxxxxx Xxxx 00000, Attention:
President.
15. PARTIES IN INTEREST. This Agreement is made solely for the benefit
of the Authority, Doral Financial, the Borrower and the Underwriters (including
the successors or assigns of the Underwriters) and no other person shall acquire
or have any right hereunder or by virtue hereof.
16. NO ORAL CHANGE. This Agreement may not be changed orally, but only
by an agreement in writing and signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
17. EFFECTIVENESS. This Agreement shall become effective upon the
execution hereof by the Authority, Doral Financial and the Borrower and shall be
valid and enforceable as of the time of delivery of such executed copy to the
Underwriters.
18. COUNTERPART EXECUTION. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed and delivered, shall be an original, but all of
which counterparts shall together constitute but one and the same instrument.
19. GOVERNING LAW. This Agreement is being made in the
40
41
Commonwealth and for all purposes shall be construed and enforced in accordance
with the laws of the Commonwealth.
20. SEVERABILITY. In the event any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
Very truly yours,
POPULAR SECURITIES, INC.
PAINEWEBBER INCORPORATED
OF PUERTO RICO
DORAL SECURITIES
SANTANDER SECURITIES
BY: POPULAR SECURITIES, INC., AS
REPRESENTATIVE
By:
------------------------------------
Name:
Title:
The foregoing Bond Purchase Agreement is hereby accepted as of July __, 1999.
41
42
PUERTO RICO INDUSTRIAL, TOURIST,
EDUCATIONAL, MEDICAL AND ENVIRONMENTAL
CONTROL FACILITIES FINANCING AUTHORITY
By:
------------------------------------
Name:
Title:
DORAL PROPERTIES, INC., S.E.
By:
------------------------------------
Name:
Title:
DORAL FINANCIAL CORPORATION
By:
------------------------------------
Name:
Title:
42
