EXHIBIT 1.0
$100,000,000
R&G CAPITAL TRUST III
___% CUMULATIVE MONTHLY INCOME TRUST PREFERRED SECURITIES
AGENCY AGREEMENT
September _____, 2003
POPULAR SECURITIES, INC.
Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
R&G CAPITAL TRUST III, (the "Issuer" or the "Trust") a statutory trust
created under the Delaware Statutory Trust Act (the "Delaware Act"), proposes to
sell an aggregate principal amount of $100,000,000 of its Trust Preferred
Securities (the "Preferred Securities") to the Puerto Rico Conservation Trust
Fund ("Conservation Trust"), in connection with the issuance by Conservation
Trust of its Secured Notes Due 2033 (the "CT Notes"). The Preferred Securities
shall be dated, shall bear interest at the rates per annum and shall be subject
to mandatory redemption, as described in the Prospectus (as defined below). The
CT Notes will be payable solely from amounts payable by the Trust on the
Preferred Securities and the Preferred Securities will be pledged as collateral
to the trustee of the CT Notes. The Preferred Securities shall be guaranteed by
R&G Financial Corporation (the "Company" and the "Guarantor") with respect to
the distributions and amounts payable upon liquidation and redemption, pursuant
to the Preferred Securities Guarantee Agreement (the "Guarantee Agreement"), to
be dated as of the Closing Date (as defined below), executed and delivered by
the Guarantor and the Wilmington Trust Company, a Delaware banking corporation,
as trustee (the "Guarantee Trustee"), for the benefit of the holder of the
Preferred Securities. The proceeds from the sale of the Preferred Securities to
the Conservation Trust will be aggregated with the entire proceeds from the sale
by the Issuer to the Company of the Common Securities of the Issuer (the "Common
Securities") and will be used by the Issuer to purchase the ___% subordinated
debentures (the "Debentures") issued by the Company. The Preferred Securities
and the Common Securities will be issued pursuant to the Amended and Restated
Declaration of Trust (the "Declaration"), among the Company and the trustees
named therein (the "Trustees"). The Debentures will be issued pursuant to a
Junior Subordinated Indenture (the "Indenture"), among the Company and the
Wilmington Trust Company, as trustee (the "Indenture Trustee"). You have agreed
to act as placement agent (the "Agent") in connection with the sale of the
Preferred Securities to Conservation Trust, and as representative of the
underwriters (the "Underwriters") in connection
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with the sale of the CT Notes to the public. References to the Agent shall be
deemed to include the Agent in its role as representative of the Underwriters.
The Issuer and the Company jointly and severally hereby confirm as
follows its agreements with you:
1. Sale of Notes: Compensation of Agent.
(a) The Issuer will sell the Preferred Securities to
Conservation Trust at a purchase price of $____. Conservation Trust will in turn
issue and sell the CT Notes to the Underwriters in accordance with the terms of
a Purchase Agreement being executed simultaneously herewith (the "Purchase
Agreement"). The CT Notes will be offered by the Underwriters by means of an
offering circular of Conservation Trust (the "Offering Circular") that will
include as an attachment a Prospectus of the Issuer described below. Prior to
the date hereof, Conservation Trust and the Issuer have delivered to the Agent a
preliminary offering circular of Conservation Trust (the "Preliminary Offering
Circular") that includes as an attachment a preliminary prospectus dated August
___, 2003.
(b) Because the proceeds from the sale of the Preferred
Securities shall be used to purchase the Debentures from the Company, as
compensation for its services hereunder, the Company will pay to the Agent a
nonrefundable fee equal to $____, which shall be fully earned upon the delivery
of the Preferred Securities on the Closing Date (as such term is defined below).
2. Delivery and Payment. Delivery of the Preferred Securities
shall be made to Banco Popular de Puerto Rico, as trustee for the CT Notes,
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 business days after the date of this Agreement, as may be agreed upon by
the Company and Conservation Trust (such date is hereinafter referred to as the
"Closing Date"). Delivery of the other documents, required to be delivered as
provided herein, shall be made at the offices of ____________________________,
_______________, San Xxxx, Puerto Rico.
3. Representations and Warranties. Each of the Issuer and the
Company, jointly and severally, represents, warrants and covenants to the Agent
and each of the Underwriters that:
(a) The Company and the Issuer, as co-registrant with the
Company, meet the requirements for use of Form S-3 and a registration statement
(Registration No. 333- _____) on Form S-3 with respect to the Preferred
Securities, including a preliminary prospectus and such amendments to such
registration statement as may have been required to the date of this Agreement,
has been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the
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Commission. No stop order preventing or suspending the use of the Prospectus (as
defined below) or any Preliminary Prospectus (as defined below) has been issued,
and, to the Company's knowledge, no proceeding for that purpose has been
instituted or threatened by the Commission. The term "Preliminary Prospectus" as
used herein means a preliminary prospectus relating to the Preferred Securities
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 the
related Preliminary Prospectus have been delivered to the Agent. 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 Preferred Securities containing
information permitted to be omitted at the time of effectiveness by Rule 430A of
the Rules and Regulations has been or will be so prepared and filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations on or before the
second business day after the date hereof (or such earlier time as may be
required by the Rules and Regulations). The term "Registration Statement" means
such registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed by virtue of Rule 430A of the Rules and
Regulations to be included in such Registration Statement at the Effective Date
and any prospectus supplement filed thereafter with the Commission and shall
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The term "Prospectus" means, collectively, the prospectus
together with any prospectus supplement, in the respective forms they are filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations. Any
references herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement, the Prospectus or any Preliminary Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date, or the date of any Preliminary Prospectus
or the Prospectus, as the case may be, that is incorporated therein by
reference. For purposes of this Agency Agreement, all references to the
Registration Statement, the Prospectus, any preliminary prospectus or any
amendment or supplement thereto shall be deemed to include any copy filed with
the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval
System (XXXXX), and such copy shall be identical (except to the extent permitted
by Regulation S-T) to any Prospectus delivered to the Agent for use in
connection with the offering of the Preferred Securities by the Company.
(b) Each part of the Registration Statement, when such
part became or becomes effective, each Preliminary Prospectus, on the date of
filing thereof with the Commission, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at the
Closing Date conformed or will conform in all material respects with the
requirements of the Act, the Trust Indenture Act of 1939 ("Trust Indenture Act")
and the Rules and Regulations; each part of the Registration Statement
(excluding any prospectus supplement with respect to an offering of securities
other than the offering of the Preferred Securities contemplated hereby), when
such part became or becomes effective, did not or will not contain an untrue
statement
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of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; each
Preliminary Prospectus, on the date of filing thereof with the Commission, and
the Prospectus and any amendment or supplement thereto, on the date of filing
thereof with the Commission and at the Closing Date, did not or will not include
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; the foregoing shall not apply to the
statements in or omissions from any such document in reliance upon, and in
conformity with, written information relating to any Underwriter furnished to
the Company by the Agent, or by any Underwriter through the Agent, specifically
for use in the preparation thereof. The Company has not distributed any offering
material in connection with the offering or sale of the Preferred Securities
other than the Registration Statement, any Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(c) The documents incorporated by reference in the
Registration Statement, the Preliminary Prospectus and any amendment or
supplement to such Registration Statement or such Prospectus, when they became
or become effective under the Act or were or are filed with the Commission under
the Exchange Act, as the case may be, conformed or will conform in all material
respects with the requirements of the Act, the Trust Indenture Act, the Rules
and Regulations, the Exchange Act and the rules and regulations of the
Commission thereunder (the "Exchange Act Rules and Regulations"), as applicable.
(d) The Issuer has been duly formed and is validly
existing in good standing as a statutory trust under Delaware law with power and
authority to own property and conduct its business as described in the
Preliminary Prospectus. All of the outstanding beneficial interests of the
Issuer have been duly authorized and validly issued and are fully paid and
nonassessable undivided beneficial interests in the assets of the Issuer; the
holders of such beneficial interests of the Issuer have no preemptive or other
rights to acquire Preferred Securities or Common Securities and there are no
restrictions on transfers of the securities.
(e) The Declaration has been duly authorized; and when
the Preferred Securities are delivered and paid for pursuant to this Agreement
on the Closing Date, the Declaration will have been duly executed and delivered
and will constitute a valid and legally binding instrument enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(f) The Guarantee Agreement has been duly authorized;
when the Preferred Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, the Guarantee Agreement will have been duly
executed and delivered and will constitute a valid and legally binding
instrument enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
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(g) The Preferred Securities have been duly authorized;
when the Preferred Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, such Preferred Securities will (i) have been
validly issued and fully paid, (ii) represent nonassessable undivided beneficial
interest in the assets of the Issuer, (iii) be entitled to the benefits set
forth in the Declaration and (iv) conform to the description thereof contained
in the Registration Statement, the Preliminary Prospectus and any amendment or
supplement to such Registration Statement or such Prospectus; the issuance of
the Preferred Securities is not subject to preemptive or other similar rights;
and the holders of the Preferred Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the General Corporation Law of the
State of Delaware.
(h) The Common Securities have been duly authorized; when
the Common Securities are delivered and paid for pursuant to this Agreement on
the Closing Date, such Common Securities will (i) have been validly issued and
fully paid, (ii) represent nonassessable undivided beneficial interest in the
assets of the Issuer, (iii) be entitled to the benefits set forth in the
Declaration and (iv) conform to the description thereof contained in the
Registration Statement, the Preliminary Prospectus and any amendment or
supplement to such Registration Statement or such Prospectus; the issuance of
the Common Securities is not subject to preemptive or other similar rights; and
the holders of the Common Securities will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
incorporated under the General Corporation Law of the State of Delaware; and at
the Closing Date, all of the issued and outstanding Common Securities of the
Issuer will be directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(i) The only directly or indirectly controlled
subsidiaries of the Company (each, a "Subsidiary" and collectively, the
"Subsidiaries") are those listed on Exhibit A hereto. The Company has been and,
at the 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, will be in good standing with the Commonwealth of Puerto Rico. The
Company is and will be as of the Closing Date registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve") as a bank
holding company under the Bank Holding Company Act of 1956 (the "BHCA") and its
election to be treated as a financial holding company under the BHCA is and will
remain in full force and effect. Each of the Subsidiaries is and, at the 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, 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 (a "Material Adverse Effect").
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(j) 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
Debentures to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, valid, binding and enforceable obligations of
the Company. The Company has, and, upon completion of the sale of the
Debentures, 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, the most recent Preliminary Prospectus in the
"As Adjusted" column).
(k) The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated
therein by reference and the 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 financial statements and related notes which have been
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.
(l) 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.
(m) Except as set forth in the Registration Statement and
the Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement the Preliminary Prospectus and the
Prospectus (if required) and prior to the Closing Date, (i) there has not been,
and will not have been, any Material Adverse Effect, (ii) neither the Company
nor any of its Subsidiaries have 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") and the payment and declaration of monthly dividends on each of
the Company's series of outstanding preferred stock in the ordinary course of
its business.
(n) 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, as owned by it, free and clear of all liens, security interests,
restrictions, pledges, encumbrances, charges, equities, claims, easements,
leases
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and tenancies (collectively, "Encumbrances") other than those described in the
Registration Statement, or in the documents incorporated by reference therein,
and Prospectus or those that will not have a Material Adverse Effect. The
Company and each of its Subsidiaries have valid, subsisting and enforceable
leases for the properties and assets described in the Registration Statement, or
in the documents incorporated by reference therein, and Prospectus as leased by
them, free and clear of all Encumbrances, other than those described in the
Registration Statement, or in the documents incorporated by reference therein,
and the Prospectus, or those that will not have a Material Adverse Effect.
(o) Neither the Issuer nor the Company is and, after
giving effect to the offering and sale of the Preferred Securities and the
Debentures and the application of the proceeds thereof as described in the
Prospectus, neither of them will be, required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(p) Except as set forth in the Registration Statement, or
incorporated therein by reference, 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, to the knowledge of the Company, any
directors, executive 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 have a Material Adverse Effect and would be required to be
disclosed in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus). Neither
the Company nor any Subsidiary which is a "significant subsidiary" as defined in
Rule 405 of Regulation C of the Rules and Regulations under the Act (each a
"Significant Subsidiary"), is in violation of, or in default with respect to,
any law, rule, or regulation, or any order, judgment, or decree, except as
described in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or when such violations or defaults, in the
aggregate, do not now have and can reasonably be expected in the future not to
have a Material Adverse Effect; nor is the Company or any Significant Subsidiary
presently required under any order, judgment or decree to take any action in
order to avoid any such violation or default.
(q) The Company and each of its Significant Subsidiaries
have and, at the 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 and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). The Company and each of its Significant
Subsidiaries have and, at the Closing Date, will have complied in all material
respects with all laws, regulations and orders applicable to it or its business,
assets and properties, except for such violations, individually or in the
aggregate which are not reasonably
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expected to have a Material Adverse Effect. Neither the Company nor any of its
Significant Subsidiaries is, nor, at the 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. There are no
governmental proceedings or actions pending or threatened for the purpose of
suspending, modifying or revoking any License held by the Company or its
Significant Subsidiaries.
(r) 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 Preferred Securities by the Issuer or in
connection with the issuance and sale of Debentures by the Company, except such
as have been obtained and such as may be required under the bylaws and rules of
the National Association of Securities Dealers, Inc. (the "NASD") in connection
with the purchase and distribution of the Preferred Securities.
(s) Both the Issuer and the Company have 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 each of the Issuer and the
Company and constitutes a valid and binding agreement of each of them and is
enforceable against any of them in accordance with its terms, except as rights
to indemnity and contribution which 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 and the 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
Issuer, the Company or any of the Significant 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 the Issuer's or the Company's 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,
or the Declaration or (ii) any contract or other agreement to which the Issuer,
the Company or any of the Significant 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,
or (iii) any judgment, ruling, decree, order, law, statute, rule or regulation
of any Governmental Body applicable to the Issuer, the Company or any of the
Significant Subsidiaries or their respective businesses or properties, the
violation of which would individually or in the aggregate have a Material
Adverse Effect.
(t) No statement, representation, or warranty made by
each of the Issuer and the Company in this Agreement or made in any certificate
or document required by this Agreement to
9
be delivered to the Agent was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
(u) Neither the Issuer, the Company nor, to the knowledge
of the Company, any of its directors, or executive officers, 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 Notes or
otherwise.
(v) Neither the Issuer, 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.
(w) The Company has 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 which would not
have a Material Adverse Effect.
(x) The Company meets the requirements for use of Rule
415 under the Rules and Regulations.
(y) The deposit accounts of R&G Premier Bank, a
Subsidiary of the Company ("R&G Premier") and R-G Crown Bank, a Subsidiary of
the Company ("R-G Crown"), are insured by 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. R&G Premier and R-G
Crown are members in good standing of the Federal Home Loan Bank of New York and
the Federal Home Loan Bank of Atlanta, respectively.
(z) None of the Issuer, the Company or its Significant
Subsidiaries, or any of their respective directors or executive 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, the most recent Preliminary Prospectus).
(aa) The Company is engaged in trade or business in Puerto
Rico. The Company derived more than 20% of its gross income from Puerto Rico
sources for the three year period ending with the close of the Company's taxable
year ended on December 31, 2002.
4. Agreements of the Company and the Issuer. Each of the Company
and the Issuer jointly and severally agree with the Agent and each of the
Underwriters as follows:
(a) The Company and the Issuer will not during such
period as the Prospectus is required by law to be delivered in connection with
sales of the CT Notes by any underwriter or dealer (the "Prospectus Delivery
Period"), file any amendment or supplement to the Registration Statement
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or the Prospectus, unless a copy thereof shall first have been submitted to the
Agent within a reasonable period of time prior to the filing thereof and the
Agent shall not have objected thereto in good faith.
(b) The Company and the Issuer will use their best
efforts to cause the Registration Statement to become or remain effective
through the completion of the Underwriters' distribution of the CT Notes, and
will notify the Agent promptly, and will confirm such advice in writing, (i) of
the preparation and filing (subject to Section 4(a)) of any post-effective
amendment and when any such 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 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 suspension of the qualification or registration of the Preferred Securities
for offering or sale in Puerto Rico, or of the initiation or threat of any
proceeding for any such purpose, (v) of the happening of any event during the
Prospectus Delivery Period that in the judgment of the Company or the Issuer
makes any statement 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 (vi) 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 or any jurisdiction shall threaten to issue, or shall issue, any
order suspending the effectiveness of the Registration Statement or suspending
the qualification or registration of the Preferred Securities for sale in any
jurisdiction, the Company and the Issuer will make every reasonable effort to
prevent the issuance of such order and, if such an order should be issued, to
obtain the withdrawal of such order at the earliest possible moment. The Company
and the Issuer will use their best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to Rule 430A and to
notify the Agent promptly of all such filings.
(c) If, at any time when a Prospectus relating to the
Preferred Securities is required to be delivered under the Act, any event occurs
as a result of which, in the judgment of the Company or the Issuer or in the
opinion of counsel to the Underwriters, 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 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 Prospectus or the Registration
Statement to comply with the Act or the Rules and Regulations, the Company will
promptly notify the Agent 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.
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(d) The Company will furnish to the Agent, without
charge, two 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 Agent, without charge, for
transmittal to each of the Underwriters, copies of the Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules but without exhibits.
(e) The Company and the Issuer will comply with all the
provisions of all undertakings contained in the Registration Statement.
(f) During the Prospectus Delivery Period, the Company
will promptly furnish to the Underwriters, without charge, as many copies of
each preliminary prospectus, the Prospectus and any amendment or supplement
thereto as the Underwriters may from time to time reasonably request. The
Company consents to the use of the Prospectus, as amended or supplemented from
time to time, by the Underwriters and by all dealers to whom the CT Notes may be
sold, both in connection with the offering or sale of the CT Notes and,
thereafter, during the Prospectus Delivery Period; if during the Prospectus
Delivery Period any event shall occur which in the judgment of the Company or
counsel to the Underwriters should be set forth in the Prospectus in order to
make any statement therein, in the light of the circumstances under which it was
made, not misleading, or if, in the reasonable opinion of counsel to the
Underwriters, it is necessary to supplement or amend the Prospectus to comply
with law, the Company will forthwith prepare and duly file with the Commission
an appropriate supplement or amendment thereto. Except as required by the
Exchange Act or the Exchange Act Rules and Regulations, the Company shall not
file any document under the Exchange Act before the termination of the
Prospectus Delivery Period if such document would be deemed to be incorporated
by reference into the Prospectus to which the Agent reasonably objects.
(g) During the period of five years commencing on the
Closing Date, the Company will furnish to the Agent, 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 furnish to the Agent, 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.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than ninety (90) days
after the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(i) The Issuer and the Company will apply the net
proceeds from the offering and sale of the Preferred Securities and the
Debentures, respectively, in the manner set forth in the Prospectus under "Use
of Proceeds."
12
(j) The Issuer and the Company will enter into a
Supplement to Agency Agreement in the form attached hereto as Exhibit B.
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 Agent, 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 and
filing by the Company of the Registration Statement and exhibits thereto, each
Preliminary Prospectus prior to or during the period specified in the first
sentence of Section 4(f) but not exceeding nine (9) months after the Effective
Date, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus, (ii) furnishing (including costs of shipping and
mailing) 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 CT Notes by
the Underwriters or by dealers to whom CT Notes may be sold, (iii) any filings
required to be made by the Underwriters with the NASD, (iv) counsel and
accountants to the Company, and (v) the reasonable fees and disbursements of the
trustee for the Notes, including its legal expenses; it being understood that
the Company and Conservation Trust will share the costs of printing the
Preliminary Offering Circular and the Offering Circular (including the
Prospectus) and all amendments thereto.
(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 Agent and the
Underwriters for all of their accountable out-of-pocket fees and expenses
(including the fees, disbursements and other charges of their counsel, not to
exceed $75,000) incurred by them in connection herewith.
6. Conditions to the Obligations of the Underwriters. The
obligations of each Underwriter under the Purchase Agreement and the
consummation of the transaction contemplated hereunder are subject to the
following conditions:
(a) All filings required under Rule 424 and 430A of the
Rules and Regulations to be made by the Company and the Issuer prior to the
Closing shall have been made by the Company or the Issuer, as the case may be.
(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 Preferred Securities under the securities or blue sky
laws Puerto Rico shall be in effect, and no proceeding for such purposes shall
be pending before or threatened or contemplated by the Commission or the
authorities of Puerto Rico, (iii) any request for additional information on the
part of the staff of the Commission or any such authorities shall have been
13
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 and approved by the Agent, and the Agent shall
have received certificates, dated the Closing Date and signed by the Chief
Executive Officer or President 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 Effect, and (ii) the Company shall not have sustained
any 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 or 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 the Issuer or,
to the knowledge of the Company, any of their respective executive officers or
directors in their capacities 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 have a Material Adverse Effect.
(e) Each of the representations and warranties of each of
the Issuer and the Company contained herein shall be true and correct at the
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, shall have been fully performed, fulfilled or complied with.
(f) The Agent shall have received opinions from Xxxxxx
Xxxxx LLP and Xxxxxxxxxx, Xxxxxx & Xxxxxx, counsel to the Company, each dated as
of the Closing Date, in form and substance satisfactory to the Agent.
(g) The Agent shall have received an opinion, dated the
Closing Date, from Xxxxxx Xxxxx, special United States tax counsel to the
Company, in form and substance satisfactory to counsel to the Agent, to the
effect that it confirms its opinion set forth in the Prospectus under the
caption "Certain Federal Income Tax Consequences."
(h) The Agent shall have received an opinion, dated the
Closing Date, from Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP, counsel to the
Underwriters, which opinion shall be satisfactory in all respects to the Agent.
14
(i) The Agent shall have received an opinion, dated the
Closing Date of Xxxxxxxx, Xxxxxx & Finger, P.A., counsel to the Wilmington Trust
Company, in form and substance reasonably satisfactory to the Agent.
(j) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Agent a letter, dated the
date of its delivery (the "Original Letter"), addressed to the Agent and in form
and substance satisfactory to the Agent, to the effect that:
(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 Prospectus 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, 2002 as set forth in the minute books through a specified
date not more than five business days prior to the date of delivery of
the Original Letter; (b) reading the unaudited interim financial data
for the period from the date of the latest balance sheet incorporated
by reference in the Prospectus 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 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) at the date of the latest available interim financial
data and at a specified date not more than five business days prior to
the date of delivery of the Original Letter there was any change in the
capital stock, deposits or any increase in long-term debt or any
decreases in total assets or 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, 2002
balance sheet incorporated by reference in the Prospectus and (2) for
the period from December 31, 2002, 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, other 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
15
(iv) they have compared specific amounts
expressed in dollars (or percentages derived from such dollar amounts)
and other financial information contained or incorporated by reference
in the Prospectus or Prospectus Supplement, which has been obtained
from accounting records that 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 computation, with the results
obtained from inquiries or 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.
At the Closing Date, the Accountants shall have
furnished to the Agent 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 business days prior to the Closing
Date, which would require any change in the Original Letter if it were required
to be dated and delivered at the Closing Date.
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 Agent deems such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the Agent, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Preferred Securities as contemplated by the Registration Statement and the
Prospectus, as amended as of the date hereof.
(k) At the Closing Date, there shall be furnished to the
Agent an officer's certificate, dated the date of its delivery, signed by each
of the Chief Executive Officer or President and the Chief Financial Officer of
the Company and the Administrative Trustees of the Trust, in form and substance
satisfactory to the Agent, 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 each of the Issuer and 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
16
required herein to be performed by any of them 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, 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.
(l) The Company and the Issuer shall have furnished to
the Agent such certificates, letters and other documents, in addition to those
specifically mentioned herein, as the Agent may have reasonably requested as to
the accuracy and completeness at the Closing Date, of any statement in the
Registration Statement or the Prospectus, as to the accuracy at the Closing Date
of the representations 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.
(m) The Agent shall have received copies, duly certified
by the Secretary or an Assistant Secretary of the Company of the resolutions or
other corporate actions adopted or taken by the Company in connection with the
transactions contemplated herein.
(n) The Agent shall have received a copy of the
certificate of incorporation of the Company, 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 the Company under the laws
of the Commonwealth and copies of the by-laws of the Company certified by the
Secretary or an Assistant Secretary of the Company. The Agent shall further have
received a copy of the Declaration, the Indenture and the Guarantee Agreement
relating to the Issuer.
(o) The Underwriters shall have received such other
documentation, certificates and opinions as may be reasonably required by 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 the Agent. The Company will furnish you with such
conformed copies of such opinions, certificates, letters and other documents as
the Agent shall reasonably request.
17
7. Indemnification and Contribution.
(a) Each of the Issuer and the Company, joint and
severally, agree to indemnify and hold harmless the Agent, each Underwriter, the
directors, officers and employees of the Agent or each Underwriter and each
person, if any, who controls the Agent or 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 or the
Issuer in Section 3 of this Agreement, (ii) any untrue statement or alleged
untrue statement of any material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement to
the Registration Statement or the Prospectus, or under the headings "Summary -
R&G Capital Trust III," "Summary - R&G Financial Corporation," "Summary -
Preferred Securities" and "R&G Financial" in the Preliminary Offering Circular
and Offering Circular, or (iii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus, or
under the headings "Summary - R&G Capital Trust III," "Summary - R&G Financial
Corporation," "Summary - Preferred Securities" and "R&G Financial" in the
Preliminary Offering Circular and Offering Circular a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and will reimburse, as incurred, the Agent and each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such Agent
or 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 and the Issuer
will not be liable in any such case to the extent that any such loss, claim,
damage or liability is 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 the Agent or any Underwriter
furnished in writing to the Company by the Agent on behalf of any Underwriter
expressly for inclusion therein, or for any information contained in the
Preliminary Offering Circular or Offering Circular for the CT Notes other than
under the headings identified above and other than in the preliminary prospectus
supplement, prospectus supplement or Prospectus for the Preferred Securities
attached to the Preliminary Offering Circular or the Offering Circular,
provided, further, that such indemnity with respect to any Preliminary
Prospectus or Preliminary Offering Circular 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 Preferred Securities or
CT Notes which are the subject thereof to the extent that any such loss, claim,
damage or liability (i) results from the fact that such Underwriter failed to
send or give a copy of the Prospectus and Offering Circular (as amended or
supplemented) to such person at or prior to the confirmation of the sale of such
Preferred Securities or CT Notes to such person in any case where such delivery
is required by the Act and (ii) arises out of or is based upon an untrue
statement or omission of a material fact contained in such Preliminary
Prospectus or Preliminary Offering Circular that was corrected in the Prospectus
and Offering Circular (or any amendment or
18
supplement thereto), unless such failure to deliver the Prospectus and Offering
Circular (as amended or supplemented) was the result of noncompliance by the
Company with Section 4(f). 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 the Agent and 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 severally and not jointly
indemnify and hold harmless each of the Company and the Issuer, the directors,
officers and employees of 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 from and against any losses, claims, damages or liabilities (or
actions in respect thereof) to which 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 of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, any amendment or supplement to the Registration Statement or the
Prospectus or under the headings "Plan of Distribution" in the Preliminary
Offering Circular and Offering Circular 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 or the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus or under
the headings "Plan of Distribution" in the Preliminary Offering Circular and
Offering Circular, 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
Agent 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 any of them 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 relating to the Underwriters set forth under the
heading "Plan of Distribution" in the Prospectus and in the Offering Circular
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Agent on behalf of the Underwriters expressly for
inclusion in the Registration Statement, any Preliminary Prospectus, the
Prospectus, the Preliminary Offering Circular or the Offering Circular. This
indemnity agreement will be in addition to any liability that each Underwriter
might otherwise have.
(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
19
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 proviso to the next 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 Agent 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), (b) or (c) 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 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 Preferred Securities 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
20
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 and the
Issuer, 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
Preferred Securities (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters in
connection with the sale of the CT Notes. 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 Agent 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 purposes) 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, 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 CT Notes 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 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).
21
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of each of the Company
and the Issuer 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 Preferred Securities or the CT Notes
and payment therefor or (iii) any termination of this Agreement.
8. Termination. This Agreement may be terminated by the Agent at
any time prior to the Closing Date, by notice to the Company, without liability
on the part of the Agent or any Underwriter to the Company if, prior to delivery
and payment for the Preferred Securities, in the sole judgment of the Agent, (i)
trading in the common stock or the preferred stock of the Company or securities
generally shall have been suspended by the Commission or by The Nasdaq Stock
Market, Inc. (the "Nasdaq") or the New York Stock Exchange, Inc. (the "NYSE"),
(ii) minimum or maximum prices shall have been established for the common stock
or the preferred stock of the Company or securities generally on either the
Nasdaq National Market System or 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 Authority,
(iii) a general banking moratorium shall have been declared by the United
States, New York State, 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 Agent, impracticable or inadvisable to market the CT Notes
on the terms and in the manner contemplated by the Offering Circular. 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. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of each of the Company,
its officers, the Issuer, 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 Preferred Securities. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
10. Notices. Notice 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, at the office of the Company, 000
Xxxxx X. Xxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000, Attention: Xxxxxx X.
Xxxxxxxx, Executive Vice President and Chief Financial Officer, or (b) if to the
Underwriters, to the office of the Agent, Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxx
Xxx, Xxxxxx Xxxx 00000, Attention:
22
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.
11. Successors. This Agreement shall inure to the benefit of, and
shall be binding upon the Agent, the several Underwriters, the Company, the
Issuer 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 (i) the indemnities of each of the Company and the Issuer
contained in Section 7 of this Agreement shall also be for the benefit of any
person or persons who control the Agent or any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and (ii) 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 CT Notes 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.
12. 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.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
R&G CAPITAL TRUST III
By:____________________________________
Name:
Title:
R&G FINANCIAL CORPORATION
By: ____________________________________
Name:
Title:
Confirmed as of the date first above mentioned:
POPULAR SECURITIES, INC.
By:_________________________________
Name:
Title:
Acting on its behalf as Agent in the placement of the Preferred Securities with
Conservation Trust and as lead underwriter of the several Underwriters named in
Schedule 1 hereof in connection with the sale of the CT Notes.
24
SCHEDULE 1
UNDERWRITERS
CT NOTES TO BE PURCHASED
------------------------
Popular Securities, Inc. $
$
$
$
Total: $
A-1
EXHIBIT A
LIST OF SUBSIDIARIES
1. R&G Mortgage Corp.
2. R&G Premier Bank of Puerto Rico
3. The Mortgage Store of Puerto Rico
4. Continental Capital Corp.
5. Home & Property Insurance Corporation
6. R-G Investments Corporation
7. R&G Acquisition Holdings Corporation
8. R-G Crown Bank
9. R&G Capital Trust I
10. R&G Capital Trust II
11. R&G Capital Trust III
12. R&G International Corp.
B-1
EXHIBIT B
SUPPLEMENT TO AGENCY AGREEMENT
SUPPLEMENT TO AGENCY AGREEMENT dated August ___, 2003, among R&G
Financial Corporation ("R&G Financial"), R&G Capital Trust III ("Trust III"),
the Puerto Rico Conservation Trust Fund ("Conservation Trust"), and Popular
Securities, Inc. (the "Agent") , as agent in connection with the sale of Trust
III's ___% Commutative Monthly Income Trust Preferred Securities (the "Preferred
Securities") to Conservation Trust, and as representative of the underwriters in
connection with the purchase by such underwriters of Conservation Trust's
Secured Notes due 2033 (the "CT Notes").
Reference is made to the Agency Agreement dated as of the date hereof
(the "Agency Agreement") between R&G Financial, Trust III and the Agent, which
is hereby incorporated by reference as if fully set forth herein, and to the
Purchase Agreement dated as of the date hereof (the "Purchase Agreement")
between Conservation Trust and the Agent. In consideration of the agreements,
representations and agreements contained herein, the parties agree as follows:
1. Subject to compliance by R&G Financial and Trust III with its
agreements, and subject to the fulfillment of the conditions, set forth in the
Agency Agreement, Conservation Trust hereby agrees to purchase the Preferred
Securities on the Closing Date set forth in the Agency Agreement at a purchase
price equal to $_____________.
2. R&G Financial and Trust III hereby agree with Conservation Trust and
with the Agent that Conservation Trust shall have the benefit of the
representations and warranties made by R&G Financial and Trust III in the Agency
Agreement.
In witness whereof, the parties have caused this supplement to be
executed by its duly authorized representatives as of the date first written
above.
R&G FINANCIAL CORPORATION
By: _________________________________________
Name:
Title:
B-2
R&G CAPITAL TRUST III
By: _________________________________________
Name:
Title:
PUERTO RICO CONSERVATION TRUST FUND
By: _________________________________________
Name:
Title:
POPULAR SECURITIES, INC.
By: _________________________________________
Name:
Title:
