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EXHIBIT 1
4,400,000 Shares
FIRST BANCORP.
__% Noncumulative Perpetual Monthly Income Preferred Stock, Series A
UNDERWRITING AGREEMENT
_____________, 1999
PAINEWEBBER INCORPORATED OF PUERTO RICO
As lead underwriter of the several Underwriters
named in Schedule 1
American Xxxxxxxxxxxxx Xxxxx, XX
Xxxx Xxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
FIRST BANCORP., a Puerto Rico corporation (the "Company"), proposes to
sell an aggregate of 4,400,000 shares (the "Firm Shares") of the Company's __%
Noncumulative Perpetual Monthly Income Preferred Stock, Series A (the "Preferred
Stock"), which are to be issued and sold by the Company to you and the other
underwriters named in Schedule 1 hereto (collectively, the "Underwriters"), for
whom you are acting as representative (the "Representative"). The Company also
has agreed to grant to you and the other Underwriters an option (the "Option")
to purchase up to an additional 660,000 shares of Preferred Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b) hereto. The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company hereby confirms as follows its agreements with the
Representative and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter and
each Underwriter, severally and not jointly, agrees to purchase from the Company
at a purchase price of $24.2125 per share, the number of Firm Shares set forth
opposite the name of such Underwriter in Column (1) of Schedule 1 hereto, plus
such
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additional number of Firm Shares which such Underwriter may become obligated to
purchase pursuant to Section 9 hereof.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase, severally
and not jointly, the Option Shares at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover overallotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time and from time to time on or before
the 30th day after the date of this Agreement (or on the next business day if
the 30th day is not a business day), upon notice (the "Option Shares Notice") in
writing or by telephone (confirmed in writing) by the Representative to the
Company no later than 5:00 p.m., Atlantic Standard time, at least two and no
more than five business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date") setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice and each
Underwriter will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing hereunder, as
adjusted by the Representative in such manner as it deems advisable to avoid
fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to
the Representative for the accounts of the Underwriters at the office of
Axtmayer Adsuar Xxxxx & Xxxxx, P.S.C., counsel to the Underwriters, 000 Xxxxx
Xxxxxx Xxx.,Xxxxx 0000, Xxxx Xxx, X.X. 00000, against payment of the purchase
price by wire transfer of immediately available funds to the bank account
designated by the Company. Such payment shall be made at 10:00 a.m., New York
City time, on the third full business day following the date of this Agreement,
or at such other time on such other date, not later than seven business days
after the date of this Agreement, as may be agreed upon by the Company and the
Representative (such date is hereinafter referred to as the "Closing Date").
Time shall be of the essence and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder.
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representative shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
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The cost of original issue tax stamps, if any, in connection with the
issuance, sale and delivery of the Firm Shares and Option Shares by the Company
to the respective Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter and any subsequent holder of the Shares harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying Federal, state or Commonwealth of Puerto Rico stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance, sale or delivery to such Underwriter of
the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement on Form S-3 (Registration No.
333-_____) relating to the Shares, including a preliminary prospectus relating
to the Shares and such amendments to such registration statement as may have
been required to the date of this Agreement, has been prepared by the Company
under the provisions of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Commission has not
issued any order preventing or suspending the use of the Prospectus (as defined
below) or any Preliminary Prospectus (as defined below) or instituted or, to the
knowledge of the Company, threatened any proceeding for that purpose. The term
"Preliminary Prospectus" as used herein means a preliminary prospectus relating
to the Shares included at any time as part of the foregoing registration
statement or any amendment thereto before it became effective under the Act and
any prospectus filed with the Commission by the Company pursuant to Rule 424(a)
of the Rules and Regulations. Copies of such registration statement and
amendments and of each related Preliminary Prospectus have been delivered to the
Representative. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus relating to the Shares
containing information permitted to be omitted at the time of effectiveness by
Rule 430A will be filed by the Company with the Commission in accordance with
Rule 424(b) of the Rules and Regulations promptly after execution and delivery
of this Agreement. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including all financial statements and schedules and all exhibits,
documents incorporated therein by reference and all information contained in any
final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations or in a term sheet described in Rule 434 of the Rules and
Regulations in accordance with Section 4 hereof and deemed to be included
therein as of the Effective Date by Rule 430A of the Rules and Regulations and
including any registration statement filed pursuant to Rule 462(b) of the Rules
and Regulations (a "Rule 462 Registration Statement") increasing the size of the
offering. The term "Prospectus" means the prospectus relating to the Shares as
first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
relating to the Shares included in the Registration Statement at the Effective
Date.
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References herein to any document or other information incorporated by reference
in the Registration Statement shall include documents or other information
incorporated by reference in the Prospectus (or if the Prospectus is not in
existence, in the most recent Preliminary Prospectus). References herein to any
Preliminary Prospectus or the Prospectus shall be deemed to include all
documents and information incorporated by reference therein and shall be deemed
to refer to and include any documents and information filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, and so
incorporated by reference, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(b) On the date that any Preliminary Prospectus was filed with
the Commission, the date the Prospectus is first filed with the Commission
pursuant to Rule 424(b) (if required), at all times subsequent to and including
the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement, each Preliminary Prospectus and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included in the Prospectus, did or will comply with all applicable provisions of
the Act and the Rules and Regulations and did or will contain all statements
required to be stated therein in accordance with the Act and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement
or any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. At the Effective Date,
the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not or will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Company by the Representative specifically for inclusion in the
Registration Statement, each Preliminary Prospectus or Prospectus or any
amendment or supplement thereto. There are no contracts or other documents
required to be filed as exhibits to the Registration Statement by the Act or the
Rules and Regulations that have not been so filed. The documents which are
incorporated by reference in any Preliminary Prospectus or the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied in all
material respects with the requirements of the Act and the Rules and Regulations
or the Exchange Act and the rules and regulations thereunder, as applicable, and
did not, when such documents were so filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and any documents so filed and
incorporated by reference subsequent to the effective date of the Registration
Statement shall, when they are filed
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with the Commission, conform in all material respects with the requirements of
the Act and the Rules and Regulations and the Exchange Act and the rules and
regulations thereunder, as applicable.
(c) The only directly or indirectly controlled subsidiaries of
the Company (each, a "Subsidiary" and collectively, the "Subsidiaries") are
those listed on Exhibit A hereto. Except as set forth in the Prospectus (or if
the Prospectus is not in existence, in the most recent Preliminary Prospectus)
or as acquired in connection with the exercise of its rights as a creditor, or
pursuant to a bona fide collateral pledge arrangement, neither the Company nor
any Subsidiary owns, nor at the Closing Date and the Option Closing Date, will
own an interest in any corporation, partnership, trust, joint venture or other
business entity. The Company has been and, at the Closing Date and Option
Closing Date, will be duly organized and validly existing as a corporation under
the laws of the Commonwealth of Puerto Rico and is and, at the Closing Date and
Option Closing Date, will be in good standing with the Commonwealth of Puerto
Rico. The Company is registered as a bank holding company under the Bank Holding
Company Act of 1956 (the "BHCA") and is and, at the Closing Date and Option
Closing Date will be in good standing with the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). Each of the Subsidiaries is and, at the
Closing Date and Option Closing Date, will be a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation. Each of the Company and its Subsidiaries is and,
at the Closing Date and the Option Closing Date, will be duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business or use of its property and assets makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, prospects or business affairs of the Company and its Subsidiaries
taken as a whole.
(d) The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights. The
Shares to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, validly issued, fully paid and nonassessable
and will not be subject to any preemptive or similar rights. The Company has,
and, upon completion of the sale of the Shares, will have, an authorized, issued
and outstanding capitalization as set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus). The description of the securities of the Company in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) is, and at the Closing Date
and, if later, the Option Closing Date, will be, complete and accurate in all
respects. No holders of securities of the Company are entitled to have such
securities registered under the Registration Statement, except where such rights
have been waived.
(e) The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated
therein by reference and the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) present fairly the
financial condition of the Company and its Subsidiaries as of the dates
indicated and the
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consolidated results of operations, and cash flows of the Company and its
Subsidiaries for the periods covered thereby, all in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the entire periods involved. PricewaterhouseCoopers LLP (the "Accountants"), who
have reported on those of such financial statements and related notes which are
audited, are independent accountants with respect to the Company and its
Subsidiaries within the meaning of the Act and the applicable and published
rules and regulations.
(f) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(g) Except as set forth in the Registration Statement and
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and, if later, the Option Closing Date, (i) there has not
been, and will not have been, any material adverse change in the business,
properties, financial condition, net worth or results of operations of the
Company and its Subsidiaries considered as one enterprise, (ii) neither the
Company nor any of its Subsidiaries has entered into, or will have entered into
any material transactions other than pursuant to this Agreement, and (iii) the
Company has not, and will not have, paid or declared any dividends or other
distributions of any kind on any class of its capital stock, except for the
payment or declaration of quarterly dividends on the Company's common stock (the
"Common Stock") in the ordinary course of its business.
(h) The Company and each of its Subsidiaries have good and
marketable title to all properties and assets described in the Registration
Statement, including the documents incorporated by reference therein, and
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), as owned by it, free and clear of all liens, security
interests, restrictions, pledges, encumbrances, charges, equities, claims,
easements, leases and tenancies (collectively, "Encumbrances") other than those
described in the Registration Statement, or in the documents incorporated by
reference therein, and Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) or those that will not materially affect
the value of such properties and assets or will not interfere with the use made
and proposed to be made of such properties and assets. 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 (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) as
leased by them, free and clear of all Encumbrances, other than those described
in the Registration Statement or in the documents incorporated by reference
therein, and Prospectus (or, if the Prospectus is not in existence, the most
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recent Preliminary Prospectus), or those that will not materially affect the
value of such properties and assets or will not interfere with the use made and
proposed to be made of such properties and assets.
(i) The Company is not required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(j) Except as set forth in the Registration Statement, or
incorporated therein by reference, and Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there are no actions,
suits, arbitrations, claims, governmental or other proceedings (formal or
informal), or investigations pending or threatened against or affecting the
Company or any of its Subsidiaries, or any directors, officers or shareholders
of the Company or any of its Subsidiaries in their respective capacities as
such, or any of the properties or assets owned or leased by the Company or any
of its Subsidiaries, before or by any Federal, state or Commonwealth of Puerto
Rico court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign (collectively, a "Governmental Body"),
wherein an unfavorable ruling, decision or finding would adversely affect the
business, prospects, financial condition, net worth or results of operations of
the Company and its Subsidiaries taken as a whole and would be required to be
disclosed in the Registration Statement and Prospectus (or if the Prospectus is
not in existence, in the most recent Preliminary Prospectus). Neither the
Company nor any Subsidiary is in violation of, or in default with respect to,
any law, rule, or regulation, or any order, judgment, or decree, except as
described in the Prospectus (or if the Prospectus is not in existence, in the
most recent Preliminary Prospectus) or such as in the aggregate do not now have
and can reasonably be expected in the future not to have a material adverse
effect upon the operations, business, properties, or assets of the Company and
its Subsidiaries taken as a whole; nor is the Company or any Subsidiary
presently required under any order, judgment or decree to take any action in
order to avoid any such violation or default.
(k) The Company and each of its Subsidiaries have and, at the
Closing Date and the Option Closing Date, will have all governmental licenses,
permits, consents, orders, approvals, franchises, certificates and other
authorizations (collectively, "Licenses") necessary to carry on their respective
businesses and own or lease their respective properties as contemplated in the
Registration Statement and Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The Company and each of its
Subsidiaries have and, at the Closing Date and the Option Closing Date, will
have complied in all material respects with all laws, regulations and orders
applicable to it or its business, assets and properties. Neither the Company nor
any of its Subsidiaries is, nor, at the Closing Date and the Option Closing
Date, will be in default (nor has any event occurred which, with notice or lapse
of time or both, would constitute a default) in the due performance and
observation of any term, covenant or condition of any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument (collectively, a "contract or other agreement") to which they are
a party or by which their respective properties are bound or affected,
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the violation of which would individually or in the aggregate have a material
adverse effect on the condition, financial or otherwise, or the earnings,
prospects or business affairs of the Company and its Subsidiaries taken as a
whole. There are no governmental proceedings or actions pending or threatened
for the purpose of suspending, modifying or revoking any License held by the
Company and its Subsidiaries.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in connection
with the issuance and sale of the Shares by the Company, except such as have
been obtained and such as may be required under state or Commonwealth of Puerto
Rico securities or blue sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares to be sold hereby.
(m) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and contribution
may be limited by federal, state or Commonwealth of Puerto Rico securities laws
or the public policy underlying such laws. Except as disclosed in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), the execution, delivery and
the performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any
Encumbrance upon any of the properties or assets of the Company or any of the
Subsidiaries pursuant to the terms or provisions of, or result in a breach or
violation of or conflict with any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, (i)
the Certificate of Incorporation or By-laws of the Company, in each case as
amended, or (ii) any contract or other agreement to which the Company or any of
the Subsidiaries is a party or by which it or any of the respective assets or
properties are bound or affected, the violation of which would individually or
in the aggregate have a material adverse effect on the condition, financial or
otherwise, or the earnings, prospects or business affairs of the Company and its
Subsidiaries, or (iii) any judgment, ruling, decree, order, law, statute, rule
or regulation of any Governmental Body applicable to the Company or any of the
Subsidiaries or their respective businesses or properties, the violation of
which would individually or in the aggregate have a material adverse effect on
the financial condition, or the earnings, prospects or business affairs of the
Company and its Subsidiaries.
(n) No statement, representation, or warranty made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representative was or will be, when made,
inaccurate, untrue or incorrect in any material respect. Each certificate signed
by an officer of the Company and delivered to the Representative or counsel
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for the Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(o) Neither the Company nor any of its directors, officers or
affiliates has taken, nor will he, she or it take, directly or indirectly, any
action designed, or which might reasonably be expected in the future, to cause
or result in, under the Act or otherwise, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or otherwise.
(p) The Shares have been approved for listing on the New York
Stock Exchange ("NYSE"), subject only to notice of issuance.
(q) Neither the Company nor any of its Subsidiaries is
involved in any collective labor dispute with its employees nor is any such
dispute threatened or imminent.
(r) Neither the Company nor any of its Subsidiaries nor, to
the Company's best knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds of the Company or any Subsidiary in violation of
any law, rule or regulation which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus (or, if the Prospectus is
not in existence, in the most recent Preliminary Prospectus).
(s) The business, operations and facilities of the Company and
its Subsidiaries have been and are being conducted in compliance with all
applicable laws, ordinances, rules, regulations, licenses, permits, approvals,
plans, authorizations or requirements relating to occupational safety and
health, or pollution, or protection of health or the environment (including,
without limitation, those relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic
substances, materials or wastes into ambient air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, treatment
storage, disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, gaseous or liquid in nature) of any governmental department, commission,
board, bureau, agency or instrumentality of the United States, any state, or the
Commonwealth of Puerto Rico or political subdivision thereof, and all applicable
judicial or administrative agency or regulatory decrees, awards, judgments and
orders relating thereto; and neither the Company nor any of its Subsidiaries has
received any notice from any governmental instrumentality or any third party
alleging any violation thereof or liability thereunder (including, without
limitation, liability for costs of investigating or remediating sites containing
hazardous substances and/or damages to natural resources), except where failure
to so comply would not have a material adverse effect on the financial
condition, or the earnings or business affairs of the Company and its
Subsidiaries taken as a whole. The intended use and occupancy of each of the
facilities owned or operated by the Company and its Subsidiaries complies in all
material respects with all applicable codes and zoning laws and regulations, and
there is no
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pending or threatened condemnation, zoning change, environmental or other
proceeding or action that will in any material respect adversely affect the size
of, use of, improvements on, construction on, or access to such facilities.
(t) The Company filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions thereof
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any failure to file that would not have a material adverse
effect on the financial condition of the Company.
(u) The Company meets the requirements for use of Form S-3
under the Rules and Regulations.
(v) The deposit accounts of FirstBank Puerto Rico, a
Subsidiary of the Company ("FirstBank") are insured by the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC") to
the legal maximum, and no proceeding for the termination or revocation of such
insurance is pending or threatened. FirstBank is a member in good standing of
the Federal Home Loan Bank of New York.
(w) None of the Company, FirstBank, their affiliates, or any
of their respective directors or officers is subject to any order or directive
of, or party to any agreement with, any regulatory agency having jurisdiction
with respect to its business or operations except as disclosed in the Prospectus
(or if the Prospectus is not in existence, in the most recent Preliminary
Prospectus).
4. Agreements of the Company. The Company covenants and agrees
with each of the several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date
or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representative within a reasonable period of time prior to the filing thereof
and the Representative shall not have objected thereto in good faith.
(b) If the Registration Statement is not yet effective, the
Company will use its best efforts to cause the Registration Statement to become
effective not later than the time indicated in Section 6(a) hereof. The Company
will notify the Representative promptly, and will confirm such advice in
writing, (i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
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thereof, (iv) of the happening of any event during the period mentioned in the
first sentence of Section 4(g) that in the judgment of the Company makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading, and (v) of receipt by
the Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any Preliminary Prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
prepare the Prospectus in a form approved by the Representative and will file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Act. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A, the Company
will use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to said Rule 430A and to notify
the Representative promptly of all such filings.
(c) If the Company elects to rely upon Rule 462(b) of the
Rules and Regulations, the Company shall file the Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing, either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) of the Rules
and Regulations.
(d) If, at any time when a Prospectus relating to the Shares
is required to be delivered under the Act, any event occurs as a result of
which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, the 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
Representative thereof and, subject to Section 4(b) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will furnish to the Representative, without
charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representative,
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without charge, for transmittal to each of the other Underwriters, copies of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(f) The Company will comply with all the provisions of all
undertakings contained in the Registration Statement.
(g) On the Effective Date, and thereafter from time to time
for such period as the Prospectus is required by the Act to be delivered, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representative
may reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such period
of time any event shall occur which in the judgment of the Company or counsel to
the Underwriters should be set forth in the Prospectus in order to make any
statement therein, in the light of the circumstances under which it was made,
not misleading, or in the Registration Statement in order to make any statement
therein not misleading, or if it is necessary to supplement or amend the
Prospectus or the Registration Statement to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and deliver to each of the Underwriters, without charge, such
number of copies thereof as the Representative may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representative and its counsel
in connection with the registration or qualification of the Shares for offer and
sale under the securities or blue sky laws of such jurisdictions as the
Representative may reasonably request; provided, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(i) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representative and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representative and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(j) The Company will make generally available to holders of
its securities, as soon as may be practicable, but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, a consolidated earnings statement (which need
not be audited but shall be in reasonable detail) for a period of 12 months
commencing
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after the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).
(k) The Company will apply the net proceeds from the offering
and sale of the Shares in the manner set forth in the Prospectus under "Use of
Proceeds."
(l) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares of
Preferred Stock to facilitate the sale or resale of any of the Shares.
5. Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Representative, all costs and expenses incidental to
the performance of the obligations of the Company under this Agreement,
including, but not limited to, costs and expenses of or relating to (i) the
preparation, printing and filing by the Company of the Registration Statement
and exhibits thereto, each Preliminary Prospectus prior to or during the period
specified in the first sentence of Section 4(g) but not exceeding nine (9)
months after the Effective Date, the Prospectus and any amendment or supplement
to the Registration Statement or the Prospectus, (ii) the preparation and
delivery of certificates representing the Shares, (iii) 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 Shares by the Underwriters or by dealers to whom Shares may be sold, (iv)
the listing of the Shares on the NYSE, (v) any filings required to be made by
the Underwriters with the NASD, (vi) the registration or qualification of the
Shares for offer and sale under the securities or blue sky laws of such
jurisdictions designated pursuant to Section 4(h) and the preparation and
printing of preliminary, supplemental and final blue sky memoranda, (vii)
counsel and accountants to the Company, and (viii) the transfer agent for the
Shares.
(b) If the transactions contemplated by this Agreement are not
consummated or if this Agreement is terminated by the Company pursuant to any of
the provisions hereof, the Company will reimburse the Representative for all of
their accountable out-of-pocket fees and expenses (including the fees,
disbursements and other charges of their counsel) incurred by them in connection
herewith.
6. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representative not later than 3:00 p.m., New
York City time, on the date of this
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Agreement or at such later date and time as shall be consented to in writing by
the Representative and all filings required by Rule 424 of the Rules and
Regulations and Rule 430A shall have been made. If the Company has elected to
rely upon Rule 462(b) of the Rules and Regulations, the Company has filed the
Rule 462(b) Registration Statement by 10:00 p.m., Washington D.C. time, on the
date of this Agreement.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or blue sky laws of any
jurisdiction shall be in effect, and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities, and (iv) after the date hereof no amendment or supplement
to the Registration Statement or the Prospectus shall have been filed unless a
copy thereof was first submitted to the Representative and the Representative
did not object thereto in good faith, and the Representative shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer of the Company and the Chief Financial Officer of
the Company (who may, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of the foregoing clauses (i), (ii) and
(iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, properties,
management, financial condition or results of operations of the Company whether
or not arising from transactions in the ordinary course of business, and (ii)
the Company shall not have sustained any material loss or interference with its
business, assets or properties from fire, explosion, flood or other casualty, or
from any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers, directors or shareholders in their capacities as such, or any of its
assets or properties, before or by any Governmental Body in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, financial condition, net worth or
results of operations of the Company.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct at the Closing Date and, with respect
to the Option Shares, at the Option Closing Date, as if made on such date, and
all covenants and agreements herein contained to be performed on the part of the
Company and all conditions herein contained to be fulfilled or complied
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with by the Company at or prior to the Closing Date and, with respect to the
Option Shares, at or prior to the Option Closing Date, shall have been fully
performed, fulfilled or complied with.
(f) The Representative shall have received an opinion,
dated the Closing Date and the Option Closing Date, from Fiddler Xxxxxxxx &
Xxxxxxxxx, LLP, Puerto Rico counsel for the Company to the following effect:
(i) The Company has been duly organized and validly
existing as a corporation under the laws of the Commonwealth
of Puerto Rico and is in good standing with the Commonwealth
of Puerto Rico. Each of First Federal Finance Corporation
("First Federal"), First Leasing & Rental Corporation ("First
Leasing") and FirstBank, each a Subsidiary, is a corporation
duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation. Each
of the Company, First Federal, First Leasing and FirstBank is
duly qualified and in good standing as a foreign corporation
in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or
conduct of its business or use of its property and assets
makes such qualification necessary, except where the failure
to so qualify would not have a material adverse effect on the
financial condition, or the earnings or business affairs of
the Company and its Subsidiaries taken as a whole;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus; the Company has duly authorized
the issuance and sale of the Shares to be sold by it
hereunder; such Shares, when issued by the Company and paid
for in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and will conform in all
material respects to the description thereof contained in the
Prospectus and will not be subject to any preemptive,
subscription or other similar rights; the Shares have been
duly authorized for listing on the NYSE, subject only to
official notice of issuance; and no holders of securities of
the Company are entitled to have such securities registered
under the Registration Statement, except for holders who have
waived any such registration rights;
(iii) The Registration Statement, including any Rule
462(b) Registration Statement, is effective under the Act; any
required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by
Rule 424(b); and to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement or any amendment thereto and no order directed at
any document incorporated by reference in the Registration
Statement or of the Rule 462(b) Registration Statement or any
amendment thereto has been issued, and, no proceedings for
that purpose have been instituted or are pending or are
threatened or contemplated under the Act;
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(iv) The Registration Statement and the Prospectus as
of its date, appeared on their face to be appropriately
responsive, in all material respects (other than the documents
incorporated therein by reference and not including the
financial statements, schedules and other financial data
contained therein, as to which such counsel need not express
any opinion), with the requirements of the Act and the related
rules and regulations thereunder;
(v) The descriptions contained and summarized in the
Registration Statement, or incorporated therein by reference,
and the Prospectus are accurate and fairly represent in all
material respects the information required to be shown in the
Registration Statement and Prospectus by the Act and the Rules
and Regulations; and the statements set forth under the
headings "Risk Factors - Banking Regulations May Restrict
First BanCorp's Ability to Pay Dividends," "Recent
Developments," "Description of Capital Stock," and "Taxation"
in the Prospectus, insofar as such statements constitute a
summary of the legal matters, documents or proceedings
referred to therein, provide an accurate summary of such legal
matters, documents and proceedings;
(vi) To the knowledge of such counsel, there are no
contracts or documents which are required by the Act to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which
are not filed or incorporated therein by reference as required
by the Act and the Rules and Regulations;
(vii) To the knowledge of such counsel after
reasonable investigation, there is not pending or threatened
against the Company or any of the Subsidiaries any legal
action or proceeding, suit, arbitration, claim, or
governmental or other proceeding (informal or formal) or
investigation before or by any Governmental Body, of a
character required to be disclosed in the Registration
Statement or the Prospectus which is not so disclosed therein
or in the materials incorporated by reference therein, and to
the knowledge of such counsel, no such proceedings have been
threatened against the Company or any of its Subsidiaries or
any of their respective assets or properties. To the knowledge
of such counsel after reasonable investigation, neither the
Company nor any Subsidiary is in violation of, or in default
with respect to, any law, rule, or regulation, or any order,
judgment or decree, except as described in the Registration
Statement or Prospectus or in the materials incorporated by
reference therein, or such as in the aggregate do not now have
and can reasonably be expected in the future not to have a
material adverse effect upon the operations, business,
properties, or assets of the Company and its Subsidiaries
taken as a whole; nor is the Company or any Subsidiary
presently required under any order, judgment or decree to take
any action in order to avoid any such violation or default;
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(viii) The Company has full legal right, power, and
authority to enter into this Agreement and to consummate the
transactions provided for herein; this Agreement has been duly
authorized, executed and delivered by the Company; this
Agreement, assuming due authorization, execution and delivery
by each other party hereto, is a valid and binding agreement
of the Company, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights
generally or by general principles of equity relating to the
availability of remedies and except as rights to indemnity and
contribution may be limited by federal, state, or Commonwealth
of Puerto Rico securities laws or the public policy underlying
such laws;
(ix) None of the Company's execution or delivery of
this Agreement, its performance hereof, its consummation of
the transactions contemplated herein or its application of the
net proceeds of the offering in the manner set forth under the
caption "Use of Proceeds," conflicts or will conflict with or
results or will result in any breach or violation of any of
the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any Encumbrance upon,
any property or assets of the Company pursuant to (A) the
terms of the Certificate of Incorporation or By-laws of the
Company, in each case as amended; (B) the terms of any
contract or other agreement to which the Company is a party or
by which it is or may be bound or to which any of its
properties is or may be subject and of which such counsel has
knowledge; (C) any statute, rule or regulation of any
Governmental Body having jurisdiction over the Company or any
of its activities or properties; or (D) the terms of any
judgment, decree or order of any arbitrator or Governmental
Body having such jurisdiction and of which such counsel has
knowledge; and no consent, approval, authorization or order of
any Governmental Body has been or is required for the
Company's performance of this Agreement or the consummation of
the transactions contemplated hereby, except such as have been
obtained under the Act or may be required under state or
Commonwealth of Puerto Rico securities or blue sky laws in
connection with the purchase and distribution by the
Underwriters of the Shares;
(x) To such counsel's knowledge, the conduct of the
respective businesses of the Company and its Subsidiaries is
not in violation of any federal, state or local statute,
administrative regulation or other law, which violation is
likely to have a material adverse effect on the Company and
its Subsidiaries taken as a whole; and the Company and its
Subsidiaries have obtained all material licenses as are
necessary or required for the conduct of their businesses as
presently conducted;
(xi) The Company is not required to be registered as
an investment company under the Investment Company Act;
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(xii) To the knowledge of such counsel, the Company
is not in any breach or violation of any of the terms or
provisions of, or in default under (nor has an event occurred
which with notice or lapse of time or both would constitute a
default or acceleration under), (A) the terms of its
Certificate of Incorporation or By-laws, in each case as
amended; (B) the terms of any contract or other agreement
known to such counsel after reasonable investigation to which
the Company is a party or by which the Company is or may be
bound or to which any of its properties or assets is or may be
subject, which breach, violation or default could have a
material adverse effect on the Company and its Subsidiaries
taken as a whole; (C) any statute, rule or regulation of any
Governmental Body having jurisdiction over the Company or any
of its activities, assets or properties, which breach,
violation or default could have a material adverse effect on
the Company and its Subsidiaries taken as a whole; or (D) the
terms of any judgment, decree or order, known to such counsel
after reasonable investigation, of any arbitrator or
Governmental Body having such jurisdiction, which breach,
violation or default could have a material adverse effect on
the Company and its Subsidiaries taken as a whole;
(xiii) The deposit accounts of FirstBank are insured
by the SAIF of the FDIC to the legal maximum, and to such
counsel's knowledge no proceeding for the termination or
revocation of such insurance is pending or threatened.
FirstBank is a member in good standing of the Federal Home
Loan Bank of New York; and
(xiv) To the knowledge of such counsel, none of the
Company or any of its Subsidiaries, or any of their respective
directors or officers is subject to any order or directive of,
or party to any agreement with, any regulatory agency having
jurisdiction with respect to the business or operations of the
Company or any of its Subsidiaries, except as disclosed in the
Registration Statement or the Prospectus or in the materials
incorporated by reference therein.
In addition, such counsel shall state that in the course of
the preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with officers and representatives of the Company
and with the Accountants, at which conferences such counsel made inquiries of
such officers, representatives and Accountants and discussed the contents of the
Registration Statement and the Prospectus and, on the basis of the foregoing
nothing has come to such counsel's attention that causes such counsel to believe
that the Registration Statement as of the date it was declared effective and as
of the Closing Date contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of the date thereof
and as of the Closing Date, contained any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need not express any opinion with respect to the financial statements,
schedules and other financial
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data included in the Registration Statement or the Prospectus). Such counsel may
state that they make no representation that they have independently verified the
accuracy or completeness of the statements contained in the Registration
Statement and Prospectus.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to matters
involving the application of laws of any other jurisdiction than the
Commonwealth of Puerto Rico and the United States (to the extent satisfactory in
form and scope to counsel for the Underwriters) such counsel may rely upon the
opinion of local (including in-house) counsel to the Company. The foregoing
opinion shall also state that such counsel has no reason to believe that the
Underwriters are not justified in relying upon such opinion of local counsel,
and copies of such opinion shall be delivered to the Representative and its
counsel.
References to the Registration Statement and the Prospectus in
this paragraph (f) shall include any amendment or supplement thereto at the date
of such opinion.
(g) The Representative shall have received an opinion,
dated the Closing Date and the Option Closing Date, from Axtmayer Adsuar Xxxxx &
Xxxxx, P.S.C., counsel to the Underwriters, which opinion shall be satisfactory
in all respects to the Representative.
(h) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date of the
Prospectus, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery (the "Original Letter"), addressed to the
Representative and in form and substance satisfactory to the Representative, to
the 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 Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the
published rules and regulations thereunder with respect to
registration statements on Form S-3;
(iii) on the basis of procedures (but not an audit in
accordance with generally accepted auditing standards)
consisting of (a) reading the minutes of meetings of the
stockholders and the Board of Directors of the Company and its
Subsidiaries since December 31, 1998 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) performing the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in SAS
No.
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71, "Interim Financial Information," on the unaudited
consolidated interim financial statements of the Company and
its Subsidiaries included in the Registration Statement and
reading the unaudited interim financial data for the period
from the date of the latest balance sheet incorporated by
reference in the Registration Statement to the date of the
latest available interim financial data; and (c) making
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters regarding
the specific items for which representations are requested
below; nothing has come to their attention (as of a date not
more than five business days prior to the date of the delivery
of such letter) as a result of the foregoing procedures that
caused them to believe that: (1) the unaudited consolidated
interim financial statements, if any, incorporated by
reference in the Registration Statement, do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder; (2) any material modifications should
be made to the unaudited consolidated interim financial
statements, if any, incorporated by reference in the
Registration Statement, for them to be in conformity with
generally accepted accounting principles; (3) (i) at the date
of the latest available 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, federal funds purchased or
securities sold under agreements to repurchase or any
decreases in the consolidated stockholders' equity (only as to
the latest interim financial data) of the Company and its
Subsidiaries as compared with amounts shown in the December
31, 1998 balance sheet incorporated by reference in the
Registration Statement and (ii) for the period from January 1,
1999, 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
(iv) the information set forth under the captions
"Prospectus Summary Summary Financial and Other Data,"
"Prospectus Summary - Consolidated Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends," "Recent
Developments," "Capitalization," "Selected Financial Data,"
and "Description of Capital Stock," which is expressed in
dollars (or percentages derived from such dollar amounts) and
has been obtained from accounting records which are subject to
the internal controls of the Company's accounting system or
which has been derived directly from such accounting records
and analysis or computations, is in agreement with such
records or computations made therefrom.
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At the Closing Date and, as to the Option Shares, the Option
Closing Date, the Accountants shall have furnished to the Representative a
letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the Original Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in the
letter) not more than five business days prior to the Closing Date or the Option
Closing Date, as the case may be, which would require any change in the Original
Letter if it were required to be dated and delivered at the Closing Date or the
Option Closing Date, as the case may be.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representative deems such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representative, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement, as amended as of the date
hereof.
(i) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to the Representative an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representative, to the effect that to the best of
their knowledge:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A)
as of the date of such certificate, (x) the Registration
Statement does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading and (y) the Prospectus does not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading and
(B) since the Effective Date no event has occurred as a result
of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or
misleading in any material respect;
(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true
and correct in all respects; each of the covenants required
herein to be performed by the Company on or prior to the date
of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with by the
Company on or prior to the delivery of such certificate has
been duly, timely and fully complied with.
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(iii) No stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by
reference in the Registration Statement or any amendment
thereto or the Prospectus has been issued, and no proceedings
for that purpose have been instituted or threatened or, to the
best of the Company's knowledge, are contemplated by the
Commission.
(j) The Shares shall be qualified for sale in such states
and possessions as the Representative may reasonably request, each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have been
accepted for listing on the NYSE, subject only to official notice of issuance.
(l) The Company shall have furnished to the
Representative such certificates, letters and other documents, in addition to
those specifically mentioned herein, as the Representative may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and the Option 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.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you. The Company will furnish you with such conformed
copies of such opinions, certificates, letters and other documents as you shall
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages or liabilities, joint or several (and actions in
respect thereof), to which they, or any of them, may become subject under the
Act or other Federal, state or Commonwealth of Puerto Rico statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement made by the Company in
Section 3 of this Agreement, (ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or (B) any application or other
document, or any amendment or supplement thereto, executed by the Company or
based upon
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written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or blue sky
laws thereof or filed with the Commission or any securities association or
securities exchange (each, an "Application"), or (iii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any amendment or supplement to the Registration Statement or
the Prospectus or any Application a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse,
as incurred, each Underwriter and each such other person for any legal or other
expenses reasonably incurred by such Underwriter or such other person in
connection with investigating defending or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability based solely upon an untrue statement
or omission or alleged untrue statement or omission in any of such documents
made in reliance upon and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representative on behalf
of any Underwriter expressly for inclusion therein; Provided, further, that such
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or any such other person) from whom the person
asserting any such loss, claim, damage, liability or action purchased Shares
which are the subject thereof to the extent that any such loss, claim, damage or
liability (i) results from the fact that such Underwriter failed to send or give
a copy of the Prospectus (as amended or supplemented) to such person at or prior
to the confirmation of the sale of such Shares to such person in any case where
such delivery is required by the Act and (ii) arises out of or is based upon an
untrue statement or omission of a material fact contained in such Preliminary
Prospectus that was corrected in the Prospectus (or any amendment or supplement
thereto), unless such failure to deliver the Prospectus (as amended or
supplemented) was the result of noncompliance by the Company with Section 4(g).
This indemnity agreement will be in addition to any liability that the Company
might otherwise have. The Company will not, without the prior written consent of
each Underwriter, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not such Underwriter
or any person who controls such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to each claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Underwriter and each such other person from all
liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter will indemnify and hold harmless the
Company, and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signed the Registration Statement
against any losses, claims, damages or liabilities (or actions in respect
thereof) to which the Company and any such director, officer or controlling
person may become subject under the Act or other federal, state or Commonwealth
of Puerto Rico statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or
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the Prospectus or any amendment or supplement to the Registration Statement or
the Prospectus or any Application, or material fact required to be stated
therein or (ii) the omission or the alleged omission to state in the
Registration Statement, any Preliminary Prospectus or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or any
Application, a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representative expressly for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company and any such director,
officer or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or any action in respect thereof. The
Company acknowledges that, for all purposes under this Agreement, the statements
set forth under the heading "Underwriting" constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representative on behalf of the Underwriters expressly for inclusion in the
Registration Statement, any Preliminary Prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability that each Underwriter
might otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
or parties under this Section 7, notify such indemnifying party or parties of
the commencement thereof, but the omission so to notify the indemnifying party
or parties will not relieve it or them from any liability which it or they may
have to any indemnified party under the foregoing provisions of this Section 7
or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party and it notifies an
indemnifying party or parties of its commencement, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses other than reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the
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indemnifying party shall not be liable for the reasonable fees and expenses of
more than one separate counsel (in addition to the fees and expenses of local
counsel necessary in connection with any such proceedings) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the
Representative in the case of paragraph (a) of this Section 7, representing the
indemnified parties under paragraph (a) who are parties to such action or
actions), or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the written consent of the indemnifying party, unless such indemnified
party waived its rights under this Section 7 in which case the indemnified party
may effect such a settlement without such consent.
(d) If the indemnification provided for in the foregoing
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties, on the one hand, and the indemnified party, on the other, from the
offering of the Shares or (ii) if, but only if, the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties on
the one hand, and the indemnified party, on the other, in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Underwriters, on the other, shall be
deemed to be in the same proportion as the total proceeds from the offering of
the Shares (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. Relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representative on behalf of the Underwriters, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 7(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, 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
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7(d), no Underwriter shall be required to contribute any amount in excess of the
total underwriting discounts received by it with respect to the Shares purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar claim. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(d), each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act will have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, will have the same rights to contribution as the
Company, subject in each case to the provisions of this paragraph (d). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made under this Section 7(d), notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation(s) it or they may have hereunder or otherwise than under this
paragraph (d) or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise have.
No party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of the Underwriters, (ii)
acceptance of any of the Shares and payment therefor or (iii) any termination of
this Agreement.
8. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from the Representative, without liability on the part of any
Underwriter to the Company if, prior to delivery and payment for the Firm Shares
(or the Option Shares, as the case may be), in the sole judgment of the
Representative, (i) trading in the Common Stock or the Preferred Stock or
securities generally shall have been suspended by the Commission or by the NYSE,
(ii) minimum or maximum prices shall have been established for the Common Stock
or the Preferred Stock or securities generally on the NYSE, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by any of such
market or exchange or by order of the Commission or any court or other
Governmental 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)
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any material adverse change in the financial or securities markets in the United
States or any outbreak or material escalation of hostilities or declaration by
the United States of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it, in the
sole judgment of the Representative, impracticable or inadvisable to market the
Shares on the terms and in the manner contemplated by the Prospectus. Any
termination pursuant to Section 8 shall be without liability of any party to any
other party except as provided in Sections 5(a) and 7.
9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Shares or Option Shares hereunder and the
aggregate number of such Shares that such defaulting Underwriter or Underwriters
agreed but failed to purchase is ten percent or less of the aggregate number of
Firm Shares or Option Shares to be purchased by all of the Underwriters at such
time hereunder, the other Underwriters may make arrangements satisfactory to the
Representative for the purchase of such Shares by other persons (who may include
one or more of the nondefaulting Underwriters, including the Representative),
but if no such arrangements are made by the Closing Date or the related Option
Closing Date, as the case may be, the other Underwriters shall be obligated
severally in proportion to their respective commitments hereunder to purchase
the Firm Shares or Option Shares that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of Shares that is more than ten
percent of the aggregate number of Firm Shares or Option Shares, as the case may
be, to be purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representative are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the nondefaulting Underwriters, including the Representative) of the
Shares with respect to which such default occurs, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter and the Company
other than as provided in Section 10 hereof. In the event of any default by one
or more Underwriters as described in this Section 9, the Representative shall
have the right to postpone the Closing Date or the Option Closing Date, as the
case may be, established as provided in Section 9 hereof for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Shares or
Option Shares, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, and
the several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the Shares.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6 and 8 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
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11. 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, 0000 Xxxxx xx
Xxxx Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000, Attention: Xxxxx Xxxxx xx Xxxxxxxxx,
Senior Executive Vice President and Chief Financial Officer, or (b) if to the
Underwriters, to the office of the Representative, American Xxxxxxxxxxxxx Xxxxx,
XX, Xxxx Xxx, Xxxxxx Xxxx 00000, Attention: Xxxx X. Xxxxx, First Vice President.
Any such notice shall be effective only upon receipt. Any notice under Section 7
or 8 may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.
12. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company, and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 7 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (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 Shares from any
Underwriter shall be deemed a successor because of such purchase. This Agreement
shall not be assignable by either party hereto without the prior written consent
of the other party.
13. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
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Very truly yours,
FIRST BANCORP.
By: ___________________________________
Name: Xxxxx Xxxxx xx Xxxxxxxxx
Title: Senior Executive Vice President
and Chief Financial Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED OF
PUERTO RICO
By: _____________________________
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
Acting on its behalf and as lead underwriter
of the several Underwriters named
in Schedule 1 hereof.
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SCHEDULE 1
UNDERWRITERS
Aggregate Number
of Shares to be
Purchased
PaineWebber Incorporated of Puerto Rico..................................
Xxxxx, Xxxxxxxx & Xxxxx, Inc.............................................
Popular Securities, Inc..................................................
Prudential Securities Incorporated.......................................
Santander Securities Corporation of Puerto Rico..........................
Solomon Xxxxx Xxxxxx, Inc................................................
Total =========
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EXHIBIT A
LIST OF SUBSIDIARIES
1. FirstBank Puerto Rico
2. First Federal Finance Corporation
3. First Leasing & Rental Corporation
