1
EXHIBIT 1.0
4,000,000 Shares
R&G FINANCIAL CORPORATION
Class B Common Stock
FORM OF UNDERWRITING AGREEMENT
May , 2001
UBS WARBURG LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
XXXXX, XXXXXXXX & XXXXX, INC.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
R&G FINANCIAL CORPORATION, a Puerto Rico corporation (the "Company"),
proposes to sell an aggregate of 2,000,000 shares (the "Company Shares") of the
Company's Class B Common Stock, par value $.01 per share (the "Class B Common
Stock"), which are to be issued and sold by the Company to you (collectively,
the "Underwriters"), and the shareholders of the Company named in Schedule II
hereto (the "Selling Shareholders") propose to sell an aggregate of 2,000,000
shares (the "Selling Shareholder Shares") of Class B Common Stock to you. Xxxxxx
X. Xxxxx ("Xx. Xxxxx") also has agreed to grant to you an option (the "Xxxxx
Option") to purchase up to an additional 150,000 shares (the "Xxxxx Option
Shares") of Class B Common stock on the terms and for the purposes set forth in
Section 1(b) hereto. The Company also has agreed to grant to you an option (the
"Company Option", and, with the Xxxxx Option, the "Option") to purchase up to an
additional 150,000 shares (the "Company Option Shares and, with the Xxxxx Option
Shares, the "Option Shares") of Class B Common Stock on the terms and for the
purposes set forth in Section 1(b) hereto. The Company Shares and the Selling
Shareholder Shares are hereinafter collectively referred to as the "Firm
Shares." The Firm Shares and the Option Shares are hereinafter collectively
referred to as the "Shares."
The Company and the Selling Shareholders hereby confirm as follows each
of their agreements with the Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties, and
agreements of each of the Company and the Selling Shareholders herein contained
and subject to all the terms and conditions of this Agreement, the Company and
the Selling Shareholders agree, severally and not jointly, to sell to each
Underwriter and each Underwriter, severally and not jointly, agrees to purchase
at a purchase price of $____ per Share, from the Company the number of Firm
Shares determined by multiplying the aggregate number of Firm Shares to be sold
by the Company and from each Selling Shareholder the number of Selling
Shareholder Shares set forth opposite each such Selling Shareholder's name in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Firm Shares to be purchased by such Underwriter as set forth opposite
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the name of such Underwriter in Schedule I hereto and the denominator of which
is the aggregate number of Firm Shares to be purchased by all of the
Underwriters from the Company and all of the Selling Shareholders hereunder.
(b) Subject to all the terms and conditions of this
Agreement, Xx. Xxxxx grants the Xxxxx Option and the Company grants the Company
Option to the several Underwriters to purchase, severally and not jointly, the
Xxxxx Option Shares and the Company Option shares, respectively, at the same
price per Share as the Underwriters shall pay for the Firm Shares. Each Option
may be exercised only to cover overallotments in the sale of the Firm Shares by
the Underwriters and may be exercised in whole or in part at any time and from
time to time on or before the thirtieth (30th) day after the date of this
Agreement (or on the next business day if the thirtieth (30th) day is not a
business day), upon notice (the "Option Shares Notice") in writing or by
telephone (confirmed in writing) by the Underwriters to Xx. Xxxxx or the
Company, as the case may be, no later than 5:00 p.m., New York City time, at
least two (2) and no more than five (5) business days before the date specified
for closing in the Option Shares Notice (the "Option Closing Date") setting
forth the aggregate number of Option Shares to be purchased and the time and
date for such purchase. On each Option Closing Date, Xx. Xxxxx or the Company,
as the case may be, will 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 Underwriters
in such manner as they deem advisable to avoid fractional Shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Underwriters for the accounts of the Underwriters at the office of
Xxxxxxxx & Xxxxxxxx, counsel to the Underwriters, 000 Xxxxx Xxxxxx, Xxx Xxxx,
XX, 00000, against payment of the purchase price by wire transfer of immediately
available funds to the bank accounts designated by the Company and the Selling
Shareholders in accordance with their respective interests. Such payment shall
be made at 10:00 a.m., New York City time, on the third full business day
following the date of this Agreement, or at such other time on such other date,
not later than seven (7) business days after the date of this Agreement, as may
be agreed upon by the Company, the Selling Shareholders, and the Underwriters
(such date is hereinafter referred to as the "Closing Date") (the Closing Date
and each Option Closing Date, if any, being sometimes referred to as an
"Applicable 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. The Firm Shares to be purchased by
each Underwriter hereunder will be represented by one or more definitive
certificates registered in the name of Cede & Co., which will be deposited by or
on behalf of the Company and the Selling Shareholders with the Depository Trust
Company ("DTC") or its designated custodian.
To the extent an 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 Underwriters
shall request at least two (2) business days prior to the Closing Date or the
Option Closing Date, as the case may be, by written notice to the Company or the
Selling Shareholders, as applicable. For the purpose of expediting the
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checking and packaging of certificates for the Shares, the Company and the
Selling Shareholders agree to make such certificates available for inspection at
least twenty-four (24) hours prior to the Closing Date or the Option Closing
Date, as the case may be, at the office of DTC or its designated custodian.
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
and the Selling Shareholders to the respective Underwriters shall be borne by
the Company and the Selling Shareholders, proportionately to their respective
interests. The Company and the Selling Shareholders 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
Underwriters. 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, 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
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term "Prospectus" means the prospectus relating to the Shares as first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no such filing is required, the form of final prospectus relating to the Shares
included in the Registration Statement at the effective date. References herein
to any document or other information incorporated by reference in the
Registration Statement shall include documents or other information incorporated
by reference in the Prospectus (or, if the Prospectus is not in existence, in
the most recent Preliminary Prospectus). References herein to any Preliminary
Prospectus or the Prospectus shall be deemed to include all documents and
information incorporated by reference therein and shall be deemed to refer to
and include any documents and information filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, and so incorporated by
reference, under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) At the respective times the Registration Statement,
any Rule 462 Registration Statement and any post-effective amendments thereto
became effective and at the Closing Date (and, if any Option Shares are
purchased, at the Option Closing Date), the Registration Statement, the Rule 462
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the Act and the
Rules and Act Regulations and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued and at the Closing Date (and, if
any Option Shares are purchased, at the Option Closing Date), included or will
include an untrue statement of a material fact or omitted or will 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. The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
any Underwriter expressly for use in the Registration Statement or Prospectus.
Each Preliminary Prospectus and the Prospectus filed as part
of the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in
all material respects with the Rules and Regulations and each Preliminary
Prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to the Commission's Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX"), except to the extent
permitted by Regulation S-T.
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
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which they were made, not misleading, and any documents so filed and
incorporated by reference subsequent to the effective date of the Registration
Statement shall, when they are filed with the Commission, conform in all
material respects with the requirements of the Act and the Rules and Regulations
and the Exchange Act and the rules and regulations thereunder, as applicable.
(c) The accountants who certified the financial
statements and supporting schedules included in the Registration Statement are
independent public accountants as required by the Act and the Rules and
Regulations.
(d) The consolidated financial statements of the Company
included or incorporated by reference in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus), together with the related schedules and notes, present
fairly the financial position of the Company and its Subsidiaries (as defined in
Section 3(g) hereof) at the dates indicated and the consolidated statement of
operations, stockholders' equity and cash flows of the Company and its
Subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the Prospectus
present fairly the information shown and have been compiled on a basis
consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement.
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company or any
of its Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the Company's
Class A common stock, par value $.01 per share (the "Class A Common Stock"), for
regular quarterly dividends on the Company's Class B Common Stock, and
collectively with the Class A Common Stock, the "Common Stock") and for the
regular monthly dividends on the Company's 7.4% Noncumulative Monthly Income
Preferred Stock, Series A ("Series A Preferred Stock"), 7.75% Noncumulative
Monthly Income Preferred Stock, Series B ("Series B Preferred Stock") and 7.60%
Noncumulative Perpetual Monthly Income Preferred Stock, Series C ("Series C
Preferred Stock"); since December 31, 2000, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the Commonwealth of
Puerto Rico with full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified to transact business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the conduct of its
business or ownership or
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leasing of its properties requires such qualification and where the failure to
be so qualified would, individually or in the aggregate, have a Material Adverse
Effect. The Company is registered as a financial holding company under the Bank
Holding Company Act of 1956, as amended (the "BHCA") in good standing with the
Board of Governors of the Federal Reserve System (the "Federal Reserve").
(g) The only 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 required 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 or the Option Closing Date (if any Option Shares are
purchased), will own an interest in any corporation, partnership, trust, joint
venture or other business entity. Each Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate power
and authority to own, lease and operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of each jurisdiction
in which the conduct of its business or ownership or leasing of its properties
requires such qualification and where the failure to be so qualified would,
individually or in the aggregate, have a Material Adverse Effect. Except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
(h) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except that the authorized capital stock of
the Company as of the Closing Date shall be as set forth under the heading "As
Adjusted" therein and except for subsequent issuances, if any, described therein
and the issuance of the Company Shares pursuant to this Agreement). The shares
of issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company. 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, as of each
Option Closing Date, will be, complete and accurate in all material respects.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The description of the Common Stock of the Company
contained in the Prospectus conforms in all material respects to the rights set
forth in the instruments defining the same.
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(k) The Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement, and, when issued and
delivered by the Company or the Selling Shareholders, as the case may be,
pursuant to this Agreement against payment of the consideration set forth herein
will be validly issued and fully paid and non-assessable Shares of capital stock
of the Company; the description of the Shares contained in the Prospectus
conforms in all material respects to the rights set forth in the instruments
defining the same; no holder of the Shares will be subject to personal liability
solely by reason of being such a holder; and the issuance of the Shares is not
subject to the preemptive or other similar rights of any security holder of the
Company.
(l) Neither the Company nor any of its Subsidiaries is in
violation of its articles of incorporation, charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments") except for
such defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Shares and the use of the proceeds from
the sale of the Company Shares as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
Subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any Subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any Subsidiary.
(m) No labor dispute with the employees of the Company or
any Subsidiary exists or, to the knowledge of the Company, is imminent. Neither
the Company nor any Subsidiary is a party to a collective bargaining agreement.
(n) There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the
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consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any Subsidiary
is a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(o) There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectus (or if
the Prospectus is not in existence, in the most recent Preliminary Prospectus)
or to be filed as exhibits thereto which have not been so described and filed as
required.
(p) The Company and its Subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
Subsidiaries has received any actual notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
(q) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by
the Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Shares hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained or as
may be required under the Act or the Rules and Regulations, state securities
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.
(r) The Company and its Subsidiaries possess such
permits, licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies ("Governmental Bodies") necessary go
conduct the business now operated by them, except where the lack of such
Governmental Licenses would not, singly or in the aggregate, have a Material
Adverse Effect; the Company and its Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material
Adverse Effect; and neither the Company nor any of its Subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in
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the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(s) The Company and its Subsidiaries have good and
marketable title to all real property owned by the Company and its Subsidiaries
and good title to all other properties and assets owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described in the
Prospectus or (b) would not, singly or in the aggregate, have a Material Adverse
Effect; and all of the leases and subleases material to the business of the
Company and its Subsidiaries, considered as one enterprise, and under which the
Company or any of its Subsidiaries holds properties described in the Prospectus,
are in full force and effect, and neither the Company nor any Subsidiary has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(t) The Company is not, and upon the issuance and sale of
the Shares as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(u) The Company meets the requirements for use of Form
S-3 under the Rules and Regulations.
(v) To the knowledge of the Company, except as described
in the Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor any
of its Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and
its Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries and (D) there
are no events or circumstances known to the Company that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its Subsidiaries relating to
Hazardous Materials or any Environmental Laws.
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(w) No court, supervisory or regulatory authority or
arbitrator has, by order or otherwise, prohibited or suspended, or, to the
knowledge of the Company, threatened to prohibit or suspend, the use of the
Prospectus.
(x) 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.
(y) 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 Closing Date and, if later, each Option Closing Date, (i) there has not been,
and will not have been, any Material Adverse Effect, (ii) neither the Company
nor any of its Subsidiaries has entered into, or will have entered into any
material transactions other than pursuant to this Agreement or in the ordinary
course of its business, 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 and its Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock, each in the ordinary course of its business.
(z) 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 Underwriters 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 Underwriters or counsel for
the Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(aa) Neither the Company, its Subsidiaries nor any of
their respective directors or officers has taken, nor will he, she or it take,
directly or indirectly, any action designed, or which might reasonably be
expected in the future, to cause or result in, under the Act or otherwise, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or
otherwise.
(bb) The Shares have been approved for quotation on the
Nasdaq Stock Market, subject only to notice of issuance.
(cc) 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
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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).
(dd) Each of the Company and its Subsidiaries has filed
all foreign, federal, Puerto Rico 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.
(ee) The deposit accounts of R-G Premier Bank of Puerto
Rico, a Subsidiary of the Company (the "Bank") are insured by the Federal
Deposit Insurance Corporation ("FDIC") to the legal maximum, and no proceeding
for the termination or revocation of such insurance is pending or threatened.
The Bank is a member in good standing of the Federal Home Loan Bank of New York.
(ff) None of the Company or 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 its business or operations except as disclosed in the Prospectus (or
if the Prospectus is not in existence, in the most recent Preliminary
Prospectus).
(gg) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment.
(hh) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(ii) The Company has obtained agreements substantially in
the form included in Exhibit B hereto of the senior executive officers of the
Company named in the Preliminary Prospectus included in the Registration
Statement and directors of the Company to the extent that such officers and
directors not sell, offer or agree to sell, hypothecate, contract to sell, grant
any option to sell or otherwise dispose of, directly or indirectly, or enter
into any agreement or arrangement that has the effect of transferring the
economic effects of holding, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or warrants or
other rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock or permit the registration under
the Act of any shares of Common Stock for the period beginning from the date
hereof and continuing to and including the date ninety (90) days after the
Closing Date (the "Lock-up Period") without the prior written consent of the
Underwriters.
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4. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders represents, warrants and covenants, solely with
respect to himself or herself and the number of Selling Shareholder Shares, and
with respect to Xx. Xxxxx, the Xxxxx Option Shares set forth opposite his or
her name in Schedule II hereto, to each Underwriter that:
(a) Shareholder has, and on each Applicable Closing Date
will have, valid and unencumbered title to the Shares to be delivered by such
Selling Shareholder on such Applicable Closing Date and full right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver
the Shares to be delivered by such Selling Shareholder on such Applicable
Closing Date hereunder; and upon the delivery of and payment for such Shares on
each Applicable Closing Date hereunder, the several Underwriters will acquire
valid and unencumbered title to the Shares to be delivered by such Selling
Shareholder on such Applicable Closing Date.
(b) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by
the Selling Shareholder of its obligations hereunder, in connection with the
offering, issuance or sale of the Selling Shareholder Shares hereunder or the
consummation of the transactions contemplated by this Agreement, except such as
has been already obtained or may be required under the Act or the Rules and
Regulations, state securities laws or the bylaws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the Selling
Shareholder Shares and the Xxxxx Option Shares to be sold hereby;
(c) Such Selling Shareholder has the legal right, power
and all authorizations and approvals required by law to enter into the Custody
Agreement and to execute the Power of Attorney (each as defined in Section 4(i)
hereof). This Agreement, the Custody Agreement and the Power of Attorney have
been duly executed and delivered by such Selling Shareholder and each such
agreement is a legal, valid and binding agreement of such Selling Shareholder;
(d) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement and in the Registration Statement (including the issuance and sale of
such Selling Shareholder Shares and Xxxxx Option Shares, if applicable) and
compliance by such Selling Shareholder with his or her obligations under this
Agreement, the Power of Attorney and the Custody Agreement do not and will not,
whether with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined in
Section 3(l) of this Agreement) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or any other agreements or instrument, to which
such Selling Shareholder is a party or by which he or she may be bound, or to
which any of the property or assets of such Selling Shareholder is subject
(except for such conflicts, breaches, defaults, liens, charges or encumbrances
that would not have a material adverse effect on the transactions contemplated
herein), nor will such action result in any violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to such
counsel, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over such Selling Shareholder or any respective
properties, assets or operations;
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13
(e) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action which is designed to 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;
(f) Neither the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto contains any
untrue statement of a material fact or omits to state therein 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 omission was made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by such
Selling Shareholder pertaining to such Selling Shareholder, as such, for use
therein;
(g) Such Selling Shareholder has no reason to believe
that the representations and warranties of the Company set forth in Section 3
are not true and correct in all material respects;
(h) Such Selling Shareholder will deliver to you prior to
or at each Applicable Closing Date a properly completed and executed Internal
Revenue Service Form W-8BEN (or other applicable Form W-8);
(i) Certificates in negotiable form representing all of
the Selling Shareholder Shares and the Xxxxx Option Shares to be sold by such
Selling Shareholder have been placed in custody under a Custody Agreement, in
the form heretofore furnished to you (the "Custody Agreement"), duly executed
and delivered by such Selling Shareholder to American Stock Transfer & Trust
Company as custodian (the "Custodian"), and each Selling Shareholder has duly
executed and delivered a Power of Attorney, in the form heretofore furnished to
you (the "Power of Attorney"), appointing Xx. Xxxxx, as such Selling
Shareholder's attorney-in-fact (the "Attorney-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to such Selling
Shareholders as provided in Section 2 hereof, to authorize the delivery of the
Selling Shareholder Shares and the Xxxxx Option Shares to be sold by and
otherwise to act on behalf of such Selling Shareholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement;
(j) Such Selling Shareholder is not subject to any order
or directive of, or party to any agreement with, any regulatory agency having
jurisdiction with respect to him or her; and
(k) The Shares represented by the certificates held in
custody for such Selling Shareholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder; the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Attorney-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of such Selling Shareholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity of
such Selling Shareholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the
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termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event; if such Selling Shareholder or any such executor
or trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event should occur, before the delivery of the
Shares hereunder, certificates representing the Shares shall be delivered by or
on behalf of such Selling Shareholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement; and actions taken by the
Attorney-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the Attorney-in-Fact, or
any of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
5. 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
Underwriters within a reasonable period of time prior to the filing thereof and
the Underwriters 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 8(a) hereof. The
Company will notify the Underwriters promptly, and will confirm such advice in
writing, (i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective; (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event during the period mentioned in the
first sentence of Section 5(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 Underwriters 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
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filings with the Commission pursuant to said Rule 430A and to notify the
Underwriters promptly of all such filings.
(c) If the Company elects to rely upon Rule 462(b) of the
Rules and Regulations, the Company shall file the Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing, either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) of the Rules
and Regulations.
(d) If, at any time when a Prospectus relating to the
Shares is required to be delivered under the Act, any event occurs as a result
of which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, the Registration Statement or the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with the Act or the Rules and
Regulations, the Company will promptly notify the Underwriters thereof and,
subject to Section 5(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 Underwriters, without
charge, three (3) 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 Underwriters, 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
Underwriters may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Registration
Statement or the Prospectus in order to make any statement therein, in the light
of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Registration Statement or the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment
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thereto, and deliver to each of the Underwriters, without charge, such number of
copies thereof as the Underwriters may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Underwriters 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
Underwriters may reasonably request; provided, however, that in no event shall
the Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(i) During the period of five (5) years commencing on the
effective date, the Company will furnish to the Underwriters 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 Underwriters and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(j) The Company will make generally available to holders
of its securities, as soon as may be practicable, but in no event later than the
last day of the fifteenth (15th) full calendar month following the calendar
quarter in which the effective date falls, a consolidated earnings statement
(which need not be audited but shall be in reasonable detail) for a period of
twelve (12) months commencing after the effective date, and satisfying the
provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(k) The Company will apply the net proceeds from the
offering and sale of the Shares in the manner set forth in the Prospectus under
"Use of Proceeds."
(l) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(m) The Company will use its best efforts to effect and
maintain the quotation of the Shares on the Nasdaq National Market and will file
with the Nasdaq National Market all documents and notices required by the Nasdaq
National Market of companies that have securities that are traded in the
over-the-counter market and quotations which are reported by the Nasdaq National
Market.
(n) The Company, during the period when the Prospectus is
required to be delivered under the Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
periods required by the 1934 Act and the rules and regulations of the Commission
thereunder.
(o) The Company will not sell, offer or agree to sell,
hypothecate, contract to sell, grant any option to sell or otherwise dispose of,
directly or indirectly, or enter into any agreement or arrangement that has the
effect of transferring the economic effects of holding, any shares of Common
Stock or securities convertible into or exchangeable or exercisable for
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Common Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock or
permit the registration under the Act of any shares of Common Stock, except for
the registration of the Shares and the sales to the Underwriters pursuant to
this Agreement, for the Lock-up Period, without the prior consent of the
Underwriters.
6. Agreements of the Selling Shareholders. Each of the Selling
Shareholders covenants and agrees with each of the several Underwriters as
follows:
(a) Not to sell, offer or agree to sell, hypothecate,
contract to sell, grant any option to sell or otherwise dispose of, directly or
indirectly, or enter into any agreement or arrangement that has the effect of
transferring the economic effects of holding, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities of the
Company that are substantially similar to Common Stock for the Lock-up Period,
without the prior written consent of the Underwriters.
(b) To advise the Underwriters promptly of the happening
of any event known to the Selling Shareholder within the time during which a
Prospectus relating to the Shares is required to be delivered under the Act
which, in the judgment of the Selling Shareholder, would require the making of
any change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(c) To pay all federal and other taxes, if any, on the
transfer and sale of the Shares being sold by the Selling Shareholder to the
Underwriters.
(d) To the extent not deposited into custody on or prior
to the date hereof, to duly deposit, prior to the date of purchase, with the
Custodian, pursuant to and under the Custody Agreement, Selling Shareholder
Shares and the Xxxxx Option Shares.
7. Expenses.
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 Underwriters, all costs and expenses incidental to
the performance of the obligations of the Company under this Agreement,
including, but not limited to, costs and expenses of or relating to (i) the
preparation, printing, and filing by the Company of the Registration Statement
and amendments and exhibits thereto, each Preliminary Prospectus prior to or
during the period specified in the first sentence of Section 5(g) but not
exceeding nine (9) months after the effective date, the Prospectus and
amendments or supplements; (ii) the preparation and delivery of certificates
representing the Shares; (iii) the furnishing (including costs of shipping and
mailing) of such copies of the Registration Statement, the Prospectus, and any
Preliminary Prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom
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Shares may be sold; (iv) the filing fees incident to, and the disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Shares and the fees and expenses incurred in connection
with the inclusion of the Shares in the Nasdaq National Market System; (v) the
fees and disbursements of the Company's counsel, accountants and other advisers
(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 5(h) and the preparation and printing of preliminary, supplemental, and
final blue sky memoranda; and the fees and expenses of any transfer agent or
registrar for the Shares. Each Selling Shareholder will pay all costs and
expenses incident to the performance of such Selling Shareholder's obligations
hereunder which are not otherwise specifically provided for in this Section,
including (i) any fees and expenses of counsel for such Selling Shareholder,
(ii) the fees and expenses of the Attorney-in-Fact and the Custodian, and (iii)
all expenses and taxes incident to the sale and delivery of the Shares to be
sold by such Selling Shareholder to the Underwriters hereunder.
8. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder to purchase and pay for the Firm
Shares on the Closing Date and Option Shares on each Option Closing Date, are
subject to the following conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Underwriters not later than 3:00 p.m.,
New York City time, on the date of this Agreement or at such later date and time
as shall be consented to in writing by the Underwriters and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations 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 Underwriters and the Underwriters did
not object thereto in good faith.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a Material Adverse Effect, and (ii) the Company shall not have sustained
any material loss or interference with its business, assets, or properties from
fire, explosion, flood, or other casualty, or from any labor dispute or any
court or legislative or other governmental action, order, or decree, which is
not set forth in the Registration Statement, including the documents
incorporated be reference therein, and the Prospectus.
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(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 have a Material
Adverse Effect.
(e) Each of the representations and warranties of the
Company and the Selling Shareholders contained herein shall be true and correct
on each Applicable Closing Date, as if made on such date, and all covenants and
agreements herein contained to be performed on the part of the Company or
Selling Shareholder and all conditions herein contained to be fulfilled or
complied with by the Company or Selling Shareholder at or prior to each
Applicable Closing Date, shall have been fully performed, fulfilled, or complied
with.
(f) The Underwriters shall have received an opinion,
dated such Applicable Closing Date, from Xxxxxx Xxxx & Xxxxxx LLP, special
counsel for the Company, to the following effect:
(i) The Company is registered as a financial
holding company under the BHCA.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or pursuant
to the exercise of options referred to in the Prospectus); the shares of issued
and outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any security holder of the Company
granted by applicable law or the Company's Certificate of Incorporation.
(v) The Shares have been duly authorized for
issuance and sale to the Underwriters pursuant to the Agreement and, when issued
and delivered by the Company pursuant to the Agreement against payment of the
consideration set forth in the Agreement, will be validly issued and fully paid
and non-assessable; no holder of the Shares is or will be subject to personal
liability for obligations of the Company solely by reason of being such a
holder.
(vi) The issuance of the Shares is not subject to
the preemptive or other similar rights of any security holder of the Company.
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(vii) Each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, each of the Subsidiaries is duly qualified as a
foreign corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
would not result in a Material Adverse Effect; to the best of such counsel's
knowledge, all of the issued and outstanding capital stock of each Subsidiary is
owned by the Company, directly or through a Subsidiary, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; and
none of the outstanding Shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any security holder of any
Subsidiary granted by applicable law or such Subsidiary's articles of
incorporation.
(viii) The Company has full legal right, power, and
authority to enter into the Agreement and to consummate the transactions
provided for therein; the Agreement has been duly authorized, executed and
delivered by the Company, and assuming due authorization, execution and delivery
by each other party thereto, 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 indemnify and contribution may
be limited by federal or state securities laws or the public policy underlying
such laws.
(ix) The Registration Statement has been declared
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 of such counsel's knowledge, 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 has been issued under the Act and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
(x) The Registration Statement, the Prospectus
and each amendment or supplement to the Registration Statement and Prospectus,
and the documents incorporated therein by reference, as of their respective
effective or issue dates (other than the financial statements, notes to the
financial statements, financial tables and other financial information and
supporting schedules included therein or omitted therefrom or contained in the
documents incorporated by reference therein, as to which such counsel need
express no opinion) complied in all materials respects with the requirements of
the Act and the Rules and Regulations.
(xi) The form of certificate used to evidence the
Shares complies in all material respects with all applicable Commonwealth of
Puerto Rico statutory requirements and with any applicable requirements of the
Certificate of Incorporation and Bylaws of the Company. The Shares have been
duly authorized for quotation on the Nasdaq Stock Market.
(xii) To the best of such counsel's knowledge,
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any Subsidiary is a party, or to which
the property or assets of the Company or any Subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or foreign of a
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21
character required to be disclosed in the Registration Statement or in the
Prospectus which is not so disclosed therein, which might reasonably be expected
to result in a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Agreement or the
performance by the Company of its obligations thereunder.
(xiii) The information in the Prospectus under
["Risk-Factors - Payment of Dividends May be Restricted by the Ability of R&G
Financials Subsidiaries to Pay Dividends to R&G Financial", "Description of
Capital Stock", "Taxation-United States Taxation" and in the Registration
Statement under Item 15]*, to the extent that it constitutes a discussion of
federal law, summaries of legal matters involving federal law, the Company's
Certificate of Incorporation and Bylaws or legal proceedings, or legal
conclusions, has been reviewed by such counsel and is accurate and complete in
all material respects.
(xiv) To the best of such counsel's knowledge,
there are no statutes or regulations that are required to be described in the
Prospectus that are not described as required.
(xv) All descriptions in the Registration
Statement of contracts and other documents to which the Company or its
subsidiaries are a party are accurate in all material respects; to the best of
such counsel's knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases, or other instruments required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xvi) To the best of such counsel's knowledge,
neither the Company nor any Subsidiary is in violation of its articles of
incorporation or by-laws and no default by the Company or any Subsidiary exists
in the due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described or
referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement.
(xvii) No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the Act
and the Rules and Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as to which such
counsel need express no opinion) is necessary or required in connection with the
due authorization, execution and delivery of the Agreement or for the offering,
issuance, sale or delivery of the Shares.
(xviii) The execution, delivery and performance of
the Agreement and the consummation of the transactions contemplated in the
Agreement and in the Registration Statement (including the issuance and sale of
the Shares and the use of the proceeds from the sale of the Shares as described
in the Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations under the Agreement do not and will not,
------
* List to be completed once Prospectus is finalized.
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22
whether with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined in
Section 3(l) of the Agreement) under or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any Subsidiary pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreements or instrument,
known to such counsel to which the Company or any Subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any Subsidiary is subject (except for such conflicts,
breaches, or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the articles of incorporation or by-laws of the Company or any
Subsidiary, or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to such counsel, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their respective properties, assets or
operations.
(xix) To the best of such counsel's knowledge,
there are no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the Act.
(xx) The Company is not, and upon the issuance
and sale of the Shares as contemplated in the Agreement and the application of
the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in 1940 Act.
(xxi) The deposit accounts of the Bank are insured
by the FDIC to the legal maximum, and to the best of such counsel's knowledge,
no proceeding for the termination or revocation of such insurance is pending or
threatened. The Bank is a member of the Federal Home Loan Bank of New York.
(xxii) To the best of such counsel's knowledge,
none of the Company, its Subsidiaries, or any of their respective directors or
officers is subject to any order or directive of, or is a party to any agreement
with, any federal banking or mortgage banking regulatory agency having
jurisdiction with respect to its business or operations, except as disclosed in
the Registration Statement or the Prospectus or which would not have a Material
Adverse Effect.
(xxiii) To the best of such counsel's knowledge, the
conduct of the respective businesses of the Company and its Subsidiaries is not
in violation of any federal banking, mortgage banking or securities laws, which
violation is likely to have a Material Adverse Effect. Each of the Company and
the Subsidiaries has obtained and, to such counsel's knowledge, is operating in
compliance with, all authorizations, licenses, orders and directives required by
federal banking, mortgage banking or securities laws which are material to the
conduct of their respective businesses. To such counsel's knowledge, all such
authorizations, licenses, orders or directives are valid and in full force and
effect and neither the Company nor the Subsidiaries have received any notice of
any proceeding relating to the revocation or modification of any such license,
authorization or order.
Nothing has come to such counsel's attention that
would lead such counsel to believe that the Registration Statement or any
amendment thereto, including the documents
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incorporated therein by reference (except for financial statements notes to the
financial statements, financial tables and other financial information and
schedules and other financial data included therein or omitted therefrom or
contained in the documents incorporated therein by reference, as to which such
counsel need make no statement), at the time of such Registration Statement or
any such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statement therein not misleading or that the Prospectus or
any amendment or supplement thereto (except for financial statements, notes to
the financial statements, financial tables and other financial information and
schedules and other financial data included therein or omitted therefrom or
contained in the documents therein incorporated by reference, as to which such
counsel need make no statement, at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Closing
Date, included or includes an untrue statement of a material fact or omitted or
omits 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.
In rendering such opinion, such counsel may rely (A)
as to the matters set forth in paragraph (v), the first clause of paragraph
(vii), paragraph (viii), the first sentence of paragraph (xi), and as to matters
involving the application of the laws of the Commonwealth of Puerto Rico in
paragraphs (xiv), (xvii), (xviii) and (xxiii), upon the opinion of the XxXxxxxxx
Xxxxxx, special Puerto Rico counsel to the Company and its Subsidiaries (which
opinion shall be dated and furnished to the Underwriters at the Closing Date,
shall be satisfactory in form and substance to counsel for the Underwriters and
shall expressly state that the Underwriters may rely on such opinion as if it
were addressed to them), provided that Xxxxxx Xxxx and Xxxxxx LLP shall state in
their opinion that they believe that they and the Underwriters are justified in
relying upon such opinion of special Puerto Rico counsel, and (B), as to matters
of fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treaties, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
(g) The Underwriters shall have received an opinion,
dated such Applicable Closing Date, from the XxXxxxxxx Xxxxxx, special Puerto
Rico counsel for the Company and its Subsidiaries to the following effect:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
Commonwealth of Puerto Rico, and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus.
(ii) The Shares have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth in this Agreement, will be validly issued and
fully paid and non-assessable. No holder of the Shares is or will be subject to
personal liability for obligations of the Company solely by reason of being such
a holder.
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(iii) Each of the Subsidiaries (other than
Continental Capital Corporation, as to which no opinion need be given) has been
duly incorporated and is validly existing as a corporation (and in the case of
the Bank as a commercial bank) in good standing under the laws of the
Commonwealth of Puerto Rico, and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus.
(iv) Except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of the
Company has been duly authorized and validly issued. To the best of such
counsel's knowledge, all of the issued and outstanding capital stock of the
Subsidiaries (other than Continental Capital Corporation, as to which no
opinion need be given) is owned by the Company, directly or through a
Subsidiary, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding Shares of capital stock
of the Company or any Subsidiary (other than Continental Capital Corporation,
as to which no opinion need be given) were issued in violation of the
preemptive or similar rights of any security holder of the Company or such
Subsidiary granted by applicable law or the Company's or such Subsidiary's
Certificate or Articles of Incorporation.
(v) The form of certificate used to evidence
the Shares complies in all material respects with all applicable Commonwealth
of Puerto Rico statutory requirements and with any applicable requirements of
the Certificate of Incorporation and By-laws of the Company.
(vi) The information in the Prospectus under
["Risk-Factors - Payment of Dividends May be Restricted by the Ability of R&G
Financial's Subsidiaries to Pay Dividends to R&G Financial," "Description of
Capital Stock", "Taxation-Puerto Rico Taxation"]* and in the Registration
Statement under Item 15, to the extent that it constitutes a discussion of
Puerto Rico law, summaries of legal matters involving Puerto Rico law, the
Company's Certificate of Incorporation and Bylaws or legal proceedings, or legal
conclusions, has been reviewed by such counsel and is accurate and complete in
all material respects.
(vii) To the best of such counsel's knowledge,
none of the Company or its Subsidiaries (other than Continental Capital
Corporation, as to which no opinion need be given) or any of their respective
directors or officers is subject to any order or directive of, or is a party to
any agreement with, any Commonwealth of Puerto Rico securities, banking or
mortgage banking regulatory agency having jurisdiction with respect to the
business or operations of the Company or the Subsidiaries, except as disclosed
in the Registration Statement or the Prospectus, and except for any such order,
directive or agreement which would not have a Material Adverse Effect.
(viii) Each of the Company and the Subsidiaries
(other than Continental Capital Corporation, as to which no opinion need be
given) has obtained and, to the best of such counsel's knowledge, is operating
in compliance with all authorizations, licenses, directives and orders required
by Puerto Rico banking, mortgage banking or securities laws which are material
to the conduct of their respective businesses. All of such authorizations,
licenses, directives and
---------
* List to be completed once Prospectus is finalized.
-24-
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orders are valid and in full force and effect. To the best of such counsel's
knowledge, neither the Company nor the Subsidiaries (other than Continental
Capital Corporation, as to which no opinion need be given) have received any
notice of proceeding relating to the revocation or modification of any such
license, authorization, directive or order.
(ix) The Company has full legal right, power,
and authority to enter into the Agreement and to consummate the transactions
provided for therein. The Agreement has been duly authorized, executed and
delivered by the Company, and assuming due authorization, execution and
delivery by each other party thereto, is a valid and binding agreement of the
Company, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer 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 Puerto
Rico securities laws or the public policy underlying such laws.
(x) No filing with or authorization, approval,
consent, license, order, registration, qualification or decree of, any Puerto
Rico court or governmental authority or agency is necessary or required in
connection with the due authorization, execution and delivery of the Agreement
for the offering, issuance, sale or delivery of the Shares.
(xi) The execution, delivery and performance of
the Agreement and the consummation of the transactions contemplated in the
Agreement and in the Registration Statement (including the issuance and sale of
the Shares and the use of the proceeds from the sale of the Shares as described
in the Prospectus under the caption "Use of Proceeds") and compliance with the
Company with its obligations under the Agreement do not and will not result in
any violation of the provisions of the Certificate of Articles of Incorporation
or By-laws of the Company or any Subsidiary (other than Continental Capital
Corporation, as to which no opinion need be given), or any applicable law,
statute, rule, regulations, judgment, order, directive, writ or decree known to
such counsel, of any Puerto Rico government, government instrumentality or
court having jurisdiction over the Company or any Subsidiary (other than
Continental Capital Corporation, as to which no opinion need be given) or any
of their respective properties, assets or operations.
(xii) To the best of such counsel's knowledge,
there are no statutes or regulations that are required to be described in the
Prospectus that are not described as required.
(h) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated the
Applicable Closing Date, with respect to such matters as you may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters.
(i) The Underwriters shall have received an opinion of
Xxxxxx Xxxx & Xxxxxx LLP, special counsel for the Selling Shareholders, dated
the Applicable Closing Date who may rely as to matters of Puerto Rico law on
the opinion of XxXxxxxxx Xxxxxx with respect to each Selling Shareholder
selling Shares on such date, to the following effect:
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(i) This Agreement has been duly executed and
delivered by each Selling Shareholder and is a legal, valid and binding
agreement of each such Selling Shareholder enforceable in accordance with its
terms, 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 indemnify and contribution may
be limited by federal or state securities laws or the public policy underlying
such laws.
(ii) No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the Act
and the Rules and Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as to which such
counsel need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the Agreement or for the
offering, issuance, sale or delivery of the Selling Shareholder Shares and
Option Shares.
(iii) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated in this
Agreement and in the Registration Statement (including the issuance and sale of
the Selling Shareholder Shares and Option Shares, if any) and compliance by each
Selling Shareholder with his or her obligations under this Agreement, the Power
of Attorney and the Custody Agreement do not and will not, to the best of such
counsel's knowledge, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 3(l) of this Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of any Selling Shareholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other agreements or
instrument, known to such counsel to which any Selling Shareholder is a party or
by which he or she may be bound, or to which any of the property or assets of
any Selling Shareholder is subject (except for such conflicts, breaches, or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to such
counsel, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over any Selling Shareholder or any respective
properties, assets or operations.
(iv) Each of the Custody Agreement and Power of
Attorney has been duly executed and delivered by each Selling Shareholder and
each such agreement constitutes a valid and binding agreement of each such
Selling Shareholder; and
(v) Each Selling Shareholder had valid and, to
the best of such counsel's knowledge, unencumbered title to the Selling
Shareholder Shares delivered by such Selling Shareholder on such Applicable
Closing Date and had full right, power and authority to sell, assign, transfer
and deliver such Selling Shareholder Shares in the manner provided in this
Agreement and the Custody Agreement entered into by such Selling Shareholder;
good and valid title to the Selling Shareholder's Shares to be sold by such
Selling Shareholder, free and clear of all Liens, has been transferred to each
of the several Underwriters who have purchased such Shares in good faith and
without notice of any such Lien or any other adverse claim within the meaning of
the Uniform Commercial Code.
In rendering the opinion in paragraphs (iii) and (v),
such counsel may rely upon a certificate of such Selling Shareholder in respect
of matters of fact as to ownership of, and liens, encumbrances, equities or
claims on, the Shares sold by such Selling Shareholder, provided that such
counsel state that they believe that both you and they are justified in relying
upon such certificate;
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(j) 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 Company's independent financial accountants shall have
furnished to the Underwriters a letter, dated the date of its delivery (the
"Original Letter"), addressed to the Underwriters and in form and substance
satisfactory to the Underwriters to the following effect:
(i) They are independent accountants within the
meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the consolidated
financial statements of the Company and its Subsidiaries audited by them and
incorporated by reference in the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the Act,
the Exchange Act, and the published rules and regulations;
(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, 2000 as set
forth in the minute books through a specified date not more than five (5)
business days prior to the date of delivery of the Original Letter; (B)
performing the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as described
in SAS No. 71, "Interim Financial Information," on the unaudited consolidated
interim financial statements of the Company and its Subsidiaries included in
the Registration Statement and reading the unaudited interim financial data for
the period from the date of the latest balance sheet incorporated by reference
in the Registration Statement to the date of the latest available interim
financial data; and (C) making inquiries of certain officials of the Company
who have responsibility for financial and accounting matters regarding the
specific items for which representations are requested below; nothing has come
to their attention (as of a date not more than five (5) business days prior to
the date of the delivery of such letter) as a result of the foregoing
procedures that caused them to believe that: (1) the unaudited consolidated
interim financial statements, if any, incorporated 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 GAAP; (3) (i) at the date of the latest available interim
financial data and at a specified date not more than five (5) business days
prior to the date of delivery of the Original Letter there was any change in
the capital stock, notes payable, advances from the Federal Home Loan Bank,
Federal Funds purchased and securities sold under repurchase agreements, and
other short term borrowings 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 March 31, 2001 statement of
financial condition incorporated by reference in the Registration Statement
and (ii) for the period from the latest interim financial statements
incorporated by reference in the Registration Statement, to the latest interim
financial data available which should be no later than five (5) days prior to
the date of delivery of the Original Letter, there were any decreases, as
compared with the corresponding period in the preceding year, in consolidated
net interest income, non-interest income, income before taxes, or in the total
or per share amounts of net income, except in all instances for changes or
decreases which
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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 ["Summary - Summary Consolidated Financial and Other Data," "Summary -
Ratios of Earnings to Fixed Charges and Preferred Stock Dividends," "Recent
Developments," "Capitalization," "Selected Consolidated Financial and Other
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.]*
On each Applicable Closing Date, the Company's
independent financial accountants shall have furnished to the Underwriters a
letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the Original Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in the
letter) not more than five (5) business days prior to the Closing Date or
Option Closing Date, as the case may be, which would require any change in the
Original Letter if it were required to be dated and delivered at the Closing
Date or the Option Closing Date, as the case may be.
In the event that the letters referred to above set
forth any such changes, decreases, or increases, it shall be a further
condition to the obligations of the Underwriters that (A) such letters shall be
accompanied by a written explanation of the Company as to the significance
thereof, unless the Underwriters deems such explanation unnecessary, and (B)
such changes, decreases, or increases do not, in the sole judgment of the
Underwriters, 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.
(k) At the Closing Date and, as to the Option Shares,
the Option Closing Date, there shall be furnished to the Underwriters 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 Underwriters, 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;
* The underwriters require comfort on all numbers included in the Company's
Form 10-K, Form 10-Q and Form 8-K filed this year.
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(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct in all respects;
each of the covenants required herein to be performed by the Company on or
prior to the date of such certificate has been duly, timely, and fully
performed and each condition herein required to be complied with by the Company
on or prior to the delivery of such certificate has been duly, timely, and
fully complied with; and
(iii) No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement or any amendment thereto or the Prospectus has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
of the Company's knowledge, are contemplated by the Commission.
(l) The Shares shall be qualified for sale in such
states and jurisdictions as the Underwriters 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.
(m) Prior to the Closing Date, the Shares shall have
been accepted for listing on the Nasdaq Stock Market.
(n) The Underwriters shall have received Lock-up
Agreements, dated the date hereof, from all of the Company's executive officers
and directors, in the form and to the effect contemplated in Section 3(ii).
(o) All filings required to be made with the NASD shall
have been made and the NASD shall have raised no objections to the terms and
arrangements presented in such filings.
(p) The Company and each Selling Shareholder shall have
furnished to the Underwriters such certificates, letters, and other documents,
in addition to those specifically mentioned herein, as the Underwriters may
have reasonably requested as to the accuracy and completeness at the Closing
Date and Option Closing Date of any statement in the Registration Statement or
the Prospectus, as to the accuracy at the Closing Date and Option Closing Date
of the representations and warranties of the Company or the Selling
Shareholder, as the case may be, as to the performance by the Company or the
Selling Shareholder, as the case may be, 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 and the Selling Shareholders will
furnish you with such conformed copies of such opinions, certificates, letters,
and other documents as you shall reasonably request.
9. Default of Underwriter. If either Underwriter defaults in its
obligation to purchase Firm Shares or Option Shares hereunder and the aggregate
number of such Shares that such defaulting Underwriter agreed but failed to
purchase is ten percent (10%) or less of the aggregate number of Firm Shares or
Option Shares to be purchased by both Underwriters at such time hereunder, the
other Underwriter may make satisfactory arrangements for the purchase of
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such Shares by other persons (who may include the nondefaulting Underwriter),
but if no such arrangements are made by the Closing Date or the related Option
Closing Date, as the case may be, the other Underwriter shall be obligated in
proportion to its respective commitments hereunder to purchase the Firm Shares
or Option Shares that such defaulting Underwriter agreed but failed to purchase.
If an Underwriter so defaults with respect to an aggregate number of Shares that
is more than ten percent (10%) of the aggregate number of Firm Shares or Option
Shares, as the case may be, to be purchased by both the Underwriters at such
time hereunder, and if satisfactory arrangements are not made within thirty-six
(36) hours after such default for the purchase (who may include the
nondefaulting Underwriter,) of the Shares with respect to which such default
occurs, this Agreement will terminate without liability on the part of the
nondefaulting Underwriter and the Company other than as provided in Section 12
hereof. In the event of any default by an Underwriter as described in this
Section 9, the non-defaulting Underwriter shall have the right to postpone the
Closing Date or Option Closing Date, as the case may be, for not more than seven
(7) business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Shares or
Option Shares, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, and employees 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 (each, an "Underwriter
Indemnified Person"), from and against any and all losses, claims, damages, or
liabilities, joint or several (and actions in respect thereof), to which they,
or any of them, may become subject under the Act or other federal, state, or
Commonwealth of Puerto Rico statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement made by the Company in Section 3 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (A) any Preliminary Prospectus, the Registration Statement, the
Prospectus, or any amendment or supplement to the Registration Statement or the
Prospectus, or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange (each, an
"Application"); or (iii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus, or any
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse, as incurred, each
Underwriter and each such other person for any legal or other expenses
reasonably incurred by such Underwriter or such other person in connection with
investigating defending or appearing as a third-party witness in connection
with any such loss, claim, damage, liability, or action; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage, or liability based solely upon an untrue statement or
omission or alleged untrue statement or
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omission in any of such documents made in reliance upon and in conformity with
information relating to any Underwriter or either Selling Shareholder furnished
in writing to the Company by the Underwriters or either Selling Shareholder, as
the case may be, on behalf of any Underwriter or such Selling Shareholder, as
the case may be, expressly for inclusion therein; and provided, further, that
such indemnity with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or any such other person) from whom the person
asserting any such loss, claim, damage, liability, or action purchased Shares
which are the subject thereof to the extent that any such loss, claim, damage,
or liability (A) results from the fact that such Underwriter failed to send or
give a copy of the Prospectus (as amended or supplemented) to such person at or
prior to the confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act, and (B) arises out of or is based
upon an untrue statement or omission of a material fact contained in such
Preliminary Prospectus that was corrected in the Prospectus (or any amendment
or supplement thereto), unless such failure to deliver the Prospectus (as
amended or supplemented) was the result of noncompliance by the Company with
Section 5(g) of this Agreement. 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 (i) includes an unconditional release
of the indemnified party from all liability arising out of such action or claim
and (ii) does not include a statement as to or an admission of default,
culpability or a failure to act, by or on behalf of any Underwriter.
(b) Each Selling Shareholder, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter and each Underwriter
Indemnified Person to the same extent as the foregoing indemnity from the
Company if and only to the extent that any loss, claim, damage, or liability,
joint or several (and actions in respect thereof) arise out of or is based upon
written information furnished to the Company by such Selling Shareholder
specifically for inclusion in the documents referred to in the foregoing
indemnity.
(c) Each Underwriter will indemnify and hold harmless
the Company and the Selling Shareholders, 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, the Selling
Shareholders and any such director, officer, or controlling person may become
subject under the Act or other federal, state, or Commonwealth of Puerto Rico
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any amendment or supplement to the Registration
Statement or the Prospectus, or any Application, or material fact required to
be stated therein, or (ii) the omission or the alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus, or any
Application, a material fact required to be stated therein or necessary to make
the statements therein not
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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 Underwriters 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, the Selling Shareholders 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 and each Selling Shareholder acknowledge 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 Underwriters 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.
(d) Promptly after receipt by an indemnified party under
this Section 10 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 10, 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 10 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 10 for any legal or other expenses other than reasonable costs of
investigation subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the reasonable fees and expenses of more than one
separate counsel (in addition to the fees and expenses of local counsel
necessary in connection with any such proceedings) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the
Underwriters in the case of paragraph (a) of this Section 10, 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
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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 10 in which case the indemnified party may effect such a settlement
without such consent.
(e) If the indemnification provided for in the foregoing
paragraphs of this Section 10 is unavailable or insufficient to hold harmless
an indemnified party under paragraph (a), (b) or (c) above in respect of any
losses, claims, damages, or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, or liabilities (or actions in respect thereof) (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties, on the one hand, and the indemnified party, on
the other, from the offering of the 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 and the Selling
Shareholders, 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 and the Selling
Shareholders 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 Underwriters, the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission. The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
10(e) were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, and liabilities (or actions in respect
thereof) referred to above in this Section 10(e) 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 10(e), 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 10(e) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 10(e), each person, if any,
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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 (e). 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 10(e), 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 (e) 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).
(f) The indemnity and contribution agreements contained
in this Section 10 and the representations and warranties of the Company and
the Selling Shareholders 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.
11. 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 and the Selling Shareholders from the Underwriters, without
liability on the part of any Underwriter to the Company or the Selling
Shareholders 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 Underwriters,
(i) trading in the Common Stock or any preferred stock issued by the Company
("Preferred Stock") shall have been suspended or materially limited by the
Commission or by the Nasdaq National Market, or if trading on the New York Stock
Exchange (the "NYSE") or the American Stock Exchange (the "AMEX") generally has
been suspended or materially limited; (ii) minimum or maximum prices shall have
been established for the Common Stock or the Preferred Stock on the Nasdaq
National Market or securities generally on the NYSE or AMEX, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by any of such
market or exchange or by order of the Commission or any court or other
Governmental Body; (iii) a general banking moratorium shall have been declared
by the United States, State of New York, or Commonwealth of Puerto Rico
authorities; or (iv) any material adverse change in the financial or securities
markets in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred, the effect of any of which is
such as to make it, in the sole judgment of the Underwriters, impracticable or
inadvisable to market the Shares on the terms and in the manner contemplated by
the Prospectus; or (v) if there has been, since the date of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, including for clarification
purposes, if the death, incapacity or the unavailability, for any other reason,
of Xx. Xxxxx should occur. Any termination pursuant to Section 11 shall be
without liability of any party to any other party except as provided in Sections
7(a) and 10.
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12. Survival. The respective representations, warranties,
agreements, covenants, indemnities, and other statements of the Company, its
officers, the Selling Shareholders 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, the Selling Shareholders,
any of its officers or directors, any Underwriter, or any controlling person
referred to in Section 10 hereof, and (ii) delivery of and payment for the
Shares. The respective agreements, covenants, indemnities, and other statements
set forth in Sections 7 and 10 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
13. Notices. Notices given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered:
(a) if to the Company, to:
R&G Financial Corporation
000 Xxxxx X. Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
(b) if to the Selling Shareholders, to:
000 Xxxxx X. Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
(c) if to the Underwriters, to:
UBS Warburg LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Director
With a copy to:
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxxxx, Managing Director
Any such notice shall be effective only upon receipt. Any
notice under Section 10 or 11 may be made by telex or telephone, but if so made
shall be subsequently confirmed in writing.
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14. 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 Underwriters, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy, or claim under or in respect of
this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (a) the indemnities of the Company and the Selling Shareholders
contained in Section 10 of this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, and (b) the indemnities of the
Underwriters contained in Section 10 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.
15. 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 STATE OF NEW YORK.
16. Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
R&G FINANCIAL CORPORATION
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer and Chairman
XXXXXX X. XXXXX
--------------------------------------
XXX X. XXXXXXXXXX
--------------------------------------
Confirmed as of the date first above mentioned:
UBS WARBURG LLC
By:
---------------------------
Name:
Title:
XXXXX, XXXXXXXX & XXXXX, INC.
By:
---------------------------
Name:
Title:
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SCHEDULE I
UNDERWRITERS
Aggregate Number of
Shares to be Purchased
UBS Warburg LLC 3,666,667
Xxxxx, Xxxxxxxx & Xxxxx, Inc. 1,333,333
4,000,000
==========
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SCHEDULE II
SELLING SHAREHOLDERS
Number of Selling
Selling Shareholders Shareholder Shares to be Sold
-------------------- -----------------------------
Xxxxxx X. Xxxxx 1,946,000
Xxx X. Xxxxxxxxxx 54,000
2,000,000
=========
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EXHIBIT A
LIST OF SUBSIDIARIES
1. R&G Mortgage Corp.
2. R-G Premier Bank of Puerto Rico
3. Money Store of Puerto Rico, Inc.
4. Continental Capital Corporation
5. Home and Property Insurance Corporation
6. R&G Investments Corporation
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