1
3,600,000 Shares
FIRST BANCORP
_____% Noncumulative Perpetual Monthly Income Preferred Stock, Series C
UNDERWRITING AGREEMENT
June ______, 2001
UBS PAINEWEBBER INCORPORATED OF PUERTO RICO
As lead underwriter of the underwriters
named in Schedule 1
American International Plaza, Penthouse Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
FIRST BANCORP, a Puerto Rico corporation (the "Company"), proposes to
sell an aggregate of 3,600,000 shares (the "Firm Shares") of the Company's
_____% Noncumulative Perpetual Monthly Income Preferred Stock, Series C (the
"Preferred Stock"), which are to be issued and sold by the Company to you and
the other underwriters named in Schedule 1 hereto (collectively, the
"Underwriters"), for whom you are acting as representative (the
"Representative"). The Company also has agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 540,000
shares of Preferred Stock (the "Option Shares") on the terms and for the
purposes set forth in Section 1(b) hereto. The Firm Shares and the Option
Shares are hereinafter collectively referred to as the "Shares."
The Company hereby confirms as follows its agreements with the
Representative and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties, and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter
and each Underwriter, severally and not jointly, agrees to purchase from the
Company at a purchase price of $24.2125 per share, the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule 1 hereto, plus such
additional number of Firm Shares which such Underwriter may become obligated to
purchase pursuant to Section 9 hereof.
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(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, the Option Shares at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time and from time
to time on or before the thirtieth (30th) day after the date of this Agreement
(or on the next business day if the thirtieth (30th) day is not a business
day), upon notice (the "Option Shares Notice") in writing or by telephone
(confirmed in writing) by the Representative to the Company no later than 5:00
p.m., New York City time, at least two (2) and no more than five (5) business
days before the date specified for closing in the Option Shares Notice (the
"Option Closing Date") setting forth the aggregate number of Option Shares to
be purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing hereunder, as adjusted by the
Representative in such manner as it deems advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representative for the accounts of the Underwriters at the office
of Axtmayer Xxxxxxx & Xxxxxxxx, P.S.C., counsel to the Underwriters, Hato Rey
Tower, Suite 600, 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx Xxxx 00000, against
payment of the purchase price by wire transfer of immediately available funds
to the bank account designated by the Company. Such payment shall be made at
10:00 a.m., New York City time, on the third full business day following the
date of this Agreement, or at such other time on such other date, not later
than seven (7) business days after the date of this Agreement, as may be agreed
upon by the Company and the Representative (such date is hereinafter referred
to as the "Closing Date"). Time shall be of the essence and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder.
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representative shall request at least two (2) business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written notice
to the Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least twenty-four (24) hours prior to the Closing
Date or the Option Closing Date, as the case may be.
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The cost of original issue tax stamps, if any, in connection with the
issuance, sale, and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying federal, state, or Commonwealth of Puerto Rico
stamp and other transfer taxes, if any, which may be payable or determined to
be payable in connection with the original issuance, sale, or delivery to such
Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants, and covenants to each Underwriter that:
(a) A registration statement on Form S-3 (Registration
No. ____________) relating to the Shares, including a preliminary prospectus
relating to the Shares and such amendments to such registration statement as
may have been required to the date of this Agreement, has been prepared by the
Company under the provisions of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (collectively referred to as the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Commission has not
issued any order preventing or suspending the use of the Prospectus (as defined
below) or any Preliminary Prospectus (as defined below) or instituted or, to
the knowledge of the Company, threatened any proceeding for that purpose. The
term "Preliminary Prospectus" as used herein means a preliminary prospectus
relating to the Shares included at any time as part of the foregoing
registration statement or any amendment thereto before it became effective
under the Act and any prospectus filed with the Commission by the Company
pursuant to Rule 424(a) of the Rules and Regulations. Copies of such
registration statement and amendments and of each related Preliminary
Prospectus have been delivered to the Representative. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly by the
Company with the Commission. If such registration statement has become
effective, a final prospectus relating to the Shares containing information
permitted to be omitted at the time of effectiveness by Rule 430A will be filed
by the Company with the Commission in accordance with Rule 424(b) of the Rules
and Regulations promptly after execution and delivery of this Agreement. The
term "Registration Statement" means the registration statement as amended at
the time it becomes or became effective (the "Effective Date"), including all
financial statements and schedules and all exhibits, documents incorporated
therein by reference, and all information contained in any final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or in a term sheet described in Rule 434 of the Rules and Regulations in
accordance with Section 4 hereof and deemed to be included therein as of the
Effective Date by Rule 430A of the Rules and Regulations and including any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations (a "Rule 462 Registration Statement") increasing the size of the
offering. The term "Prospectus" means the prospectus relating to the Shares as
first filed with the Commission pursuant to Rule 424(b) of the Rules and
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Regulations or, if no such filing is required, the form of final prospectus
relating to the Shares included in the Registration Statement at the Effective
Date. References herein to any document or other information incorporated by
reference in the Registration Statement shall include documents or other
information incorporated by reference in the Prospectus (or, if the Prospectus
is not in existence, in the most recent Preliminary Prospectus). References
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
include all documents and information incorporated by reference therein and
shall be deemed to refer to and include any documents and information filed
after the date of such Preliminary Prospectus or Prospectus, as the case may be,
and so incorporated by reference, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) On the date that any Preliminary Prospectus was
filed with the Commission, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to
and including the Closing Date and, if later, the Option Closing Date and when
any post-effective amendment to the Registration Statement becomes effective or
any amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement, each Preliminary Prospectus, and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included in the Prospectus, did or will comply with all applicable provisions
of the Act and the Rules and Regulations and did or will contain all statements
required to be stated therein in accordance with the Act and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement
or any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading. At the
Effective Date, the date the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on
and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representative specifically for inclusion in the
Registration Statement, each Preliminary Prospectus or Prospectus or any
amendment or supplement thereto. There are no contracts or other documents
required to be filed as exhibits to the Registration Statement by the Act or
the Rules and Regulations that have not been so filed. The documents which are
incorporated by reference in any Preliminary Prospectus or the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied in
all material respects with the requirements of the Act and the Rules and
Regulations or the Exchange Act and the rules and regulations thereunder, as
applicable, and did not, when such documents were so filed, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading,
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and any documents so filed and incorporated by reference subsequent to the
effective date of the Registration Statement shall, when they are filed with the
Commission, conform in all material respects with the requirements of the Act,
the Rules and Regulations, and the Exchange Act and the rules and regulations
thereunder, as applicable.
(c) The only directly or indirectly controlled
subsidiaries of the Company (each, a "Subsidiary" and collectively, the
"Subsidiaries") are those listed on Exhibit A hereto. Except as set forth in
the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus) or as acquired in connection with the exercise of its
rights as a creditor, or pursuant to a bona fide collateral pledge arrangement,
neither the Company nor any Subsidiary owns, nor at the Closing Date and the
Option Closing Date, will own an interest in any corporation, partnership,
trust, joint venture, or other business entity. The Company has been and, at
the Closing Date and Option Closing Date, will be duly organized and validly
existing as a corporation under the laws of the Commonwealth of Puerto Rico and
is and, at the Closing Date and Option Closing Date, will be in good standing
with the Commonwealth of Puerto Rico. The Company is registered as a financial
holding company under the Bank Holding Company Act of 1956 and is and, at the
Closing Date and Option Closing Date will be in good standing with the Board of
Governors of the Federal Reserve System (the "Federal Reserve"). Each of the
Subsidiaries is and, at the Closing Date and Option Closing Date, will be a
corporation duly organized, validly existing, and in good standing under the
laws of its respective jurisdiction of incorporation. Each of the Company and
its Subsidiaries is and, at the Closing Date and the Option Closing Date, will
be duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased, or licensed) or the nature or conduct of its business or use of its
property and assets makes such qualification necessary, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects, or business
affairs of the Company and its Subsidiaries taken as a whole.
(d) The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights. The
Shares to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, validly issued, fully paid, and
nonassessable and will not be subject to any preemptive or similar rights. The
Company has, and, upon completion of the sale of the Shares, will have, an
authorized, issued, and outstanding capitalization as set forth in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The description of the
securities of the Company in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
is, and at the Closing Date and Option Closing Date, will be complete and
accurate in all respects. No holders of securities of the Company are entitled
to have such securities registered under the Registration Statement, except
where such rights have been waived.
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(e) The consolidated financial statements and the
related notes of the Company included in the Registration Statement or
incorporated therein by reference and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) present fairly the
financial condition of the Company and its Subsidiaries as of the dates
indicated and the consolidated results of operations, and cash flows of the
Company and its Subsidiaries for the periods covered thereby, all in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the entire periods involved. PricewaterhouseCoopers LLP (the
"Accountants"), who have reported on those of such financial statements and
related notes which are audited, are independent accountants with respect to
the Company and its Subsidiaries within the meaning of the Act and the
applicable and published rules and regulations.
(f) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(g) Except as set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and Option Closing Date, (i) there has not been, and will
not have been, any material adverse change in the business, properties,
financial condition, net worth, or results of operations of the Company and its
Subsidiaries considered as one enterprise; (ii) neither the Company nor any of
its Subsidiaries has entered into, or will have entered into, any material
transactions other than pursuant to this Agreement; and (iii) the Company has
not, and will not have, paid or declared any dividends or other distributions of
any kind on any class of its capital stock, except for the payment or
declaration of quarterly dividends on the Company's common stock (the "Common
Stock") and the payment or declaration of monthly dividends on the Company's
outstanding preferred stock in the ordinary course of its business.
(h) The Company and each of its Subsidiaries have good
and marketable title to all properties and assets described in the Registration
Statement, including the documents incorporated by reference therein, and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), as owned by it, free and clear of all liens, security
interests, restrictions, pledges, encumbrances, charges, equities, claims,
easements, leases, and tenancies (collectively, "Encumbrances") other than
those described in the Registration Statement, including the documents
incorporated by reference therein, and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) or those that will
not materially affect the value of such properties and assets or will not
interfere with the use made
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and proposed to be made of such properties and assets. The Company and each of
its Subsidiaries have valid, subsisting, and enforceable leases for the
properties and assets described in the Registration Statement, including the
documents incorporated by reference therein, and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) as
leased by them, free and clear of all Encumbrances, other than those described
in the Registration Statement, including the documents incorporated by
reference therein, and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), or those that will not
materially affect the value of such properties and assets or will not interfere
with the use made and proposed to be made of such properties and assets.
(i) The Company is not required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company Act").
(j) Except as set forth in the Registration Statement,
including the documents incorporated by reference therein, and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no actions, suits, arbitrations, claims, governmental or
other proceedings (formal or informal), or investigations pending or threatened
against or affecting the Company or any of its Subsidiaries or any directors,
officers, or shareholders of the Company or any of its Subsidiaries in their
respective capacities as such or any of the properties or assets owned or
leased by the Company or any of its Subsidiaries, before or by any federal,
state, or Commonwealth of Puerto Rico court, commission, regulatory body,
administrative agency, or other governmental body, domestic or foreign
(collectively, a "Governmental Body"), wherein an unfavorable ruling, decision,
or finding would adversely affect the business, prospects, financial condition,
net worth, or results of operations of the Company and its Subsidiaries taken
as a whole and would be required to be disclosed in the Registration Statement,
including the documents incorporated by reference therein, and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus). Neither the Company nor any Subsidiary is in violation of, or in
default with respect to, any law, rule, regulation, order, judgment, or decree,
except as described in the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) or such as in the
aggregate do not now have and can reasonably be expected in the future not to
have a material adverse effect upon the operations, business, properties, or
assets of the Company and its Subsidiaries taken as a whole; nor is the Company
or any Subsidiary presently required under any order, judgment, or decree to
take any action in order to avoid any such violation or default.
(k) The Company and each of its Subsidiaries have and,
at the Closing Date and Option Closing Date, will have all governmental
licenses, permits, consents, orders, approvals, franchises, certificates, and
other authorizations (collectively, "Licenses") necessary to carry on their
respective businesses and own or lease their respective properties as
contemplated in the Registration Statement, including the documents
incorporated by reference therein, and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). The Company and each
of its Subsidiaries have and, at the Closing Date and Option Closing Date, will
have complied in all material respects with all laws, regulations, and
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orders applicable to it or its business, assets, and properties. Neither the
Company nor any of its Subsidiaries is nor, at the Closing Date and Option
Closing Date, will be in default (nor has any event occurred which, with notice
or lapse of time or both, would constitute a default) in the due performance
and observation of any term, covenant, or condition of any indenture, mortgage,
deed of trust, voting trust, agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract, or other
agreement or instrument (collectively, a "contract or other agreement") to
which they are a party or by which their respective properties are bound or
affected, the violation of which would individually or in the aggregate have a
material adverse effect on the condition, financial or otherwise, or the
earnings, prospects, or business affairs of the Company and its Subsidiaries
taken as a whole. There are no governmental proceedings or actions pending or
threatened for the purpose of suspending, modifying, or revoking any License
held by the Company and its Subsidiaries.
(l) No consent, approval, authorization or order of, or
any filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in
connection with the issuance and sale of the Shares by the Company, except such
as have been obtained and such as may be required under state or Commonwealth
of Puerto Rico securities or blue sky laws or the By-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection
with the purchase and distribution by the Underwriters of the Shares to be sold
hereby.
(m) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed, and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and
contribution may be limited by federal, state, or Commonwealth of Puerto Rico
securities laws or the public policy underlying such laws. Except as disclosed
in the Registration Statement, including the documents incorporated by
reference therein, and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), the execution, delivery,
and the performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any
Encumbrance upon any of the properties or assets of the Company or any of the
Subsidiaries pursuant to the terms or provisions of, or result in a breach or
violation of, or conflict with any of the terms or provisions of, or constitute
a default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, (i)
the Certificate of Incorporation or By-laws of the Company, in each case as
amended; (ii) any contract or other agreement to which the Company or any of
the Subsidiaries is a party or by which it or any of the respective assets or
properties are bound or affected, the violation of which would individually or
in the aggregate have a material adverse effect on the condition, financial or
otherwise, or the earnings, prospects, or business affairs of the Company and
its Subsidiaries; or (iii) any judgment, ruling, decree, order, law, statute,
rule, or regulation of any Governmental Body applicable to the Company or any
of the Subsidiaries or their respective businesses or properties, the violation
of which would individually or in the
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aggregate have a material adverse effect on the financial condition, earnings,
prospects, or business affairs of the Company and its Subsidiaries.
(n) No statement, representation, or warranty made by
the Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to the Representative was or will be when
made, inaccurate, untrue, or incorrect in any material respect. Each
certificate signed by an officer of the Company and delivered to the
Representative or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(o) Neither the Company nor any of its directors,
officers, or affiliates has taken, nor will he, she, or it take, directly or
indirectly, any action designed, or which might reasonably be expected in the
future, to cause or result in, under the Act or otherwise, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise.
(p) The Shares have been approved for listing on the New
York Stock Exchange ("NYSE"), subject only to notice of issuance.
(q) Neither the Company nor any of its Subsidiaries is
involved in any collective labor dispute with its employees nor is any such
dispute threatened or imminent.
(r) Neither the Company nor any of its Subsidiaries nor,
to the Company's best knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds of the Company or any Subsidiary in violation of
any law, rule, or regulation which payment, receipt, or retention of funds is
of a character required to be disclosed in the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
(s) The business, operations, and facilities of the
Company and its Subsidiaries have been and are being conducted in compliance
with all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations, or requirements relating to occupational
safety and health, pollution, or protection of health or the environment
(including, without limitation, those relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic substances, materials, or wastes into ambient air, surface water,
groundwater, or land, or relating to the manufacture, processing, distribution,
use, treatment storage, disposal, transport, or handling of chemical
substances, pollutants, contaminants, or hazardous or toxic substances,
materials, or wastes, whether solid, gaseous, or liquid in nature) of any
governmental department, commission, board, bureau, agency, or instrumentality
of the United States, any state, the Commonwealth of Puerto Rico, or political
subdivision thereof, and all applicable judicial or administrative agency or
regulatory decrees, awards, judgments, and orders relating thereto; and neither
the Company nor any of its Subsidiaries has received any notice from any
governmental instrumentality or any third party
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alleging any violation thereof or liability thereunder (including, without
limitation, liability for costs of investigating or remediating sites
containing hazardous substances and/or damages to natural resources), except
where failure to so comply would not have a material adverse effect on the
financial condition, earnings, or business affairs of the Company and its
Subsidiaries taken as a whole. The intended use and occupancy of each of the
facilities owned or operated by the Company and its Subsidiaries complies in
all material respects with all applicable codes and zoning laws and
regulations, and there is no pending or threatened condemnation, zoning change,
environmental, or other proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction on, or
access to such facilities.
(t) The Company filed all foreign, federal, state, and
local tax returns that are required to be filed or has requested extensions
thereof and has paid all taxes required to be paid by it and any other
assessment, fine, or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any failure to file that would not
have a material adverse effect on the financial condition of the Company.
(u) The Company meets the requirements for use of Form
S-3 under the Rules and Regulations.
(v) The deposit accounts of FirstBank Puerto Rico, a
Subsidiary of the Company ("FirstBank") are insured by the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC")
to the legal maximum, and no proceeding for the termination or revocation of
such insurance is pending or threatened. First Bank is a member in good
standing of the Federal Home Loan Bank of New York.
(w) None of the Company, FirstBank, their affiliates, or
any of their respective directors or officers is subject to any order or
directive of, or party to any agreement with, any regulatory agency having
jurisdiction with respect to its business or operations except as disclosed in
the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus).
(x) The Company's relationship with FMR Corp. and
Xxxxxxx & Co., Capital Management is limited to that described in Exhibit B
hereto.
4. Agreements of the Company. The Company covenants and agrees
with each of the several Underwriters as follows:
(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representative within a reasonable period of time prior to the filing thereof
and the Representative shall not have objected thereto in good faith.
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(b) If the Registration Statement is not yet effective,
the Company will use its best efforts to cause the Registration Statement to
become effective not later than the time indicated in Section 6(a) hereof. The
Company will notify the Representative promptly, and will confirm such advice
in writing, (i) when the Registration Statement has become effective and when
any post-effective amendment thereto becomes effective; (ii) of any request by
the Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event during the period mentioned in the
first sentence of Section 4(g) that in the judgment of the Company makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading;
and (v) of receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the Company,
the Registration Statement, any Preliminary Prospectus, or the Prospectus. If
at any time the Commission shall issue any order suspending the effectiveness
of the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment. The
Company will prepare the Prospectus in a form approved by the Representative
and will file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A,
the Company will use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to said Rule 430A and to
notify the Representative promptly of all such filings.
(c) If the Company elects to rely upon Rule 462(b) of
the Rules and Regulations, the Company shall file the Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing, either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b) of
the Rules and Regulations.
(d) If, at any time when a Prospectus relating to the
Shares is required to be delivered under the Act, any event occurs as a result
of which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, the Registration Statement or the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to
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comply with the Act or the Rules and Regulations, the Company will promptly
notify the Representative thereof and, subject to Section 4(b) hereof, will
prepare and file with the Commission, at the Company's expense, an amendment to
the Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will furnish to the Representative,
without charge, two (2) signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representative, without
charge, for transmittal to each of the other Underwriters, copies of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(f) The Company will comply with all the provisions of
all undertakings contained in the Registration Statement.
(g) On the Effective Date, and thereafter from time to
time for such period as the Prospectus is required by the Act to be delivered,
the Company will deliver to each of the Underwriters, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as the
Representative may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which in the
judgment of the Company or counsel to the Underwriters should be set forth in
the Registration Statement or the Prospectus in order to make any statement
therein, in the light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the Registration
Statement or the Prospectus to comply with law, the Company will forthwith
prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and deliver to each of the Underwriters, without charge,
such number of copies thereof as the Representative may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representative and its
counsel in connection with the registration or qualification of the Shares for
offer and sale under the securities or blue sky laws of such jurisdictions as
the Representative may reasonably request; provided, however, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it
to general service of process in any jurisdiction where it is not now so
subject.
(i) During the period of five (5) years commencing on
the Effective Date, the Company will furnish to the Representative and each
other Underwriter who may so request copies of such financial statements and
other periodic and special reports as the Company may
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from time to time distribute generally to the holders of any class of its
capital stock, and will furnish to the Representative and each other
Underwriter who may so request a copy of each annual or other report it shall
be required to file with the Commission.
(j) The Company will make generally available to holders
of its securities, as soon as may be practicable, but in no event later than
the last day of the fifteenth (15th) full calendar month following the calendar
quarter in which the Effective Date falls, a consolidated earnings statement
(which need not be audited but shall be in reasonable detail) for a period of
twelve (12) months commencing after the Effective Date, and satisfying the
provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(k) The Company will apply the net proceeds from the
offering and sale of the Shares in the manner set forth in the Prospectus under
"Use of Proceeds."
(l) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
5. Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Representative, all costs and expenses
incidental to the performance of the obligations of the Company under this
Agreement, including, but not limited to, costs and expenses of or relating to
(i) the preparation, printing, and filing by the Company of the Registration
Statement and amendments and exhibits thereto, each Preliminary Prospectus
prior to or during the period specified in the first sentence of Section 4(g)
but not exceeding nine (9) months after the Effective Date, and the Prospectus
and amendments or supplements thereto; (ii) the preparation and delivery of
certificates representing the Shares; (iii) the furnishing (including costs of
shipping and mailing) of such copies of the Registration Statement, the
Prospectus, and any Preliminary Prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be sold;
(iv) the listing of the Shares on the NYSE; (v) any filings required to be made
by the Underwriters with the NASD; (vi) the registration or qualification of
the Shares for offer and sale under the securities or blue sky laws of such
jurisdictions designated pursuant to Section 4(h) and the preparation and
printing of preliminary, supplemental, and final blue sky memoranda; (vii)
counsel and accountants to the Company; and (viii) the transfer agent for the
Shares.
(b) If the transactions contemplated by this Agreement
are not consummated or if this Agreement is terminated by the Company pursuant
to any of the provisions hereof, the Company will reimburse the Representative
for all of their accountable out-of-pocket fees and
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expenses (including the fees, disbursements, and other charges of their
counsel) incurred by them in connection herewith.
6. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Representative not later than 3:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representative and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A shall
have been made. If the Company has elected to rely upon Rule 462(b) of the
Rules and Regulations, the Company has filed the Rule 462(b) Registration
Statement by 10:00 p.m., Washington D.C. time, on the date of this Agreement.
(b) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission; (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or blue sky laws of any
jurisdiction shall be in effect, and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction; (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities; and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representative and the
Representative did not object thereto in good faith, and the Representative
shall have received certificates, dated the Closing Date and Option Closing
Date and signed by the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of the foregoing
clauses (i), (ii), and (iii).
(c) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) there shall not
have been a material adverse change in the general affairs, business,
properties, management, financial condition, or results of operations of the
Company whether or not arising from transactions in the ordinary course of
business; and (ii) the Company shall not have sustained any material loss or
interference with its business, assets, or properties from fire, explosion,
flood, or other casualty, or from any labor dispute or any court, legislative,
or other governmental action, order, or decree, which is not set forth in the
Registration Statement, including the documents incorporated by reference
therein, and the Prospectus.
(d) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall have
been no litigation or other proceeding instituted against the Company or any of
its officers, directors, or shareholders in
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their capacities as such, or any of its assets or properties, before or by any
Governmental Body in which litigation or proceeding an unfavorable ruling,
decision, or finding would materially and adversely affect the business,
properties, financial condition, net worth, or results of operations of the
Company.
(e) Each of the representations and warranties of the
Company contained herein shall be true and correct at the Closing Date and,
with respect to the Option Shares, at the Option Closing Date, as if made on
such date, and all covenants and agreements herein contained to be performed on
the part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date and, with respect
to the Option Shares, at or prior to the Option Closing Date, shall have been
fully performed, fulfilled, or complied with.
(f) The Representative shall have received an opinion,
dated the Closing Date and Option Closing Date, from Fiddler Xxxxxxxx &
Xxxxxxxxx, LLP, Puerto Rico counsel for the Company to the following effect:
(i) The Company has been duly organized and
validly existing as a corporation under the laws of the Commonwealth of Puerto
Rico and is in good standing in the Commonwealth of Puerto Rico. Each of First
Federal Finance Corporation ("First Federal"), First Leasing & Rental
Corporation ("First Leasing"), and FirstBank, each a Subsidiary, is a
corporation duly organized, validly existing, and in good standing under the
laws of its respective jurisdiction of incorporation. Each of the Company,
First Federal, First Leasing, and FirstBank is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character
or location of its properties (owned, leased, or licensed) or the nature or
conduct of its business or use of its property and assets makes such
qualification necessary, except where the failure to so qualify would not have
a material adverse effect on the financial condition, earnings, or business
affairs of the Company and its Subsidiaries taken as a whole;
(ii) The Company has an authorized
capitalization as set forth in the Prospectus; the Company has duly authorized
the issuance and sale of the Shares to be sold by it hereunder; such Shares,
when issued by the Company and paid for in accordance with the terms hereof,
will be validly issued, fully paid, and nonassessable and will conform in all
material respects to the description thereof contained in the Prospectus and
will not be subject to any preemptive, subscription, or other similar rights;
the Shares have been duly authorized for listing on the NYSE; and no holders of
securities of the Company are entitled to have such securities registered under
the Registration Statement, except for holders who have waived any such
registration rights;
(iii) The Registration Statement, including any
Rule 462(b) Registration Statement, is effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); and to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
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Registration Statement or any amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement or of the Rule
462(b) Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or are pending or are
threatened or contemplated under the Act;
(iv) The Registration Statement and the
Prospectus as of its date, appeared on their face to be appropriately
responsive, in all material respects (other than the documents incorporated
therein by reference and not including the financial statements, schedules, and
other financial data contained therein, as to which such counsel need not
express any opinion), with the requirements of the Act and the related rules
and regulations thereunder;
(v) The descriptions contained and summarized
in the Registration Statement, or incorporated therein by reference, and the
Prospectus are accurate and fairly represent in all material respects the
information required to be shown by the Act and the Rules and Regulations; and
the statements set forth under the headings "Risk Factors - Banking Regulations
May Restrict First BanCorp's Ability to Pay Dividends," "Description of Capital
Stock," and "Taxation" in the Prospectus, insofar as such statements constitute
a summary of the legal matters, documents, or proceedings referred to therein,
provide an accurate summary of such legal matters, documents, and proceedings;
(vi) To the knowledge of such counsel, there are
no contracts or documents which are required by the Act to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not filed or incorporated therein by reference
as required by the Act and the Rules and Regulations;
(vii) To the knowledge of such counsel after
reasonable investigation, there is not pending or threatened against the
Company or any of the Subsidiaries, or any of the assets or properties of the
Company or any of the Subsidiaries, any action, suit, arbitration, claim,
governmental or other proceeding (informal or formal), or investigation before
or by any Governmental Body of a character required to be disclosed in the
Registration Statement or the Prospectus which is not so disclosed therein. To
the knowledge of such counsel after reasonable investigation, neither the
Company nor any Subsidiary is in violation of, or in default with respect to,
any law, rule, regulation, order, judgment, or decree, except as described in
the Registration Statement or the Prospectus or such as in the aggregate do not
now have and can reasonably be expected in the future not to have a material
adverse effect upon the operations, business, properties, or assets of the
Company and its Subsidiaries taken as a whole; nor is the Company or any
Subsidiary presently required under any order, judgment, or decree to take any
action in order to avoid any such violation or default;
(viii) The Company has full legal right, power,
and authority to enter into this Agreement and to consummate the transactions
provided for herein; this Agreement has been duly authorized, executed, and
delivered by the Company; this Agreement, assuming due authorization,
execution, and delivery by each other party hereto, is a valid and binding
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agreement of the Company, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws now or hereafter in
effect relating to or affecting creditors' rights generally or by general
principles of equity relating to the availability of remedies and except as
rights to indemnity and contribution may be limited by federal, state, or
Commonwealth of Puerto Rico securities laws or the public policy underlying
such laws;
(ix) None of the Company's execution or delivery
of this Agreement, its performance hereof, its consummation of the transactions
contemplated herein or its application of the net proceeds of the offering in
the manner set forth under the caption "Use of Proceeds," conflicts or will
conflict with or results or will result in any breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any Encumbrance upon, any property or assets of the
Company pursuant to (A) the terms of the Certificate of Incorporation or
By-laws of the Company, in each case as amended; (B) the terms of any contract
or other agreement to which the Company is a party or by which it is or may be
bound or to which any of its properties is or may be subject and of which such
counsel has knowledge; (C) any statute, rule, or regulation of any Governmental
Body having jurisdiction over the Company or any of its activities or
properties; or (D) the terms of any judgment, decree, or order of any
arbitrator or Governmental Body having such jurisdiction and of which such
counsel has knowledge; and no consent, approval, authorization, or order of any
Governmental Body has been or is required for the Company's performance of this
Agreement or the consummation of the transactions contemplated hereby, except
such as have been obtained under the Act or may be required under state or
Commonwealth of Puerto Rico securities or blue sky laws in connection with the
purchase and distribution by the Underwriters of the Shares;
(x) To such counsel's knowledge, the conduct of
the respective businesses of the Company and its Subsidiaries is not in
violation of any federal, state, or local statute, administrative regulation,
or other law, which violation is likely to have a material adverse effect on
the Company and its Subsidiaries taken as a whole; and the Company and its
Subsidiaries have obtained all material licenses as are necessary or required
for the conduct of their businesses as presently conducted;
(xi) The Company is not required to be
registered as an investment company under the Investment Company Act;
(xii) To the knowledge of such counsel, the
Company is not in any breach or violation of any of the terms or provisions of,
or in default under (nor has an event occurred which with notice or lapse of
time or both would constitute a default or acceleration under), (A) the terms
of its Certificate of Incorporation or By-laws, in each case as amended; (B)
the terms of any contract or other agreement known to such counsel after
reasonable investigation to which the Company is a party or by which the
Company is or may be bound or to which any of its properties or assets is or
may be subject; (C) any statute, rule, or regulation of any Governmental Body
having jurisdiction over the Company or any of its activities, assets, or
properties, which breach, violation, or default could have a material adverse
effect on the
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Company and its Subsidiaries taken as a whole; or (D) the terms of any
judgment, decree, or order, known to such counsel after reasonable
investigation, of any arbitrator or Governmental Body having such jurisdiction,
which breach, violation, or default could have a material adverse effect on the
Company and its Subsidiaries taken as a whole;
(xiii) The deposit accounts of FirstBank are
insured by the SAIF or the FDIC to the legal maximum, and to such counsel's
knowledge no proceeding for the termination or revocation of such insurance is
pending or threatened. FirstBank is a member in good standing of the Federal
Home Loan Bank of New York; and
(xiv) To such counsel's knowledge, none of the
Company, FirstBank, their affiliates, or any of their respective directors or
officers is subject to any order or directive of, or party to any agreement
with, any regulatory agency having jurisdiction with respect to its business or
operations except as disclosed in the Registration Statement or the Prospectus.
In addition, such counsel shall state that, in the course of the
preparation of the Registration Statement and the Prospectus, such counsel has
participated in conferences with officers and representatives of the Company
and with the Accountants, at which conferences such counsel made inquiries of
such officers, representatives, and Accountants and discussed the contents of
the Registration Statement and the Prospectus and, on the basis of the
foregoing, nothing has come to such counsel's attention that causes such
counsel to believe that the Registration Statement as of the date it was
declared effective and as of the Closing Date contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus as of the date thereof and as of the Closing Date, contained any
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(it being understood that such counsel need not express any opinion with
respect to the financial statements, schedules, and other financial data
included in the Registration Statement or the Prospectus). Such counsel may
state that it makes no representation as to its independent verification of the
accuracy or completeness of the statements contained in the Registration
Statement and the Prospectus.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any other jurisdiction than the Commonwealth of Puerto
Rico and the United States (to the extent satisfactory in form and scope to
counsel for the Underwriters), such counsel may rely upon the opinion of local
(including in-house) counsel to the Company. The foregoing opinion shall also
state that such counsel has no reason to believe that the Underwriters are not
justified in relying upon such opinion of local counsel, and copies of such
opinion shall be delivered to the Representative and its counsel.
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References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.
(g) The Representative shall have received an opinion,
dated the Closing Date and Option Closing Date, from Axtmayer Xxxxxxx &
Xxxxxxxx, P.S.C., counsel to the Underwriters, which opinion shall be
satisfactory in all respects to the Representative.
(h) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date of the
Prospectus, the Accountants shall have furnished to the Representative a
letter, dated the date of its delivery (the "Original Letter"), addressed to
the Representative and in form and substance satisfactory to the Representative
to the following effect:
(i) They are independent accountants within the
meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the consolidated
financial statements of the Company and its Subsidiaries audited by them and
incorporated by reference in the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the Act,
the Exchange Act, and the published rules and regulations thereunder with
respect to registration statements on Form S-3;
(iii) On the basis of procedures (but not an
audit in accordance with generally accepted auditing standards) consisting of
(A) reading the minutes of meetings of the stockholders and the Board of
Directors of the Company and its Subsidiaries since December 31, 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 generally accepted accounting principles; (3) (i) at the date
of the latest
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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 Federal Home Loan
Bank, federal funds purchased and securities sold under repurchase agreements,
and other short term borrowing 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
forty (40) days prior to the date of delivery of the Original Letter, there
were any decreases, as compared with the corresponding period in the preceding
year, in consolidated net interest income, non-interest income, income before
taxes, or in the total or per share amounts of net income, except in all
instances for changes or decreases which the Registration Statement discloses
have occurred or may occur, or they shall state any specific changes or
decreases; and
(iv) The information set forth under the
captions "Prospectus Summary - Summary Financial Data," "Prospectus Summary -
Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends," "Recent Developments," "Capitalization," "Selected Financial Data,"
and "Description of Capital Stock," which is expressed in dollars (or
percentages derived from such dollar amounts) and has been obtained from
accounting records which are subject to the internal controls of the Company's
accounting system or which has been derived directly from such accounting
records and analysis or computations, is in agreement with such records or
computations made therefrom.
At the Closing Date and, as to the Option Shares, the Option Closing
Date, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery, which shall confirm, on the basis of a review
in accordance with the procedures set forth in the Original Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in the
letter) not more than five (5) business days prior to the Closing Date or
Option Closing Date, as the case may be, which would require any change in the
Original Letter if it were required to be dated and delivered at the Closing
Date or the Option Closing Date, as the case may be.
In the event that the letters referred to above set forth any such
changes, decreases, or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representative deems such explanation unnecessary; and (B) such changes,
decreases, or increases do not, in the sole judgment of the Representative,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Shares as contemplated by the Registration Statement, as amended as of the
date hereof.
(i) At the Closing Date and, as to the Option Shares,
the Option Closing Date, there shall be furnished to the Representative an
accurate certificate, dated the date of its
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delivery, signed by each of the Chief Executive Officer and the Chief Financial
Officer of the Company, in form and substance satisfactory to the
Representative, to the effect that to the best of their knowledge:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (y) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; and (B) since
the Effective Date no event has occurred as a result of which it is necessary
to amend or supplement the Prospectus in order to make the statements therein
not untrue or misleading, in any material respect;
(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct in all respects;
each of the covenants required herein to be performed by the Company on or
prior to the date of such certificate has been duly, timely, and fully
performed and each condition herein required to be complied with by the Company
on or prior to the delivery of such certificate has been duly, timely, and
fully complied with; and
(iii) No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement or any amendment thereto or the Prospectus has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
of the Company's knowledge, are contemplated by the Commission.
(j) The Shares shall be qualified for sale in such
states and jurisdictions as the Representative may reasonably request, each
such qualification shall be in effect and not subject to any stop order or
other proceeding on the Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have
been accepted for listing on the NYSE.
(l) All filings required to be made with the NASD shall
have been made and the NASD shall have raised no objections to the terms and
arrangements presented in such filings.
(m) The Company shall have furnished to the
Representative such certificates, letters, and other documents, in addition to
those specifically mentioned herein, as the Representative may have reasonably
requested as to the accuracy and completeness at the Closing Date and Option
Closing Date of any statement in the Registration Statement or the
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Prospectus, as to the accuracy at the Closing Date and Option Closing Date of
the representations and warranties of the Company, as to the performance by the
Company of its obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Underwriters.
All such opinions, certificates, letters, and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you. The Company will furnish you with such conformed copies
of such opinions, certificates, letters, and other documents as you shall
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees, and agents of each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, or liabilities, joint or several
(and actions in respect thereof), to which they, or any of them, may become
subject under the Act or other federal, state, or Commonwealth of Puerto Rico
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
made by the Company in Section 3 of this Agreement; (ii) any untrue statement
or alleged untrue statement of any material fact contained in (A) any
Preliminary Prospectus, the Registration Statement, the Prospectus, or any
amendment or supplement to the Registration Statement or the Prospectus, or (B)
any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Shares
under the securities or blue sky laws thereof or filed with the Commission or
any securities association or securities exchange (each, an "Application"); or
(iii) the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus, or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating defending or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability, or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability based solely upon an untrue statement or omission or alleged untrue
statement or omission in any of such documents made in reliance upon and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representative on behalf of any Underwriter expressly for
inclusion therein; and provided, further, that such indemnity with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
(or any such other person) from whom the person asserting any such loss, claim,
damage, liability, or action purchased Shares which are the subject thereof to
the extent that any such loss, claim, damage, or liability (A)
23
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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 4(g).
This indemnity agreement will be in addition to any liability that the Company
might otherwise have. The Company will not, without the prior written consent
of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit, or proceeding in
respect of which indemnification may be sought hereunder (whether or not such
Underwriter or any person who controls such Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act is a party to each
claim, action, suit, or proceeding), unless such settlement, compromise, or
consent includes an unconditional release of each Underwriter and each such
other person from all liability arising out of such claim, action, suit, or
proceeding.
(b) Each Underwriter will indemnify and hold harmless
the Company, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company, and each officer of the Company who signed the
Registration Statement against any losses, claims, damages, or liabilities (or
actions in respect thereof) to which the Company and any such director,
officer, or controlling person may become subject under the Act or other
federal, state, or Commonwealth of Puerto Rico statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement, the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus, or any
Application, or material fact required to be stated therein, or (ii) the
omission or the alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus, or any Application, a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representative expressly for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company and any such director, officer, or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability, or any action in respect thereof. The Company acknowledges that, for
all purposes under this Agreement, the statements set forth under the heading
"Underwriting" constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representative on behalf of the
Underwriters expressly for inclusion in the Registration Statement, any
Preliminary Prospectus, or the Prospectus. This indemnity agreement will be in
addition to any liability that each Underwriter might otherwise have.
24
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(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party or parties under this Section 7, notify such indemnifying party or
parties of the commencement thereof, but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party under the foregoing
provisions of this Section 7 or otherwise unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by
the indemnifying party. If any such action is brought against an indemnified
party and it notifies an indemnifying party or parties of its commencement, the
indemnifying party or parties against which a claim is made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses other than reasonable costs of
investigation subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the reasonable fees and expenses of more than one
separate counsel (in addition to the fees and expenses of local counsel
necessary in connection with any such proceedings) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the
Representative in the case of paragraph (a) of this Section 7, representing the
indemnified parties under paragraph (a) who are parties to such action or
actions); or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the written consent of the indemnifying party, unless such indemnified
party waived its rights under this Section 7 in which case the indemnified
party may effect such a settlement without such consent.
(d) If the indemnification provided for in the foregoing
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
25
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payable by such indemnified party as a result of such losses, claims, damages,
or liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties, on the one hand, and the indemnified party, on the other, from the
offering of the Shares; or (ii) if, but only if, the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties on
the one hand, and the indemnified party, on the other, in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages, or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other,
shall be deemed to be in the same proportion as the total proceeds from the
offering of the Shares (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. Relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Representative on behalf of the Underwriters, the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 7(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, and liabilities (or actions
in respect thereof) referred to above in this Section 7(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Underwriter shall be
required to contribute any amount in excess of the total underwriting discounts
received by it with respect to the Shares purchased by such Underwriter under
this Agreement, less the aggregate amount of any damages that such Underwriter
has otherwise been required to pay in respect of the same or any substantially
similar claim. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) will be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 7(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 7(d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act will have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
will have the same rights to contribution as the Company, subject in each case
to the provisions of this paragraph (d). Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit, or
proceeding against such party in respect of which a claim for contribution may
be made under this Section 7(d), notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from
26
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whom contribution may be sought from any other obligation(s) it or they may
have hereunder or otherwise than under this paragraph (d) or to the extent that
such party or parties were not adversely affected by such omission. The
contribution agreement set forth above shall be in addition to any liabilities
which any indemnifying party may otherwise have. No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriters;
(ii) acceptance of any of the Shares and payment therefor; or (iii) any
termination of this Agreement.
8. Termination. The obligations of the several Underwriters
under this Agreement may be terminated at any time prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representative, without liability on
the part of any Underwriter to the Company if, prior to delivery and payment
for the Firm Shares (or the Option Shares, as the case may be), in the sole
judgment of the Representative, (i) trading in the Common Stock or the
Preferred Stock or securities generally shall have been suspended by the
Commission or by the NYSE; (ii) minimum or maximum prices shall have been
established for the Common Stock or the Preferred Stock or securities generally
on the NYSE, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by any of such market or exchange or by order of the Commission or
any court or other Governmental Body; (iii) a general banking moratorium shall
have been declared by the United States, State of New York, or Commonwealth of
Puerto Rico authorities; or (iv) any material adverse change in the financial
or securities markets in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in the sole judgment of the Representative,
impracticable or inadvisable to market the Shares on the terms and in the
manner contemplated by the Prospectus. Any termination pursuant to Section 8
shall be without liability of any party to any other party except as provided
in Sections 5(a) and 7.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Shares or Option Shares hereunder and the
aggregate number of such Shares that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent (10%) or less of the
aggregate number of Firm Shares or Option Shares to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representative for the purchase of such Shares
by other persons (who may include one or more of the nondefaulting
Underwriters, including the Representative), but if no such arrangements are
made by the Closing Date or the related Option Closing Date, as the case may
be, the other Underwriters shall be obligated severally in proportion to their
respective
27
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commitments hereunder to purchase the Firm Shares or Option Shares that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If one or
more Underwriters so default with respect to an aggregate number of Shares that
is more than ten percent (10%) of the aggregate number of Firm Shares or Option
Shares, as the case may be, to be purchased by all of the Underwriters at such
time hereunder, and if arrangements satisfactory to the Representative are not
made within thirty-six (36) hours after such default for the purchase by other
persons (who may include one or more of the nondefaulting Underwriters,
including the Representative) of the Shares with respect to which such default
occurs, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter and the Company other than as provided in Section 10
hereof. In the event of any default by one or more Underwriters as described in
this Section 9, the Representative shall have the right to postpone the Closing
Date or Option Closing Date, as the case may be, established as provided in
Section 9 hereof for not more than seven (7) business days in order that any
necessary changes may be made in the arrangements or documents for the purchase
and delivery of the Firm Shares or Option Shares, as the case may be. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 9. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities, and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Underwriter, or any controlling
person referred to in Section 7 hereof; and (ii) delivery of and payment for the
Shares. The respective agreements, covenants, indemnities, and other statements
set forth in Sections 5 and 7 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. Notices. Notices given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered:
(a) If to the Company, to:
First BanCorp
Penthouse Floor
0000 Xxxxx xx Xxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxx Xxxxx xx Xxxxxxxxx,
Senior Executive Vice President and
Chief Financial Officer;
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(b) If to the Underwriters, to:
UBS Xxxxx Xxxxxx Incorporated of Puerto Rico
American International Plaza, Penthouse Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Attention: Xxxx X. Xxxxx, First Vice President.
Any such notice shall be effective only upon receipt. Any notice under
Section 7 or 8 may be made by telex or telephone, but if so made shall be
subsequently confirmed in writing.
12. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy, or claim under or in respect of
this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (a) the indemnities of the Company contained in Section 7 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act; and (b) the indemnities of the Underwriters contained in Section 7
of this Agreement shall also be for the benefit of the directors of the Company,
the officers of the Company who have signed the Registration Statement, and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Shares from any
Underwriter shall be deemed a successor because of such purchase. This Agreement
shall not be assignable by either party hereto without the prior written consent
of the other party.
13. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
14. Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
FIRST BANCORP
By:
--------------------------------------
Name: Xxxxx Xxxxx xx Xxxxxxxxx
Title: Senior Executive Vice President and
Chief Financial Officer
Confirmed as of the date first above mentioned:
UBS PAINEWEBBER INCORPORATED OF
PUERTO RICO
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
By:
------------------------------------
Name: Xxxx X. Xxxxx
Title: First Vice President
Acting on its behalf and as lead
underwriter of the several Underwriters
named in Schedule 1 hereof.
30
SCHEDULE 1
UNDERWRITERS
Aggregate Number
of Shares to be
Purchased
UBS PaineWebber Incorporated of Puerto Rico......................
Doral Securities, Inc. ..........................................
Oriental Financial Services Corp. ...............................
Prudential Securities Incorporated...............................
Popular Securities, Inc..........................................
Santander Securities Corporation.................................
=========
Total 3,600,000
31
EXHIBIT A
LIST OF SUBSIDIARIES
1. FirstBank Puerto Rico
2. First Federal Finance Corporation
3. First Leasing & Rental Corporation
32
EXHIBIT B
RELATIONSHIP WITH FMR CORP. AND XXXXXXX & CO., CAPITAL MANAGEMENT
The Company's existing relationship with FMR Corp. ("FMR") and Xxxxxxx
& Co., Capital Management ("Xxxxxxx") is limited to the following:
a. Pursuant to information disclosed by FMR in Amendment No. 9 to
the Schedule 13G filed by FMR on February 14, 2001 with the
Securities and Exchange Commission ("SEC") under Section 13(g)
of the Securities Exchange Act of 1934 (the "1934 Act"), a
wholly-owned subsidiary of FMR named Fidelity Management &
Research Company, which is an investment adviser registered
under the Investment Advisers Act of 1940, was the beneficial
owner on the filing date of 2,642,000 shares or 9.998% of the
issued and outstanding common stock of the Company as a result
of acting as investment adviser to an investment company named
Fidelity Low-Priced Stock Fund that owns such shares.
b. Pursuant to information disclosed by Xxxxxxx in Amendment No.2
to the Schedule 13G filed by Xxxxxxx on February 15, 2001 with
the SEC under Section 13(g) of the 1934 Act, Xxxxxxx, which is
an investment adviser registered under the Investment Advisers
Act of 1940, was the beneficial owner on the filing date of
1,945,262 shares or 7.4% of the issued and outstanding common
stock of the Company as a result of acting as investment
adviser to persons that own such shares.
