$150,000,000
BANPONCE TRUST I
8.327% Capital Securities
UNDERWRITING AGREEMENT
January 31, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1. Introductory. BanPonce Trust I (the "Issuer"), a statutory business
trust created under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Section 3801 et
seq.), proposes, subject to the terms and conditions stated herein, to issue and
sell to the several Underwriters ("Underwriters") 150,000 of its 8.327% Capital
Securities, Liquidation Amount $1,000 per Capital Security (the "Capital
Securities").
The Capital Securities will be guaranteed by BanPonce Financial Corp.
(the "Corporation") and BanPonce Corporation (the "Guarantor"), to the extent
set forth in the Prospectus (as defined below), with respect to distributions
and amounts payable upon liquidation or redemption (the "Guarantees"), pursuant
to the Guarantee Agreement (the "Guarantee Agreement"), to be dated as of the
Closing Date (as defined below), executed and delivered by the Corporation, the
Guarantor and The First National Bank of Chicago, a national banking
association, as trustee (the "Guarantee Trustee"). The proceeds from the sale of
the Capital Securities to the Underwriters will be aggregated with the entire
proceeds from the sale by the Issuer to the Corporation of the common securities
of the Issuer (the "Common Securities") and will be used by the Issuer to
purchase the 8.327% Junior Subordinated Deferrable Interest Debentures (the
"Debentures"), issued by the Corporation and guaranteed (the "Debenture
Guarantee") by the Guarantor. The Capital Securities and the Common Securities
will be issued pursuant to the Amended and Restated Declaration of Trust of the
Issuer, to be dated as of the Closing Date (the "Declaration"), among the
Corporation, as Depositor, the Guarantor and the trustees named therein (the
"Trustees") and the holders from time to time of the Capital Securities and the
Common Securities, which represent undivided beneficial interests in the assets
of the Issuer. The Debentures and the Debenture Guarantees will be issued
pursuant to a Junior Subordinated Indenture, to be dated as of the Closing Date
(the "Indenture"), among the Guarantor, the Corporation and The First National
Bank of Chicago, as trustee (the "Debenture Trustee"). The Capital Securities,
the Guarantees, the Debentures and the Debenture Guarantee are collectively
referred to herein as the "Securities." This Agreement, the Indenture, the
Declaration, the Guarantee Agreement and the Expense Agreement (as defined
herein) are referred to collectively as the "Operative Documents."
The Issuer, the Corporation and the Guarantor, jointly and severally,
hereby agree with the Underwriters as follows:
2. Representations and Warranties. Each of the Issuer, the Corporation
and the Guarantor, jointly and severally, represents and warrants to, and agrees
with, the Underwriters that:
(a) The Guarantor, the Corporation and the Issuer have filed
with the Securities and Exchange Commission (the "Commission") a
registration statement, and may have filed an amendment or amendments
thereto, on Form S-3, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Act"), and such registration
statement has become effective under the Act. Such Registration
Statement (including all documents incorporated therein by reference)
is hereinafter referred to as the "Registration Statement." Any
post-effective amendment to such registration statement has been filed
with the Commission prior to the execution and delivery of this
Agreement and the most recent such amendment has been declared
effective by the Commission. For purposes of this Agreement, "Effective
Time" of the Registration Statement means (i) the date and time as of
which such registration statement was declared effective by the
Commission or (ii) the later of (A) the date on which the most recent
post-effective amendment or amendments thereto, if any, became or
become effective and (B) the date of filing of the Guarantor's most
recent Annual Report on Form 10-K, if such filing occurs after the date
set forth in clause (i) above. "Effective Date" means the date of the
Effective Time. "Base Prospectus" means the prospectus (including all
documents incorporated therein by reference) relating to the
Registration Statement, in the form in which such prospectus has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date hereof (but without regard to any prospectus
supplement relating specifically to securities other than the
Securities); and "Prospectus" means the Base Prospectus together with
the prospectus supplement (including all documents incorporated therein
by reference) specifically relating to the Securities, as such
prospectus supplement is first filed with the Commission on or after
the date hereof pursuant to Rule 424(b) under the Act; provided
however, that if a previously unfiled form of prospectus with an issue
date later than the issue date of the Base Prospectus is to be filed
with the Commission together with the prospectus supplement relating to
the Securities, then "Prospectus" means such new form of prospectus
(including all documents incorporated therein by reference) together
with such prospectus supplement (including all documents incorporated
therein by reference) as first filed with the Commission on or after
the date hereof pursuant to Rule 424(b) under the Act. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or after the date hereof of
any document deemed to be incorporated therein by reference.
(b) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Puerto Rico with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus; the Guarantor is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended
(the "Bank Holding Company Act"); and the Guarantor is not required to
register as a foreign corporation in any jurisdiction in order to
conduct the business presently conducted by it.
(c) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus; and the Corporation is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification.
(d) Each subsidiary of the Guarantor which is a significant
subsidiary as defined in Rule 405 of Regulation C of the rules and
regulations under the Act (each, a "Significant Subsidiary") has been
duly incorporated and is validly existing as a corporation or a bank in
good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify and be
in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Guarantor and its subsidiaries considered as
one enterprise; and all of the issued and outstanding capital stock of
each such Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable (subject to the provisions of
Section 55 of Title 12 of the United States Code in the case of
Significant Subsidiaries which are national banking associations) and,
except as otherwise disclosed in the Prospectus and except for
directors' qualifying shares, is owned by the Guarantor, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity or, if such is not
the case, that any such security interest, mortgage pledge, lien,
encumbrance, claim or equity, when exercised, enforced or otherwise
asserted, will not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Guarantor and its subsidiaries considered as one
enterprise.
(e) The Issuer has been duly formed and is validly existing in
good standing as a business trust under the Delaware Act with the power
and authority to own property and to conduct its business as described
in the Prospectus.
(f) All of the outstanding beneficial interests of the Issuer
have been duly authorized and validly issued and are fully paid and
nonassessable undivided beneficial interests in the assets of the
Issuer; the holders of such beneficial interests of the Issuer have no
preemptive or other rights to acquire Capital Securities or Common
Securities; and there are no restrictions on transfers of the
Securities.
(g) (i) On the Effective Date, the Registration Statement
conformed in all material respects to the requirements of the Act, the
Trust Indenture Act of 1939, as amended ("Trust Indenture Act"), and
the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration
Statement, on the date of this Agreement, and at the time of filing of
the Prospectus pursuant to Rule 424(b), the Prospectus and any
amendments and supplements to the Registration Statement or the
Prospectus will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) as of
the Closing Date, the Registration Statement, the Prospectus and any
amendments or supplements to the Registration Statement or the
Prospectus will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with written information furnished to the Guarantor by any
Underwriter specifically for use therein.
(h) The accountants who certified the financial statements
included or incorporated by reference in the Prospectus are independent
public accountants within the meaning of the Act and the Rules and
Regulations.
(i) The consolidated financial statements and any supporting
schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Guarantor and its consolidated subsidiaries as of the
dates indicated and the consolidated results of their operations for
the periods specified; except as stated therein, said financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis during the periods involved; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein.
(j) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor, the Corporation and the Issuer.
(k) The Declaration has been duly authorized by the Guarantor
and the Corporation; and when the Capital Securities are delivered and
paid for pursuant to this Agreement on the Closing Date, the
Declaration will have been duly executed and delivered by the Guarantor
and the Corporation and will constitute a valid and legally binding
instrument of the Guarantor and the Corporation enforceable against the
Guarantor and the Corporation in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(l) The Guarantee Agreement has been duly authorized by the
Guarantor and the Corporation; and when the Capital Securities are
delivered and paid for pursuant to this Agreement on the Closing Date,
the Guarantee Agreement will have been duly executed and delivered by
the Guarantor and the Corporation, and will constitute a valid and
legally binding instrument of the Guarantor and the Corporation,
enforceable against the Guarantor and the Corporation in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(m) The Capital Securities have been duly authorized; when the
Capital Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, such Capital Securities will (i) have
been validly issued and fully paid, (ii) represent nonassessable
undivided beneficial interests in the assets of the Issuer, (iii) be
entitled to the benefits of the Declaration and (iv) conform to the
description thereof contained in the Prospectus; the issuance of the
Capital Securities is not subject to preemptive or other similar
rights; and the holders of the Capital Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit incorporated under the General
Corporation Law of the State of Delaware.
(n) The Common Securities have been duly authorized; when the
Common Securities are delivered and paid for on the Closing Date, such
Common Securities will (i) have been validly issued and fully paid,
(ii) represent nonassessable undivided beneficial interests in the
assets of the Issuer, (iii) be entitled to the benefits of the
Declaration and (iv) conform to the description thereof contained in
the Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Date, all of the
issued and outstanding Common Securities of the Issuer will be directly
owned by the Corporation free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(o) The Indenture has been duly authorized by the Corporation
and the Guarantor; and when the Debentures and the Debenture Guarantees
are delivered and paid for on the Closing Date, the Indenture will have
been duly executed and delivered by the Corporation and the Guarantor,
such Debentures will have been duly executed, authenticated, issued and
delivered, such Debenture Guarantees will have been duly executed,
issued and delivered and such Debentures and Debenture Guarantees will
conform to the description thereof contained in the Prospectus and the
Indenture, such Debentures and the Debenture Guarantees will constitute
valid and legally binding obligations of the Corporation and the
Guarantor, respectively, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(p) The Expense Agreement to be entered into by the Guarantor,
the Corporation and the Property Trustee (the "Expense Agreement") has
been duly authorized by the Corporation and the Guarantor; and when the
Capital Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, the Expense Agreement will have been
duly executed and delivered by the Corporation and the Guarantor and
will constitute a valid and legally binding instrument of the
Corporation and the Guarantor enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(q) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Guarantor
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business.
(r) Neither the Guarantor, the Corporation nor any of the
Significant Subsidiaries is in violation of its charter or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound; the
execution, delivery and performance of the Operative Documents by the
Guarantor, the Corporation or the Issuer and the consummation of the
transaction contemplated thereby will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Guarantor, the Corporation, the Issuer or any of the Significant
Subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Guarantor, the
Corporation, the Issuer or any of its subsidiaries is a party or by
which it or any of them may be bound or to which any of the property or
assets of the Guarantor, the Corporation, the Issuer or any such
subsidiary is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Guarantor, the
Corporation or any such subsidiary or any law, administrative
regulation or administrative or court order or decree which breach,
default, imposition or violation would, in each case, have a material
adverse effect on the Guarantor and its subsidiaries taken as a whole;
and no consent, approval, authorization, order or decree of any court
or governmental agency or body is required for the consummation by the
Guarantor, the Corporation or the Issuer of the transactions
contemplated by the Operative Documents, except such as have already
been obtained or as may be required under the Act or the rules and
regulations thereunder (which have been obtained), the Trust Indenture
Act or state securities or Blue Sky laws.
(s) Except as may be set forth in the Prospectus, there is no
action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge
of the Guarantor, threatened against or affecting, the Guarantor or any
of its subsidiaries, which might result in any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Guarantor and its subsidiaries
considered as one enterprise, or might materially and adversely affect
the consummation of this Agreement; and there are no contracts or
documents of the Guarantor or any of its subsidiaries which are
required to be filed or incorporated by reference as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been so filed or incorporated by reference.
(t) The Guarantor, the Corporation and the Significant
Subsidiaries possess adequate certificates, authorities or permits
issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them except
for such certificates, authorities or permits as are not material to
the business, operations, financial condition or income of the
Guarantor, the Corporation or the Significant Subsidiaries; and neither
the Guarantor, the Corporation nor any of the Significant Subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially adversely affect the conduct of the
business, operations, financial condition or income of the Guarantor
and its subsidiaries considered as one enterprise.
(u) Neither the Issuer, the Guarantor nor the Corporation is
and, after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the Prospectus,
none of them will be, an "investment company" or a company "controlled"
by an investment company as defined in the United States Investment
Company Act of 1940 (the "Investment Company Act").
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Issuer agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Issuer, at a purchase price of U.S.$1,000 per Capital Security plus
accumulated distributions, if any, from February 5, 1997 to the Closing Date,
the respective liquidation amounts of Securities set forth opposite the names of
the Underwriters in Schedule A hereto.
The Corporation will deliver against payment of the purchase price the
Capital Securities in the form of one or more permanent global securities in
definitive form (the "Global Securities") deposited with the Property Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Capital Securities
shall be made by the Underwriters in Federal (same day) funds by official check
or checks or wire transfer to an account previously designated to Credit Suisse
First Boston Corporation ("CSFBC") by the Corporation at a bank acceptable to
CSFBC drawn to the order of the Issuer at the office of Xxxxxxx Xxxxxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx Xxx Xxxx 00000, at 10:00 A.M. (New York
time), on February 5, 1997 or at such other time not later than seven full
business days thereafter as CSFBC and the Corporation determine, such time being
herein referred to as the "Closing Date," against delivery to the Property
Trustee as custodian for DTC of the Global Securities representing all of the
Capital Securities. The Global Securities will be made available for checking at
the above office at least 24 hours prior to the Closing Date.
As compensation for the Underwriters' commitment and in view of the
fact that the proceeds of the sale of the Capital Securities and the Common
Securities will be used to purchase the Debentures, the Corporation will pay, on
the Closing Date, to each Underwriter a commission of $10.00 per Capital
Security purchased by such underwriter on the Closing Date by wire transfer of
immediately available funds to bank accounts designated by CSFBC.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Certain Agreements of the Guarantor, the Corporation and the Issuer.
Each of the Guarantor, the Corporation and the Issuer, jointly and severally,
agree with the Underwriters that:
(a) The Guarantor will file the Prospectus (or if permitted by
Rule 424(c) under the Act, the prospectus supplement relating to the
Securities which forms a part thereof) with the Commission pursuant to
and in accordance with Rule 424(b)(4) within the time periods
prescribed. The Guarantor will advise you promptly of any such filing
pursuant to Rule 424(b).
(b) The Guarantor will furnish the each Underwriter, without
charge, a certified copy of the Registration Statement including
exhibits and materials, if any, incorporated by reference therein and,
during the period mentioned in paragraph (d) below, as many copies of
the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as CSFBC may reasonably request.
(c) The Guarantor will advise you promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus (other
than a supplement relating solely to an offering of securities other
than the Securities), and prior to amending or supplementing the Regis-
tration Statement or the Prospectus with respect to the Securities, the
Guarantor will furnish CSFBC with a copy of each such proposed
amendment or supplement.
(d) If at any time after the public offering of the
Securities, in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered, any event shall occur as
a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the
Underwriters, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances under which they were made,
be misleading or so that the Prospectus will comply with law, as the
case may be. Neither your consent to, nor your delivery of, any such
amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(e) As soon as practicable, but not later than the
Availability Date (as defined below), the Guarantor will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the Effective Date which
will satisfy the provisions of Section 11(a) of the Act. For the
purpose of the preceding sentence, "Availability Date" means the 45th
day after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Closing Date, except that, if such fourth
fiscal quarter is the last quarter of the Guarantor's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(f) The Guarantor will arrange for the qualification of the
Securities for offer and sale under the securities or Blue Sky laws of
such jurisdictions as CSFBC shall reasonably request and to pay all
reasonable expenses (including fees and disbursements of counsel) in
connection with such qualification, the determination of the
eligibility of the Securities for investment under the laws of such
jurisdictions as CSFBC may reasonably designate, the printing of any
memoranda concerning the aforesaid qualification or eligibility and the
rating of the Securities by securities rating services.
(g) During the period of five years hereafter, the Guarantor
will furnish to CSFBC, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year;
and the Guarantor will furnish to CSFBC (i) as soon as available, a
copy of each report and any definitive proxy statement of the Guarantor
filed with the Commission under the Exchange Act or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Guarantor or the Corporation as CSFBC may reasonably
request.
(h) The Corporation will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Underwriters for any expenses (including fees and disbursements of
counsel) incurred by them in connection with qualification of the
Securities for sale and determination of their eligibility for
investment under the laws of such jurisdictions as CSFBC designates and
the printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Securities, for the
filing fee incident to, and the fees and disbursements of counsel to
the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. of the Securities, for any
travel expenses of the Corporation's officers and employees and any
other expenses of the Corporation in connection with attending or
hosting meetings with prospective purchasers of the Securities and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(i) During the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
Closing Date or (ii) the termination of trading restrictions on the
Securities, as determined by CSFBC, not to offer, sell, contract to
sell or otherwise dispose of any Securities, any other beneficial
interests in the assets of the Issuer or any preferred securities or
any other securities of any issuer trust or the Corporation which are
substantially similar to the Securities, including any guarantees of
such securities, or any securities convertible or exchangeable for or
representing the right to receive preferred securities or any such
substantially similar securities of either any issuer trust or the
Corporation, without the prior written consent of the CSFBC, except for
the Securities offered in connection with this Agreement.
6. Conditions of the Obligation of the Underwriters. The obligation of
the Underwriters to purchase and pay for the Capital Securities will be subject
to the accuracy of the representations and warranties on the part of the
Guarantor, the Corporation and the Issuer herein, to the accuracy of the
statements of officers of the Guarantor, the Corporation and the Issuer made
pursuant to the provisions hereof, to the performance by the Guarantor, the
Corporation and the Issuer of their respective obligations hereunder and to the
following additional conditions precedent:
(a) CSFBC shall have received a letter, dated the Closing
Date, of Price Waterhouse confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) In their opinion the financial statements
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on any unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Guarantor, inquiries of officials
of the Guarantor who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) any unaudited financial statements included in the
Registration Statements do not comply as to form in
all material respects with the applicable accounting
requirements of the Securities Act, the Exchange Act
and the related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified
date not more than three business days prior to the
Closing Date, there was any decrease in the capital
stock or any increase in long-term debt of the
Guarantor and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by
such accountants, there was anydecrease in
consolidated total assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or
(C) for the period from the date of the latest income
statement included in the Prospectus to the closing
date of the latest available income statement read
by such accountants and to a subsequent specified date
not more than three business days prior to the Closing
Date there were any decreases, as compared with the
corresponding periods of the previous year, in
consolidated revenues, net interest income,
consolidated net income or in the ratio of earnings
to fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus disclose
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Guarantor and its
subsidiaries subject to the internal controls of the
Guarantor's accounting system or are derived directly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection all financial statements and schedules included
in material incorporated by reference into the Prospectus shall be deemed
included in the Registration Statement for purposes of this subsection.
(b) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Guarantor, the Corporation or CSFBC, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Guarantor or its subsidiaries considered as one
enterprise which, in the judgment of a majority in interest of the Underwriters,
is material and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Securities;
(ii) any downgrading in the rating of any debt securities of the Guarantor by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Guarantor (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Guarantor
on any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal, Puerto Rico or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Securities.
(d) CSFBC shall have received an opinion, dated the Closing Date, of
Puerto Rican counsel for the Guarantor, in form and substance reasonably
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Puerto
Rico;
(ii) The Guarantor has corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Prospectus;
(iii) The Guarantor is not required to register as a
foreign corporation in any jurisdiction in order to conduct
the business presently conducted by it;
(iv) Each Significant Subsidiary has been duly incorporated
and is validly existing as a corporation or a bank in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus, and, to the best
of such counsel's knowledge and information, is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases substantial properties or
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business; except
where the failure to so qualify and be in good standing would not have
a material adverse effect on the Guarantor and its subsidiaries taken
as a whole;
and all of the issued and outstanding capital stock of each such
Significant Subsidiary has been duly authorized and validly issued and
is fully paid and non-assessable (subject to the provisions of Section
55 of Title 12 of the United States Code in the case of Significant
Subsidiaries which are national banking associations) and, except for
directors' qualifying shares, is owned, directly or through such
subsidiaries, by the Guarantor free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(v) The Indenture has been duly authorized, executed and
delivered by the Corporation and the Guarantor; the Debentures have
been duly authorized, executed, authenticated, issued and delivered,
the Debenture Guarantees have been duly authorized, executed, issued
and delivered; and (x) the Indenture and the Debentures constitute
valid and legally obligations of the Corporation and (y) the Indenture
and the Debenture Guarantees constitute valid and legally binding
obligations of the Guarantor, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(vi) Each of the Declaration, the Guarantee Agreement and the
Expense Agreement has been duly authorized, executed and delivered by
the Guarantor and the Corporation, respectively, and each of the
Guarantee Agreement and the Expense Agreement constitutes a valid and
legally binding obligation of the Corporation and the Guarantor,
respectively, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(vii) This Agreement has been duly authorized, executed and
delivered by the Guarantor, the Corporation and the Issuer;
(viii) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Guarantor under the
federal laws of the United States and the laws of the Commonwealth of
Puerto Rico for the issuance, sale and delivery of the Capital
Securities to or through the Underwriters have been obtained or made;
provided, however, that, for purposes of this paragraph (viii), such
counsel need express no opinion with respect to state securities laws;
(ix) To the best of such counsel's knowledge, neither the
Guarantor, the Corporation nor any of the Significant Subsidiaries is
in violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note or
lease known to such counsel to which it or any of them is a party or by
which their properties may be bound;
(x) The issuance of the Capital Securities in accordance with
the Operative Documents does not, and the sale of the Capital
Securities to the Underwriters pursuant to this Agreement and the
performance by the Guarantor, the Corporation or the Issuer of their
respective obligations under the Operative Documents will not (a)
violate the articles of incorporation or by-laws of the Guarantor or
(b) violate any existing Federal law of the United States or any law of
the Commonwealth of Puerto Rico or any administrative regulation or
administrative or court decree applicable to the Guarantor or (c)
conflict with or constitute a breach of, or a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Guarantor, pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
known to such counsel to which the Guarantor is a party or by which it
may be bound, or to which any of the property or assets of the
Guarantor is subject, which breach,
default, imposition or violation would, in each case, have a material
adverse effect on the Guarantor and its subsidiaries taken as a whole;
provided, however, that, for purposes of this paragraph (x), such
counsel need express no opinion with respect to Federal or state
securities laws, other anti-fraud laws, fraudulent transfer laws, the
Employee Retirement Income Security Act of 1974 and related laws, and
laws that restrict transactions between United States persons and
citizens or residents of certain foreign countries; provided, further,
that insofar as performance by the Guarantor, the Corporation or the
Issuer of their respective obligations under the Operative Documents
and the Securities are concerned, such counsel need express no opinion
as to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights or general equity principles;
(xi) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
which are required to be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or governmental proceedings to
which the Guarantor or any of its subsidiaries is a party or to which
any of its property or assets is subject which are not described in the
Prospectus, including ordinary routine litigation incidental to the
business of the Guarantor or any such subsidiary, are, considered in
the aggregate, not material;
(xii) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto; and the descriptions
thereof or references thereto are correct in all material respects;
(xiii) The Registration Statement is effective under the Act
and, to the best of such counsel's knowledge, (i) no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Act and (ii) no proceedings therefor have been
initiated or threatened by the Commission;
(xiv) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements,
schedules and other financial data included or incorporated by
reference therein as to which no opinion need be rendered by such
counsel) complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the regulations
under each of those acts;
(xv) Each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus complied when filed as to
form in all material respects with the Exchange Act and the rules and
regulations thereunder; and
(xvi) Such counsel confirms that, in her opinion, nothing has
come to her attention in the course of her review that has caused her
to believe that any part of the Registration Statement, when such part
became effective (within the meaning of the Act) or at the Closing
Date, as the case may be, contains or contained any untrue statement of
a material fact or omits or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus, at the time of filing of the
Prospectus pursuant to Rule 424(b) or at the Closing Date, contains or
contained any untrue statement of a material fact or omits or omitted
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. Such counsel may say that the limitations inherent in
the
independent verification of factual matters and the character of
determinations involved in the registration process are such that she
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus except for those made under the captions "ERISA
Considerations," "Supervision and Regulation" and the appropriate
sections in the Prospectus describing the Securities offered thereby,
insofar as they relate to provisions of documents therein described and
that she does not express any opinion or belief as to the financial
statements or other financial data contained in the Registration
Statement and the Prospectus, as to the statement of the eligibility
and qualification of the Trustee under the Indenture; and that her
letter is furnished as counsel for the Guarantor to the Underwriters
and is solely for the benefit of the Underwriters.
Such counsel may base her opinions, as to certain questions of fact, on
certificates of officers of the Guarantor, the Corporation or the Issuer and may
rely as to all matters relating to the laws of the State of New York upon the
opinion of Xxxxxxxx & Xxxxxxxx.
(e) CSFBC shall have received an opinion, dated the Closing Date, of
Xxxxxxxx & Xxxxxxxx, counsel for the Guarantor, in form and substance reasonably
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Guarantor is duly registered as a bank holding company
under the Bank Holding Company Act of 1956;
(ii) The Indenture has been duly authorized, executed and
delivered by the Corporation and duly qualified under the Trust
Indenture Act; the Debentures have been duly authorized, executed,
authenticated, issued and delivered; the Debenture Guarantees have been
duly authorized, executed, issued and delivered; and (x) the Indenture
and the Debentures constitute valid and legally binding obligations of
the Corporation and (y) the Indenture and the Debenture Guarantees
constitute valid and legally binding obligations of the Guarantor,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(iii) Each of the Declaration, the Guarantee Agreement and the
Expense Agreement has been duly authorized, executed and delivered by
the Guarantor or the Corporation, respectively, and each of the
Guarantee Agreement and the Expense Agreement constitutes a valid and
legally binding obligation of the Corporation and the Guarantor,
respectively, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iv) This Agreement has been duly authorized, executed and
delivered by the Guarantor, the Corporation and the Issuer;
(v) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Guarantor under the
federal laws of the United States and the laws of the State of New York
for the issuance, sale and delivery of the Capital Securities to or
through the Underwriters have been obtained or made;
(vi) The issuance of the Securities in accordance with the
Operative Documents and the sale of the Capital Securities to the
Underwriters pursuant to this Agreement do not, and the performance by
the Guarantor, the Corporation and the Issuer of their respective
obligations under the Operative Documents and the Capital Securities
will not, violate any existing federal law of the United States
applicable to the Guarantor, the Corporation or the Issuer; provided,
however, that, for the purposes of this paragraph (vi), such counsel
need express no opinion with respect to federal or state securities
laws, other anti-fraud laws, fraudulent transfer laws, the Employee
Retirement Income Security Act of 1974 and related laws, and laws that
restrict transactions between United States persons and citizens or
residents of certain foreign countries; provided, further, that insofar
as performance by the Guarantor, the Corporation and the Issuer of
their respective obligations under the Operative Documents and the
Capital Securities is concerned, such counsel need express no opinion
as to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights;
(vii) The Registration Statement is effective under the Act
and, to the best of such counsel's knowledge, (i) no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Act and (ii) no proceedings therefor have been
initiated or threatened by the Commission;
(viii) Neither the Guarantor, the Corporation nor the Issuer
is, and after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the
Prospectus will be, an "investment company" or a company "controlled"
by an investment company as defined in the Investment Company Act; and
(ix) As counsel to the Guarantor, the Corporation and the
Issuer such counsel has reviewed the Registration Statement and the
Prospectus, participated in discussions with representatives of the
Underwriters and those of the Guarantor, the Corporation and the Issuer
and its accountants, and advised the Guarantor as to the requirements
of the Act and the applicable rules and regulations thereunder, and on
the basis of the information that such counsel gained in the course of
the performance of their services considered in the light of their
understanding of the applicable law, including the requirements of Form
S-3 and the character of the prospectus contemplated thereby, and the
experience they have gained through their practice under the Act, such
counsel confirm that, in their opinion, each part of the Registration
Statement, when such part became effective, and the Prospectus, at the
time of filing of the Prospectus pursuant to Rule 424(b), appeared on
their face to be appropriately responsive, in all material respects, to
the requirements of the Act, the Trust Indenture Act, and the
applicable rules and regulations of the Commission thereunder; and that
nothing that came to their attention in the course of their review that
has caused them to believe that any part of the Registration Statement,
when such part became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Prospectus,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Also, that nothing has come to their attention in the
course of the procedures described in the second sentence of this
paragraph that has caused them to believe that the Prospectus, as of
the date and time of delivery of this letter, contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such counsel may say that the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process are such that they do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except (i) for those made under the
appropriate sections in the Prospectus describing
the Securities offered thereby, insofar as they relate to provisions of
documents therein described, and (ii) the accuracy of the descriptions of the
Federal laws of the United States contained in the Registration Statement and
the Prospectus under the captions "ERISA Considerations," "Certain Federal
Income Tax Consequences" and "Supervision and Regulation" and that they do not
express any opinion or belief as to the financial statements or other financial
data contained in the Registration Statement, the Prospectus, as to the
statement of the eligibility and qualification of the Trustee under the
Indenture under which the Securities are being issued and that their letter is
furnished as counsel for the Guarantor to the Underwriters and is solely for the
benefit of the Underwriters.
Such counsel may base their opinions, as to certain questions of fact,
on certificates of officers of the Guarantor, the Corporation or the Issuer and
may rely as to all matters relating to the laws of the Commonwealth of Puerto
Rico upon the opinion of Xxxxxxxx Xxxxxx xx Xxxxxxx, Esq.
(f) CSFBC shall have received an opinion, dated the Closing Date, of
Xxxxxxxx & Xxxxxxxx, special United States tax counsel to the Guarantor, the
Corporation and the Issuer, in form and substance reasonably satisfactory to
counsel for the Underwriters, to the effect that it confirms its opinion set
forth in the Prospectus under the caption "Certain Federal Income Tax
Consequences."
(g) CSFBC shall have received an opinion, dated the Closing Date, of
Xxxxxxxx, Xxxxxx & Finger, special counsel to the Guarantor and special counsel
to the Issuer, in form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect set forth below.
(i) The Issuer has been duly created and is validly existing
in good standing as a business trust under the Delaware Act, and all
filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Issuer as a business trust
have been made.
(ii) Under the Delaware Act and the Declaration, the Issuer
has the trust power and authority to own its property and conduct its
business, all as described in the Prospectus.
(iii) The Declaration constitutes a valid and binding
obligation of the Guarantor, the Corporation and the Trustees, and is
enforceable against the Guarantor, the Corporation and the Trustees in
accordance with its terms, subject, as to enforcement, to the effect
upon the Declaration of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent transfer and
other similar laws relating to the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating
to fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(iv) Under the Delaware Act and the Declaration, the Issuer
has the trust power and authority (i) to execute and deliver, and to
perform its obligations under, this Agreement and (ii) to issue and
perform its obligations under the Capital Securities and the Common
Securities.
(v) Under the Delaware Act and the Declaration, the execution
and delivery by the Issuer of this Agreement, and the performance by
the Issuer of its obligations hereunder, have been duly authorized by
all necessary trust action on the part of the Issuer.
(vi) The Capital Securities have been duly authorized by the
Declaration and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable
beneficial
interests in the assets of the Issuer and are entitled to the benefits
of the Declaration. The holders of the Capital Securities, as
beneficial owners of the Issuer, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware. Such counsel may note that the holders of
Capital Securities may be obligated, pursuant to the Declaration, (i)
to provide indemnity and/or security in connection with and pay taxes
or governmental charges arising from transfers or exchanges of
certificates for Capital Securities and the issuance of replacement
certificates for Capital Securities, and (ii) to provide security or
indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Declaration.
(vii) Under the Delaware Act and the Declaration, the issuance
of the Capital Securities is not subject to preemptive rights.
(viii) The issuance and sale by the Issuer of the Capital
Securities, the execution, delivery and performance by the Issuer of
this Agreement, the consummation by the Issuer of the transactions
contemplated hereby and compliance by the Issuer with its obligations
hereunder, and the performance by the Corporation, as sponsor, of its
obligations under the Declaration (A) do not violate (i) any of the
provisions of the certificate of trust of the Issuer or the Declaration
or (ii) any applicable Delaware law or administrative regulation
(except that such counsel need express no opinion with respect to the
securities laws of the State of Delaware) and (B) do not require any
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or
Delaware governmental authority or Delaware agency.
(ix) Assuming that the Issuer derives no income from or in
connection with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing
of documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, the holders of the Capital
Securities (other than those holders of Capital Securities who reside
or are domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of
their participation in the Issuer, and the Issuer will not be liable
for any income tax imposed by the State of Delaware.
(h) CSFBC shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel
for the Underwriters, such opinion or opinions, dated such Closing Date, with
respect to the incorporation of the Guarantor and the Corporation, the validity
of the Securities delivered on such Closing Date, the Registration Statements,
the Prospectus and other related matters as the Underwriters may require, and
the Guarantor and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(i) Each Underwriter shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Guarantor in which such officers, to the best of
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Guarantor, the Corporation and the Issuer
in this Agreement are true and correct, that each of the Guarantor, the
Corporation and the Issuer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, and that, subsequent to the date of the most recent financial
statements included in or incorporated by reference in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the
Guarantor and its subsidiaries taken as a whole except as set forth in
or contemplated by the Prospectus or as described in such certificate.
The Guarantor will furnish the Underwriter with such conformed copies
of such opinions, certificates, letters and documents as the Underwriters
reasonably request.
7. Indemnification and Contribution. (a) Each of the Guarantor, the
Corporation and the Issuer will, jointly and severally, indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither the Guarantor, the Corporation nor the Issuer will be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Guarantor by any
Underwriter specifically for use therein; and provided, further, that with
respect to any untrue statement or alleged untrue statement in or omission or
alleged omission from any preliminary prospectus the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities concerned, to the extent that a prospectus
relating to such Securities was required to be delivered by such Underwriter
under the Act in connection with the purchase and any such loss, claim, damage
or liability of such Underwriter results from the fact that there was not sent
or given to such person, at or prior to the time the written confirmation of the
sale of such Securities to such person, a copy of the Prospectus (exclusive of
material incorporated by reference) if the Company had previously furnished
copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless each of the Guarantor, the Corporation and the Issuer against any
losses, claims, damages or liabilities to which any of them may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Guarantor by such
Underwriter specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Guarantor, the
Corporation and the Issuer on the one hand and the Underwriters on the other
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above 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 Guarantor, the Corporation and the
Issuer on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Guarantor, the Corporation and the Issuer on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Guarantor bear to the total underwriting discounts and
commissions received by the Underwriters from the Guarantor under this
Agreement. The relative fault shall be determined by reference to, among other
things, 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 Guarantor, the Corporation, the Issuer or the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Guarantor, the Corporation and the Issuer
under this Section shall be in addition to any liability which they may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Guarantor
and the Corporation, to each officer of the Guarantor or the Corporation who has
signed a Registration Statement and to each person, if any, who controls the
Guarantor, the Corporation or the Issuer within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Securities hereunder and the aggregate
liquidation amount of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
liquidation amount of the Securities, you may make arrangements satisfactory to
the Guarantor for the purchase of such Securities by other persons, including
any of the Underwriters, but if no such arrangements are made by the Closing
Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Securities
that such defaulting Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of the
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of the Securities and arrangements satisfactory to
you and the Guarantor for the purchase of such Securities by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non- defaulting Underwriter, the Guarantor,
the Corporation or the Issuer, except as provided in Section 9. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Guarantor, the Corporation or the Issuer or their respective officers and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the Guarantor, the
Corporation, the Issuer or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Securities. If this Agreement is terminated pursuant to Section 8 or for
any reason the purchase of the Securities by the Underwriters is not
consummated, the Guarantor shall remain responsible for the expenses to be paid
or reimbursed by it pursuant to Section 5 and the respective obligations of the
Guarantor, the Corporation, the Issuer and the Underwriters pursuant to Section
7 shall remain in effect. If the purchase of the Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 6(c), the Guarantor will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) incurred by them in connection with the offering of the Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to them c/o Credit Suisse First Boston Corporation, Eleven Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000-0000, Attention: Investment Banking Department -- Transactions
Advisory Group or, if sent to the Guarantor, will be mailed, delivered or
telegraphed and confirmed to it at 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx
Xxxx 00000, Attention: Controller or, if sent to the Corporation or the Issuer,
will be mailed, delivered or telegraphed and confirmed to it care of BanPonce
Financial Corp., 000 Xxxxxxxxxx Xxxx, Xx. Xxxxxx, Xxx Xxxxxx 00000, with a copy
to the Guarantor at the address stated herein.
11. Representation of Underwriters. Any action under this Agreement
taken by you jointly or by CSFBC will be binding upon all the Underwriters.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
The Guarantor hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Guarantor one of the counterparts
hereof, whereupon it will become a binding agreement among the Guarantor, the
Corporation, the Issuer and the several Underwriters in accordance with its
terms.
Very truly yours,
BANPONCE CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Executive Vice
President
BANPONCE FINANCIAL CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
BANPONCE TRUST I
By BANPONCE FINANCIAL CORP.,
Depositor
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above
written.
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Xxxxxx Sarkozy
--------------------------------
Name: Xxxxxx Sarkozy
Title: Director
SCHEDULE A
Underwriter
-----------
Number of
Securities
-----------
Credit Suisse First Boston Corporation..................... 75,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 75,000
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Total............................................. 150,000
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