1
EXHIBIT 1
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ORIENTAL FINANCIAL GROUP INC.
A Puerto Rico Corporation
1,225,000 Shares
of
____% Noncumulative Monthly Income Preferred Stock, Series A
($25 liquidation preference per share)
UNDERWRITING AGREEMENT
Dated: __________, 1999
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TABLE OF CONTENTS
Page
UNDERWRITING AGREEMENT.............................................................................2
SECTION 1. Representations and Warranties.............................................2
(a) Representations and Warranties by the Company.......................................2
(b) Officer's Certificates.............................................................11
SECTION 2. Sale and Delivery to Underwriters; Closing................................11
(a) Initial Securities.................................................................11
(b) Option Securities..................................................................11
(c) Payment............................................................................11
(d) Denominations; Registration........................................................12
SECTION 3. Covenants of the Company..................................................13
(a) Compliance with Securities Regulations and Commission Requests.....................13
(b) Filing of Amendments...............................................................13
(c) Delivery of Registration Statements................................................13
(d) Delivery of Prospectuses...........................................................14
(e) Continued Compliance with Securities Laws..........................................14
(f) Blue Sky Qualifications............................................................14
(g) Rule 158...........................................................................15
(h) Use of Proceeds....................................................................15
(i) Listing............................................................................15
(j) Restriction on Sale of Securities..................................................15
(k) Reporting Requirements.............................................................15
(l) Compliance with Undertakings.......................................................15
(m) Additional Information.............................................................15
SECTION 4. Payment of Expenses.......................................................16
(a) Expenses...........................................................................16
(b) Termination of Agreement...........................................................16
SECTION 5. Conditions of Underwriters' Obligations...................................16
(a) Effectiveness of Registration Statement............................................16
(b) Opinion of Counsel for Company.....................................................17
(c) Opinion of Counsel for Underwriters................................................17
(d) Officers' Certificate..............................................................17
(e) Accountant's Comfort Letter........................................................17
(f) Bring-down Comfort Letter..........................................................18
(g) Approval of Listing................................................................18
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(h) No Objection.......................................................................18
(i) Conditions to Purchase of Option Securities........................................18
(j) Additional Documents...............................................................19
(k) Termination of Agreement...........................................................19
SECTION 6. Indemnification...........................................................19
(a) Indemnification of Underwriters....................................................19
(b) Indemnification of Company, Directors and Officers by Underwriters.................20
(c) Actions against Parties; Notification..............................................21
(d) Settlement without Consent if Failure to Reimburse.................................21
SECTION 7. Contribution..............................................................22
SECTION 8. Representations, Warranties and Agreements to Survive Delivery............23
SECTION 9 Termination of Agreement..................................................23
(a) Termination; General...............................................................23
(b) Liabilities........................................................................24
SECTION 10. Default by One or More of the Underwriters................................24
SECTION 11. Notices...................................................................25
SECTION 12. Parties...................................................................25
SECTION 13. GOVERNING LAW AND TIME....................................................25
SECTION 14. Effect of Headings........................................................25
SECTION 15. Counterparts..............................................................25
SCHEDULES
Schedule A - List of Underwriters.....................................Sch A-1
Schedule B - Pricing Information......................................Sch B-1
EXHIBITS
Exhibit A - List of Subsidiaries.........................................A-1
Exhibit B - Form of Opinion of XxXxxxxxx Xxxxxx..........................B-1
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ORIENTAL FINANCIAL GROUP INC.
(A Puerto Rico Corporation)
1,225,000 Shares
of
____% Noncumulative Monthly Income Preferred Stock, Series A
($25 liquidation preference per share)
UNDERWRITING AGREEMENT
_____________, 1999
Santander Securities Corporation
of Puerto Rico
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
x/x Xxxxxxxxx Xxxxxxxxxx Xxxxxxxxxxx xx Xxxxxx Xxxx
Torre Santander
221 Xxxxxxx Xxxxx xx Xxxx, Xxxxx 000
Xxx Xxxx, Xxxxxx Xxxx 00000-0000
Ladies and Gentlemen:
ORIENTAL FINANCIAL GROUP INC., a Puerto Rico corporation (the
"Company"), confirms its agreement with you, and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom you are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of the Company's ____% Noncumulative Monthly
Income Preferred Stock, Series A ($25 liquidation preference per share) set
forth in said Schedule A, and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 180,000 additional shares of
such preferred stock to cover over-allotments, if any. The aforesaid 1,225,000
shares of preferred stock (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 180,000 shares of preferred stock
subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities".
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_______ ) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus. Promptly after
execution and delivery of this Agreement, the Company will prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations. The information included in such prospectus that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information". Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto, the documents
incorporated therein by reference and schedules thereto at the time it became
effective and including the Rule 430A Information is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus." For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which
is incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c)
hereof, and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933
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Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will include an untrue statement
of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
There are no contracts or other documents required to be
filed as exhibits to the Registration Statement by the 1933 Act or the
1933 Act 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 1933 Act and the 1933 Act Regulations or the 1934 Act and the
rules and regulations thereunder, as applicable, and did not, when
such documents were so filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and
any documents so filed and incorporated by reference subsequent to the
effective date of the Registration Statement shall, when they are
filed with the Commission, conform in all material respects with the
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requirements of the 1933 Act and the 1933 Act Regulations and the 1934
Act and the rules and regulations thereunder, as applicable, and will
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.
(ii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules included
in the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The consolidated financial
statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, in the most recent preliminary prospectus), together
with the related schedules and notes, present fairly the financial
position of the Company and its Subsidiaries (as defined in Section
1(a)(vi) hereof) at the dates indicated and the consolidated statement
of operations, stockholders' equity and cash flows of the Company and
its Subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectus
present fairly the information shown and have been compiled on a basis
consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the
Company's Common Stock, par value $1.00 per share (the "Common
Stock"), since December 31, 1998 there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(v) Good Standing of Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Puerto Rico with full corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified to transact business as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the
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conduct of its business or ownership or leasing of its properties
requires such qualification and where the failure to be so qualified
would, individually or in the aggregate, have a Material Adverse
Effect. The Company is registered as a bank holding company under the
Bank Holding Company Act of 1956 (the "BHCA") in good standing with
the Board of Governors of the Federal Reserve System (the "Federal
Reserve").
(vi) Subsidiaries. The only subsidiaries of the Company
(each a "Subsidiary and collectively the "Subsidiaries") are those
listed on Exhibit A hereto. Except as set forth in the Prospectus (or
if the Prospectus is not in existence, in the most recent preliminary
prospectus) or as required in connection with the exercise of its
rights as a creditor, or pursuant to a bona fide collateral pledge
arrangement, neither the Company nor any Subsidiary owns, nor at the
Closing Time or the Date of Delivery (if any Option Securities are
purchased), will own an interest in any corporation, partnership,
trust, joint venture or other business entity. Each Subsidiary has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Prospectus, and is duly qualified to transact
business as a foreign corporation and is in good standing under the
laws of each jurisdiction in which the conduct of its business or
ownership or leasing of its properties requires such qualification and
where the failure to be so qualified would, individually or in the
aggregate, have a Material Adverse Effect. Except as otherwise
disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary.
(vii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, described
therein and the issuance of the Securities pursuant to this
Agreement). The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company. The
description of the securities of the Company in the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent preliminary prospectus) is, and at the
Closing Time and, if later, as of each Date of Delivery, will be,
complete and accurate in all material respects.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
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(ix) Authorization and Description of Common Stock. The
description of the Common Stock of the Company contained in the
Prospectus conforms in all material respects to the rights set forth
in the instruments defining the same.
(x) Authorization and Description of Securities. The
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement, and, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein will be validly issued and fully
paid and non-assessable shares of capital stock of the Company; the
description or the Securities contained in the Prospectus conforms in
all material respects to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability solely by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any security holder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is in violation of its articles of
incorporation, charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company or any Subsidiary is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any Subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any Subsidiary.
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(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company, is imminent. Neither the Company nor any Subsidiary is
a party to a collective bargaining agreement.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any
Subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus (or if the Prospectus is not in existence,
in the most recent preliminary prospectus) or to be filed as exhibits
thereto which have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company
and its Subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its Subsidiaries has received any actual notice
or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance
or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations, state securities laws or the bylaws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution by the
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Underwriters of the Securities to be sold hereby and the filing by the
Company of the Certificate of Designation and Preferences with respect
to the Securities with the Secretary of State of the Commonwealth of
Puerto Rico ("Puerto Rico").
(xvii) Possession of Licenses and Permits. The Company and
its Subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, Puerto Rico, local or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the lack of such
Governmental Licenses would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and its Subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all other properties
and assets owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectus or (b) would not, singly or in the aggregate, have a
Material Adverse Effect; and all of the leases and subleases material
to the business of the Company and its Subsidiaries, considered as one
enterprise, and under which the Company or any of its Subsidiaries
holds properties described in the Prospectus, are in full force and
effect, and neither the Company nor any Subsidiary has any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xix) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Form S-3. The Company meets the requirements for use
of Form S-3 under the 1933 Act Regulations.
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(xxi) Environmental Laws. To the knowledge of the Company,
except as described in the Registration Statement and except as would
not, singly or in the aggregate, result in a Material Adverse Effect,
(A) neither the Company nor any of its Subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
Subsidiaries and (D) there are no events or circumstances known to the
Company that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its Subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(xxii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
included in the offering described in the Registration Statement.
(xxiii) Stop Orders. No court, supervisory or regulatory
authority or arbitrator has, by order or otherwise, prohibited or
suspended, or, to the knowledge of the Company, threatened to prohibit
or suspend, the use of the Prospectus.
(xxiv) Internal Accounting Controls. 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.
(xxv) No Material Changes. Except as set forth in the
Registration Statement and Prospectus (or, if the Prospectus is not in
existence, the most recent preliminary prospectus), subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus and prior to Closing Time and, if later,
each Date of Delivery,
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(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 or in the ordinary
course of its business, and (iii) the Company has not, and will not
have, paid or declared any dividends or other distributions of any
kind on any class of its capital stock, except for the payment or
declaration of quarterly dividends, on the Company's Common Stock in
the ordinary course of its business.
(xxvi) No Material Misstatements. 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 Representatives was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(xxvii) No Manipulation. Neither the Company, its
Subsidiaries nor any of their respective directors or officers has
taken, nor will he, she or it take, directly or indirectly, any action
designed, or which might reasonably be expected in the future, to
cause or result in, under the Act or otherwise, or which has
constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or otherwise.
(xxviii) Approval for Listing. The Securities have
been approved for listing on the New York Stock Exchange, subject only
to notice of issuance.
(xxix) Unlawful Payments. 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).
(xxx) Taxes. Each of the Company and its Subsidiaries has
filed all foreign, federal, Puerto Rico and local tax returns that are
required to be filed or has requested extensions thereof and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable.
(xxxi) Oriental Bank. The deposit accounts of Oriental Bank
and Trust, a Subsidiary of the Company (the "Bank"), are insured by
the Federal Deposit Insurance Corporation ("FDIC") to the legal
maximum, and no proceeding for the termination or revocation of such
insurance is pending or threatened. The Bank is a member in good
standing of the Federal Home Loan Bank of New York.
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(xxxii) Regulatory Directives. None of the Company or its
Subsidiaries or any of their respective directors or officers is
subject to any order or directive of, or party to any agreement with,
any regulatory agency having jurisdiction with respect to its business
or operations except as disclosed in the Prospectus (or if the
Prospectus is not in existence, in the most recent preliminary
prospectus).
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its Subsidiaries delivered to the Representatives or
to counsel for the Underwriters shall be deemed a representation and warranty
by the Company to the Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
180,000 shares of the Company's ____% Noncumulative Monthly Income Preferred
Stock, Series A ($25 liquidation preference per share) at the price per share
set forth in Schedule B. The option hereby granted will expire 30 days after
the date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Xxxxxxxxxxx Xxxxxx & Xxxxxxx, counsel to the Underwriters, Xxxxx 0000, Xxxxxxx
Xxxxxx Xxxxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000, or at such other place as shall
be agreed upon by the Representatives and the Company, at 9:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern
time) on any given date) business day after the
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date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time"). The Initial
Securities to be purchased by each Underwriter hereunder will be represented by
one or more definitive certificates registered in the name of Cede & Co., which
will be deposited by or on behalf of the Company with the Depository Trust
Company ("DTC") or its designated custodian.
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them, duly endorsed for
transfer or by causing DTC to credit the Securities to the account of each
Underwriter in the case of the Initial Securities. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Each Representative, individually and not as Representatives of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities and the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in definitive form and
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time
or the relevant Date of Delivery, as the case may be. The certificates for the
Initial Securities and the Option Securities, if any, will be made available
for examination and packaging by the Representatives in San Xxxx, Puerto Rico
not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be at the office
of DTC or its designated custodian.
(e) Appointment of Qualified Independent Underwriter. The Company
hereby confirms its engagement of Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("Xxxxx
Xxxxxxxx") as, and Xxxxx Xxxxxxxx hereby confirms its agreement with the Company
to render services as, a "qualified independent underwriter" within the meaning
of Rule 2720 of the Conduct Rules of the NASD with respect to the offering and
sale of the Securities. Xxxxx Xxxxxxxx, solely in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the
"Independent Underwriter". The sale of the Securities shall be conducted
pursuant to Rule 2720(c) of the Conduct Rules of the NASD because Oriental
Financial Services Inc., a registered-broker and member of the NASD, is an
affiliate of the Company under the
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Rule 2720 of the Conduct Rules of the NASD, and is participating as a member of
the selling group for the Securities.
SECTION 3. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)) or of any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, and will furnish the
Representatives with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or
counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will
also deliver to the Representatives, without charge, a conformed copy
of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
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(d) Delivery of Prospectuses. The Company has delivered
to each Underwriter, without charge, as many copies of each
preliminary prospectus as such Underwriter reasonably requested, and
the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations so
as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend
the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission
or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its
best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may
designate and to maintain such qualifications in effect for a period
of not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the date of the
Registration Statement and any Rule 462(b) Registration Statement.
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(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to
effect the listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period
of 90 days from the date of the Prospectus, the Company will not,
without the prior written consent of the Representatives, (i) directly
or indirectly, offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer
or dispose of any share of the Company's preferred stock (the
"Preferred Stock") or any securities convertible into or exercisable
or exchangeable for Preferred Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Preferred Stock, whether any such swap
or transaction described in clause (i) or (ii) above is to be settled
by delivery of Preferred Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the Securities to
be sold hereunder.
(k) Reporting Requirements. The Company, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, will file all documents required to be filed with
the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the rules and regulations of the
Commission thereunder.
(l) Compliance with Undertakings. The Company will comply
with all the provisions of all undertakings contained in the
Registration Statement.
(m) Additional Information. During a period of five years
commencing on the date the Registration Statement is declared
effective by the Commission, the Company will furnish to the
Representatives and each other Underwriter who may so request copies
of such financial statements and other periodic and special reports as
the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the
Representatives 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.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay, or reimburse, if paid by the Representatives, all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the
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preparation, printing and delivery to the Underwriters of this Agreement, any
agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates
for the Securities to the Underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities to the Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery
to the Underwriters of copies of each preliminary prospectus and of the
Prospectus and any amendments or supplements thereto, (vii) the fees and
expenses of any transfer agent or registrar for the Securities, (viii) the
filing fees incident to, and the disbursements of counsel to the Underwriters
in connection with the review by the NASD of the terms of the sale of the
Securities and (ix) the fees and expenses incurred in connection with the
listing of the Securities in the New York Stock Exchange. Except as provided in
Sections 6 and 7 and subparagraph (b) below, the Company will reimburse the
Underwriters for all of their costs and expenses (including the fees and
disbursements of their counsel, which fees shall not in the aggregate exceed
$50,000), stock transfer taxes payable on resale of any of the Securities by
them and any advertising expenses connected with any offers they may make.
(b) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy
of the representations and warranties of the Company contained in Section 1
hereof or in certificates of any officer of the Company or any Subsidiary of
the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of
Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of XxXxxxxxx Xxxxxx, counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, together
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with signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
Such counsel may state that, insofar as such opinions involve factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time,
the Representatives shall have received the favorable opinion, dated
as of Closing Time of Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP, counsel for
the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters with respect to the issuance
and sale to the Securities and other related matters as the
Underwriters may reasonably require. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the
Company and its Subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no Material Adverse Effect, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order or similar proceeding suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or,
to such officers' knowledge, are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have received
from PricewaterhouseCoopers LLP a letter dated such date, in form and
substance reasonably satisfactory to the Representatives, together
with signed or reproduced copies of such letter for each of the
Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the
Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a
date not more than five business days prior to Closing Time.
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(g) Approval of Listing. At Closing Time, the Securities
shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(h) No Objection. The NASD shall have confirmed that it
has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(i) Conditions to Purchase of Option Securities. In the
event that the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and
the statements in any certificates furnished by the Company or any
Subsidiary of the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
Opinion of Counsel for the Company. The favorable
opinion of XxXxxxxxx Xxxxxx, in form and substance
satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
Opinion of Counsel for Underwriters. The favorable
opinion of Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance
satisfactory to the Representatives and dated such Date of
Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section
5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery.
(j) Additional Documents. At Closing Time and at each
Date of Delivery counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein
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contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as required to
be fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities on a Date of Delivery which is after
Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the
Representatives by notice to the Company at any time at or prior to
Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except
that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) (1) Indemnification of Underwriters. The Company
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below)
any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by
the Representatives), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement
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or omission or alleged untrue statement or omission made in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(2) In addition to and without limitation of the
Company's obligation to indemnify Xxxxx Xxxxxxxx, as an Underwriter, the
Company also agrees to indemnify and hold harmless the Independent Underwriter
and each person, if any, who controls the Independent Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all loss, liability, claim, damage, and expense whatsoever, as
incurred, incurred as a result of the Independent Underwriter's participation as
a "qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the NASD in connection with the offering of the Securities.
(b) Indemnification of Company, Directors and Officers by
Underwriters. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a)(1) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), including the Rule
430A Information, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto). The Company acknowledges that, for all
purposes of this Agreement, the amounts of the selling concession and
reallowance set forth under the heading "Underwriting" contained in the
Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company expressly for inclusion in the preliminary
prospectus, the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Sections 6(a)(1) above, counsel to the indemnified parties shall be selected by
the Representatives, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
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24
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances; provided, that, if indemnity is sought pursuant to Section
6(a)(2), then, in addition to the fees and expenses of such counsel for the
indemnified parties, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one counsel (in addition to any local
counsel) separate from its own counsel and that of the other indemnified
parties for the Independent Underwriter in its capacity as a "qualified
independent underwriter" and all persons, if any, who control the Independent
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
1934 Act in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances if, in the reasonable judgment of the Independent Underwriter,
there may exist a conflict of interest between the Independent Underwriter and
the other indemnified parties. Any such separate counsel for the Independent
Underwriter and such control persons of the Independent Underwriter shall be
designated in writing by the Independent Underwriter. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Sections 6(a)(1)(ii) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause 7(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 7(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
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The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and 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 Xxxxx Xxxxxxxx will not
receive any additional benefits hereunder for serving as the Independent
Underwriter in connection with the offering and sale of the securities.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were 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 account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, 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 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective
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obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company and its
Subsidiaries submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company and shall
survive delivery of the Securities to the Underwriters.
SECTION 9 Termination of Agreement.
(a) Termination; General. The Representatives may
terminate this Agreement, by notice to the Company, at any time at or prior to
Closing Time (and with respect to Option Securities, any applicable Date of
Delivery) (i) if there has been, since the time of execution of this Agreement
or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by the order of the
Commission, the NASD or any other governmental authority or (iv) if a banking
moratorium has been declared by Federal, New York or Puerto Rican authorities.
(b) Liabilities. If this Agreement is terminated pursuant
to this Section, such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof, and provided further
that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail or refuse at Closing Time or at a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set
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forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date and arrangements
satisfactory to the remaining Underwriters and the Company for the purchase of
such shares are not made within 36 hours of such default, this Agreement, or
with respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery, shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the Representatives or the
Company shall have the right to postpone Closing Time or the relevant Date of
Delivery, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Santander Securities
Corporation of Puerto Rico, Torre Santander, 221 Xxxxxxx Xxxxx xx Xxxx, Xxxxx
000, Xxx Xxxx, Xxxxxx Xxxx, 00000-0000, Attention: Director of Investment
Banking, to Xxxxx, Xxxxxxxx & Xxxxx, Inc. at __________________, Attention:
___________, and notices to the Company shall be directed to the Company at Hato
Rey Tower, Suite 503, 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx Xxxx 00000,
Attention: President.
SECTION 12. Parties. This Agreement shall inure to the benefit
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any
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legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters and the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF PUERTO
RICO. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER
TO PUERTO RICO TIME.
SECTION 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours,
ORIENTAL FINANCIAL GROUP INC.
By:
----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANTANDER SECURITIES CORPORATION
OF PUERTO RICO
By:
----------------------------------
Name:
Title:
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29
XXXXX, XXXXXXXX & XXXXX, INC.
By:
----------------------------------
Name:
Title:
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
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SCHEDULE A
UNDERWRITERS NUMBER OF
------------ SECURITIES
----------
Santander Securities Corporation of Puerto Rico.............................
Xxxxx, Xxxxxxxx & Xxxxx, Inc................................................
Total..................................................... 1,225,000
=========
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SCHEDULE B
ORIENTAL FINANCIAL GROUP INC.
1,225,000 Shares
____% Noncumulative Monthly Income Preferred Stock,
Series A
($25 liquidation preference per share)
1. The initial public offering price per share for the Securities
shall be $25.00.
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $_________, being an amount equal to the
initial public offering price set forth above less $_______ per share; provided
that the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial Securities but not payable on the
Option Securities.
3. The dividend rate on the Securities will be ____% per annum of
their liquidation preference.
4. The Securities will be subject to redemption at the option of
the Company commencing on ______________, at declining prices, as described in
the Prospectus.
32
EXHIBIT A
LIST OF SUBSIDIARIES
1. Oriental Bank and Trust
2. Oriental Financial Services Corp.
A-1
33
EXHIBIT B
FORM OF OPINION OF
XXXXXXXXX XXXXXX,
AS COMPANY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(C)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Puerto Rico, and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus.
(ii) Each of the Subsidiaries has been duly incorporated
and is validly existing as a corporation (and in the case of the Bank
as a commercial bank) in good standing under the laws of the
Commonwealth of Puerto Rico, and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The Company is registered as a bank holding company
under the Bank Holding Company Act of 1956.
(iv) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(v) The Company is duly qualified as a foreign
corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify would not result in a Material Adverse Effect.
(vi) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to the Underwriting Agreement
or pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); the
shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other similar
rights of any security holder of the Company.
(vii) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to the Underwriting Agreement
and, when issued and delivered by the
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Company pursuant to the Underwriting Agreement against payment of the
consideration set forth in the Underwriting Agreement, will be validly
issued and fully paid and non-assessable; no holder of the Securities
is or will be subject to personal liability for obligations of the
Company solely by reason of being such a holder; the Securities
conform to the provisions of the certificate of designation of the
Company creating the Securities (the "Certificate of Designation") and
the rights, preferences and other terms of the Securities are as set
forth in the Certificate of Designation relating thereto, and all such
provisions are valid under the laws of the Commonwealth of Puerto
Rico.
(viii) The issuance of the Securities is not subject to the
preemptive or other similar rights of any security holder of the
Company.
(ix) Each Subsidiary has been duly incorporated and is
validly existing as a corporation (and in the case of the Bank, as a
commercial bank) in good standing under the laws of the Commonwealth
of Puerto Rico, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and each Subsidiary is duly qualified as a foreign
corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, has been
duly authorized and validly issued, is fully paid and non-assessable
and, to the best of our knowledge, is owned by the Company, directly
or through a Subsidiary, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any security holder
of any Subsidiary.
(x) The Company has full legal right, power, and
authority to enter into the Underwriting Agreement and to consummate
the transactions provided for therein. The Underwriting Agreement has
been duly authorized, executed and delivered by the Company, and
assuming due authorization, execution and delivery by each other party
thereto, is a valid and binding agreement of the Company, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws now or hereafter in effect relating to or
affecting creditors' rights generally or by general principles of
equity relating to the availability of remedies and except as rights
to indemnity and contribution may be limited by federal, state or
Puerto Rico securities laws or the public policy underlying such laws.
(xi) The Registration Statement has been declared
effective under the 1933 Act; any required filing of the Prospectus
pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); and, to the best of our
knowledge, no stop order suspending the effectiveness of the
Registration Statement, or any amendment thereto and no order directed
at any document incorporated by reference in the Registration
Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
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35
(xii) The Registration Statement, the Rule 430A
Information, the Prospectus and each amendment or supplement to the
Registration Statement and Prospectus, and the documents incorporated
therein by reference, as of their respective filing, effective or
issue dates, as the case may be (other than the financial statements,
notes to the financial statements, financial tables and other
financial information and supporting schedules included therein or
omitted therefrom or contained in the documents incorporated by
reference therein, as to which we need express no opinion), complied
as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and, in the case of the documents
incorporated by reference, the 1934 Act and the rules and regulations
of the Commission thereunder.
(xiii) The form of certificate used to evidence the
Securities complies in all material respects with all applicable
Commonwealth of Puerto Rico statutory requirements, with any
applicable requirements of the Certificate of Incorporation and
By-laws of the Company and the requirements of the New York Stock
Exchange. The Securities have been duly authorized for listing on the
New York Stock Exchange.
(xiv) To the best of our knowledge, there is not pending
or threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any Subsidiary is a party, or to which the
property or assets of the Company or any Subsidiary is subject, before
or brought by any court or governmental agency or body, domestic or
foreign, of a character required to be disclosed in the Registration
Statement or the Prospectus which is not so disclosed therein, which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in the Underwriting Agreement or the
performance by the Company of its obligations thereunder.
(xv) The information in the Prospectus under "Risk
Factors--Payment of Dividends", "Risk Factors--Holding Company
Structure", "Description of Series A Preferred Stock", "Description of
Capital Stock", "Taxation-United States Taxation", "Taxation-Puerto
Rico Taxation" and in the Registration Statement under Item 15, to the
extent that it constitutes a discussion of federal or Puerto Rico law,
summaries of legal matters involving federal or Puerto Rico law, the
Company's Certificate of Incorporation and By-laws or legal
proceedings, or legal conclusions, has been reviewed by us and is
accurate and complete in all material respects; and our opinion set
forth under "Taxation" is confirmed. The Securities conform as to
legal matters in all material respects to the descriptions thereof in
the Prospectus.
(xvi) To the best of our knowledge, there are no statutes
or regulations that are required to be described in the Prospectus
that are not described as required.
(xvii) All descriptions in the Registration Statement of
contracts and other documents to which the Company or its Subsidiaries
are a party are accurate in all material respects; to the best of our
knowledge, there are no franchises, contracts, indentures,
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36
mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement
or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xviii) To the best of our knowledge, neither the Company
nor any Subsidiary is in violation of its articles of incorporation or
by-laws and no default by the Company or any Subsidiary exists in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than
under the 1933 Act and the 1933 Act Regulations, which have been
obtained, the filing of the Certificate of Designation with the Puerto
Rico Department of State which has been made, or as may be required
under the securities or blue sky laws of the various states, as to
which blue sky laws we express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the
Underwriting Agreement or for the offering, issuance, sale or delivery
of the Securities.
(xx) The execution, delivery and performance of the
Underwriting Agreement and the consummation of the transactions
contemplated in the Underwriting Agreement and in the Registration
Statement (including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds") and compliance by
the Company with its obligations under the Underwriting Agreement do
not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xi) of the
Underwriting Agreement) under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Company or
any Subsidiary is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
Subsidiary is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the articles of incorporation or by-laws of the Company
or any Subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations.
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37
(xxi) To the best of our knowledge, there are no persons
with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 0000 Xxx.
(xxii) The Company is not, and upon the issuance and sale
of the Securities as contemplated in the Underwriting Agreement and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
(xxiii) The deposit accounts of the Bank are insured by the
FDIC to the legal maximum, and to the best of our knowledge, no
proceeding for the termination or revocation of such insurance is
pending or threatened. The Bank is a member of the Federal Home Loan
Bank of New York.
(xxiv) To the best of our knowledge, none of the Company,
its Subsidiaries, or any of their respective directors or officers is
subject to any order or directive of, or is a party to any agreement
with, any federal or Puerto Rico securities, banking or mortgage
banking regulatory agency having jurisdiction with respect to the
business or operations of the Company or the Subsidiaries except as
disclosed in the Registration Statement or the Prospectus and except
for any such order, directive or agreement which would not have a
Material Adverse Effect.
(xxv) To the best of our knowledge, the conduct of the
respective businesses of the Company and its Subsidiaries is not in
violation of any federal or Puerto Rico banking, mortgage banking or
securities law, which violation is likely to have a Material Adverse
Effect. Each of the Company and the Subsidiaries has obtained and, to
our knowledge, is operating in compliance with, all authorizations,
licenses, orders and directives required by federal and Puerto Rico
banking, mortgage banking or securities laws which are material to the
conduct of their respective businesses. To our knowledge, all such
authorizations, licenses, orders or directives are valid and in full
force and effect and neither the Company nor the Subsidiaries have
received any notice of any proceeding relating to the revocation or
modification of any such license, authorization or order.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the documents
incorporated therein by reference and the Rule 430A Information (except for
financial statements, notes to the financial statements, financial tables and
other financial information and schedules and other financial data included
therein or omitted therefrom or contained in the documents incorporated therein
by reference, as to which we need make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements, notes to the financial statements, financial
tables and other financial information and schedules and other financial data
included therein or omitted therefrom or contained in the documents therein
incorporated by
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reference, as to which we need make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
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