EXHIBIT (1)(a)
$31,152,000
POPULAR, INC.
Notes Linked to the S&P 500 Index due September 30, 2008
UNDERWRITING AGREEMENT
September 25, 2003
POPULAR SECURITIES, INC.
Hato Rey, Puerto Rico 00918
Ladies and Gentlemen:
POPULAR, INC., a Puerto Rico corporation (the "Company"), proposes to
sell its Notes Linked to the S&P 500 Index due September 30, 2008, Series A and
Series B in an aggregate principal amount of $31,152,000 (the "Notes"), which
are to be issued and sold by the Company to you (the "Underwriter"). The Notes
are to be issued pursuant to resolutions adopted by the Board of Directors of
the Company on November 7, 2001 and by the Funding Committee on September 25,
2003 (collectively the "Board Resolutions") and to the provisions of an
indenture regarding the Company's senior unsecured debt securities dated as of
February 15, 1995, as amended (the "Indenture"), between the Company and Bank
One, NA, as successor trustee (the "Trustee").
The Company hereby confirms as follows its agreements with the
Underwriter.
1. Agreement to Sell and Purchase.
On the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions of this
Agreement, the Company agrees to sell to the Underwriter, and the Underwriter
agrees to purchase the Note from the Company, at an aggregate purchase price of
$30,451,080, equal to the aggregate public offering price of the Notes minus an
underwriting discount of $700,920.
2. Delivery and Payment. The Notes shall be evidenced in the form
of one or more global notes and will be delivered to the Underwriter in book
entry form through the facilities of the Depository Trust Company, against
payment of the purchase price by wire transfer of immediately available funds to
the bank account designated by the Company. Such payment shall be made at
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10:00 a.m., New York City time, on the third full business day following the
date of this Agreement, or such other time on such other date, not later than
seven business days after the date of this Agreement, as may be agreed upon by
the Company and the Underwriter (such date is hereinafter referred to as the
"Closing Date"). Time shall be of the essence and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
the Underwriter hereunder.
The cost of original issue tax stamps, if any, in connection with the
issuance, sale and delivery of Notes by the Company to the Underwriter shall be
borne by the Company. The Company will pay and save the Underwriter and any
subsequent holder of the Notes harmless from any and all liabilities with
respect to or resulting from any failure or delay in paying Federal, state or
Commonwealth of Puerto Rico stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance,
sale or delivery to the Underwriter of the Notes.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to the Underwriter that:
(a) The Company meets the requirements for use of Form
S-3 and a registration statement (Registration No. 333-73242) on Form S-3, as
amended, with respect to the Notes, including a prospectus (the "Base
Prospectus"), has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission and has become effective. Such registration statement and the Base
Prospectus may have been amended or supplemented prior to the date of this
Agreement; any such amendment or supplement was so prepared and filed, and any
such amendment or supplement filed after the effective date of such registration
statement has become effective. No stop order suspending the effectiveness of
the registration statement has been issued, and, to the Company's knowledge, no
proceeding for that purpose has been instituted or threatened by the Commission.
A final prospectus supplement relating to the Notes containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the Rules
and Regulations has been or will be so prepared and filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations on or before the second
business day after the date hereof (or such earlier time as may be required by
the Rules and Regulations); and the Rules and Regulations do not require the
Company to, and, without the Underwriter's consent, the Company will not, file a
post-effective amendment after the time of execution of this Agreement and prior
to the filing of such final form of prospectus supplement. The registration
statement has been supplemented by one or more forms of preliminary prospectus
supplement, as contemplated by Rule 430 or Rule 430A of the Rules and
Regulations, used in connection with the offering and sale of the Notes (each a
"Preliminary Prospectus"). Copies of such registration statement, any such
amendments, the final prospectus supplement (if filed with the commission prior
to the date of this Underwriting Agreement) and each Preliminary Prospectus and
all documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Underwriting Agreement have been
delivered to the Underwriter and its counsel. The term "Registration Statement"
means such registration statement as amended at the time it
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became effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed by virtue of Rule 430A of the Rules and
Regulations to be included in such Registration Statement at the Effective Date
and any prospectus supplement filed thereafter with the Commission, and shall
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The term "Prospectus" means, collectively, the Base
Prospectus together with any prospectus supplement, in the respective forms they
are filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Base Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date, or the date of any Preliminary Prospectus or the Prospectus, as the case
may be, that is incorporated therein by reference. For purposes of this
Underwriting Agreement, all references to the Registration Statement, the
Prospectus, any Preliminary Prospectus or any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (XXXXX), and such copy
shall be identical (except to the extent permitted by Regulation S-T) to any
Prospectus delivered to the Underwriter for use in connection with the offering
of the Notes by the Company.
(b) Each part of the Registration Statement (excluding
any prospectus supplement with respect to an offering of securities other than
the offering of the Notes contemplated hereby), when such part became or becomes
effective, each Preliminary Prospectus, on the date of filing thereof with the
Commission, and the Prospectus and any amendments or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date, conformed
and will conform in all material respects with the requirements of the Act and
the Rules and Regulations; each part of the Registration Statement (excluding
any prospectus supplement with respect to an offering of securities other than
the offering of the Notes contemplated hereby), when such part became or becomes
effective, 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; each Preliminary Prospectus, on the
date of filing thereof with the Commission, and the Prospectus and any amendment
or supplement thereto, on the date of filing thereof with the Commission and at
the Closing Date, did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
the foregoing shall not apply to the statements in or omissions from any such
document relating to the Underwriter in reliance upon, and in conformity with,
written information relating to the Underwriter furnished to the Company by the
Underwriter specifically for use in the preparation thereof. The Company has not
distributed any offering material in connection with the offering or sale of the
Notes other than the Registration Statement, any Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus and any amendment or supplement to such
Registration Statement or such Prospectus, when they became or become effective
under the Act or were or are filed with the Commission under
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the Exchange Act, as the case may be, conformed or will conform in all material
respects with the requirements of the Act, the Rules and Regulations, the
Exchange Act and the rules and regulations of the Commission thereunder (the
"Exchange Act Rules and Regulations"), as applicable.
(d) The only direct or indirect subsidiaries of the
Company ("Subsidiaries") that are "significant subsidiaries," as defined in Rule
405 of Regulation C of the Rules and Regulations under the Act (each, a
"Significant Subsidiary") are Banco Popular de Puerto Rico, a Puerto Rico
corporation ("Banco Popular"), Popular International Bank, Inc., a Puerto Rico
corporation, Popular North America, Inc., a Delaware corporation, Banco Popular
North America, Inc., a New York corporation, and Equity One, Inc., a Delaware
corporation. The Company has been and, at the Closing Date, will be duly
organized and validly existing as a corporation under the laws of the
Commonwealth of Puerto Rico and is and, at the Closing Date, will be in good
standing with the Commonwealth of Puerto Rico. The Company is and will be as of
the Closing Date registered with the Board of Governors of the Federal Reserve
System (the "Federal Reserve") as a bank holding company under the Bank Holding
Company Act of 1956 (the "BHCA") and its election to be treated as a financial
holding company under the BHCA, as amended by the Xxxxx-Xxxxx-Xxxxxx Act, is and
will remain in full force and effect. Each of the Significant Subsidiaries is
and, at the Closing Date, will be a corporation duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation. Each of the Company and its Significant Subsidiaries is and, at
the Closing Date, will be duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
or use of its property and assets makes such qualification necessary, except
where the failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects or business
affairs of the Company and its Subsidiaries considered as a single enterprise.
(e) The description of the securities of the company in
the Registration Statement and the Prospectus is, and at the Closing Date, will
be, complete and accurate in all respects. No holders of securities of the
Company are entitled to have such securities registered under the Registration
Statement, except where such rights have been waived.
(f) The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated
therein by reference and the Prospectus present fairly the financial condition
of the Company and its Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and its
Subsidiaries for the periods covered thereby, all in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the entire periods involved. PricewaterhouseCoopers LLP (the "Accountants"), who
have reported on those of such financial statements and related notes which are
audited, are independent accountants with respect to the Company and its
Subsidiaries within the meaning of the Act and the applicable and published
rules and regulations.
(g) 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
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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.
(h) Except as set forth in the Registration Statement and
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date,
(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 a single
enterprise, (ii) neither the Company nor any of its Significant Subsidiaries has
entered into, or will have entered into any transactions that would be
considered material to the Company and its Subsidiaries considered as a single
enterprise, other than pursuant to this Agreement, and (iii) the Company has
not, and will not have, paid or declared any dividends or other distributions of
any kind on any class of its capital stock, except for the payment or
declaration of quarterly dividends on the Company's common stock (the "Common
Stock") and monthly dividends on its preferred stock in the ordinary course of
its business.
(i) The Company is not required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company Act").
(j) Except as set forth or incorporated therein by
reference in the Registration Statement, and the Prospectus, there are no
actions, suits, arbitrations, claims, governmental or other proceedings (formal
or informal), or investigations pending or threatened against or affecting the
Company or any of its Significant Subsidiaries, or any directors, officers or
shareholders of the Company or any of its Significant Subsidiaries in their
respective capacities as such, or any of the properties or assets owned or
leased by the Company or any of its Significant Subsidiaries, before or by any
Federal, state or Commonwealth of Puerto Rico court, commission, regulatory
board, administrative agency or other governmental body, domestic or foreign
(collectively, a "Governmental Body"), wherein an unfavorable ruling, decision
or finding would adversely affect the business, prospects, financial condition,
net worth or results of operations of the Company and its Subsidiaries
considered as a single enterprise and would be required to be disclosed in the
Registration Statement and the Prospectus. Neither the Company nor any
Significant Subsidiary is in violation of, or in default with respect to, any
law, rule, or regulation, or any order, judgment, or decree, except as described
in the Prospectus or such as in the aggregate do not now have and can reasonably
be expected in the future not to have a material adverse effect upon the
operations, business, properties, or assets of the Company and its Subsidiaries
considered as a single enterprise; nor is the Company or any Significant
Subsidiary presently required under any order, judgment or decree to take any
action in order to avoid any such violation or default, except as described in
the Prospectus.
(k) The Company and each of its Significant Subsidiaries
possess and, at the Closing Date, will possess adequate governmental permits,
consents, orders, approvals, franchises, certificates and other authorizations
(collectively, "Licenses") necessary to carry on their respective businesses and
own or lease their respective properties as contemplated in the Registration
Statement
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and Prospectus. The Company and each of its Significant Subsidiaries have and,
at the Closing Date, will have complied in all material respects with all laws,
regulations and orders applicable to it or its business, assets and properties.
Neither the Company nor any of its Significant Subsidiaries is, nor, at the
Closing Date, will be in default (nor has any event occurred which, with notice
or lapse of time or both, would constitute a default) in the due performance and
observation of any term, covenant or condition of any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument (collectively, a "contract or other agreement") to which they are
a party or by which their respective properties are bound or affected, the
violation of which would individually or in the aggregate have a material
adverse effect on the condition, financial or otherwise, or the earnings,
prospects or business affairs of the Company and its Subsidiaries considered as
a single enterprise. There are no governmental proceedings or actions pending or
threatened for the purpose of suspending, modifying or revoking any License held
by the Company or any of its Significant Subsidiaries, except where such
suspension, modification or revocation would not individually or in the
aggregate have a material adverse effect on the condition, financial or
otherwise, or the earnings, prospects or business affairs of the Company and its
Subsidiaries considered as a single enterprise.
(l) No consent, approval, authorization or order of, or
any filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in connection
with the issuance and sale of the Notes by the Company, except such as have been
obtained and such as may be required under state or Commonwealth of Puerto Rico
securities or blue sky laws or the bylaws and rules of the National Association
of Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the Underwriter of the Notes to be sold hereby.
(m) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and contribution
may be limited by federal, state or Commonwealth of Puerto Rico securities laws
or the public policy underlying such laws. Except as disclosed in the
Registration Statement and the Prospectus, the execution, delivery and the
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any
Encumbrance upon any of the properties or assets of the Company or any of the
Significant Subsidiaries pursuant to the terms or provisions of, or result in a
breach or violation of or conflict with any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
(i) the Certificate of Incorporation or By-laws of the Company, in each case as
amended, or (ii) any contract or other agreement to which the Company or any of
the Significant Subsidiaries is a party or by which it or any of their
respective assets or properties are bound or affected, the violation of which
would individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects or business
affairs of the Company and its Subsidiaries considered as a single enterprise,
or (iii) any judgment, ruling, decree, order, law, statute, rule or regulation
of any Governmental Body applicable to the Company
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or any of the Significant Subsidiaries or their respective businesses or
properties, the violation of which would individually or in the aggregate have a
material adverse effect on the financial condition, or the earnings, prospects
or business affairs of the Company and its Subsidiaries considered as a single
enterprise.
(n) No statement, representation, or warranty made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriter was or will be, when made,
inaccurate, untrue or incorrect in any material respect. Each certificate signed
by an officer of the Company and delivered to the Underwriter or its counsel
shall be deemed to be a representation and warranty by the Company to the
Underwriter as to the matters covered thereby.
(o) Neither the Company nor any of its directors,
officers or affiliates has taken, nor will he, she or it take, directly or
indirectly, any action designed, or which might reasonably be expected in the
future, to cause or result in, under the Act or otherwise, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Notes or otherwise.
(p) Neither the Company nor any of its Significant
Subsidiaries is involved in any collective labor dispute with its employees nor
is any such dispute threatened or imminent.
(q) Neither the Company nor any of its Significant
Subsidiaries nor, to the Company's best knowledge, any employee or agent of the
Company or any Significant Subsidiary has made any payment of funds of the
Company or any Significant Subsidiary or received or retained any funds of the
Company or any Significant 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.
(r) The business, operations and facilities of the
Company and its Significant Subsidiaries have been and are being conducted in
compliance with all applicable laws, ordinances, rules, regulations, licenses,
permits, approvals, plans, authorizations or requirements relating to
occupational safety and health, or pollution, or protection of health or the
environment (including, without limitation, those relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous or toxic substances, materials or wastes into ambient air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, gaseous or liquid in nature) of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States, any state, or the Commonwealth of Puerto Rico or any
political subdivision thereof, and all applicable judicial or administrative
agency or regulatory decrees, awards, judgments and orders relating thereto,
except where failure to so comply would not have a material adverse effect on
the financial condition, or the earnings or business affairs of the Company and
its Subsidiaries considered as a single enterprise; and neither the Company nor
any of its Significant Subsidiaries has received any notice from any
governmental instrumentality or any third party alleging any violation
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thereof or liability thereunder (including, without limitation, liability for
costs of investigating or remediating sites containing hazardous substances or
damages to natural resources), except where failure to so comply would not have
a material adverse effect on the financial condition, or the earnings or
business affairs of the Company and its Subsidiaries considered as a single
enterprise.
(s) The Company and each of its Significant Subsidiaries
has filed all foreign, federal, state and local tax returns that are required to
be filed or has requested extensions thereof and has paid all taxes required to
be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any failure
to file that would not have a material adverse effect on the financial
condition, or the earnings or business affairs of the Company and its
Subsidiaries considered as a single enterprise.
(t) The Company meets the requirements for use of Form
S-3 under the Rules and Regulations and the use of Rule 415 under the Rules and
Regulations.
(u) The deposit accounts of Banco Popular, and of each of
the other Significant Subsidiaries of the Company that are depository
institutions, are insured by the Bank Insurance Fund (the "BIF") of the Federal
Deposit Insurance Corporation ("FDIC") to the legal maximum, and no proceeding
for the termination or revocation of such insurance is pending or threatened.
Banco Popular is a member of the Federal Reserve Bank of New York and of the
Federal Home Loan Bank of New York.
(v) None of the Company nor any of its Significant
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 and except for any such order, directive or
agreement that is not material to the Company and its Subsidiaries considered as
a single enterprise.
(w) For the three year period ended December 31, 2002,
approximately 99% of Popular Inc.'s gross income was attributable to income
derived from sources within Puerto Rico and approximately 100% of its gross
income was attributable to the conduct of a trade or business in Puerto Rico,
both percentages determined in accordance with the applicable sourcing rules of
Section 861(c)(1)(B) of the United States Internal Revenue Code of 1986, as
amended.
(x) The Company is not a party to any agreement or order
of any governmental entity or court that, as of the date hereof, and assuming no
material adverse change to the Company's financial condition, restricts its
ability to pay interest on, or the principal of the Notes. Banco Popular is not
a party to any agreement or order of any governmental entity or court that, as
of the date hereof, and assuming no material adverse change to the Company's
financial condition, restricts its ability to pay dividends to the Company
sufficient to allow the Company to pay interest on the Notes.
(y) The Notes will be, upon their issuance and payment
therefor in accordance with the terms of this Agreement, duly authorized,
executed, and delivered and will constitute legally
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valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, and entitled to the benefits of the Indenture. The
Notes shall be payable and shall have such other terms as provided in the
Indenture and the Board Resolutions and as described in the Prospectus. The
terms of the Notes and the terms of their issuance and sale have been
established in conformity with the Indenture.
(z) The Company has full legal right, power and authority
(i) to adopt the Board Resolutions, (ii) to enter into this Agreement, and (iii)
to carry out and consummate the transactions contemplated by each of the
foregoing instruments.
(aa) The Company has duly authorized (i) the execution,
delivery and performance of this Agreement and the Notes, (ii) the preparation
and distribution of the Prospectus and of each Preliminary Prospectus, and (iii)
the taking of any and all such actions as may be required on the part of the
Company to carry out, give effect to and consummate the transactions
contemplated by this Agreement, the Prospectus, the Notes and the Indenture.
(bb) The Board Resolutions have been duly adopted, and the
Indenture and this Agreement have each been duly authorized, executed and
delivered by the Company and each is in full force and effect, and each of the
Indenture and this Agreement constitutes a legally valid and binding obligation
of the Company enforceable against the Company in accordance with their terms.
4. Agreements of the Company. The Company covenants and agrees
with the Underwriter as follows:
(a) The Company will cause the Prospectus Supplement to
be filed as contemplated by Section 3(a) hereof (but only if the Underwriter has
not reasonably objected thereto by notice to the Company after having been
furnished a copy within a reasonable time prior to filing) and will notify the
Underwriter promptly of such filing. The Company will not, during such period as
the Prospectus is required by law to be delivered in connection with sales of
the Notes by the Underwriter (the "Prospectus Delivery Period"), file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Underwriter within a
reasonable period of time prior to the filing thereof and the Underwriter shall
not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the
Registration Statement to remain effective through the completion of the
Underwriter's distribution of the Notes, and will notify the Underwriter
promptly, and will confirm such advice in writing, (i) of the preparation and
filing (subject to Section 4(a)) of any post-effective amendment and when any
such post-effective amendment to the Registration Statement becomes effective,
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
or the threat thereof, (iv) of the suspension of the qualification or
registration of the Notes for offering or sale in any jurisdiction, or of the
initiation or threat of any proceeding for any such purpose; (v) of the
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happening of any event during the Prospectus Delivery Period that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (vi) of receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the Company,
the Registration Statement, any Preliminary Prospectus or the Prospectus. If at
any time the Commission or any jurisdiction shall threaten to issue, or shall
issue, any order suspending the effectiveness of the Registration Statement or
suspending the qualification or registration of the Notes for sale in any
jurisdiction, the Company will make every reasonable effort to prevent the
issuance of such order and, if such an order should be issued, to obtain the
withdrawal of such order at the earliest possible moment. The Company will use
its best efforts to comply with the provisions of and make all requisite filings
with the Commission pursuant to Rule 430A and to notify the Underwriter promptly
of all such filings.
(c) If, at any time when a Prospectus relating to the
Notes is required to be delivered under the Act, any event occurs as a result of
which, in the judgment of the Company or the Underwriter, the Prospectus, as
then amended or supplemented, would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or the Registration Statement, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Prospectus or the Registration Statement to comply with the Act or the Rules and
Regulations, the Company will promptly notify the Underwriter thereof and,
subject to Section 4(b) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(d) The Company will furnish to the Underwriter, without
charge, copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto.
(e) The Company will comply with all the provisions of
all undertakings contained in the Registration Statement.
(f) During the Prospectus Delivery Period, the Company
will promptly furnish to the Underwriter, without charge, as many copies of each
Preliminary Prospectus, the Prospectus (containing the Prospectus Supplement)
and any amendment or supplement thereto as the Underwriter may from time to time
reasonably request. The Company consents to the use of the Prospectus, as
amended or supplemented from time to time, by the Underwriter and by all dealers
to whom the Notes may be sold, both in connection with the offering or sale of
the Notes and, thereafter, during the Prospectus Delivery Period. If during the
Prospectus Delivery Period any event shall occur which in the judgment of the
Company or the Underwriter should be set forth in the Prospectus in order to
make any statement therein, in the light of the circumstances under which it
10
was made, not misleading, or if, in the reasonable opinion of counsel to the
Underwriter, it is necessary to supplement or amend the Prospectus to comply
with law, the Company will forthwith prepare and duly file with the Commission
an appropriate supplement or amendment thereto. Except as required by the
Exchange Act or the Exchange Act Rules and Regulations, the Company shall not
file any document under the Exchange Act before the termination of the
Prospectus Delivery Period if such document would be deemed to be incorporated
by reference into the Prospectus to which the Underwriter reasonably objects.
(g) Prior to any public offering of the Notes by the
Underwriter, the Company will cooperate with the Underwriter and its counsel in
connection with the registration or qualification of the Notes for offer and
sale under the securities or blue sky laws of such jurisdictions as the
Underwriter may reasonably request; provided, that in no event shall the Company
be obligated to quality to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to the
holders of the Notes as soon as practicable, but not later than ninety (90) days
after the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(i) The Company will apply the net proceeds from the
offering and sale of the Notes in the manner set forth in the Prospectus.
(j) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of any
security of the Company to facilitate the sale or resale of any of the Notes.
5. Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Underwriter, all costs and expenses incidental to
the performance of the obligations of the Company under this Agreement,
including, but not limited to, costs and expenses of or relating to (i) the
preparation, printing and filing by the Company of the Registration Statement
and exhibits thereto, each Preliminary Prospectus prior to or during the period
specified in the first sentence of Section 4(f) but not exceeding nine (9)
months after the Effective Date, the Prospectus and any amendment or supplement
to the Registration Statement or the Prospectus, (ii) the preparation and
delivery of certificates representing the Notes, (iii) furnishing (including
costs of shipping and mailing) such copies of the Registration Statement, the
Prospectus and any Preliminary Prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Notes by the Underwriter, (iv) the filing fees and out-of-pocket expenses
relating to
11
such filings for any filings required to be made by the Underwriter with the
NASD, (v) the registration or qualification of the Notes for offer and sale
under the securities or blue sky laws of such jurisdictions designated pursuant
to Section 4(g) and the preparation and printing of preliminary, supplemental
and final blue sky memoranda, (vi) counsel and accountants to the Company, and
(vii) the transfer agent for the Notes.
(b) If the transactions contemplated by this Agreement
are not consummated or if this Agreement is terminated by the Company pursuant
to any of the provisions hereof, the Company will reimburse the Underwriter for
all of its accountable out-of-pocket fees and expenses (including the fees,
disbursements and other charges of its counsel) incurred by it in connection
herewith.
6. Conditions of the Obligations of the Underwriter. The
obligations of the Underwriter hereunder are subject to the following
conditions:
(a) All filings required under Rule 424 and 430A of the
Rules and Regulations to be made by the Company prior to the Closing shall have
been made by the Company.
(b) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Notes under the securities or blue sky laws of any
jurisdiction shall be in effect, and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities, and (iv) after the date hereof no amendment or supplement
to the Registration Statement or the Prospectus shall have been filed unless a
copy thereof was first submitted to the Underwriter and the Underwriter did not
object thereto in good faith, and the Underwriter shall have received
certificates, dated the Closing Date and signed by the Chief Executive Officer,
the President or any Senior Executive Vice President of the Company and the
Chief Financial Officer, the Treasurer or the Chief Accounting Officer of the
Company (who may, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of the foregoing clauses (i), (ii) and
(iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, properties,
management, financial condition or results of operations of the Company whether
or not arising from transactions in the ordinary course of business, and (ii)
the Company shall not have sustained any material loss or interference with its
business, assets or properties from fire, explosion, flood or other casualty, or
from any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted
12
against the Company or any of its officers, directors or shareholders in their
capacities as such, or any of its assets or properties, before or by any
Governmental Body in which litigation or proceeding an unfavorable ruling,
decision or finding would materially and adversely affect the business,
properties, financial condition, net worth or results of operations of the
Company.
(e) Each of the representations and warranties of the
Company contained herein shall be true and correct at the Closing Date, as if
made on such date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date shall
have been fully performed, fulfilled or complied with.
(f) The Underwriter shall have received opinions, dated
the Closing Date, from Xxxxxxxxxxx Xxxxxx & Xxxxxxx, LLP, counsel for the
Company, and Xxxxxxxx Xxxxxx xx Xxxxxxx, General Counsel of the Company, to the
following effect:
(A) in the case of the opinion from Xxxxxxxxxxx
Xxxxxx & Xxxxxxx, LLP:
(i) The Company has been duly organized and is
validly existing as a corporation under the laws of the Commonwealth of
Puerto Rico and is in good standing with the Commonwealth of Puerto
Rico; Banco Popular is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Puerto Rico
and is in good standing with the Commonwealth of Puerto Rico;
(ii) The Company has duly authorized the issuance
and sale of the Notes; the Notes have been validly issued, and are
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture; the Notes conform in all material respects
to the description thereof contained in the Prospectus, and will not be
subject to any preemptive, subscription or other similar rights; the
terms of the Notes and their issuance and sale have been duly
established in conformity with the Indenture; and no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement, except for holders who
have waived any such registration rights;
(iii) The Registration Statement is effective
under the Act; any required filing of the Prospectus Supplement
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and to the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement or any
amendment thereto has been issued, and, no proceedings for that purpose
have been instituted or are pending or are threatened or contemplated
under the Act;
(iv) The Registration Statement and the
Prospectus as of its date, appeared on their face to be appropriately
responsive, in all material respects (other than the
13
documents incorporated therein by reference and not including the
financial statements, schedules and other financial data contained
therein, as to which such counsel need not express any opinion), with
the requirements of the Act and the related rules and regulations
thereunder;
(v) The descriptions contained and summarized in
the Registration Statement, or incorporated therein by reference, and
the Prospectus are accurate and fairly represent in all material
respects the information required to be shown in the Registration
Statement and Prospectus by the Act and the Rules and Regulations; and
the statements set forth under the headings "Description of the Notes,"
"Certain Tax Considerations" (including "Puerto Rico Taxation" and
"United States Taxation") in the Prospectus Supplement, under the
heading "Description of Notes We May Offer" in the Prospectus, and
under the headings "Regulation and Supervision" in the Company's Annual
report on Form 10-K, incorporated by reference in the Prospectus,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, provide an accurate
summary of such legal matters, documents and proceedings;
(vi) The Company has full legal right, power, and
authority to enter into this Agreement and to consummate the
transactions provided for herein; and this Agreement has been duly
authorized, executed and delivered by the Company;
(vii) None of the Company's issuance and sale of
the Notes, its execution or delivery of this Agreement, its performance
hereof, its consummation of the transactions contemplated herein or its
application of the net proceeds of the offering in the manner set forth
in the Prospectus, conflicts or will conflict with or results or will
result in any breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any Encumbrance upon, any property or assets of the Company pursuant
to (A) the terms of the Certificate of Incorporation or By-laws of the
Company, in each case as amended; or (B) any statute, rule or
regulation of any Governmental Body having jurisdiction over the
Company or any of its activities or properties; and no consent,
approval, authorization or order of any Governmental Body has been or
is required for the Company's issuance and sale of the Notes, its
performance of this Agreement or the consummation of the transactions
contemplated hereby, except such as have been obtained under the Act or
may be required under state or Commonwealth of Puerto Rico securities
or blue sky laws in connection with the purchase and distribution by
the Underwriter of the Notes;
(viii) The Company is not required to be registered
as an investment company under the Investment Company Act; and
(ix) The deposit accounts of Banco Popular are
insured by the BIF of the FDIC to the legal maximum, and to such
counsel's knowledge no proceeding for the termination or revocation of
such insurance is pending or threatened. Banco Popular is a member of
the Federal Reserve Bank of New York and of the Federal Home Loan Bank
of
14
New York.
(x) The Indenture has been duly authorized,
executed and delivered by the Company, and is a valid and binding
instrument, enforceable against the Company in accordance with its
terms.
(B) in the case of the opinion from Xxxxxxxx Xxxxxx
xx Xxxxxxx:
(i) The Company has been duly organized and is
validly existing as a corporation under the laws of the Commonwealth of
Puerto Rico and is in good standing with the Commonwealth of Puerto
Rico. Each of Banco Popular and each of the other Significant
Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of
incorporation. Each of the Company, Banco Popular, and each of the
other Significant Subsidiaries is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business or use of its property and assets makes such
qualification necessary, except where the failure to so qualify would
not have a material adverse effect on the financial condition, or the
earnings or business affairs of the Company and its Subsidiaries
considered as a single enterprise;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus; the Company has duly authorized the
issuance and sale of the Notes; the Notes have been validly issued, and
are legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture; the Notes conform in all material respects
to the description thereof contained in the Prospectus, and will
conform in all material respects to the description thereof contained
in the Prospectus, and will not be subject to any preemptive,
subscription or other similar rights; the terms of the Notes and their
issuance and sale have been duly established in conformity with the
Indenture; and no holders of securities of the Company are entitled to
have such securities registered under the Registration Statement,
except for holders who have waived any such registration rights;
(iii) To the knowledge of such counsel, there are
no contracts or documents which are required by the Act to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not filed or
incorporated therein by reference as required by the Act and the Rules
and Regulations;
(iv) To the knowledge of such counsel, there is
not pending or threatened against the Company or any of the Significant
Subsidiaries any legal action or proceeding, suit, arbitration, claim,
or governmental or other proceeding (informal or formal) or
investigation before or by any Governmental Body, of a character
required to be disclosed in the Registration Statement or the
Prospectus which is not so disclosed therein or in the materials
incorporated by reference therein, and to the knowledge of such
counsel, no such proceedings have been threatened against the Company
or any of its Significant Subsidiaries
15
or any of their respective assets or properties. To the knowledge of
such counsel, neither the Company nor any Significant Subsidiary is in
violation of, or in default with respect to, any law, rule, or
regulation, or any order, judgment or decree, except as described in
the Registration Statement or Prospectus or in the materials
incorporated by reference therein, or such as in the aggregate do not
now have and can reasonably be expected in the future not to have a
material adverse effect upon the operations, business, properties, or
assets of the Company and its Subsidiaries considered as a single
enterprise; nor is the Company or any Significant Subsidiary presently
required under any order, judgment or decree to take any action in
order to avoid any such violation or default;
(v) The Company has full legal right, power, and
authority to enter into this Agreement and to consummate the
transactions provided for herein; and this Agreement has been duly
authorized, executed and delivered by the Company;
(vi) None of the Company's execution or delivery
of this Agreement, its performance hereof, its consummation of the
transactions contemplated herein or its application of the net proceeds
of the offering in the manner set forth in the Prospectus, conflicts or
will conflict with or results or will result in any breach or violation
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any Encumbrance upon, any
property or assets of the Company pursuant to (A) the terms of the
Certificate of Incorporation or By-laws of the Company, in each case as
amended; (B) the terms of any contract or other agreement to which the
Company is a party or by which it is or may be bound or to which any of
its properties is or may be subject and of which such counsel has
knowledge; (C) any statute, rule or regulation of any Governmental Body
having jurisdiction over the Company or any of its activities or
properties; or (D) the terms of any judgment, decree or order of any
arbitrator or Governmental Body having such jurisdiction and of which
such counsel has knowledge; and no consent, approval, authorization or
order of any Governmental Body has been or is required for the
Company's performance of this Agreement or the consummation of the
transactions contemplated hereby, except such as have been obtained
under the Act or may be required under state or Commonwealth of Puerto
Rico securities or blue sky laws in connection with the purchase and
distribution by the Underwriter of the Notes;
(vii) To such counsel's knowledge, the conduct of
the respective businesses of the Company and its Significant
Subsidiaries is not in violation of any federal, state or local
statute, administrative regulation or other law, which violation is
likely to have a material adverse effect on the Company and its
Subsidiaries considered as a single enterprise; and the Company and its
Significant Subsidiaries have obtained all material licenses as are
necessary or required for the conduct of their businesses as presently
conducted;
(viii) The Company is not required to be registered
as an investment company under the Investment Company Act;
(ix) To the knowledge of such counsel, the
Company is not in any breach
16
or violation of any of the terms or provisions of, or in default under
(nor has an event occurred which with notice or lapse of time or both
would constitute a default or acceleration under), (A) the terms of its
Certificate of Incorporation or By-laws, in each case as amended; (B)
the terms of any contract or other agreement known to such counsel to
which the Company is a party or by which the Company is or may be bound
or to which any of its properties or assets is or may be subject, which
breach, violation or default could have a material adverse effect on
the Company and its Subsidiaries considered as a single enterprise; (C)
any statute, rule or regulation of any Government Body having
jurisdiction over the Company or any of its activities, assets or
properties, which breach, violation or default could have a material
adverse effect on the Company and its Subsidiaries considered as a
single enterprise; or (D) the terms of any judgment, decree or order,
known to such counsel, of any arbitrator or Governmental Body having
such jurisdiction, which breach, violation or default could have a
material adverse effect on the Company and its Subsidiaries considered
as a single enterprise;
(x) The deposit accounts of Banco Popular and of
each other Significant Subsidiary of the Company that is a depository
institution are insured by the BIF of the FDIC to the legal maximum,
and to such counsel's knowledge no proceeding for the termination or
revocation of such insurance is pending or threatened. Banco Popular is
a member of the Federal Reserve Bank of New York and of the Federal
Home Loan Bank of New York; and
(xi) To the knowledge of such counsel, none of
the Company or any of its Significant Subsidiaries, or any of their
respective directors or officers is subject to any order or directive
of, or party to any agreement with, any regulatory agency having
jurisdiction with respect to the business or operations of the Company
or any of its Significant Subsidiaries, except as disclosed in the
Registration Statement or the Prospectus or in the materials
incorporated by reference therein, and except for any such order,
directive or agreement that is not material to the Company and its
Subsidiaries considered as a single enterprise.
(xii) The Indenture has been duly authorized,
executed and delivered by the Company and is a valid and binding
instrument, enforceable against the Company in accordance with its
terms.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. Notwithstanding the above, and
except with respect to opinions regarding the Indenture, such counsel shall not
be required to opine as to matters involving the application of laws of any
jurisdiction other than the Commonwealth of Puerto Rico and the United States.
When opining as to matters involving the application of laws of any jurisdiction
other than the Commonwealth of Puerto Rico and the United States, such counsel
may rely upon the opinion of local (including in-house) counsel to the Company
(to the extent satisfactory in form and scope to counsel for the Underwriter);
the foregoing opinion shall also state that such counsel has no reason to
believe that the Underwriter is not justified in relying upon such opinion of
local counsel, and copies of such opinion shall be
17
delivered to the Underwriter and its counsel.
In addition, such counsel shall state that in the course of the
preparation of the Prospectus, such counsel has participated in conferences with
officers and representatives of the Company and with the Accountants, at which
conferences such counsel made inquiries of such officers, representatives and
Accountants and discussed the contents of the Prospectus and, on the basis of
the foregoing and of the experience such counsel has gained through its practice
under the Act, nothing has come to such counsel's attention that causes such
counsel to believe that the Registration Statement as of the date it became
effective or the Prospectus as of its date and as of the Closing Date contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date hereof and as of the Closing
Date, contained any untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need not express any
opinion with respect to the financial statements, schedules and other financial
data included in the Prospectus). Such counsel may state that they make no
representation that they have independently verified the accuracy or
completeness of the statements contained in the Registration Statement and
Prospectus.
References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such option.
(g) The Underwriter shall have received an opinion, dated
the Closing Date, from X'Xxxxx & Xxxxxx, counsel to the Underwriter, which
opinion shall be satisfactory in all respects to the Underwriter.
(h) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Underwriter a letter,
dated the date of its delivery (the "Accountants Letter"), addressed to the
Underwriter and in form and substance satisfactory to the Underwriter, to the
effect that:
(i) they are independent accountants within the
meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) in their opinion, the consolidated financial
statements of the Company and its Subsidiaries audited by them
and incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the published
rules and regulations thereunder with respect to registration
statements on Form S-3;
(iii) on the basis of procedures (but not an audit
in accordance with generally accepted auditing standards)
consisting of (a) reading the minutes of meetings of the
stockholders and the Board of Directors of the Company and its
Subsidiaries since December 31, 2002, as set forth in the
minute books through a date
18
five business days before the date hereof; (b) performing the
procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial
information as described in SAS No. 71 or in SAS No. 100,
"Interim Financial Information", as applicable, on the
unaudited consolidated interim financial statements of the
Company and its Subsidiaries included in the Prospectus and
reading the unaudited interim financial data for the period
from the date of the latest audited balance sheet incorporated
by reference in the Prospectus to the date of the latest
available interim financial data; and (c) making inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters regarding the specific items
for which representations are requested below, nothing has
come to their attention (as of a date not earlier than five
business days before the date hereof) as a result of the
foregoing procedures that caused them to believe that: (1) the
unaudited consolidated interim financial statements
incorporated by reference in the Registration Statement or in
the Prospectus, do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the published rules and regulations
thereunder; (2) any material modifications should be made to
the unaudited consolidated interim financial statements, if
any, incorporated by reference in the Registration Statement
or in the Prospectus, for them to be in conformity with
generally accepted accounting principles; (3)(i) at the date
of the latest available interim financial data and at a
specified date not earlier than five business days before the
date hereof, there was any decrease in the total assets or
consolidated stockholders' equity, any increase in long term
debt, or any change in capital stock of the Company and its
Subsidiaries as compared with amounts shown in the most recent
balance sheet incorporated by reference in the Prospectus and
(ii) for the period from the date of the most recent balance
sheet incorporated by reference in the Prospectus to the date
of the latest interim financial data available, and to a date
not earlier than five business days before the date hereof,
there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net interest
income, non-interest income, or in the total or per share
amounts of net income, except in all instances for changes or
decreases which the Registration Statement discloses have
occurred or may occur, or they shall state any specific
changes or decreases; and
(iv) the information set forth under the captions
"Consolidated Ratio of Earnings to Fixed Charges," in the
Prospectus Supplement, under the caption "Consolidated Ratio
of Earnings to Fixed Charges and Ratio of Earnings to Fixed
Charges and Preferred Stock Dividends of Popular, Inc." in the
Base Prospectus, and under the headings "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Statistical Summaries" in the Company's
Annual Report, incorporated by reference in the Prospectus,
which is expressed in dollars (or percentages derived from
such dollar amounts) and has been obtained from accounting
records which are subject to the internal controls of the
Company's accounting system or which has been derived directly
from such accounting records and analysis or computations, is
in agreement with such records or computations
19
made therefrom.
In the event that the Accountants Letter sets forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriter that (A) such letter shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Underwriter deems such explanation unnecessary, and (B) such changes, decreases
or increases do not, in the sole judgment of the Underwriter, make it
impractical or inadvisable to proceed with the purchase and delivery of the
Notes as contemplated by the Registration Statement and the Prospectus, as
amended as of the date hereof.
(i) At the Closing Date, the Accountants shall have
furnished to the Representative a letter, dated the date of its delivery, which
shall confirm, on the basis of a review in accordance with the procedures set
forth in the Accountants Letter, that nothing has come to their attention during
the period from the date of the Accountants Letter referred to in the prior
sentence to a date (specified in the letter) not more than five business days
prior to the Closing Date, which would require any change in the original letter
if it were required to be dated and delivered at the Closing Date.
(j) At the Closing Date, there shall be furnished to the
Underwriter an accurate certificate, dated the date of its delivery, signed by
each of the Chief Executive Officer, or any Senior Executive Vice President and
the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of
the Company, in form and substance satisfactory to the Underwriter, to the
effect that to the best of their knowledge:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the
Prospectus and (A) as of the date of such certificate, (x) the
Registration Statement does not contain any untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading and (y) the Prospectus does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading
and (B) since the Effective Date no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue
or misleading in any material respect;
(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when
originally made, and are, at the time such certificate is
delivered, true and correct in all respects; each of the
covenants required herein to be performed by the Company on or
prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be
complied with by the Company on or prior to the delivery of
such certificate has been duly, timely and fully complied
with; and
20
(iii) No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by
reference in the Registration Statement or any amendment
thereto or the Prospectus has been issued, and no proceedings
for that purpose have been instituted or threatened by the
Commission.
(k) The Notes shall be qualified for sale in such states
and possessions as the Underwriter may reasonably request, each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date.
(l) The Company shall have furnished to the Underwriter
such officers' certificates, certificates of government officials, letters and
other documents, in addition to those specifically mentioned herein, as the
Underwriter may have reasonably requested as to the accuracy and completeness at
the Closing Date of any statement in the Registration Statement or the
Prospectus, as to the accuracy at the Closing Date of the representations and
warranties of the Company, as to the performance by the Company of its
obligations hereunder, and as to the fulfillment of the conditions concurrent
and precedent to the obligations hereunder of the Underwriter.
(m) A certificate of the Trustee, dated the Closing Date
addressed to the Underwriter substantially to the effect that: (i) the Trustee
is a national banking association duly created, validly existing and in good
standing pursuant to the laws of the United States and is duly qualified to
perform its duties as Trustee; and (ii) the Trustee has been duly authorized to
act as successor trustee under the Indenture and to perform all of its
obligations thereunder as trustee.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Underwriter, the directors, officers, employees and agents of the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages or liabilities, joint or several (and actions in
respect thereof), to which they, or any of them, may become subject under the
Act or other Federal, state or Commonwealth of Puerto Rico statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement made by the Company in
Section 3 of this Agreement, (ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or (B) any application or other
document,
21
or any amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Notes under the securities or blue sky laws
thereof or filed with the Commission or any securities association or securities
exchange (each, an "Application"), or (iii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus or any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse, as
incurred, the Underwriter and each such other person for any legal or other
expenses reasonably incurred by the Underwriter or such other person in
connection with investigating, defending or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability is based solely upon an untrue
statement or omission or alleged untrue statement or omission in any of such
documents made in reliance upon and in conformity with information relating to
the Underwriter furnished in writing to the Company by the Underwriter on behalf
of the Underwriter expressly for inclusion therein; provided, further that such
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of the Underwriter (or any such other person) from whom the person
asserting any such loss, claim, damage, liability or action purchased Notes
which are the subject thereof to the extent that any such loss, claim, damage or
liability (i) results from the fact that the Underwriter failed to send or give
a copy of the Prospectus (as amended or supplemented) to such person at or prior
to the confirmation of the sale of such Notes to such person in any case where
such delivery is required by the Act and (ii) arises out of or is based upon an
untrue statement or omission of a material fact contained in such Preliminary
Prospectus that was corrected in the Prospectus (or any amendment or supplement
thereto), unless such failure to deliver the Prospectus (as amended or
supplemented) was the result of noncompliance by the Company with Section 4(f).
This indemnity agreement will be in addition to any liability that the Company
might otherwise have. The Company will not, without the prior written consent of
the Underwriter, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Underwriter or any
person who controls the Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act is a party to each claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Underwriter and each such other person from all
liability arising out of such claim, action, suit or proceeding.
(b) The Underwriter will indemnify and hold harmless the
Company, its employees, officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, against all losses, claims, damages or liabilities (or
actions in respect thereof) to which the Company and any such director, officer
or controlling person may become subject under the Act or other federal, state
or Commonwealth of Puerto Rico statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or any Application,
or (ii) the omission
22
or the alleged omission to state in the Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or any Application, a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company and any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. The Company
acknowledges that, for all purposes under this Agreement, the statements
relating to the Underwriter set forth under the heading "Underwriting" (which
does not include information on the Company's expenses and the listing of the
Notes) constitute the only information furnished in writing to the Company by
the Underwriter expressly for inclusion in the Registration Statement, any
Preliminary Prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Underwriter might otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party or parties under this Section 7, notify the indemnifying party or parties
of the commencement thereof, but the omission so to notify the indemnifying
party or parties will not relieve it or them from any liability which it or they
may have to any indemnified party under the foregoing provisions of this Section
7 or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party and it notifies an
indemnifying party or parties of its commencement, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses other than reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood that, in connection
with such action, the indemnifying party shall not be liable for the reasonable
fees and expenses of more than one separate counsel (in addition to the fees and
expenses of local counsel necessary in connection with any such proceedings) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general
23
allegations or circumstances, designated by the Underwriter in the case of
paragraph (a) of this Section 7, representing the indemnified parties under
paragraph (a) who are parties to such action or actions), or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the written consent of the
indemnifying party, unless such indemnified party waived its right under this
Section 7 in which case the indemnified party may effect such a settlement
without such consent.
(d) If the indemnification provided for in the foregoing
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion s is
appropriate to reflect the relative benefits received by the indemnifying party
or parties, on the one hand, and the indemnified party, on the other, from the
offering of the Notes or (ii) if, but only if, the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties on
the one hand, and the indemnified party, on the other, in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Underwriter, on the other, shall be
deemed to be in the same proportion as the total proceeds from the offering of
the Notes (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus. Relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Underwriter,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriter agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities (or actions in
respect thereof) referred to above in this Section 7(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), the Underwriter shall not
be required to contribute any amount in excess of the total underwriting
discounts received by it with respect to the Notes purchased by the Underwriter
under this Agreement, less the aggregate amount of any damages that the
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(d), each person, if any, who
controls the Underwriter within the meaning of Section
24
15 of the Act or Section 20 of the Exchange Act will have the same rights to
contribution as the Underwriter, and each director or officer of the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, will have the same rights to
contribution as the Company, subject in each case to the provisions of this
paragraph (d). The provisions of section 7(c) shall be applicable to any claim
for contribution under this Section 7(d). The contribution agreement set forth
above shall be in addition to any liabilities which any indemnifying party may
otherwise have. No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriter,
(ii) acceptance of any of the Notes and payment therefor or (iii) any
termination of this Agreement.
8. Termination. The obligations of the Underwriter under this
Agreement may be terminated at any time prior to the Closing Date, by notice to
the Company from the Underwriter, without liability on the part of the
Underwriter to the Company if, prior to delivery and payment for the Notes in
the sole judgment of the Underwriter, (i) trading in securities of the Company
or in securities generally shall have been suspended by the Commission or by the
Nasdaq, (ii) minimum or maximum prices shall have been established for
securities of the Company or for securities generally on either the Nasdaq or
the NYSE, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by any of such market or exchange or by order of the Commission or any
court or other Governmental Authority, (iii) a general banking moratorium shall
have been declared by the United States, New York State, or Commonwealth of
Puerto Rico authorities, or (iv) any material adverse change in the financial or
securities markets in the United States or any outbreak or material escalation
of hostilities or declaration by the United States of war or other calamity or
crisis shall have occurred, the effect of any of which is such as to make it, in
the sole judgment of the Underwriter, impracticable or inadvisable to market the
Notes on the terms and in the manner contemplated by the Prospectus. Any
termination pursuant to Section 8 shall be without liability of any party to any
other party except as provided in Sections 5(a) and 7.
9. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, and the Underwriter set forth in this Agreement, shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Underwriter or any
controlling person referred to in Section 7 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants, indemnities and
other statements set forth in Sections 5 and 7 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
10. Notices. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the
25
office of the Company, Banco Popular Center, 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx,
XX 00000, Attention: Treasurer with a copy to the attention of the General
Counsel, or (b) if to the Underwriter, to the office of the Underwriter, Banco
Popular Center, Suite 1020, 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, XX 00000,
Attention: Managing Director. Any such notice shall be effective only upon
receipt. Any notice under Section 7 or 8 may be made by telex or telephone, but
if so made shall be subsequently confirmed in writing.
11. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the Underwriter, the Company, and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 7 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriter, contained in Section 7 of this
Agreement shall also be for the benefit of the directors, employees and
officers of the Company and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Notes from the Underwriter shall be deemed a successor because of
such purchase. This Agreement shall not be assignable by any party hereto
without the prior written consent of the other party.
12. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
13. 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.
26
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriter.
Very truly yours,
POPULAR, INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
Confirmed as of the date first above mentioned:
POPULAR SECURITIES, INC.
By: /s/ Xxxxxxx X. XxXxxxx
----------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief Executive Officer
27
