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DORAL FINANCIAL CORPORATION
4,400,000 SHARES
COMMON STOCK
($1.00 PAR VALUE)
UNDERWRITING AGREEMENT
JULY 26, 2001
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UNDERWRITING AGREEMENT
July 26, 2001
UBS WARBURG LLC
DEUTSCHE BANC ALEX. XXXXX INC.
XXXXX XXXXXX & CO., INC.,
AS MANAGING UNDERWRITERS
c/o UBS WARBURG LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Doral Financial Corporation, a Puerto Rico corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, an aggregate of 4,400,000 shares (the "Firm Shares")
of Common Stock, $1.00 par value ("Common Stock"), of the Company. The
respective amounts of the Firm Shares to be purchased by each of the several
Underwriters are set forth opposite their names on Schedule A hereto. In
addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 660,000 shares of Common Stock (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "Shares." The Shares are described in the Final Prospectus
which is referred to below. To the extent there are no additional Underwriters
listed on Schedule A other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires.
As used in this Agreement, the term (i) "Act" means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, (ii) "Basic Prospectus" means the prospectus contained in the
Registration Statement at the Effective Date; (iii) "Business Day" means a day
on which the New York Stock Exchange is open for trading; (iv) "Effective Date"
means the date and time that the Registration Statement as then amended became
effective; (v) "Final Prospectus" means the prospectus supplement to the Basic
Prospectus relating to the Shares that was first filed pursuant to Rule 424(b)
under the Act after the Execution Time, together with the Basic Prospectus; (vi)
"Preliminary Final Prospectus" means any preliminary prospectus supplement to
the Basic Prospectus which describes the Shares and the offering thereof and is
used prior to filing of the Final Prospectus, together with the Basic
Prospectus; (vii) "Registration Statement" means (1) the registration statement
no. 333-52978 and any amendments thereto and (2) any Rule 462(b) Registration
Statement including, in each case, exhibits,
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financial statements and information and documents deemed to be a part of each
such registration statement through incorporation by reference pursuant to Item
12 of Form S-3; (viii) "Rule 462(b) Registration Statement" means a registration
statement and any amendments thereto filed pursuant to Rule 462(b) under the Act
relating to the offering covered by the registration statement No. 333-52978, as
amended and (ix) "Significant Subsidiary" has the meaning given to it in Rule
405 under the Act. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were or will be filed under the Exchange
Act; any reference herein to information that is "contained," "included" or
"stated" in the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus or other references of like import,
shall be deemed to mean and include all information that is incorporated by
reference in any of the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, the Final
Prospectus or any Preliminary Final Prospectus shall be deemed to include the
filing of any document under the Exchange Act after the Execution Time deemed to
be incorporated by reference in any of the foregoing documents. For purposes of
this Agreement, all references to the Registration Statement, the Basic
Prospectus, the Final Prospectus, any Preliminary Final Prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System ("XXXXX"); each such document delivered to the
Underwriters for use in connection with the offering of the Shares will, at the
time of such delivery, be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T under the Act. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Final Prospectus and are authorized to distribute
the Final Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the Underwriters).
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations and
subject to the terms, conditions and agreements herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the respective
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A hereto, in each case at a purchase price of $30.40 per Share. The
Company is advised by you that the Underwriters intend (i) to make a public
offering of their respective portions of the Shares as soon after the date of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Final Prospectus. You may from time to
time increase or decrease the public offering price after the initial public
offering to such extent as you may determine.
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In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per Share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by you on
behalf of the several Underwriters at any time (but not more than once) on or
before the thirtieth day following the date hereof, by written notice to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "Additional Time of Purchase"); provided, however, that the Additional
Time of Purchase shall not be earlier than the Time of Purchase nor earlier than
the second Business Day after the date on which the option shall have been
exercised nor later than the tenth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold to
each Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price
for the Firm Shares shall be made to the Company by Federal Funds wire transfer,
against delivery of the certificates for the Firm Shares to you through the
facilities of the Depository Trust Company ("DTC") for the respective accounts
of the Underwriters. Such payment and delivery shall be made at the offices of
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, at 10:00 A.M.,
New York City time, on August 1, 2001 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are actually made
is hereinafter sometimes called the "Time of Purchase." Certificates for the
Firm Shares shall be delivered to you in definitive form in such names and in
such denominations as you shall specify no later than the second Business Day
preceding the Time of Purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company agrees to make such
certificates available to you for such purpose, at such place as is designated
by you, at least one full Business Day preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall
be made at the Additional Time of Purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second Business Day
preceding the Additional Time of Purchase. For the
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purpose of expediting the checking of the certificates for the Additional Shares
by you, the Company agrees to make such certificates available to you for such
purpose, at such place as is designated by you, at least one full Business Day
preceding the Additional Time of Purchase.
3. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, each of the Underwriters
that:
(a) the Company meets the requirements for the use of
Form S-3 under the Act and has carefully prepared and filed in
accordance with the provisions of the Act, with the Securities and
Exchange Commission (the "Commission"), a registration statement on
Form S-3 (File No. 333-52978), which includes the Basic Prospectus, for
the registration under the Act of certain of the Company's securities,
which include the Shares. The Company may have filed one or more
amendments thereto and one or more Preliminary Final Prospectuses, each
of which has previously been furnished to you. The Registration
Statement incorporates by reference documents which the Company has
filed or will file in accordance with the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively called the "Exchange Act"). The Registration
Statement has been declared effective under the Act by the Commission
and no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for that
purpose have been instituted or are pending or, to the best of the
Company's knowledge, are threatened by the Commission, and any request
on the part of the Commission for additional information has been
complied with. The Basic Prospectus and each Preliminary Final
Prospectus filed before the Execution Time complied when so filed in
all material respects with the Act and was filed in the manner and
within the time period required by Rule 424(b) under the Act, and no
order of the Commission preventing or suspending the use of any
Preliminary Final Prospectus, and no proceedings for any such purpose
have been instituted or are pending or, to the best of the Company's
knowledge, are threatened by the Commission, and any request on the
part of the Commission for additional information has been complied
with. The Company will next file with the Commission the Final
Prospectus in accordance with Rules 415 and 424(b) under the Act. As
filed, the Final Prospectus shall contain all required information and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to the Representatives prior to the date and time that this
Agreement is executed and delivered by the parties hereto (the
"Execution Time") or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond those contained in the Preliminary Final Prospectus
dated July 13, 2001) as the Company has advised the Representatives,
prior to the Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the requirements
set forth in Rule 415(a)(1)(x) under the Act;
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(b) when first filed in accordance with Rule 424(b) under
the Act, the Final Prospectus complied or will comply in all material
respects with the applicable provisions of the Act. As of the Effective
Date, the Execution Time, the dates of the filing of each Preliminary
Final Prospectus and the Final Prospectus pursuant to Rule 424(b) under
the Act, and each of the Time of Purchase and the Additional Time of
Purchase, the Registration Statement complied or will comply in all
material respects with the applicable provisions of the Act, and did
not and will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and as of the
date of the filing pursuant to Rule 424(b) under the Act of the Final
Prospectus and as of each of the Time of Purchase and the Additional
Time of Purchase, the Final Prospectus 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; when any Preliminary Final Prospectus was first filed with
the Commission and when any amendment thereof or supplement thereto was
first filed with the Commission, such Preliminary Final Prospectus as
amended or supplemented did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the
Registration Statement, the Preliminary Final Prospectus dated July 13,
2001, or the Final Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or
on behalf of any Underwriter through you to the Company expressly for
use in the Registration Statement, the Preliminary Final Prospectus
dated July 13, 2001, or the Final Prospectus; the documents
incorporated by reference in the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus and the Final Prospectus
have been carefully prepared by the Company and, at the time such
documents incorporated by reference became effective or were filed with
the Commission, as applicable (or, if a supplement or an amendment with
respect to any such document was filed, when such supplement or
amendment was filed), complied in all material respects with the
applicable requirements of the Act and the Exchange Act, and do 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, and such documents incorporated by
reference have been timely filed in conformity with the applicable
requirements of the Act and the Exchange Act; and the Company has not
distributed any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the
Preliminary Final Prospectus dated July 13, 2001, the Final Prospectus
and any other materials, if any, permitted by the Act;
(c) the Company has an authorized capitalization as set
forth under the heading entitled "Actual" in the section of the Final
Prospectus entitled
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"Capitalization" and, as of the Time of Purchase and the Additional
Time of Purchase, the Company shall have an authorized capitalization
as set forth under the heading entitled "As Adjusted for this Offering"
in the section of the Final Prospectus entitled "Capitalization"; all
of the issued and outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal, state
and Puerto Rico laws and were not issued in violation of any preemptive
right, co-sale right, resale right, right of first refusal or similar
right; the Shares when issued will be free of statutory and contractual
preemptive rights, co-sale rights, resale rights, rights of first
refusal and similar rights; no person has the right, contractual or
otherwise, to cause the Company to issue to it, or register pursuant to
the Act, any shares of capital stock of the Company upon the issue and
sale of the Shares to the Underwriters hereunder;
(d) 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 Registration Statement and the Final Prospectus, to
execute and deliver this Agreement, to perform its obligations
hereunder and to issue, sell and deliver the Shares as herein
contemplated;
(e) the Company has no subsidiaries within the meaning of
Rule 405 under the Act other than those listed on Schedule B hereto
(collectively, the "Subsidiaries"); other than the Subsidiaries, the
Company does not own or control, directly or indirectly, any shares of
stock of any corporation or any other equity or have any equity
interest in any firm, partnership, joint venture, association, limited
liability company or other entity (each, an "Entity"); none of the
Subsidiaries owns, directly or indirectly, any shares of stock or any
other equity securities of any Entity other than as listed on Schedule
B hereto; complete and correct copies of the certificates of
incorporation and of the bylaws of the Company and each of the
Subsidiaries and all amendments thereto have been delivered to you, and
no changes therein will be made subsequent to the Execution Time and
prior to the Time of Purchase or, if later, the Additional Time of
Purchase without your prior written consent; each Subsidiary has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Final Prospectus; all of the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, in each such case subject to no
security interest, other encumbrance or adverse claims; no options,
warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in any Subsidiary are
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outstanding; the Company and each Subsidiary is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction where the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it
requires such qualification, except for such jurisdictions where the
failure to so qualify would not have a material adverse effect on the
assets or properties, business, prospects, results of operations or
financial condition of the Company and the Subsidiaries taken as whole
(a "Material Adverse Effect"); and the Company and each Subsidiary is
in compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such
jurisdictions;
(f) neither the Company nor any Subsidiary is in
violation, breach of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach
of, or constitute a default under), its charter or by-laws, and the
execution, delivery and performance of this Agreement, the issuance and
sale of the Shares and the consummation of the transactions
contemplated hereby, and compliance by the Company with its obligations
hereunder, do not and will not conflict with, or result in any breach
of, or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would result in any breach of or
constitute a default under), any provision of the charter or by-laws of
the Company or any Subsidiary; except for such violations, breaches or
defaults that would not have, individually or in the aggregate, a
Material Adverse Effect, neither the Company nor any Subsidiary is in
violation, breach of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach
of, or constitute a default under), or has failed to perform or
observe, any obligation, agreement, covenant or condition contained in
any license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease, contract or
any other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or any of their
respective properties may be bound or affected, and the execution,
delivery and performance of this Agreement, the issuance and sale of
the Shares and the consummation of the transactions contemplated
hereby, and compliance by the Company with its obligations hereunder,
do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both would result in any breach of or constitute a
default under), any provision of any license, indenture, mortgage, deed
of trust, bank loan, credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument
to which the Company or any Subsidiary is a party or by which any of
them or their respective properties may be bound or affected, or under
any federal, state, Puerto Rico, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company or any
Subsidiary;
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(g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms;
(h) the capital stock of the Company, including the
Shares, conforms to the description thereof contained in the
Registration Statement and the Final Prospectus, and the certificates
for the Shares are in due and proper form and have been duly authorized
for issuance by the Company and the holders of the Shares will not be
subject to personal liability by reason of being such holders; the
Shares have been approved for listing for quotation and trading on the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ");
(i) the Shares have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and will be fully paid and
non-assessable;
(j) no approval, authorization, consent or order of or
filing with any national, state, Puerto Rico or local governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance and sale of the Shares, delivery and
performance of this Agreement or the consummation by the Company of the
transaction contemplated hereby other than registration of the Shares
under the Act and any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or under the rules and regulations of
the National Association of Securities Dealers, Inc. (the "NASD");
(k) PricewaterhouseCoopers LLP, whose report on the
consolidated financial statements of the Company and the Subsidiaries
is incorporated by reference in the Registration Statement and the
Final Prospectus, are, and during the periods covered by their report,
were independent public accountants as required by the Act;
(l) The Company and each Subsidiary possesses all
licenses, authorizations, consents and approvals and has made all
filings required under any federal, state, Puerto Rico, local or
foreign law, regulation or rule, and possesses all licenses,
authorizations, consents and approvals from other persons, in order to
conduct its respective businesses except for such licenses,
authorizations, consents and approvals that, if not so possessed, would
not have a Material Adverse Effect; such licenses, authorizations,
consents and approvals are valid and in full force and effect and
neither the Company nor any Subsidiary has received any notice of any
proceeding relating to the revocation or modification of any such
license, authorization, consent or approval; neither the Company nor
any of the Subsidiaries is in violation of, or in default under, any
such license, authorization, consent or approval or any federal, state,
Puerto Rico, local or
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foreign law, regulation or rule or any directive, decree, order or
judgment applicable to the Company or any Subsidiary the effect of
which could have a Material Adverse Effect;
(m) all statutes, regulations, contracts, licenses,
agreements, leases or documents of a character required to be
summarized or described in the Registration Statement or the Final
Prospectus or to be filed as an exhibit to the Registration Statement
have been so summarized, described or filed as required; each such
summary description accurately reflects in all material respects the
terms of the underlying statute, regulation, contract, license,
agreement, lease or document;
(n) there are no actions, suits, claims, investigations
or proceedings pending, threatened or contemplated to which the Company
or any of the Subsidiaries or any of their respective officers is a
party or is subject, or of which any of their respective properties is
subject at law or in equity, or before or by any federal, state, Puerto
Rico, local or foreign governmental or regulatory commission, board,
body, authority or agency which could result in a judgment, decree or
order having a Material Adverse Effect, affect the consummation of the
transactions contemplated hereby or are required to be described in the
Registration Statement or the Final Prospectus but are not so
described;
(o) the audited consolidated statements of financial
condition of the Company and the Subsidiaries (and the notes related
thereto), incorporated by reference in the Registration Statement and
the Final Prospectus present fairly the financial condition, results of
operations, income, comprehensive income, changes in stockholders'
equity and cash flows of the entities purported to be shown thereby in
conformity with generally accepted accounting principles, at the dates
and for the periods indicated, and have been carefully prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the period or periods involved; and the
supporting schedules, if applicable, incorporated by reference in the
Registration Statement and the Final Prospectus present fairly the
information required to be stated therein. The unaudited consolidated
financial statements of the Company and the Subsidiaries (including all
notes and schedules thereto), incorporated by reference in the
Registration Statement and the Final Prospectus present fairly the
financial position of the Company and the Subsidiaries at the dates and
for the periods indicated in conformity with generally accepted
accounting principles (except for the absence of notes) applied on a
consistent basis throughout the periods shown, subject to normally
recurring charges, and have been carefully prepared in accordance with
the instructions to Form 10-Q under the Exchange Act. The summary and
selected financial data of the Company and the Subsidiaries included in
the Final Prospectus present fairly the information shown therein as of
the respective dates and for the respective periods specified therein
and the summary and selected financial data have been presented on a
basis consistent
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with the financial statements incorporated by reference in the
Registration Statement and the Final Prospectus;
(p) subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus (exclusive, in each case, of any amendment thereof or
supplement thereto filed after the Execution Time), there has not been
(i) any material adverse change, or any development which is likely to
cause a material adverse change, in the prospects, business,
properties, assets, results of operations, condition (financial or
otherwise), or operations of the Company and the Subsidiaries taken as
a whole, (ii) any transaction which is material to the Company or the
Subsidiaries taken as a whole, except transactions in the ordinary
course of business, (iii) any obligation, direct or contingent, which
is material to the Company and the Subsidiaries taken as a whole,
incurred by the Company or the Subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change in the
capital stock of the Company or the Subsidiaries (other than any change
in the capital stock of the Company related to the exercise of stock
options of the Company outstanding at the Execution Time), (v) any
change in the outstanding indebtedness of the Company or the
Subsidiaries (other than indebtedness incurred in the ordinary course
of the Company's or the Subsidiaries' business) or (vi) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company (other than the declaration or payment of (A) quarterly
dividends on the Common Stock or (B) monthly dividends on the Company's
7% Noncumulative Monthly Income Preferred Stock, Series A or the
Company's 8.35% Noncumulative Monthly Income Preferred Stock, Series
B). Neither the Company nor the Subsidiaries has any material
contingent obligation which is not disclosed in the Registration
Statement and the Final Prospectus (exclusive, in each case, of any
amendment thereof or supplement thereto filed after the Execution
Time);
(q) the Company has obtained the agreement of each of its
directors and officers to the effect that such persons shall not sell,
offer or agree to sell, assign, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, or file (or
participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or
any other securities of the Company that are substantially similar to
the Common Stock, or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of this Agreement
without the prior written consent of UBS Warburg LLC;
(r) the Company is not and, upon consummation of the
transactions contemplated by this Agreement, will not be an "investment
company" or an entity "controlled" by an "investment company" or a
"promoter" or "principal
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underwriter" for a "registered investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) each of the Company and the Subsidiaries owns or
possesses adequate and enforceable rights to use all trademarks,
trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, know-how and other similar rights and
proprietary knowledge collectively, "Intangibles") described in the
Registration Statement or the Final Prospectus as being owned by it or
necessary for the conduct of its business. Neither the Company nor any
of the Subsidiaries has received any notice of, or is aware of, any
infringement of or conflict with asserted rights of others with respect
to any Intangible;
(t) the Company and each Subsidiary owns, or has valid
rights to use, all items of real and personal property used in its
business free and clear of all liens, encumbrances and claims which may
have a Material Adverse Effect;
(u) neither the Company nor any of the Subsidiaries is
involved in any labor dispute nor is any such dispute threatened, which
dispute would have a Material Adverse Effect. The Company is not aware
of any existing or imminent labor disturbance by the employees of any
of the principal suppliers or contractors of the Company or the
Subsidiaries that would have a Material Adverse Effect;
(v) no transaction has occurred between or among the
Company and any of its officers or directors or five percent
shareholders or any affiliate or affiliates of any such officer or
director or five percent shareholders that is required to be described
in and is not described in the Registration Statement and the Final
Prospectus;
(w) the Company has not taken, directly or indirectly,
any action designed to or that might reasonably be expected to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Shares;
(x) the Company and each of the Subsidiaries has filed
all federal, state, Puerto Rico, local and foreign tax returns which
are required to be filed through the date hereof, or has received
extensions thereof, and has paid all taxes shown on such returns and
all assessments received by each of them to the extent that the same
are material and have become due. There are no tax audits pending or
any investigations pending which if adversely determined would have a
Material Adverse Effect. There are no material proposed additional tax
assessments against the Company or any of the Subsidiaries;
-11-
13
(y) the books, records and accounts of the Company and
each of the Subsidiaries accurately and fairly reflect, in reasonable
detail, the transactions in, and dispositions of, the assets of, and
the results of operations of, the Company and each of the Subsidiaries.
The Company and each of the Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain asset
accountability, (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 the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences;
(z) the Company and each of the Subsidiaries is insured
in accordance with industry standards against such losses and risks and
in such amounts as are customary in the businesses in which it is
engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of the Subsidiaries or the Company's or any
of the Subsidiaries' respective businesses, assets, employees, officers
and directors are in full force and effect; the Company and each of the
Subsidiaries is in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor any
Subsidiary has reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect;
(aa) except to the extent that would not have a Material
Adverse Effect (i) the Company and each Subsidiary is in compliance in
all material respects with all rules, laws and regulations relating to
the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Laws") that are
applicable to its business; (ii) neither the Company nor any of the
Subsidiaries has received any notice from any governmental authority or
third party of an asserted claim under Environmental Laws; (iii) the
Company and each Subsidiary has received all permits, licenses or other
approval required of it under applicable Environmental Laws to conduct
its business and is in compliance with all terms and conditions of any
such permit, license or approval; (iv) no facts currently exist that
will require the Company or any Subsidiary to make future material
capital expenditures to comply with Environmental Laws; (v) no property
that is or has been owned, leased or occupied by the Company or any
Subsidiary has been designated as a Superfund site pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA 1980") or
otherwise designated as a contaminated site under applicable state,
Puerto Rico or local law; and (vi) the Company has reasonably concluded
that there are no
-12-
14
unanticipated associated costs and liabilities which would, singly or
in the aggregate, have a Material Adverse Effect. Neither the Company
nor any Subsidiary has been named as a "potentially responsible party"
under CERCLA 1980;
(bb) none of the Company, any Subsidiary or any other
person associated with or acting on behalf of the Company or any
Subsidiary including, without limitation, any director, officer, agent
or employee of the Company or any Subsidiary has, directly or
indirectly, while acting on behalf of the Company or any Subsidiary (i)
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
Final Prospectus or the Registration Statement; (ii) made any unlawful
payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate
funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; (iv) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating
to political activity; or (v) made any other unlawful payment;
(cc) the certificates delivered pursuant to the terms of
this Agreement and all other documents delivered by the Company or its
representatives in connection with the issuance and sale of the Shares
were on the dates on which they were delivered, or will be on the dates
on which they are to be delivered, true and complete. Any certificate
signed by an officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the
offering of the Shares shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to the Underwriters;
(dd) the Company is 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, as amended (the
"BHCA"); the Company is in good standing with the Federal Reserve; the
Company's election to be treated as a financial holding company under
the BHCA is in full force and effect; any Subsidiary required to be
registered with the Federal Reserve is so registered; and each
Subsidiary required to be so registered is in good standing with the
Federal Reserve;
(ee) the deposit accounts of Doral Bank ("Doral Bank") and
Doral Bank, FSB ("Doral FSB") are insured by the Savings Association
Insurance Fund (the "SAIF") of the Federal Deposit Insurance
Corporation (the "FDIC") to the legal maximum, and no proceeding for
the termination or revocation of such insurance is pending or
threatened. Doral Bank and Doral FSB are members in good standing of
the Federal Home Loan Bank of New York;
-13-
15
(ff) none of the Company, Doral Bank, Doral FSB or their
affiliates, 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 regulatory agency having jurisdiction with respect to its
business or operations except as disclosed in the Registration
Statement and in the Final Prospectus or as would not have a Material
Adverse Effect;
(gg) the Company is engaged in trade or business in Puerto
Rico. The Company derived more than 20% of its gross income from Puerto
Rico sources for the three year period ending with the close of the
Company's taxable year end on December 31, 2000;
(hh) there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment;
(ii) the Company and each Subsidiary has fulfilled its
respective obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security
Act of 1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company or any Subsidiary are eligible to participate
and each such plan is in compliance with the presently applicable
provisions of ERISA and such regulations and published interpretations,
except for any failure to fulfill any such obligations, or failure to
comply, that singly or in the aggregate would not have a Material
Adverse Effect. None of the Company or any Subsidiary has incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA, except for any such liability that would
not have a Material Adverse Effect; and
(jj) the Company is not a "passive foreign investment
company" ("PFIC") within the meaning of Section 1296 of the United
States Internal Revenue Code of 1986, as amended, and does not
anticipate that it will become a PFIC in the foreseeable future.
4. Certain Covenants of the Company. The Company hereby
covenants and agrees with each of the Underwriters as follows:
(a) to furnish such information as may be required and
otherwise to arrange, if necessary, for the qualification of the Shares
for offering and sale under the laws of such jurisdictions as you may
designate, and to maintain such qualifications in effect so long as
required for the distribution of the Shares; provided that the Company
shall not be required to qualify to do business or to consent to the
service of process under the laws of any such jurisdiction where it
-14-
16
is not now so qualified or subject (except for service of process with
respect to the offering and sale of the Shares); to promptly advise you
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the suspension of
any such qualification and, if so suspended, to obtain as soon as
possible the withdrawal thereof;
(b) to make available to the Underwriters in New York
City, as many copies of each Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto or amendment thereof, and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, to prepare and deliver to the Underwriters such
amendments and supplements to the Preliminary Final Prospectus and the
Final Prospectus as are necessary for the Underwriters and the dealers
to comply with the requirements of the Act;
(c) not to file, prior to the termination of the offering
of the Shares, any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus, any Rule 462(b) Registration
Statement or any document incorporated by reference in any of the
foregoing unless the Company has furnished you a copy for your review
prior to the filing, and the Company will not file any such proposed
amendment, supplement, Rule 462(b) Registration Statement, or any
document incorporated by reference into any of the foregoing, to which
you reasonably object. Subject to the foregoing sentence, the Company
will cause the Final Prospectus, properly completed, and any supplement
thereto, to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (i) when
the Final Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (ii)
when, prior to the termination of the offering of the Shares, any
amendment to the Registration Statement shall have been filed or become
effective and (iii) when any document incorporated by reference into
any of the foregoing has been filed;
(d) to advise you promptly, confirming such advice in
writing, of any request by the Commission or its staff for any
amendment or supplement to the Registration Statement, the Final
Prospectus, or any document incorporated by reference in any of the
foregoing, or for any additional information with respect thereto, or
of notice of institution of proceedings for, or the issuance of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceedings for that purpose;
the Company will use its best efforts to prevent the issuance of any
such stop order and, if the Commission should issue a stop order
suspending the effectiveness of the Registration
-15-
17
Statement, to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement, the Final Prospectus, or any document
incorporated by reference in any of the foregoing, including by filing
any documents that would be incorporated therein by reference;
(e) subject to the provisions of Section 4(c) hereof, to
file promptly all reports and any definitive proxy or information
statement required to be filed by the Company with the Commission in
order to comply with the Exchange Act subsequent to the date of the
Final Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares, and to
promptly notify you of such filing;
(f) subject to the provisions of Section 4(c) hereof, to
file any Rule 462(b) Registration Statement if necessary or
appropriate;
(g) to furnish to you, in each case as soon as such
communications, documents or information become available, and, upon
request, to each of the other Underwriters for a period of five years
from the date of this Agreement (i) copies of any reports or other
communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of
all annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission and (iii) copies of documents or reports
filed with any national securities exchange on which any class of
securities of the Company is listed;
(h) to advise the Underwriters promptly of the happening
of any event within the time during which a prospectus relating to the
Shares is required to be delivered under the Act which would require
the making of any change in the Final Prospectus, as then being
supplemented, or in the information incorporated therein by reference,
so that the Final Prospectus, as then supplemented, would not include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act, the
Company promptly will (1) notify the Representatives of such event, (2)
prepare and file with the Commission, subject to Section 4(c) hereof,
an amendment or supplement which will correct such statement or
omission or effect such compliance and (3) prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or
supplements to the Final Prospectus as may be necessary to reflect any
such change in such quantities as you may request;
(i) subject to Section 4(c) hereof, to make generally
available to its security holders, and to deliver to you, an earnings
statement or statements of the
-16-
18
Company (which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date
of the Registration Statement (as defined in Rule 158(c) of the Act) as
soon as is reasonably practicable after the termination of such
twelve-month period but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of the
Company during which the Effective Date occurred (or 90 days if such
12-month period coincides with the Company's fiscal year);
(j) subject to Section 4(c) hereof, to furnish to its
shareholders as soon as practicable after the end of each fiscal year
an annual report (including a balance sheet and statements of income,
stockholders' equity and of cash flow of the Company for such fiscal
year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants;
(k) to furnish to you two signed originals and two signed
photostatic copies of the Registration Statement, as initially filed
with the Commission, and of all amendments thereof (including all
exhibits thereto and documents incorporated by reference therein) and
sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(l) to furnish to you as early as practicable prior to
the Time of Purchase and the Additional Time of Purchase, as the case
may be, but not later than two business days prior thereto, a copy of
the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiaries which have been
read by the Company's independent certified public accountants, as
stated in their letters to be furnished pursuant to Section 6(b)
hereof;
(m) to apply the net proceeds from the sale of the Shares
in the manner set forth under the caption "Use of Proceeds" in the
Final Prospectus;
(n) for a period of 90 days after the date of this
Agreement, without your prior written consent, not to sell, offer or
agree to sell, assign, contract to sell, pledge, grant any option to
sell or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company), directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to purchase
Common Stock or any other securities of the Company that are
substantially similar to Common Stock or permit the registration under
the Act of any shares of Common Stock, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16
-17-
19
of the Exchange Act in respect of any shares of Common Stock, or
publicly announce an intention to effect any such transaction, except
for the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement and except for issuances of Common Stock
upon the exercise of options, warrants and debentures that are
outstanding as of the Execution Time; provided, however, that the
Company may file a registration statement on Form S-8 under the Act and
make awards pursuant to the Company's Restricted Stock Plan and the
Company's 1997 Employee Stock Option Plan as in effect at the Execution
Time, provided, that any such awards shall not be exercisable for a
period of at least 90 days from the date of this Agreement;
(o) to pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 5 hereof or (iii) or
(iv) below) in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Final Prospectus, the Final
Prospectus, and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the issuance,
sale and delivery of the Shares by the Company, (iii) the word
processing of this Agreement, any Agreement Among Underwriters, any
dealer agreements, any Statements of Information and the reproduction
and/or printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under the
laws of the several jurisdictions as provided in Section 4(a) hereof
and the determination of their eligibility for investment under the
laws of such jurisdictions (including the legal fees and filing fees
and other disbursements of counsel to the Underwriters) and the
printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing
of the Shares on any securities exchange or qualification of the Shares
for quotation on NASDAQ and any registration thereof under the Exchange
Act, (vi) the filing for review of the public offering of the Shares by
the NASD and (vii) the performance of the Company's other obligations
hereunder; and
(p) not to take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in,
or which might reasonably be expected to constitute, under the Exchange
Act or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Shares.
5. Reimbursement of Underwriters' Expenses. If the
Shares are not delivered for any reason other than the termination of this
Agreement pursuant to Section 8 hereof, the Company shall, in addition to paying
the amounts described in Section 4(o) hereof, reimburse the Underwriters for all
of their out-of-pocket expenses, including the fees and disbursements of their
counsel.
-18-
20
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company when made at the
Execution Time and at and as of the Time of Purchase as if made at the Time of
Purchase (and the several obligations of the Underwriters at the Additional Time
of Purchase are subject to the accuracy of the representations and warranties on
the part of the Company when made at the Execution Time and at and as of the
Time of Purchase as if made at the Time of Purchase (unless previously waived)
and at and as of the Additional Time of Purchase as if made at the Additional
Time of Purchase), the performance by the Company of all covenants and
agreements and the satisfaction of all the conditions contained in this
Agreement required to be performed or satisfied by the Company on or before the
Time of Purchase or the Additional Time of Purchase, as the case may be, and to
the following additional conditions precedent:
(a) The Company shall furnish to you at the Time of
Purchase and at the Additional Time of Purchase, as the case may be, an
opinion of Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP, counsel for the Company,
addressed to the Underwriters, and dated the Time of Purchase or the
Additional Time of Purchase, as the case may be, with reproduced copies
for each of the other Underwriters, in form and substance satisfactory
to you and to Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters,
stating that:
(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 the
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement and the Final Prospectus, to execute
and deliver this Agreement, to perform its obligations
hereunder and to issue, sell and deliver the Shares as herein
contemplated;
(ii) the Company and each Subsidiary has obtained
all authorizations, licenses, directives and orders required
by federal and Puerto Rico banking, mortgage banking,
insurance and securities laws which are material to the
conduct of its business and, to the best of such counsel's
knowledge, the Company and each Subsidiary has obtained all
authorizations, licenses, directives and orders required by
New York and Delaware banking, mortgage banking, insurance and
securities laws which are material to the conduct of its
business; to the best of such counsel's knowledge, the Company
and each Subsidiary is operating in compliance with, all
authorizations, licenses, directives and orders required by
federal, New York, Delaware and Puerto Rico banking, mortgage
banking, insurance and securities laws which are material to
the conduct of its business; to the best of such counsel's
knowledge, all such authorizations, licenses, directives and
orders are valid and in full force and effect and neither the
Company nor any Subsidiary has received any notice of any
-19-
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proceeding relating to the revocation or modification of any
such license, directive, authorization or order; to the best
of such counsel's knowledge, neither the Company nor any of
the Subsidiaries is in violation of, or in default under, any
license, authorization, consent or approval or any federal,
state, Puerto Rico, local or foreign law, regulation or rule
or any directive, decree, order or judgment applicable to the
Company or any Subsidiary the effect of which could have a
Material Adverse Effect; to the best of such counsel's
knowledge, none of the Company, Doral Bank, Doral FSB or their
affiliates, 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 regulatory agency having jurisdiction with
respect to its business or operations except as disclosed in
the Registration Statement and in the Final Prospectus or as
would not have a Material Adverse Effect;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Shares have been duly and validly
authorized and issued and are fully paid and non-assessable;
(v) the Company has an authorized capitalization
as set forth under the heading entitled "As Adjusted for this
Offering" in the section of the Final Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable,
have been issued in compliance with all federal, state and
Puerto Rico laws and (A) were not issued in violation of any
preemptive right, co-sale right, resale right, right of first
refusal or similar right granted by applicable law or the
Company's charter and (B) to the best of the such counsel's
knowledge, were not issued in violation of any contractual
preemptive right, co-sale right, resale right, right of first
refusal or similar right; the Shares are free of preemptive
rights, co-sale rights, resale rights, rights of first refusal
and similar rights granted by applicable law, the Company's
charter or by contract; no person has any right granted by
applicable law or by the Company's charter to cause the
Company to issue to it, or register pursuant to the Act, any
shares of capital stock of the Company as a result of the
issue and sale of the Shares to the Underwriters hereunder
and, to the best of such counsel's knowledge, no person has
the contractual right to cause the Company to issue to it, or
register pursuant to the Act, any shares of capital stock of
the Company as a result of the issue and sale of the Shares to
the Underwriters hereunder;
(vi) each Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the
-20-
22
jurisdiction of its incorporation, and has the corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Final Prospectus; the Company and each
Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where
the nature of the business conducted by it or location of the
assets or properties owned, leased or licensed by it requires
such qualification, except for such jurisdictions where the
failure to so qualify would not have a Material Adverse
Effect; all of the outstanding shares of capital stock of each
Subsidiary are owned directly or indirectly by the Company, in
each case subject, to the best of such counsel's knowledge, to
no security interest, other encumbrance or adverse claim; all
of the outstanding shares of capital stock of each Significant
Subsidiary have been duly authorized and validly issued and
are fully paid and non-assessable; to the best of such
counsel's knowledge, all of the outstanding shares of capital
stock of each Subsidiary which is not a Significant Subsidiary
have been duly authorized and validly issued and are fully
paid and non-assessable; to the best of such counsel's
knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or
ownership interests in any Subsidiary are outstanding; and, to
the best of such counsel's knowledge, the Company and each
Subsidiary is in compliance in all respects with the laws,
orders, rules, regulations and directives issued or
administered by such jurisdictions except for such
non-compliance as would not have a Material Adverse Effect;
(vii) the capital stock of the Company, including
the Shares, conforms to the description thereof contained in
the Registration Statement and the Final Prospectus, and the
certificates for the Shares are in due and proper form and
have been duly authorized for issuance by the Company and the
holders of the Shares will not be subject to personal
liability by reason of being such holders; the Shares have
been approved for listing for quotation and trading on NASDAQ;
(viii) the Registration Statement and the Final
Prospectus (except as to the financial statements and
schedules and other financial and statistical data contained
or incorporated by reference therein, as to which such counsel
need express no opinion) comply as to form in all respects
with the requirements of the Act and the Exchange Act;
(ix) the Registration Statement has become
effective under the Act and, to the best of such counsel's
knowledge, no stop order proceedings with respect thereto are
pending or threatened under the Act and any required filing of
the Final Prospectus and any supplement thereto
-21-
23
pursuant to Rule 424(b) under the Act has been made in the
manner and within the time period required by such Rule
424(b);
(x) no approval, authorization, consent or order
of or filing with any national, state, Puerto Rico or local
governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance and sale
of the Shares, delivery and performance of this Agreement or
the consummation by the Company of the transactions
contemplated hereby other than those that have been obtained
under the Act (except such counsel need express no opinion as
to any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters);
(xi) the execution, delivery and performance of
this Agreement by the Company, the issuance and sale of the
Shares by the Company and the consummation by the Company of
the transactions contemplated hereby, and compliance by the
Company with its obligations hereunder, have not, do not and
will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which
with notice, lapse of time, or both, would result in any
breach of or constitute a default under), (A) any provision of
the charter or by-laws of the Company or any Subsidiary, (B)
to the best of such counsel's knowledge, any provision of any
license, indenture, mortgage, deed of trust, bank loan, credit
agreement or other evidence of indebtedness, or any lease,
contract or other agreement, instrument, decree, judgment or
order to which the Company or any of the Subsidiaries is a
party or by which any of them or their respective properties
may be bound or affected, (C) any federal or Puerto Rico law,
regulation or rule applicable to the Company or any Subsidiary
or (D) to the best of such counsel's knowledge, any state,
local or foreign law, regulation or rule applicable to the
Company or any Subsidiary;
(xii) to the best of such counsel's knowledge,
neither the Company nor any Subsidiary is in violation, breach
of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of,
or constitute a default under), its charter or by-laws; to the
best of such counsel's knowledge, neither the Company nor any
Subsidiary is in violation, breach of, or in default under
(nor has any event occurred which with notice, lapse of time,
or both would result in any breach of, or constitute a default
under), or has failed to perform or observe, any obligation,
agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease,
contract or any other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them
or their respective properties may be
-22-
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bound or affected or under any federal, state, Puerto Rico,
local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any Subsidiary
whose violation, breach of or default under would,
individually or in the aggregate, have a Material Adverse
Effect;
(xiii) all statutes and regulations and, to the
best of such counsel's knowledge, contracts, licenses,
agreements, leases or documents of a character required to be
summarized or described in the Registration Statement or the
Final Prospectus or to be filed as an exhibit to the
Registration Statement have been so summarized, described or
filed as required; each such summary description accurately
reflects in all material respects the terms of the underlying
statute, regulation, contract, license, agreement, lease or
document;
(xiv) to the best of such counsel's knowledge,
there are no actions, suits, claims, investigations or
proceedings pending, threatened or contemplated to which the
Company or any of the Subsidiaries or any of their respective
officers is a party or is subject, or of which any of their
respective properties is subject at law or in equity, or
before or by any federal, state, Puerto Rico, local or foreign
governmental or regulatory commission, board, body, authority
or agency which could result in a judgment, decree or order
having a Material Adverse Effect, affect the consummation of
the transactions contemplated hereby or are required to be
described in the Registration Statement or the Final
Prospectus but are not so described;
(xv) the documents incorporated by reference in
any of the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, at the
time such documents became effective or were filed with the
Commission, as applicable (or, if a supplement or an amendment
with respect to any such document was filed, when such
supplement or amendment was filed), complied as to form in all
material respects with the Act or the Exchange Act, as
applicable (except as to the financial statements and
schedules and other financial and statistical data contained
or incorporated by reference therein as to which such counsel
need express no opinion);
(xvi) the Company is not and, upon consummation of
the transactions contemplated by this Agreement, will not be
an "investment company" or an entity "controlled" by an
"investment company" or a "promoter" or "principal
underwriter" for a "registered investment company" as such
terms are defined in the Investment Company Act;
(xvii) the Company is registered with the Federal
Reserve as a bank holding company under the BHCA; the
Company's election to be
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treated as a financial holding company under the BHCA is in
full force and effect; any Subsidiary required to be
registered with the Federal Reserve is so registered;
(xviii) the deposit accounts of Doral Bank and Doral
FSB are insured by the SAIF of the FDIC to the legal maximum
and, to the best of such counsel's knowledge, no proceeding
for the termination or revocation of such insurance is pending
or threatened. Doral Bank and Doral FSB are members of the
Federal Home Loan Bank of New York;
(xix) to the best of such counsel's knowledge, no
transaction has occurred between or among the Company and any
of its officers or directors or five percent shareholders or
any affiliate or affiliates of any such officer or director or
five percent shareholder that is required to be described in
and is not described in the Registration Statement or the
Final Prospectus;
(xx) the information set forth in the Final
Prospectus under the caption "Taxation" to the extent that it
constitutes matters of law or legal conclusions has been
reviewed by such counsel and is correct in all material
respects and represents the opinion of such counsel; and
(xxi) such counsel have participated in
conferences with officers and other representatives of the
Company, representatives of the independent public accountants
of the Company and representatives of the Underwriters at
which the contents of the Registration Statement and the Final
Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Final Prospectus (except
insofar as such statements relate to such counsel), on the
basis of the foregoing, nothing has come to the attention of
such counsel that causes them to believe that the Registration
Statement or any amendment thereto at the time such
Registration Statement or 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 Final
Prospectus or any supplement thereto at the date of such Final
Prospectus or such supplement, and at all times up to and
including the Time of Purchase or Additional Time of Purchase,
as the case may be, contained or contains an 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 light of the circumstances under which
they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial
statements and schedules and other financial
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and statistical data included or incorporated by reference in
the Registration Statement or the Final Prospectus).
(b) You shall have received from PricewaterhouseCoopers
LLP, letters dated, respectively, the date of this Agreement, the Time
of Purchase and Additional Time of Purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in form and substance satisfactory to you, to the effect
that:
(i) they are independent certified public
accountants with respect to the Company within the meaning of
the Act;
(ii) in their opinion, the consolidated financial
statements of the Company and the Subsidiaries audited by them
and incorporated by reference in the Registration Statement
and the Final Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Act and the Exchange Act;
(iii) on the basis of procedures (but not an audit
in accordance with U.S. generally accepted auditing standards)
consisting of (A)(1) reading the minutes of meetings of the
stockholders, (2) the Board of Directors and (3) the
committees appointed by the Board of Directors of the Company
and the Subsidiaries since December 31, 2000 as set forth in
the minute books through a specified date not more than five
days prior to the date of delivery of the such letter; (B)
performing the procedures specified by the American Institute
of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, "Interim
Financial Information," on the unaudited condensed
consolidated financial statements of the Company and the
Subsidiaries incorporated by reference in the Registration
Statement and the Final Prospectus and reading the interim
financial data for the period from the date of the latest
unaudited condensed consolidated financial statements
incorporated by reference in the Registration Statement and
the Final Prospectus to the date of the latest available
interim financial data; (C) making inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters; and (D) other specified procedures;
nothing has come to their attention (as of a date not more
than five days prior to the date of the delivery of such
letter) as a result of the foregoing procedures that caused
them to believe that: (1) the unaudited condensed consolidated
financial statements of the Company and the Subsidiaries
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act; (2) any material modifications should be made to
the unaudited condensed consolidated financial statements
incorporated by reference in the Registration Statement and
the Final
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Prospectus for them to be in conformity with U.S. generally
accepted accounting principles; (3) (i) at the date of the
latest available interim financial data and at a specified
date not more than five days prior to the date of delivery of
such letter, there was any change in the capital stock,
deposits, notes payable, loans payable, advances from the
Federal Home Loan Bank, Federal Funds purchased and securities
sold under repurchase agreements, and other short term
borrowings or any decreases in the consolidated stockholders'
equity of the Company and the Subsidiaries as compared with
amounts shown in the latest unaudited condensed consolidated
financial statements incorporated by reference in the
Registration Statement and the Final Prospectus and (ii) for
the period from the latest unaudited condensed consolidated
financial statements incorporated by reference in the
Registration Statement and the Final Prospectus, to the latest
interim financial data available, of a date no later than five
days prior to the date of delivery of such letter, there were
any decreases, as compared with the corresponding period in
the preceding year, in consolidated net interest income,
non-interest income, income before taxes, or in the total or
per share amounts of net income, except in all instances for
changes or decreases which the Registration Statement and the
Final Prospectus discloses have occurred or may occur, or they
shall state any specific changes or decreases; and
(iv) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information included or incorporated by reference in
the Registration Statement and the Final Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Company, subject to the internal
controls of the Company's accounting system, as applicable, or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
In the event that any of the letters referred to above set
forth any such changes, decreases, or increases, it shall be a further condition
to the obligations of the Underwriters under this Agreement that (A) such
letters shall be accompanied by a written explanation of the Company as to the
significance thereof, unless the Underwriters deem such explanation unnecessary,
and (B) such changes, decreases, or increases do not, in the sole judgment of
the Underwriters, make it impractical or inadvisable to proceed with the
purchase and delivery of the Shares;
(c) You shall have received at the Time of Purchase and
at the Additional Time of Purchase, as the case may be, such opinion or
opinions of
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Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the Time of
Purchase or the Additional Time of Purchase, as the case may be, with
respect to the Shares, the Registration Statement and the Final
Prospectus, and such other related matters as you may reasonably
request, and the Company shall have furnished to Xxxxxxxx & Xxxxxxxx
such documents as they may request for the purpose of enabling them to
pass upon such matters.
(d) No amendment or supplement to the Registration
Statement, any Preliminary Final Prospectus or the Final Prospectus,
including documents deemed to be incorporated by reference therein,
shall have been filed after the Execution Time and prior to the Time of
Purchase or the Additional Time of Purchase, as the case may be, in
contravention of the terms of Section 4(c) hereof.
(e) The Final Prospectus shall have been filed via XXXXX
with the Commission pursuant to Rule 424(b) under the Act within the
time period permitted under the Act; provided, however, that the
Company and you and any group of Underwriters, including you, who have
agreed hereunder to purchase in the aggregate at least 50% of the Firm
Shares may from time to time agree on a later date.
(f) Prior to the Time of Purchase or the Additional Time
of Purchase, as the case may be, (i) no order preventing or suspending
the use of any Preliminary Final Prospectus of the Final Prospectus
shall have been issued under the Act or proceedings initiated therefor;
(ii) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or
proceedings initiated therefor; (iii) the Registration Statement and
all amendments thereto, or modifications thereof, if any, shall 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; (iv) the Final Prospectus and all
amendments or supplements thereto, or modifications thereof, if any,
shall 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, in the light of the circumstances under
which they are made, not misleading; and (v) any request for additional
information on the part of the Commission (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall have
been complied with.
(g) Between the Execution Time and the Time of Purchase
or the Additional Time of Purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred
to in the Registration Statement (exclusive of any amendment thereof or
supplement thereto filed after the Execution Time) and the Final
Prospectus (exclusive of any amendment thereof or supplement thereto
filed after the first filing of the Final Prospectus in accordance with
the terms of Section 3(a) hereof)), in the business, condition or
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prospects of the Company and the Subsidiaries taken as a whole shall
occur or become known and (ii) no transaction which is material and
unfavorable to the Company shall have been entered into by the Company
or any of the Subsidiaries.
(h) The Company will, at the Time of Purchase or
Additional Time of Purchase, as the case may be, deliver to you a
certificate of two of its executive officers to the effect that the
representations and warranties of the Company as set forth in this
Agreement are true and correct on and as of each such date as if made
as of and on each such date, that the Company has performed such of its
obligations under this Agreement as are to be performed at or before
the Time of Purchase and at or before the Additional Time of Purchase,
as the case may be, and the conditions set forth in paragraphs (f) and
(g) of this Section 6 have been met.
(i) You shall have received signed letters, dated as of
the date of this Agreement, from each of the directors and officers of
the Company listed under the caption "Management" in the Preliminary
Final Prospectus dated July 13, 2001 to the effect that such persons
shall not sell, offer or agree to sell, assign, contract to sell, grant
any option to sell or otherwise dispose of, directly or indirectly, or
file (or participate in the filing of) a registration statement with
the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or
any other securities of the Company that are substantially similar to
the Common Stock, or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of this Agreement
without your prior written consent.
(j) The Company shall have furnished to you such other
information, documents and certificates as you or counsel to the
Underwriters may reasonably request.
(k) The Shares shall have been approved for listing for
quotation and trading on NASDAQ, and satisfactory evidence of such
actions shall have been provided to you.
(l) Between the Execution Time and the Time of Purchase
or Additional Time of Purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement
have been given or made of (i) any intended or potential downgrading or
(ii) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by
the Company or any Subsidiary by any "nationally recognized statistical
rating organization", as that term is defined in Rule 436(g)(2) under
the Act.
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(m) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Shares, the Registration Statement, any Preliminary Final Prospectus,
the Final Prospectus and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
satisfactory in all respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to
ascertain such matters.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance satisfactory to
counsel for the Underwriters.
7. Effective Date of Agreement; Termination. This
Agreement shall become effective at the Execution Time.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if, since the Execution Time or the
respective dates as of which information is given in the Registration Statement
and Final Prospectus, (y) there has been any material adverse change, financial
or otherwise (other than as referred to in the Registration Statement (exclusive
of any amendment thereof or supplement thereto filed after the Execution Time)
and the Final Prospectus (exclusive of any amendment thereof or supplement
thereto filed after the first filing of the Final Prospectus pursuant to the
terms of Section 3(a) hereof)), in the operations, business, condition or
prospects of the Company and the Subsidiaries taken as a whole, which would, in
your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares, or (z) there shall have occurred any
downgrading, or any notice shall have been given of (i) any intended or
potential downgrading or (ii) any review or possible change that does not
indicate an improvement, in the rating accorded any securities of or guaranteed
by the Company or any Subsidiary by any "nationally recognized statistical
rating organization," as that term is defined in Rule 436(g)(2) under the Act
or, if, at any time prior to the Time of Purchase or, with respect to the
purchase of any Additional Shares, the Additional Time of Purchase, as the case
may be, trading in securities on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market shall have been suspended or limitations
or minimum prices shall have been established on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ National Market, or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in your judgment or in the judgment of such group of
Underwriters, to make it impracticable to market the Shares.
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If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(o), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. Subject to
Sections 6 and 7, if any Underwriter shall default in its obligation to take up
and pay for the Firm Shares to be purchased by it hereunder (otherwise than for
reasons sufficient to justify the termination of this Agreement under the
provisions of Section 5 hereof) and if the number of Firm Shares which all
Underwriters so defaulting shall have agreed but failed to take up and pay for
does not exceed 10% of the total number of Firm Shares, the non-defaulting
Underwriters shall take up and pay for (in addition to the number of Firm Shares
they are obligated to purchase pursuant to Section 1 hereof) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be taken up and paid for by such
non-defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five Business Days
in order that any necessary changes in the Registration Statement and Final
Prospectus and other documents may be effected.
The term Underwriter as used in this agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
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If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five Business Day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability or claim
(including the reasonable costs of investigation) which, jointly or severally,
any such Underwriter or any such person may incur under the Act, the Exchange
Act, common law or otherwise, insofar as such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Final Prospectus, the Final Prospectus, or any amendment thereof or
supplement thereto, or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use with reference to such
Underwriter in the Preliminary Final Prospectus dated July 13, 2001, or the
Final Prospectus or that arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in the Preliminary Final Prospectus dated July 13, 2001 or the
Final Prospectus or necessary to make such information not misleading, provided,
however, that the indemnity agreement contained in this subsection (a) with
respect to any Preliminary Final Prospectus shall not inure to the benefit of
any Underwriter (or to the benefit of any person controlling such Underwriter)
from whom the person asserting any such loss, damage, expense, liability or
claim purchased the Shares which is the subject thereof if the Final Prospectus
corrected any such alleged untrue statement or omission and if such Underwriter
failed to send or give a copy of the Final Prospectus to such person at or prior
to the written confirmation of the sale of such Shares to such person,
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unless the failure is the result of non-compliance by the Company with
paragraphs (b) and (h) of Section 4 of this Agreement.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such Underwriter or such person shall promptly
notify the Company in writing of the institution of such Proceeding and
the Company shall assume the defense of such Proceeding, including the
employment of counsel satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission
to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such
person or otherwise. Such Underwriter or such person shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel
shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in
which case the Company shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company
shall not be liable for any settlement of any such Proceeding effected
without its written consent but if settled with the written consent of
the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable
for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 Business
Days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could
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34
have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and officers and
any person who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such
person may incur under the Act, the Exchange Act, or common law or
otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use with reference to such
Underwriter in the Preliminary Final Prospectus dated July 13, 2001 or
the Final Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated therein or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability which
such Underwriter may have to the Company or any such person or
otherwise. The Company or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless
the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or
them which are different from or additional to or in conflict with
those available to such Underwriter (in which case such Underwriter
shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may
employ counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such
Underwriter and paid as incurred (it being understood, however, that
such Underwriter shall not be
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liable for the expenses of more than one separate counsel (in addition
to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be
liable for any settlement of any such Proceeding effected without the
written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and
hold harmless the Company and any such person from and against any loss
or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
Business Days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsections (a) and (b) of
this Section 9 in respect of any losses, damage, expenses, liabilities
or claims referred to therein, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (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 Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be
in the same respective proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the shares. The relative fault of
the
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Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission 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 amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any claim or
Proceeding.
(d) The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9
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 that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by such Underwriter and distributed to the public
were offered to the public exceeds the amount of any damage which such
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and
not joint.
(e) The indemnity and contribution agreements contained
in this Section 9 and the covenants, warranties, representations and
agreements of the Company contained Sections 3, 4 and 5 of this
Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its partners,
directors and officers or any person (including each partner, officer
or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or
by or on behalf of the Company, its directors or officers or any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and shall survive any termination of
this Agreement or the issuance and delivery of the Shares. The Company
and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the
Company, against any of the Company's officers or directors in
connection with the issuance and sale of the Shares, or in connection
with the Registration Statement, any Preliminary Final Prospectus or
the Final Prospectus.
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10. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 0000 X.X.
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx, 00000, Attention: Chief Executive
Officer.
11. Governing Law; Construction. This Agreement and any
claim, counterclaim or dispute of any kind or nature whatsoever arising out of
or in any way relating to this Agreement ("Claim"), directly or indirectly,
shall be governed by, and construed in accordance with, the laws of the State of
New York. The section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except (i) as set forth
below or (ii) in the event such courts do not accept jurisdiction over the
adjudication of such matters, no Claim may be commenced, prosecuted or continued
in any court other than the courts of the State of New York located in the City
and County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Company consents to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
any of the Underwriters or any indemnified party. Each Underwriter and the
Company (on its behalf and, to the extent permitted by applicable law, on behalf
of its stockholders and affiliates) waives all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts in the jurisdiction of which the Company is
or may be subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth
has been and is made solely for the benefit of the Underwriters, the Company
and, to the extent provided in Section 9 hereof, the controlling persons,
directors and officers referred to in such Section 9, and their respective
successors, assigns, heirs, pursuant representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the
parties in one or more counterparts which together shall constitute one and the
same agreement among the parties.
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15. Successors and Assigns. This Agreement shall be
binding upon the Underwriters and the Company and their successors and assigns
and any successor or assign of any substantial portion of the Company's and any
of the Underwriters' respective businesses and/or assets.
16. Miscellaneous. UBS Warburg LLC, an indirect, wholly
owned subsidiary of UBS AG, is not a bank and is separate from any affiliated
bank, including any U.S. branch or agency of UBS Warburg LLC. Because UBS
Warburg LLC is a separately incorporated entity, it is solely responsible for
its own contractual obligations and commitments, including obligations with
respect to sales and purchases of securities. Securities sold, offered or
recommended by UBS Warburg LLC are not deposits, are not insured by the Federal
Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are
not otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg LLC will disclose the existence of any such lending relationships
and whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBS Warburg LLC.
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If the foregoing correctly sets forth the understanding among
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
DORAL FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Executive Vice President
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
hereto
UBS WARBURG LLC
DEUTSCHE BANC ALEX. XXXXX INC.
XXXXX XXXXXX & CO., INC.
By: UBS WARBURG LLC
By: Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxxx Xxxxxxx-Xxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx-Xxxxxxxxx
Title: Associate Director
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SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS WARBURG LLC 1,980,000
DEUTSCHE BANC ALEX. XXXXX INC. 1,540,000
XXXXX XXXXXX & CO., INC. 880,000
---------
Total........................ 4,400,000
=========
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SCHEDULE B
Subsidiaries of Doral Financial Corporation
Name Jurisdiction of Organization
---- ----------------------------
Doral Mortgage Corporation Puerto Rico
Doral Securities, Inc. Puerto Rico
Doral Bank Puerto Rico
Doral Bank, FSB U.S.A.
Centro Hipotecario de Puerto Rico, Inc. Puerto Rico
Doral Properties, Inc. Puerto Rico
Sana Investment Mortgage Bankers, Inc. (1) Puerto Rico
Doral International, Inc. (2) Puerto Rico
Doral Money, Inc. (3) Delaware
Doral Insurance Agency, Inc. Puerto Rico
Doral Capital, Inc. (4) Delaware
(1) Sana Investment Mortgage Bankers, Inc. is a wholly-owned subsidiary of
Doral Mortgage Corporation.
(2) Doral International, Inc. is a wholly-owned subsidiary of Doral Bank.
(3) Doral Money is a wholly-owned subsidiary of Doral Bank.
(4) Inactive.
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