EXHIBIT 1.1
4,000,000 Shares
FIRST BANCORP
_____ % Noncumulative Perpetual Monthly Income Preferred Stock, Series E
UNDERWRITING AGREEMENT
UBS FINANCIAL SERVICES INCORPORATED OF PUERTO RICO
As lead underwriter of the several Underwriters
named in Schedule 1
American International Plaza, PH
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
FIRST BANCORP, a corporation organized under the laws of Puerto Rico
(the "Company"), proposes to sell to you and the other underwriters named in
Schedule 1 (collectively, the "Underwriters"), for whom you are acting as
representative (the "Representative"), an aggregate of 4,000,000 shares (the
"Firm Shares") of the Company's ____% Noncumulative Perpetual Monthly Income
Preferred Stock, Series E to be issued by the Company (the "Preferred Stock").
The Company also has agreed to grant to you and the other Underwriters an option
(the "Option") to purchase up to an additional 600,000 shares of Preferred
Stock (the "Option Shares") on the terms and for the purposes set forth in
Section 1(b) hereto. The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The Company hereby confirms its agreements with the Representative and
the other Underwriters as follows:
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1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company contained herein and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to the Representative
for the account of the Underwriters, and the Representative agrees to purchase
from the Company on behalf of the Underwriters, at a purchase price of $24.15
per share, the number of Firm Shares set forth above, plus such additional
number of Firm Shares which the Underwriters may become obligated to purchase
pursuant to Section 9 hereof.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the Representative as agent of the
Underwriters, to purchase the Option Shares at the same price per share as the
Representative shall pay for the Firm Shares on behalf of the Underwriters. The
Option may be exercised only to cover overallotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time
and from time to time on or before the thirtieth (30th) day after the date of
this Agreement (or on the next business day if the thirtieth (30th) day is not a
business day), upon notice (the "Option Shares Notice") in writing or by
telephone (confirmed in writing) by the Representative to the Company no later
than 5:00 p.m., New York City time, at least two (2) and no more than five (5)
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date") setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Representative for the account of
the Underwriters the number of Option Shares set forth in the Option Shares
Notice and Representative will purchase on behalf of the Underwriters such
number of Option Shares as is set forth in the Option Shares Notice and will
allocate the Option Shares purchased among the Underwriters in such manner as
the Representative, in its sole discretion, deems necessary and advisable. The
term "business day" as used in this Agreement means any day in which banks are
open for business in both New York and Puerto Rico.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representative for the accounts of the Underwriters at the office of
Adsuar Xxxxx Xxxxx & Xxxxxx, P.S.C., counsel to the Underwriters, Westernbank
World Plaza, 000 Xxxxx Xxxxxx Xxx., Xxxxx 0000, Xxx Xxxx, P.R. 00918, or such
other place as may be agreed upon by the Company and the Representative, against
payment of the purchase price by wire transfer of immediately available funds to
the bank account designated by the Company. Such payment shall be made at 10:00
a.m., New York City time, on the third (3rd) full business day following the
date of this Agreement, or at such other time on such other date, not later than
seven (7) business days after the date of this Agreement, as may be agreed upon
by the Company and the Representative (such date is hereinafter referred to as
the "Closing Date").
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Time shall be of the essence and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder.
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Representative on behalf of the Underwriters (in the
manner specified above) will take place at the offices specified above for the
Closing Date at the time and date (which may be the Closing Date) specified in
the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representative shall request at least two (2) business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least twenty-four (24) hours prior to the Closing
Date or the Option Closing Date, as the case may be.
Notwithstanding the other provisions of this Section 2, if transactions
in the Shares can be settled through the facilities of the Depository Trust
Company ("DTC"), payment for and delivery of the Shares will be made through the
facilities of DTC.
The cost of original issue tax stamps, if any, in connection with the
issuance, sale and delivery of the Firm Shares and Option Shares by the Company
to the Representative for the account of the Underwriters shall be borne by the
Company. The Company will pay and save the Representative and the Underwriters
and any subsequent holder of the Shares harmless from any and all liabilities
with respect to or resulting from any failure or delay in paying Federal, state
or Commonwealth of Puerto Rico stamp or other transfer taxes, if any, which may
be payable or determined to be payable in connection with the original issuance,
sale or delivery to such Underwriter of the Firm Shares or Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to the Representative and to each Underwriter
that:
(a) The Company and the Shares meet the requirements for
the use of Form S -3 under the Securities Act of 1933 (the "Act") and the rules
and regulations promulgated thereunder (the "Rules and Regulations"), and the
Company has filed with the Securities and Exchange Commission (the "SEC") a
Registration Statement (as defined below) on such form, including a basic
prospectus, for registration under the Act of the offering and sale of the
Shares. The Company may have filed one or more amendments thereto, and may have
used one or more prospectus supplement(s), each of which has previously been
furnished to you. Such Registration Statement, as so amended, has become
effective. The offering of the Shares is a delayed offering pursuant to Rule 415
of the Rules and Regulations. Although the basic prospectus may not include all
the information with respect to the Shares and the offering
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thereof required by the Act and the Rules and Regulations to be included in the
prospectus supplement(s), the basic prospectus includes all such information
required by the Act and the Rules and Regulations to be included therein as of
the Effective Date (as defined below). The Company will next file with the SEC
pursuant to Rules 415 and 424(b)(2) or (5) of the Rules and Regulations one or
more prospectus supplement(s). As filed, such prospectus supplement(s) shall
include all required information with respect to the Shares and the
offering thereof and, except to the extent the Representative shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to the Representative prior to the Closing Date or, to the extent not
completed at the Closing Date, shall contain only such specific additional
information and other changes as the Company has advised you, prior to the
Closing Date, will be included or made therein.
(b) The term "Registration Statement" means the
registration statement at the time it became effective (the "Effective Date"),
including all financial statements and schedules and all exhibits, documents
incorporated therein by reference, and all information contained in the basic
prospectus, any preliminary prospectus(es) and any final prospectus
supplement(s) filed with the SEC pursuant to Rule 424(b) of the Rules and
Regulations and including any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations (a "Rule 462 Registration Statement")
increasing the size of the offering. The term "Prospectus" means the basic
prospectus relating to the Shares as filed with the SEC pursuant to Rule 424(b)
of the Rules and Regulations, and includes any preliminary and final prospectus
supplement(s). References herein to any document or any other information
incorporated by reference in the Registration Statement shall include documents
or other information incorporated by reference in the Prospectus. References
herein to the Prospectus shall be deemed to include all documents and
information incorporated by reference therein and shall be deemed to refer to
and include any documents and information filed after the date of such
Prospectus, as the case may be, and so incorporated by reference, under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act").
(c) On the date that the Prospectus was first filed with
the SEC pursuant to Rule 424(b), at all times subsequent to and including the
Closing Date and, if later, the Option Closing Date and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the SEC, the Registration Statement
and the Prospectus (as amended or as supplemented if the Company shall have
filed with the SEC any amendment or supplement thereto), including the financial
statements included in the Prospectus, did or will comply with all applicable
provisions of the Act and the Rules and Regulations and did or will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement or any such amendment did or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the
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Prospectus or any amendment or supplement to the Prospectus is filed with the
SEC and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not or will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(c) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representative specifically for inclusion in the Registration Statement, the
Prospectus or any amendment or supplement thereto. There are no contracts or
other documents required to be filed as exhibits to the Registration Statement
by the Act or the Rules and Regulations that have not been so filed. The
documents which are incorporated by reference in the Prospectus or from which
information is so incorporated by reference, when they became effective or were
filed with the SEC, as the case may be, complied in all material respects with
the requirements of the Act and the Rules and Regulations or the Exchange Act
and the rules and regulations thereunder, as applicable, and did not, when such
documents were so filed, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and any documents so filed and incorporated by reference
subsequent to the Effective Date shall, when they are filed with the SEC,
conform in all material respects with the requirements of the Act and the Rules
and Regulations and the Exchange Act and the rules and regulations thereunder,
as applicable.
(d) The only directly or indirectly controlled
subsidiaries of the Company (each, a "Subsidiary" and collectively, the
"Subsidiaries") are FirstBank Puerto Rico, First Federal Financial Corp., First
Leasing and Rental Corporation, FirstBank Insurance Agency, Inc., FirstBank
Insurance Agency V.I., Inc. and First Trade, Inc. Except as set forth in the
Prospectus or as acquired in connection with the exercise of its rights as a
creditor, or pursuant to a bona fide collateral pledge arrangement, neither the
Company nor any Subsidiary owns, nor at the Closing Date and the Option Closing
Date, will own an interest in any corporation, partnership, trust, joint venture
or other business entity other than passive, non-controlling equity investments
permitted under the applicable laws and regulations. The Company has been and,
at the Closing Date and Option Closing Date, will be duly organized and validly
existing as a corporation under the laws of the Commonwealth of Puerto Rico and
is and, at the Closing Date and Option Closing Date, will be in good standing
with the Commonwealth of Puerto Rico. The Company is treated as a bank holding
company under the Bank Holding Company Act of 1956 (the "BHCA") and is and, at
the Closing Date and Option Closing Date will be in good standing with the Board
of Governors of the Federal Reserve System (the "Federal Reserve"). Each of the
Subsidiaries is and, at the Closing Date and Option Closing Date, will be,
respectively, a commercial bank, a finance company, a leasing and rental
company, an insurance agency, an insurance agency and a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation, and are duly authorized to conduct
therein their respective businesses. Each of
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the Company and its Subsidiaries is and, at the Closing Date and the Option
Closing Date, will be duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
or use of its property and assets makes such qualification necessary, except
where the failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects results of
operations or business affairs of the Company and its Subsidiaries taken as a
whole (each, a "Material Adverse Effect").
(e) The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights. The
Shares to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, validly issued, fully paid and nonassessable
and will not be subject to any preemptive or similar rights. The Company has,
and, upon completion of the sale of the Shares, will have, an authorized, issued
and outstanding capitalization as set forth in the Registration Statement and
the Prospectus. The description of the securities of the Company in the
Registration Statement and the Prospectus is, and at the Closing Date and, if
later, the Option Closing Date, will be, complete and accurate in all respects.
No holders of securities of the Company are entitled to have such securities
registered under the Registration Statement, except where such rights have been
waived.
(f) The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated
therein by reference and the Prospectus present fairly the financial condition
of the Company and its Subsidiaries as of the dates indicated and the
consolidated results of operations, and cash flows of the Company and its
Subsidiaries for the periods covered thereby, all in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the entire periods involved. PricewaterhouseCoopers LLP (the "Accountants"), who
have reported on those of such financial statements and related notes which are
audited, are independent accountants with respect to the Company and its
Subsidiaries within the meaning of the Act and the applicable Rules and
Regulations.
(g) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
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(h) Except as set forth in the Registration Statement and
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date
and, if later, the Option Closing Date, (i) there has not been, and will not
have been, any Material Adverse Effect, (ii) neither the Company nor any of its
Subsidiaries has entered into, or will have entered into any material
transactions other than pursuant to this Agreement, and (iii) the Company has
not, and will not have, paid or declared any dividends or other distributions of
any kind on any class of its capital stock, except for the payment or
declaration of quarterly dividends on the Company's common stock (the "Common
Stock") and payment or declaration of monthly dividends on its outstanding
series of preferred stock, both in the ordinary course of its business.
(i) The Company and each of its Subsidiaries have good
and marketable title to all properties and assets described in the Registration
Statement, including the documents incorporated by reference therein, and the
Prospectus, as owned by it, free and clear of all liens, security interests,
restrictions, pledges, encumbrances, charges, equities, claims, easements,
leases and tenancies (collectively, "Encumbrances") other than those described
in the Registration Statement, or in the documents incorporated by reference
therein, and the Prospectus or those that will not materially affect the value
of such properties and assets or will not interfere with the use made and
proposed to be made of such properties and assets. The Company and each of its
Subsidiaries have valid, subsisting and enforceable leases for the properties
and assets described in the Registration Statement or in the documents
incorporated by reference therein, and the Prospectus as leased by them, free
and clear of all Encumbrances, other than those described in the Registration
Statement or in the documents incorporated by reference therein, and the
Prospectus or those that will not materially affect the value of such properties
and assets or will not interfere with the use made and proposed to be made of
such properties and assets.
(j) The Company and its Subsidiaries are not required to
be registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(k) Except as set forth in the Registration Statement, or
incorporated therein by reference, and the Prospectus, there are no actions,
suits, arbitrations, claims, governmental or other proceedings (formal or
informal), or investigations pending or, to the Company's knowledge, threatened
against or affecting the Company or any of its Subsidiaries, or any directors,
officers or shareholders of the Company or any of its Subsidiaries in their
respective capacities as such, or any of the properties or assets owned or
leased by the Company or any of its Subsidiaries, before or by any Federal,
state or Commonwealth of Puerto Rico court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign
(collectively, a "Governmental Body"), wherein an unfavorable ruling, decision
or finding would have a Material Adverse Effect and would be required to be
disclosed in the Registration Statement and the Prospectus. Neither the Company
nor any
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Subsidiary is in violation of, or in default with respect to, any law, rule, or
regulation, or any order, judgment, or decree, except as described in the
Prospectus or such as in the aggregate do not now have and can reasonably be
expected in the future not to have a Material Adverse Effect; nor is the Company
or any Subsidiary presently required under any order, judgment or decree to take
any action in order to avoid any such violation or default.
(l) The Company and each of its Subsidiaries have and, at
the Closing Date and the Option Closing Date, will have all governmental
licenses, permits, consents, orders, approvals, franchises, certificates and
other authorizations (collectively, "Licenses") necessary to carry on their
respective businesses, except where the failure to have such licenses would not
have a Material Adverse Effect, and own or lease their respective properties as
contemplated in the Registration Statement and the Prospectus. The Company and
each of its Subsidiaries have and, at the Closing Date and the Option Closing
Date will have, complied with all laws, regulations and orders applicable to it
or its business, assets and properties, the violations of which would,
individually or in the aggregate, not now have, or could reasonably be expected
in the future to have, a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is, nor, at the Closing Date and the Option Closing Date, will
be in default (nor has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the due performance and observation of any
term, covenant or condition of any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument
(collectively, a "contract or other agreement") to which they are a party or by
which their respective properties are bound or affected, the violation of which
would individually or in the aggregate have a Material Adverse Effect. There are
no governmental proceedings or actions pending or to be threatened for the
purpose of suspending, modifying or revoking any License held by the Company and
its Subsidiaries.
(m) No consent, approval, authorization or order of, or
any filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in connection
with the issuance and sale of the Shares by the Company, except such as have
been obtained and such as may be required under state or Commonwealth of Puerto
Rico securities or blue sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares to be sold hereby.
(n) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution may be
limited by applicable laws. Except as disclosed in the Registration Statement
and the Prospectus, the execution, delivery and the performance of this
Agreement and the
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consummation of the transactions contemplated hereby will not result in the
creation or imposition of any Encumbrance upon any of the properties or assets
of the Company or any of its Subsidiaries pursuant to the terms or provisions
of, or result in a breach or violation of or conflict with any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, (i) the Certificate of Incorporation or By-laws of the
Company, in each case as amended, or (ii) any contract or other agreement to
which the Company or any of its Subsidiaries is a party or by which it or any of
the respective assets or properties are bound or affected, the violation of
which would individually or in the aggregate have a Material Adverse Effect, or
(iii) any judgment, ruling, decree, order, law, statute, rule or regulation of
any Governmental Body applicable to the Company or any of its Subsidiaries or
their respective businesses or properties, the violation of which would
individually or in the aggregate have a Material Adverse Effect.
(o) No statement, representation, or warranty made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representative was or will be, when made,
inaccurate, untrue or incorrect in any material respect. Each certificate signed
by an officer of the Company and delivered to the Representative or counsel for
the Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(p) Neither the Company nor any of its directors,
officers or affiliates has taken, nor will he, she or it take, directly or
indirectly, any action designed, or which might reasonably be expected in the
future, to cause or result in, under the Act or otherwise, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise.
(q) The Shares have been approved for listing on the New
York Stock Exchange ("NYSE"), subject only to notice of issuance.
(r) Neither the Company nor any of its Subsidiaries is
involved in any collective labor dispute with its employees nor is any such
dispute threatened or imminent.
(s) Neither the Company nor any of its Subsidiaries nor,
to the Company's best knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds of the Company or any Subsidiary in violation of
any law, rule or regulation which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(t) The business, operations and facilities of the
Company and its Subsidiaries have been and are being conducted in compliance
with all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or
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requirements relating to occupational safety and health, or pollution, or
protection of health or the environment (including, without limitation, those
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic substances, materials or wastes
into ambient air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment storage, disposal,
transport or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, gaseous or
liquid in nature) of any governmental department, commission, board, bureau,
agency or instrumentality of the United States, any state, or the Commonwealth
of Puerto Rico or political subdivision thereof, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto, except where failure to so comply would not have a Material
Adverse Effect; and neither the Company nor any of its Subsidiaries has received
any notice from any governmental instrumentality or any third party alleging any
violation thereof or liability thereunder (including, without limitation,
liability for costs of investigating or remediating sites containing hazardous
substances and/or damages to natural resources). The intended use and occupancy
of each of the facilities owned or operated by the Company and its Subsidiaries
complies in all material respects with all applicable codes and zoning laws and
regulations, and there is no pending or threatened condemnation, zoning change,
environmental or other proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction on, or
access to such facilities.
(u) The Company and each of its Subsidiaries have filed
all foreign, federal, state and local tax returns that are required to be filed
or have requested extensions thereof and have paid all taxes required to be paid
by them and any other assessment, fine or penalty levied against them, to the
extent that any of the foregoing is due and payable, except for any failure to
file that would not have a Material Adverse Effect.
(v) The deposit accounts of FirstBank Puerto Rico, a
Subsidiary of the Company ("FirstBank") are insured by the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC") to
the legal maximum, and no proceeding for the termination or revocation of such
insurance is pending or threatened. FirstBank is a member in good standing of
the Federal Home Loan Bank of New York.
(w) None of the Company, FirstBank, their affiliates, or,
to the Company's knowledge, any of their respective directors or officers is
subject to any order or directive of, or party to any agreement with, any
regulatory agency having jurisdiction with respect to its business or operations
except as disclosed in the Prospectus.
4. Agreements of the Company. The Company covenants and agrees
with each of the several Underwriters as follows:
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(a) The Company will not, during such period as the
Prospectus is required by law to be delivered in connection with sales of the
Shares by an Underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof shall first have
been submitted to the Representative within a reasonable period of time prior to
the filing thereof and the Representative shall not have objected thereto in
good faith.
(b) The Company will notify the Representative promptly,
and will confirm such advice in writing, (i) when any post-effective amendment
to the Registration Statement becomes effective, (ii) of any request by the SEC
for amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (iv) of the happening of
any event during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
that in the judgment of the Company makes any statement of a material fact made
in the Registration Statement or the Prospectus untrue or that requires the
making of any changes in the Registration Statement or the Prospectus in order
to make the statements therein, in light of the circumstances in which they are
made, not misleading, and (v) of receipt by the Company or any representative or
attorney of the Company of any other communication from the SEC relating to the
Company, the Registration Statement or the Prospectus. If at any time the SEC
shall issue any order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment. The Company will
prepare the Prospectus in a form approved by the Representative and will file
such Prospectus pursuant to Rule 424(b) under the Act not later than the SEC's
close of business on the second business day following the execution and
delivery of this Agreement.
(c) If the Company elects to rely upon Rule 462(b) of the
Rules and Regulations, the Company shall file the Rule 462(b) Registration
Statement with the SEC in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing, either pay to the SEC the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) of the Rules and
Regulations.
(d) If, at any time when a Prospectus relating to the
Shares is required to be delivered under the Act, any event occurs as a result
of which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or the Registration Statement, as then
amended or supplemented, would include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein not
misleading, or if for any other reason it is necessary at any time to amend or
supplement the Prospectus or the
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Registration Statement to comply with the Act or the Rules and Regulations, the
Company will promptly notify the Representative thereof and, subject to Section
4(b) hereof, will prepare and file with the SEC, at the Company's expense, an
amendment to the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance.
(e) The Company will furnish to the Representative,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representative, without charge,
for transmittal to each of the other Underwriters, copies of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(f) The Company will comply with all the provisions of
all undertakings contained in the Registration Statement.
(g) From time to time for such period as the Prospectus
is required by the Act to be delivered, the Company will deliver to each of the
Underwriters, without charge, as many copies of the Prospectus or any amendment
or supplement thereto as the Representative may reasonably request. The Company
consents to the use of the Prospectus or any amendment or supplement thereto by
the several Underwriters and by all dealers to whom the Shares may be sold, both
in connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or counsel to the Underwriters should be set
forth in the Prospectus in order to make any statement therein, in the light of
the circumstances under which it was made, not misleading, or in the
Registration Statement in order to make any statement therein not misleading, or
if it is necessary to supplement or amend the Prospectus or the Registration
Statement to comply with law, the Company will forthwith prepare and duly file
with the SEC an appropriate supplement or amendment thereto, and deliver to each
of the Underwriters, without charge, such number of copies thereof as the
Representative may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representative and its counsel
in connection with the registration or qualification of the Shares for offer and
sale under the securities or blue sky laws of such jurisdictions as the
Representative may reasonably request; provided, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(i) During the period of five (5) years commencing on the
Closing Date, the Company will furnish to the Representative and each other
Underwriter who may so request
13
copies of such financial statements and other periodic and special reports as
the Company may from time to time distribute generally to the holders of any
class of its capital stock, and will furnish to the Representative and each
other Underwriter who may so request a copy of each annual or other report it
shall be required to file with the SEC.
(j) The Company will make generally available to holders
of its securities, as soon as may be practicable, but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Closing Date falls, a consolidated earnings statement (which need not
be audited but shall be in reasonable detail) for a period of twelve (12) months
commencing after the Closing Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(k) The Company will apply the net proceeds from the
offering and sale of the Shares in the manner set forth in the Prospectus under
"Use of Proceeds."
(l) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
Shares to facilitate the sale or resale of any of the Shares.
14
5. Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Representative, all costs and expenses incidental to
the performance of the obligations of the Company under this Agreement,
including, but not limited to, costs and expenses of or relating to (i) the
preparation, printing and filing by the Company of the Registration Statement
and amendments and exhibits thereto, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (ii) the preparation
and delivery of certificates representing the Shares, (iii) furnishing
(including costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (iv) the listing of the
Shares on the NYSE, (v) any filings required to be made by the Underwriters with
the NASD, (vi) the registration or qualification of the Shares for offer and
sale under the securities or blue sky laws of such jurisdictions designated
pursuant to Section 4(h) and the preparation and printing of preliminary,
supplemental and final blue sky memoranda, (vii) counsel and accountants to the
Company, and (viii) the transfer agent for the Shares.
(b) If the transactions contemplated by this Agreement
are not consummated or if this Agreement is terminated by the Company pursuant
to any of the provisions hereof, the Company will reimburse the Representative
for all of its accountable out-of-pocket fees and expenses (including the fees,
disbursements and other charges of its counsel) incurred by it in connection
herewith.
6. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) All filings required by Rule 424 of the Rules and
Regulations and Rule 430A shall have been made. If the Company has elected to
rely upon Rule 462(b) of the Rules and Regulations, the Company has filed the
Rule 462(b) Registration Statement by 10:00 p.m., Washington D.C. time, on the
date of this Agreement.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the SEC, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or blue sky laws of any jurisdiction shall be
in effect, and no proceeding for such purpose shall be pending before or
threatened or contemplated by the SEC or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the SEC or any such authorities shall have been complied with to the
satisfaction of the staff of the SEC or such authorities,
15
and (iv) after the date hereof no amendment or supplement to the Registration
Statement or the Prospectus shall have been filed unless a copy thereof was
first submitted to the Representative and the Representative did not object
thereto in good faith, and the Representative shall have received certificates,
dated the Closing Date and the Option Closing Date and signed by the Chief
Executive Officer of the Company and the Chief Financial Officer of the Company
(who may, as to proceedings threatened, rely upon the best of their information
and belief), to the effect of the foregoing clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a Material Adverse Effect whether or not arising from transactions in the
ordinary course of business, and (ii) the Company and its Subsidiaries shall not
have sustained any material loss or interference with its business, assets or
properties from fire, explosion, flood or other casualty, or from any labor
dispute or any court or legislative or other governmental action, order or
decree, which is not set forth in the Registration Statement and the Prospectus.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers, directors or shareholders in their capacities as such, or any of its
assets or properties, before or by any Governmental Body in which litigation or
proceeding an unfavorable ruling, decision or finding would result in a Material
Adverse Effect.
(e) Each of the representations and warranties of the
Company contained herein shall be true and correct at the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, as if made on such
date, and all covenants and agreements herein contained to be performed on the
part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date and, with respect
to the Option Shares, at or prior to the Option Closing Date, shall have been
fully performed, fulfilled or complied with.
(f) The Representative shall have received an opinion,
dated the Closing Date and the Option Closing Date, from Fiddler Xxxxxxxx &
Xxxxxxxxx, P.S.C., counsel for the Company in a form and substance reasonably
satisfactory to counsel for the Underwriters
(g) The Representative shall have received an opinion,
dated the Closing Date and the Option Closing Date, from Adsuar Xxxxx Xxxxx &
Xxxxxx, P.S.C., counsel to the Underwriters, which opinion shall be satisfactory
in all respects to the Representative.
(h) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery
16
(the "Original Comfort Letter"), addressed to the Representative and in form and
substance satisfactory to the Representative, to the effect that:
(i) they are independent accountants within the meaning of the
Act and the applicable Rules and Regulations;
(ii) in their opinion, the consolidated financial statements
of the Company and its Subsidiaries audited by them and
incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the
Rules and Regulations with respect to registration statements
on Form S-3;
(iii) on the basis of procedures set forth in detail in such
letter, nothing has come to their attention (as of a date not
more than five (5) business days prior to the date of the
delivery of such letter) as a result of the foregoing
procedures that caused them to believe that: (1) the unaudited
consolidated interim financial statements, if any,
incorporated by reference in the Registration Statement, do
not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the
published rules and regulations thereunder; (2) any material
modifications should be made to the unaudited consolidated
interim financial statements, if any, incorporated by
reference in the Registration Statement, for them to be in
conformity with generally accepted accounting principles; (3)
(i) at the date of the latest available interim financial data
and at a specified date not more than five (5) business days
prior to the date of delivery of the Original Comfort Letter
there was any change in the capital stock, notes payable,
advances from the Federal Home Loan Bank, or federal funds
purchased and securities sold under agreements to repurchase
or any decreases in the consolidated stockholders' equity
(only as to the latest interim financial data) of the Company
and its Subsidiaries as compared with amounts shown in the
December 31, 2002 balance sheet incorporated by reference in
the Registration Statement and (ii) for the period from the
latest interim financial statements incorporated by reference
in the Registration Statement, to the latest interim financial
data available which should be no later than forty (40) days
prior to the date of delivery of the Original Comfort Letter,
there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net interest
income, other income, income before taxes or in the total or
per share amounts of net income, except in all instances for
changes or decreases which the Registration Statement
discloses have occurred or may occur, or they shall state any
specific changes or decreases; and
17
(iv) the information set forth under the captions "Prospectus
Summary - Summary Financial Data," "Preliminary Prospectus
Summary - Consolidated Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends," "Recent Developments,"
"Capitalization," "Selected Financial Data,", "Description of
Capital Stock," "Preliminary Prospectus Summary - The
Company", "About First BanCorp" and "Consolidated Ratio of
Earnings to Combined Fixed Charges and Preferred Stock
Dividends," which is expressed in dollars (or percentages
derived from such dollar amounts) and has been obtained from
accounting records which are subject to the internal controls
of the Company's accounting system or which has been derived
directly from such accounting records and analysis or
computations, is in agreement with such records or
computations.
At the Closing Date and, as to the Option Shares, the Option
Closing Date, the Accountants shall have furnished to the Representative a
letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the Original Comfort
Letter, that nothing has come to their attention during the period from the date
of the Original Comfort Letter referred to in the prior sentence to a date
(specified in the letter) not more than five business days prior to the Closing
Date or the Option Closing Date, as the case may be, which would require any
change in the Original Comfort Letter if it were required to be dated and
delivered at the Closing Date or the Option Closing Date, as the case may be.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representative deems such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representative, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement, as amended as of the date
hereof.
(i) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to the Representative an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representative, to the effect that to the best of
their knowledge:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the
date of such certificate, (x) the Registration Statement does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading and (y) the Prospectus does
18
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading
and (B) since the Effective Date no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue
or misleading in any material respect;
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and
correct in all respects; each of the covenants required herein
to be performed by the Company on or prior to the date of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company
on or prior to the delivery of such certificate has been duly,
timely and fully complied with.
(iii) No stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto
and no order directed at any document incorporated by
reference in the Registration Statement or any amendment
thereto or the Prospectus has been issued, and no proceedings
for that purpose have been instituted or, to the Company's
best knowledge, are threatened or contemplated by the SEC.
(j) The Shares shall be qualified for sale in such states
and possessions as the Representative may reasonably request, and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have been
accepted for listing on the NYSE, subject only to official notice of issuance.
(l) The Company shall have furnished to the
Representative such certificates, letters and other documents, in addition to
those specifically mentioned herein, as the Representative may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company, as to the performance by the
Company of its obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Underwriters.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the
19
Representative. The Company will furnish the Representative with such conformed
copies of such opinions, certificates, letters and other documents as you shall
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages or liabilities, joint or several
(and actions in respect thereof), to which they, or any of them, may become
subject under the Act or other Federal, state or Commonwealth of Puerto Rico
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement, (ii) any untrue statement or alleged
untrue statement of any material fact contained in (A) the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or blue sky laws thereof or
filed with the SEC or any securities association or securities exchange (each,
an "Application"), or (iii) the omission or alleged omission to state in the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating defending or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability is based solely upon an untrue statement or omission or alleged untrue
statement or omission in any of such documents made in reliance upon and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representative on behalf of any Underwriter expressly for
inclusion therein. This indemnity agreement will be in addition to any liability
that the Company might otherwise have. The Company will not, without the prior
written consent of each Underwriter, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
each claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of each Underwriter and each such
other person from all liability arising out of such claim, action, suit or
proceeding.
20
(b) Each Underwriter will indemnify and hold harmless the
Company, and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signed the Registration Statement
against any losses, claims, damages or liabilities (or actions in respect
thereof) to which the Company and any such director, officer or controlling
person may become subject under the Act or other federal, state or Commonwealth
of Puerto Rico statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus or any Application, or material fact required to be stated therein or
(ii) the omission or the alleged omission to state in the Registration Statement
or the Prospectus or any amendment or supplement to the Registration Statement
or the Prospectus, or any Application, a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representative expressly for use therein; and, subject
to the limitation set forth immediately preceding this clause, will reimburse,
as incurred, any legal or other expenses reasonably incurred by the Company and
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any action
in respect thereof. The Company acknowledges that, for all purposes under this
Agreement, the statements set forth under the heading "Underwriting" constitute
the only information relating to any Underwriter furnished in writing to the
Company by the Representative on behalf of the Underwriters expressly for
inclusion in the Registration Statement or the Prospectus. This indemnity
agreement will be in addition to any liability that each Underwriter might
otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party or parties under this Section 7, notify such indemnifying party or parties
of the commencement thereof, but the omission so to notify the indemnifying
party or parties will not relieve it or them from any liability which it or they
may have to any indemnified party under the foregoing provisions of this Section
7 or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party and it notifies an
indemnifying party or parties of its commencement, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it
21
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 7 for any legal or
other expenses other than reasonable costs of investigation subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall not be
liable for the reasonable fees and expenses of more than one separate counsel
(in addition to the fees and expenses of local counsel necessary in connection
with any such proceedings) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representative in the case of
paragraph (a) of this Section 7, representing the indemnified parties under
paragraph (a) who are parties to such action or actions), or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the written consent of the
indemnifying party, unless such indemnified party waived its rights under this
Section 7 in which case the indemnified party may effect such a settlement
without such consent.
(d) If the indemnification provided for in the foregoing
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties, on the one hand, and the indemnified party, on the other, from the
offering of the Shares or (ii) if, but only if, the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties on
the one hand, and the indemnified party, on the other, in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Underwriters, on the other, shall be
deemed to be in the same proportion as the total proceeds from the offering of
the Shares (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions
22
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. Relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Representative on behalf of the Underwriters, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 7(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities (or actions in respect
thereof) referred to above in this Section 7(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Underwriter shall be
required to contribute any amount in excess of the total underwriting discounts
and commissions received by it with respect to the Shares purchased by such
Underwriter under this Agreement, less the aggregate amount of any damages that
such Underwriter has otherwise been required to pay in respect of the same or
any substantially similar claim. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 7(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 7(d), each person, if
any, who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act will have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, will have the same rights to contribution as the Company, subject
in each case to the provisions of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made under this Section 7(d), notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation(s) it or they may have hereunder or otherwise than under this
paragraph (d) or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise have.
No party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on
23
behalf of the Underwriters, (ii) acceptance of any of the Shares and payment
therefor or (iii) any termination of this Agreement.
(f) In no case shall the indemnification provided in this
Section 7 be available to protect any person against any liability to which any
such person would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its or his obligations or duties
hereunder, or by reason of its or his reckless disregard of its or his
obligations and duties hereunder.
8. Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from the Representative, without liability on the part of any
Underwriter to the Company if, prior to delivery and payment for the Firm Shares
(or the Option Shares, as the case may be), in the sole judgment of the
Representative, (i) trading in the Company's Common Stock or any series of
Preferred Stock or securities generally shall have been suspended by the SEC or
by the NYSE , (ii) minimum or maximum prices shall have been established for the
Company's Common Stock or any series of Preferred Stock or securities generally
on the NYSE, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by any of such market or exchange or by order of the SEC or any court
or other Governmental Authority, (iii) a general banking moratorium shall have
been declared by the United States, New York State, or Commonwealth of Puerto
Rico authorities, or (iv) any material adverse change in the financial or
securities markets in the United States or any outbreak or material escalation
of hostilities or declaration by the United States of a national emergency or
war or other calamity or crisis shall have occurred, the effect of any of which
is such as to make it, in the sole judgment of the Representative, impracticable
or inadvisable to market the Shares on the terms and in the manner contemplated
by the Prospectus. Any termination pursuant to Section 8 shall be without
liability of any party to any other party except as provided in Sections 5(a)
and 7.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Shares or Option Shares hereunder and the
aggregate number of such Shares that such defaulting Underwriter or Underwriters
agreed but failed to purchase is ten (10%) percent or less of the aggregate
number of Firm Shares or Option Shares to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representative for the purchase of such Shares
by other persons (who may include one or more of the nondefaulting Underwriters,
including the Representative), but if no such arrangements are made by the
Closing Date or the related Option Closing Date, as the case may be, the other
Underwriters shall be obligated severally in proportion to their respective
commitments hereunder to purchase the Firm Shares or Option Shares that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If one or
more Underwriters so default with respect to an aggregate number of Shares that
is
24
more than ten (10%) percent of the aggregate number of Firm Shares or Option
Shares, as the case may be, to be purchased by all of the Underwriters at such
time hereunder, and if arrangements satisfactory to the Representative are not
made within 36 hours after such default for the purchase by other persons (who
may include one or more of the nondefaulting Underwriters, including the
Representative) of the Shares with respect to which such default occurs, this
Agreement will terminate without liability on the part of any nondefaulting
Underwriter and the Company other than as provided in Section 10 hereof. In the
event of any default by one or more Underwriters as described in this Section 9,
the Representative shall have the right to postpone the Closing Date or the
Option Closing Date, as the case may be, for not more than seven (7) business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Shares or Option Shares, as
the case may be. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 7 hereof and (ii) delivery of and
payment for the Shares. The respective agreements, covenants, indemnities and
other statements set forth in Sections 5 and 7 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
11. Notices. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered:
(a) If to the Company, to:
First BanCorp.
0000 Xxxxx xx Xxxx Xxx., Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxx Xxxxx xx Xxxxxxxxx,
Senior Executive Vice President and
Chief Financial Officer
With a copy to:
Fiddler Xxxxxxxx & Xxxxxxxxx, P.S.C.
Banco Bilbao Vizcaya Bldg, 6th Floor
25
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx Xxxxxx, Esq.
(a) If to the Underwriters, to:
UBS Financial Services Incorporated of
Puerto Rico
American International Plaza, Penthouse
Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Managing Director
With a copy to:
Adsuar Xxxxx Xxxxx & Xxxxxx, P.S.C.
Westernbank World Plaza
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx-Xxxxx, Esq.
Any such notice shall be effective only upon receipt. Any notice under
Section 7 or 8 may be made by telex or telephone, but if so made shall be
subsequently confirmed in writing.
12. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 7 of this Agreement shall
also be for the benefit of directors, officers, employees and agents of, and any
person or persons who control, any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 7 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Shares from any Underwriter shall be deemed a
successor because of such purchase. This Agreement shall not be assignable by
either party hereto without the prior written consent of the other party.
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13. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings, and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty other than those set forth in this Agreement has been made or relied
upon by either party hereto.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
FIRST BANCORP
By: _____________________________
Name: Xxxxx Xxxxx-Xxxxxxxxx
Title: Senior Executive Vice President
and Chief Financial Officer
27
Confirmed as of the date first above mentioned:
UBS FINANCIAL SERVICES
INCORPORATED OF PUERTO RICO
By: ________________________________
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
By: ________________________________
Name: Xxxx X. Xxxxx
Title: Managing Director
Acting on its behalf and as lead underwriter of the
several Underwriters named in Schedule 1 hereof.
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SCHEDULE 1
UNDERWRITERS
UBS Financial Services Incorporated of Puerto Rico
BBVA Capital Markets of Puerto Rico, Inc.
R-G Investments Corporation
Santander Securities Corporation
