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EXHIBIT 1
1,300,000 Shares
DORAL FINANCIAL CORPORATION
___% Noncumulative Monthly Income Preferred Stock, Series A
UNDERWRITING AGREEMENT
----------------------
November ___, 1998
PAINEWEBBER INCORPORATED OF PUERTO RICO
As joint-lead underwriter and co-representative
of the several Underwriters named in Schedule I
American Xxxxxxxxxxxxx Xxxxx, XX
Xxxx Xxx, Xxxxxx Xxxx 00000
POPULAR SECURITIES, INC.
As joint-lead underwriter and co-representative
of the several Underwriters named in Schedule I
Banco Popular Center, 00xx. Xxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
DORAL FINANCIAL CORPORATION, a Puerto Rico corporation (the "Company"),
proposes to sell an aggregate of 1,300,000 shares (the "Firm Shares") of the
Company's ___% Noncumulative Monthly Income Preferred Stock, Series A (the
"Preferred Stock"), which are to be issued and sold by the Company to you and
the other underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as co-representatives (the
"Representatives"). The Company also has agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 195,000
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."
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The Company hereby confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter
and each Underwriter, severally and not jointly, agrees to purchase from the
Company at a purchase price of $____ per share, the number of Firm Shares set
forth opposite the name of such Underwriter in Column (1) of Schedule I hereto,
plus such additional number of Firm Shares which such Underwriter 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 several Underwriters to
purchase, severally and not jointly, the Option Shares at the same price per
share as the Underwriters shall pay for the Firm Shares. 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 30th day after the date of this Agreement (or on the
next business day if the 30th day is not a business day), upon notice (the
"Option Shares Notice") in writing or by telephone (confirmed in writing) by
the Representatives to the Company no later than 5:00 p.m., Atlantic Standard
time, at least two and no more than five 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 Underwriters the number of Option Shares set forth in the
Option Shares Notice and each Underwriter will purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing hereunder, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters at the office
of Axtmayer Adsuar Xxxxx & Xxxxx, P.S.C., counsel to the Underwriters, 000
Xxxxx Xxxxxx Xxx.,Xxxxx 0000, Xxxx Xxx, X.X. 00000, 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 full business day following the date of this
Agreement, or at such other time on such other date, not later than seven
business days after the date of this Agreement, as may be agreed upon by the
Company and the Representatives (such date is hereinafter referred to as the
"Closing Date"). Time shall be of the essence and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder.
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To the extent the Option is exercised, delivery of the Option Shares
against payment by 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
Representatives shall request at least two 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 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
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 respective Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter 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 and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance, sale or delivery to such Underwriter of
the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement on Form S-3 (Registration No.
333-_____) relating to the Shares, including a preliminary prospectus relating
to the Shares and such amendments to such registration statement as may have
been required to the date of this Agreement, has been prepared by the Company
under the provisions of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Commission has not
issued any order preventing or suspending the use of the Prospectus (as defined
below) or any Preliminary Prospectus (as defined below) or instituted or, to
the knowledge of the Company, threatened any proceeding for that purpose. The
term "Preliminary Prospectus" as used herein means a preliminary prospectus
relating to the Shares included at any time as part of the foregoing
registration statement or any amendment thereto before it became effective
under the Act and any prospectus filed with the Commission by the Company
pursuant to Rule 424(a) of the Rules and Regulations. Copies of such
registration statement and amendments and of each related Preliminary
Prospectus have been delivered to the Representatives. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly by the
Company with the Commission. If such registration statement has become
effective, a final prospectus relating to the Shares containing information
permitted to be omitted at the time of effectiveness by Rule
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430A will be filed by the Company with the Commission in accordance with Rule
424(b) of the Rules and Regulations promptly after execution and delivery of
this Agreement. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including all financial statements and schedules and all exhibits,
documents incorporated therein by reference and all information contained in
any final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or in a term sheet described in Rule 434 of the Rules and
Regulations in accordance with Section 4 hereof and deemed to be included
therein as of the Effective Date by Rule 430A 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 prospectus relating to the Shares
as first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
relating to the Shares included in the Registration Statement at the Effective
Date. References herein to any document or other information incorporated by
reference in the Registration Statement shall include documents or other
information incorporated by reference in the Prospectus (or if the Prospectus
is not in existence, in the most recent Preliminary Prospectus). References
herein to any Preliminary Prospectus or 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 Preliminary Prospectus or Prospectus, as the case may
be, and so incorporated by reference, under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) On the date that any Preliminary Prospectus was filed
with the Commission, the date the Prospectus is first filed with the Commission
pursuant to Rule 424(b) (if required), 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 Commission, the
Registration Statement, each Preliminary Prospectus and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
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 Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission 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(b) do not apply to any statements or omissions made in reliance on
and in conformity with information relating to any Underwriter
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furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement, each Preliminary Prospectus or
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 any Preliminary Prospectus or
the Prospectus or from which information is so incorporated by reference, when
they became effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the 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 of the Registration Statement shall, when they are filed
with the Commission, 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.
(c) The only subsidiaries of the Company (each, a
"Subsidiary" and collectively, the "Subsidiaries") are those listed on Exhibit
A hereto. Except as set forth in the Prospectus (or if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) or as 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.
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 registered 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 a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation. Each of the Company and its 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 or business affairs of the Company and its Subsidiaries
taken as a whole.
(d) 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, other
than certain conversion and registration rights issued by the
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Company to Popular, Inc., under a certain Exchange Agreement dated July 9,
1997. 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 (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus). The description of the
securities of the Company in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
is, and at the Closing 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.
(e) The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated
therein by reference and the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) present fairly the
financial condition of the Company and its Subsidiaries as of the dates
indicated and the consolidated results of operations, and cash flows of the
Company and its Subsidiaries for the periods covered thereby, all in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the entire periods involved. PricewaterhouseCoopers LLP (the
"Accountants"), who have reported on those of such financial statements and
related notes which are audited, are independent accountants with respect to
the Company and its Subsidiaries within the meaning of the Act and the
applicable and published rules and regulations.
(f) 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.
(g) Except as set forth in the Registration Statement and
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and, if later, the Option Closing Date, (i) there has not
been, and will not have been, any material adverse change in the business,
properties, financial condition, net worth or results of operations of the
Company and its Subsidiaries considered as one enterprise, (ii) neither the
Company nor any of its Subsidiaries has entered into, or will have entered into
any material transactions other than pursuant to this Agreement, 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
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on the Company's common stock (the "Common Stock") in the ordinary course of
its business and the payment of the monthly dividends to the holders of the
Company's 8% Convertible Cumulative Preferred Stock (Liquidation Preference
$1,000 per share).
(h) 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
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary 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 Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary 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 Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary 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 Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary 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.
(i) The Company is not required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(j) Except as set forth in the Registration Statement, or
incorporated therein by reference, and Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there are no actions,
suits, arbitrations, claims, governmental or other proceedings (formal or
informal), or investigations pending or threatened against or affecting the
Company or any of its 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 adversely affect the
business, prospects, financial condition, net worth or results of operations of
the Company and its Subsidiaries taken as a whole and would be required to be
disclosed in the Registration Statement and Prospectus (or if the Prospectus is
not in existence, in the most recent Preliminary Prospectus). Neither the
Company nor any 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 if the Prospectus is not in existence, in the
most recent Preliminary Prospectus) or such as in the aggregate do not now
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have and can reasonably be expected in the future not to have a material
adverse effect upon the operations, business, properties, or assets of the
Company and its Subsidiaries taken as a whole; 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.
(k) 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 and own or lease their respective properties as
contemplated in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus). The
Company and each of its Subsidiaries have and, at the Closing Date and the
Option Closing Date, will have complied in all material respects with all laws,
regulations and orders applicable to it or its business, assets and properties.
Neither the Company nor any of its 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 on the condition, financial or
otherwise, or the earnings, prospects or business affairs of the Company and
its Subsidiaries taken as a whole. There are no governmental proceedings or
actions pending or threatened for the purpose of suspending, modifying or
revoking any License held by the Company and its Subsidiaries.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in
connection with the issuance and sale of the 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.
(m) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and
contribution may be limited by federal, state or Commonwealth of Puerto Rico
securities laws or the public policy underlying such laws. Except as disclosed
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), the execution, delivery
and the performance of this Agreement and the consummation of the transactions
contemplated
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hereby will not result in the creation or imposition of any Encumbrance upon
any of the properties or assets of the Company or any of the Subsidiaries
pursuant to the terms or provisions of, or result in a breach or violation of
or conflict with any of the terms or provisions of, or constitute a default
under, or give any other party a right to terminate any of its obligations
under, or result in the acceleration of any obligation under, (i) the
Certificate of Incorporation or By-laws of the Company, in each case as
amended, or (ii) any contract or other agreement to which the Company or any of
the 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 on the condition, financial or
otherwise, or the earnings, prospects or business affairs of the Company and
its Subsidiaries or (iii) any judgment, ruling, decree, order, law, statute,
rule or regulation of any Governmental Body applicable to the Company or any of
the Subsidiaries or their respective businesses or properties, the violation of
which would individually or in the aggregate have a material adverse effect on
the financial or otherwise, or the earnings, prospects or business affairs of
the Company and its Subsidiaries.
(n) No statement, representation, or warranty made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives 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 Representatives 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.
(o) Neither the Company nor any of its directors, officers or
affiliates has taken, nor will he, she or it take, directly or indirectly, any
action designed, or which might reasonably be expected in the future, to cause
or result in, under the Act or otherwise, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or otherwise.
(p) The Shares have been approved for quotation on the
National Association of Securities Dealers Automated Quotation National Market
System ("NASDAQ NMS"), subject only to notice of issuance.
(q) 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.
(r) Neither the Company nor any of its Subsidiaries nor, to
the Company's best knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds of the Company or any Subsidiary in violation of
any law, rule or regulation which payment, receipt or retention of funds is of
a character required to be disclosed in the Prospectus (or, if the Prospectus
is not in existence, in the most recent Preliminary Prospectus).
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(s) 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 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; 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), except where failure to so comply would not have a material adverse
effect on the financial condition, or the earnings or business affairs of the
Company and its Subsidiaries taken as a whole. 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.
(t) The Company filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions thereof
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due
and payable, except for any failure to file that would not have a material
adverse effect on the financial condition of the Company.
(u) The Company meets the requirements for use of Form S-3
under the Rules and Regulations.
(v) The deposit accounts of Doral Bank, a Subsidiary of the
Company ("Doral Bank") 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. Doral Bank is a member in good standing of the
Federal Home Loan Bank of New York.
(w) None of the Company, Doral Bank, their affiliates, or any
of their respective directors or officers is subject to any order or directive
of, or party to any agreement with, any regulatory agency having jurisdiction
with respect to its business or operations except
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as disclosed in the Prospectus (or if the Prospectus is not in existence, in
the most recent Preliminary Prospectus).
4. Agreements of the Company. The Company covenants and agrees with
each of the several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date
or thereafter 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
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) If the Registration Statement is not yet effective, the
Company will use its best efforts to cause the Registration Statement to become
effective not later than the time indicated in Section 6(a) hereof. The Company
will notify the Representatives promptly, and will confirm such advice in
writing, (i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof, (iv) of the happening of any event during the period mentioned in the
first sentence of Section 4(f) 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 Commission relating to the Company,
the Registration Statement, any Preliminary Prospectus or the Prospectus. If at
any time the Commission 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 Representatives
and will file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A,
the Company will use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to said Rule 430A and to
notify the Representatives promptly of all such filings.
(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 Commission in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C.
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time, on the date of this Agreement, and the Company shall at the time of
filing, either pay to the Commission 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 Registration Statement
to comply with the Act or the Rules and Regulations, the Company will promptly
notify the Representatives thereof and, subject to Section 4(b) hereof, will
prepare and file with the Commission, at the Company's expense, an amendment to
the Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will furnish to the Representatives, 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 Representatives, 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) On the Effective Date, and thereafter 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
Representatives 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
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Commission an appropriate supplement or amendment thereto, and deliver to each
of the Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and their
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 Representatives 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 years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives and each other Underwriter who may so request a copy of
each annual or other report it shall be required to file with the Commission.
(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 Effective Date falls, a consolidated earnings statement (which need
not be audited but shall be in reasonable detail) for a period of 12 months
commencing after the Effective 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
of Preferred Stock to facilitate the sale or resale of any of the Shares.
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 Representatives, all costs and expenses
incidental to the performance of the obligations of the Company under this
Agreement, including, but not limited to, costs and expenses of or relating to
(i) the preparation, printing and filing by the Company of the Registration
Statement and exhibits thereto, each Preliminary Prospectus prior to or during
the period specified in the first
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sentence of Section 4(g) but not exceeding nine (9) months after the Effective
Date, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus, (ii) the preparation and delivery of certificates
representing the Shares, (iii) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
Preliminary Prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (iv) the quotation of
the Shares on the NASDAQ NMS, (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 Representatives
for all of their accountable out-of-pocket fees and expenses (including the
fees, disbursements and other charges of their counsel) incurred by them in
connection herewith.
6. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 3:00 p.m.,
New York City time, on the date of this Agreement or at such later date and
time as shall be consented to in writing by the Representatives and 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, and the
Company has otherwise.
(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 Commission, (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 Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities, and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representatives and the
Representatives did not object thereto in good faith, and the Representatives
shall have received certificates, dated the Closing Date and the Option Closing
Date and signed by the Chief
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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 change in the general affairs, business,
properties, management, financial condition or results of operations of the
Company whether or not arising from transactions in the ordinary course of
business, and (ii) the Company shall not have sustained any material loss or
interference with its business, assets or properties from fire, explosion,
flood or other casualty, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been
no litigation or other proceeding instituted against the Company or any of its
officers, directors or shareholders in their capacities as such, or any of its
assets or properties, before or by any Governmental Body in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, financial condition, net worth or
results of operations of the Company.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct at the Closing Date 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 Representatives shall have received an opinion, dated
the Closing Date and the Option Closing Date, from Xxxxxxxxxxx Xxxxxx &
Xxxxxxx, Puerto Rico counsel for the Company to the following effect:
(i) The Company has been duly organized and validly
existing as a corporation under the laws of the Commonwealth
of Puerto Rico and is in good standing with the Commonwealth
of Puerto Rico. Each of Doral Mortgage Corporation ("Doral
Mortgage") and Doral Bank, each a Subsidiary, is a
corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation. Each of the Company, Doral Mortgage and Doral
Bank is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the
nature or conduct of its business or use of its property and
assets makes such qualification necessary, except where the
failure
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to so qualify would not have a material adverse effect on the
financial condition, or the earnings or business affairs of
the Company and its Subsidiaries taken as a whole;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus; the Company has duly authorized
the issuance and sale of the Shares to be sold by it
hereunder; such Shares, when issued by the Company and paid
for in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and will conform in all
material respects to the description thereof contained in the
Prospectus and will not be subject to any preemptive,
subscription or other similar rights; the Shares have been
duly authorized for quotation on the NASDAQ NMS; and no
holders of securities of the Company are entitled to have
such securities registered under the Registration Statement,
except for holders who have waived any such registration
rights;
(iii) The Registration Statement, including any Rule
462(b) Registration Statement, is effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period
required by Rule 424(b); and to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto and no order
directed at any document incorporated by reference in the
Registration Statement or of the Rule 462(b) Registration
Statement or any amendment thereto has been issued, and, no
proceedings for that purpose have been instituted or are
pending or are threatened or contemplated under the Act;
(iv) The Registration Statement and the Prospectus
as of its date, appeared on their face to be appropriately
responsive, in all material respects (other than the
documents incorporated therein by reference and not including
the financial statements, schedules and other financial data
contained therein, as to which such counsel need not express
any opinion), with the requirements of the Act and the
related rules and regulations thereunder;
(v) The descriptions contained and summarized in
the Registration Statement, or incorporated therein by
reference, and the Prospectus are accurate and fairly
represent in all material respects the information required
to be shown by the Act and the Rules and Regulations; and the
statements set forth under the headings "Recent
Developments," "Risk Factors-Holding Company Structure,"
"Description of Capital Stock," and "Taxation" in the
Prospectus, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to
therein, provide an accurate summary of such legal matters,
documents and proceedings;
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(vi) To the knowledge of such counsel, there are no
contracts or documents which are required by the Act to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which
are not filed or incorporated therein by reference as
required by the Act and the Rules and Regulations;
(vii) To the knowledge of such counsel after
reasonable investigation, there is not pending or threatened
against the Company or any of the Subsidiaries any action,
suit, arbitration, claim, governmental or other proceeding
(informal or formal) or investigation before or by any
Governmental Body of a character required to be disclosed in
the Registration Statement or the Prospectus which is not so
disclosed therein. To the knowledge of such counsel after
reasonable investigation, neither the Company nor any
Subsidiary is in violation of, or in default with respect to,
any law, rule, or regulation, or any order, judgment or
decree, except as described in the Registration Statement or
Prospectus or such as in the aggregate do not now have and
can reasonably be expected in the future not to have a
material adverse effect upon the operations, business,
properties, or assets of the Company and its Subsidiaries
taken as a whole; 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;
(viii) The Company has full legal right, power, and
authority to enter into this Agreement and to consummate the
transactions provided for herein; this Agreement has been
duly authorized, executed and delivered by the Company; this
Agreement, assuming due authorization, execution and delivery
by each other party hereto, is a valid and binding agreement
of the Company, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors'
rights generally or by general principles of equity relating
to the availability of remedies and except as rights to
indemnity and contribution may be limited by federal, state,
or Commonwealth of Puerto Rico securities laws or the public
policy underlying such laws;
(ix) None of the Company's execution or delivery of
this Agreement, its performance hereof, its consummation of
the transactions contemplated herein or its application of
the net proceeds of the offering in the manner set forth
under the caption "Use of Proceeds," conflicts or will
conflict with or results or will result in any breach or
violation of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of
any Encumbrance upon, any property or assets of the Company
pursuant to (A) the terms of the Certificate of Incorporation
or By-laws of the Company, in each case as amended; (B) the
terms of any contract or other agreement to which the Company
is a party or by
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which it is or may be bound or to which any of its properties
is or may be subject and of which such counsel has knowledge,
(C) any statute, rule or regulation of any Governmental Body
having jurisdiction over the Company or any of its activities
or properties; or (D) the terms of any judgment, decree or
order of any arbitrator or Governmental Body having such
jurisdiction and of which such counsel has knowledge; and no
consent, approval, authorization or order of any Governmental
Body has been or is required for the Company's performance of
this Agreement or the consummation of the transactions
contemplated hereby, except such as have been obtained under
the Act or may be required under state or Commonwealth of
Puerto Rico securities or blue sky laws in connection with
the purchase and distribution by the Underwriters of the
Shares;
(x) To such counsel's knowledge, the conduct of
the respective businesses of the Company and its Subsidiaries
is not in violation of any federal, state or local statute,
administrative regulation or other law, which violation is
likely to have a material adverse effect on the Company and
its Subsidiaries taken as a whole; and the Company and its
Subsidiaries have obtained all material licenses as are
necessary or required for the conduct of their businesses as
presently conducted;
(xi) The Company is not required to be registered
as an investment company under the Investment Company Act;
(xii) To the knowledge of such counsel, the Company
is not in any breach or violation of any of the terms or
provisions of, or in default under (nor has an event occurred
which with notice or lapse of time or both would constitute a
default or acceleration under), (A) the terms of its
Certificate of Incorporation or By-laws, in each case as
amended; (B) the terms of any contract or other agreement
known to such counsel after reasonable investigation to which
the Company is a party or by which the Company is or may be
bound or to which any of its properties or assets is or may
be subject; (C) any statute, rule or regulation of any
Governmental Body having jurisdiction over the Company or any
of its activities, assets or properties, which breach,
violation or default could have a material adverse effect on
the Company and its Subsidiaries taken as a whole; or (D) the
terms of any judgment, decree or order, known to such counsel
after reasonable investigation, of any arbitrator or
Governmental Body having such jurisdiction, which breach,
violation or default could have a material adverse effect on
the Company and its Subsidiaries taken as a whole;
(xiii) To such counsel's knowledge after reasonable
investigation, no legal or governmental proceedings are
pending to which the Company or any of its Subsidiaries is a
party or by which the assets or property of the Company or
any of its Subsidiaries is subject that are required to be
described in the Registration
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Statement or the Prospectus and are not described therein and
to the knowledge of such counsel, no such proceedings have
been threatened against the Company or any of its
Subsidiaries or any of their respective assets or properties;
(xiv) The deposit accounts of Doral Bank are insured
by the SAIF of the FDIC to the legal maximum, and to such
counsel's knowledge no proceeding for the termination or
revocation of such insurance is pending or threatened. Doral
Bank is a member in good standing of the Federal Home Loan
Bank of New York; and
(xv) To the knowledge of such counsel, none of the
Company, Doral Bank, their affiliates, or any of their
respective directors or officers is subject to any order or
directive of, or party to any agreement with, any regulatory
agency having jurisdiction with respect to its business or
operations except as disclosed in the Registration Statement
or the Prospectus.
In addition, such counsel shall state that in the course of
the preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with officers and representatives of the
Company and with the Accountants, at which conferences such counsel made
inquiries of such officers, representatives and Accountants and discussed the
contents of the Registration Statement and the Prospectus and, on the basis of
the foregoing nothing has come to such counsel's attention that causes such
counsel to believe that the Registration Statement as of the date it was
declared effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of the date
thereof, contained any untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need not express
any opinion with respect to the financial statements, schedules and other
financial data included in the Registration Statement or the Prospectus). Such
counsel may state that they make no representation that they have independently
verified the accuracy or completeness of the statements contained in the
Registration Statement and Prospectus.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to matters
involving the application of laws of any other jurisdiction than the
Commonwealth of Puerto Rico and the United States (to the extent satisfactory
in form and scope to counsel for the Underwriters) such counsel may rely upon
the opinion of local (including in-house) counsel to the Company. The foregoing
opinion shall also state that such counsel has no reason to believe that the
Underwriters are not justified in relying upon such opinion of local counsel,
and copies of such opinion shall be delivered to the Representatives and their
counsel.
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References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.
(g) The Representatives shall have received an opinion, dated
the Closing Date and the Option Closing Date, from Axtmayer Adsuar Xxxxx &
Xxxxx, P.S.C. , counsel to the Underwriters, which opinion shall be
satisfactory in all respects to the Representatives.
(h) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date of the
Prospectus, the Accountants shall have furnished to the Representatives a
letter, dated the date of its delivery (the "Original Letter"), addressed to
the Representatives and in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants within the meaning
of the Act and the applicable published rules and regulations
thereunder;
(ii) in their opinion, the consolidated financial
statements of the Company and its Subsidiaries audited by
them and incorporated by reference in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Act, the Exchange
Act and the published rules and regulations thereunder with
respect to registration statements on Form S- 3;
(iii) on the basis of procedures (but not an audit in
accordance with generally accepted auditing standards)
consisting of (a) reading the minutes of meetings of the
stockholders and the Board of Directors of the Company and its
Subsidiaries since December 31, 1997 as set forth in the
minute books through a specified date not more than five
business days prior to the date of delivery of the Original
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
consolidated interim financial statements of the Company and
its Subsidiaries included in the Registration Statement and
reading the unaudited interim financial data for the period
from the date of the latest balance sheet incorporated by
reference in the Registration Statement to the date of the
latest available interim financial data; and (c) making
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters regarding
the specific items for which representations are requested
below; nothing has come to their attention (as of a date not
more than five 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, incorporated by reference in the
Registration Statement, do not comply as to form in all
material respects with the applicable
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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, included 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 business days prior to the date of
delivery of the Original Letter there was any change in the
capital stock, loans payable, or 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 June 30, 1998 balance sheet incorporated
by reference in the Registration Statement and (ii) for the
period from July 1, 1998, 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 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
discloses have occurred or may occur, or they shall state any
specific changes or decreases; and
(iv) the information set forth under the captions
"Consolidated Ratios of Earnings to Combined Fixed Charges
and Preference Security Dividends," "Capitalization,"
"Description of Capital Stock," "Recent Developments," and
"Selected Financial Data," 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 made therefrom.
At the Closing Date and, as to the Option Shares, the Option
Closing Date, the Accountants shall have furnished to the Representatives 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 Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in the
letter) not more than five days prior to the Closing Date or the Option Closing
Date, as the case may be, which would require any change in the Original 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
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or
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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 Representatives 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 Representatives, to the effect that to the
best of their knowledge:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and
(A) as of the date of such certificate, (x) the Registration
Statement does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading and (y) the Prospectus does not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading and
(B) since the Effective Date no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue
or misleading in any material respect;
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered,
true and correct in all respects; each of the covenants
required herein to be performed by the Company on or prior to
the date of such certificate has been duly, timely and fully
performed and each condition herein required to be complied
with by the Company on or prior to the delivery of such
certificate has been duly, timely and fully complied with.
(iii) No stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by
reference in the Registration Statement or any amendment
thereto or the Prospectus has been issued, and no proceedings
for that purpose have been instituted or threatened or, to
the best of the Company's knowledge, are contemplated by the
Commission.
(j) The Shares shall be qualified for sale in such states and
possessions as the Representatives may reasonably request, 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 quotation on the NASDAQ NMS.
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(l) The Company shall have furnished to the Representatives
such certificates, letters and other documents, in addition to those
specifically mentioned herein, as the Representatives 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 you. The Company will furnish you with such conformed
copies of such opinions, certificates, letters and other documents as you shall
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless 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) any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or (B) any application or other
document, 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 Commission or any securities association or
securities exchange (each, an "Application"), or (iii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any amendment or supplement to the Registration Statement or
the Prospectus or any Application a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse,
as incurred, 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 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
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the Representatives on behalf of any Underwriter expressly for inclusion
therein; Provided, further, that such indemnity with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or any such other
person) from whom the person asserting any such loss, claim, damage, liability
or action purchased Shares which are the subject thereof to the extent that any
such loss, claim, damage or liability (i) results from the fact that such
Underwriter failed to send or give a copy of the Prospectus (as amended or
supplemented) to such person at or prior to the confirmation of the sale of
such Shares to such person in any case where such delivery is required by the
Act and (ii) arises out of or is based upon an untrue statement or omission of
a material fact contained in such Preliminary Prospectus that was corrected in
the Prospectus (or any amendment or supplement thereto), unless such failure to
deliver the Prospectus (as amended or supplemented) was the result of
noncompliance by the Company with Section 4(g). 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.
(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 any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or any Application,
or material fact required to be stated therein or (ii) the omission or the
alleged omission to state in the Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or any Application, a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through the Representatives 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
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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 Representatives on behalf of the Underwriters expressly for
inclusion in the Registration Statement, any Preliminary Prospectus 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 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, 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)
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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 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
Representatives 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 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 (e). Any
party entitled to contribution
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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), will 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 behalf of the Underwriters,
(ii) acceptance of any of the Shares and payment therefor or (iii) any
termination of this Agreement.
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 any of the Representatives, 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 Representatives, (i) trading in the Common Stock or the
Preferred Stock or securities generally shall have been suspended by the
Commission or by the NASDAQ NMS, (ii) minimum or maximum prices shall have been
established for the Common Stock or the Preferred Stock or securities generally
on either the NASDAQ NMS or the New York Stock Exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any of such market or
exchange or by order of the Commission or any court or other Governmental
Authority, (iii) a general banking moratorium shall have been declared by the
United States, New York State, or Commonwealth of Puerto Rico authorities, or
(iv) any material adverse change in the financial or securities markets in the
United States or any outbreak or material escalation of hostilities or
declaration by the United States of 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 any of the Representatives, 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 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
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to the Representatives for the purchase of such Shares by other persons (who
may include one or more of the nondefaulting Underwriters, including the
Representatives), but if no such arrangements are made by the Firm 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
more than ten 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 Representatives 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
Representatives) 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 Representatives shall have the right to postpone the Firm Closing Date
or the Option Closing Date, as the case may be, established as provided in
Section 9 hereof for not more than seven 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 6 and 8 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, at the office of the Company, 1159 Xxxxxxxx
X. Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000, Attention: Xxxxx X. Xxxxx,
Executive Vice President and Treasurer, or (b) if to the Underwriters, to the
Representatives at the offices of (i) PaineWebber Incorporated of Puerto Rico,
American Xxxxxxxxxxxxx Xxxxx, XX, Xxxx Xxx, Xxxxxx Xxxx 00000, Attention: Xxxx
X. Xxxxx, and (ii) Popular Securities, Inc., Banco Popular Center, 10th. Floor,
Hato Rey, Puerto Rico 00918, Attention: Xxxxxx X. Xxxxx. 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.
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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 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.
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.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
DORAL FINANCIAL CORPORATION
By:
------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and Treasurer
Confirmed as of the date first above mentioned:
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PAINEWEBBER INCORPORATED OF
PUERTO RICO
By:
-----------------------------
Name:
Title:
Acting on its behalf and
as joint-lead underwriter and co-representative
of the other several Underwriters
named in Schedule I hereof.
POPULAR SECURITIES, INC.
By:
-----------------------------
Name:
Title:
Acting on its behalf and
as joint-lead underwriter and co-representative
of the other several Underwriters
named in Schedule I hereof.
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SCHEDULE 1
UNDERWRITERS
Aggregate Number
of Shares to be
Purchased
PaineWebber Incorporated of Puerto Rico......................................... ----------------
Popular Securities, Inc. ....................................................... ----------------
Xxxxxxx Xxxxx Xxxxxx Inc. ...................................................... ----------------
Santander Securities Corporation of Puerto Rico................................. ----------------
Prudential Securities Incorporated.............................................. ----------------
Total
----------------
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EXHIBIT A
LIST OF SUBSIDIARIES
1. Doral Mortgage Corporation
2. Doral Securities, Inc.
3. Centro Hipotecario, Inc.
4. Doral Bank
5. Doral Bank, FSB
6. Doral Money, Inc.
7. Doral Capital (USA), Inc. (inactive)
