Exhibit 1(a)
PURCHASE AGREEMENT
POPULAR, INC.
(a Puerto Rico corporation);
POPULAR NORTH AMERICA, INC.
(a Delaware corporation); and
POPULAR NORTH AMERICA CAPITAL TRUST I
(a Delaware statutory trust)
250,000 [-]% Capital Securities
(Liquidation Amount $1,000 Per Capital Security)
Dated: September [-], 2004
Table of Contents
Page
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SECTION 1. Representations and Warranties................................................................................. 3
(a) Representations and Warranties by Popular, PNA and the Trust................................................... 3
(i) Due Incorporation and Qualification of Popular and PNA............................................... 3
(ii) Subsidiaries......................................................................................... 3
(iii) Existence of Trust................................................................................... 4
(iv) Compliance with Registration Requirements............................................................ 4
(v) Incorporated Documents............................................................................... 5
(vi) Independent Accountants.............................................................................. 5
(vii) Financial Statements................................................................................. 5
(viii) Authorization of Trust Agreement..................................................................... 5
(ix) Common Securities.................................................................................... 6
(x) Capital Securities................................................................................... 6
(xi) Guarantee Agreement.................................................................................. 6
(xii) Authorization of Indenture........................................................................... 6
(xiii) Authorization of Debentures.......................................................................... 7
(xiv) Authorization of Debenture Guarantees................................................................ 7
(xv) Authorization of Expense Agreement................................................................... 7
(xvi) Authorization of Agreement........................................................................... 7
(xvii) Accuracy of Descriptions............................................................................. 7
(xviii) No Material Changes.................................................................................. 7
(xix) No Defaults; Regulatory Approvals.................................................................... 7
(xx) Legal Proceedings; Contracts......................................................................... 8
(xxi) Regulatory Certificates, Authorities and Permits..................................................... 8
(xxii) Investment Company Act............................................................................... 8
(b) Officers' Certificates......................................................................................... 9
SECTION 2. Sale and Delivery to Underwriters; Closing..................................................................... 9
(a) Capital Securities............................................................................................. 9
(b) Payment........................................................................................................ 9
(c) Denominations; Registration.................................................................................... 9
SECTION 3. Covenants 10
SECTION 4. Payment of Expenses............................................................................................ 14
(a) Expenses....................................................................................................... 14
(b) Termination of Agreement....................................................................................... 15
SECTION 5. Conditions of Underwriters' Obligations........................................................................ 15
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(a) Effectiveness of Registration Statement........................................................................ 15
(b) Opinion of Counsel for Popular and PNA......................................................................... 15
(c) Opinion of Puerto Rico Counsel for Popular and PNA............................................................. 16
(d) Opinion of United States Tax Counsel for the Trust, PNA and Popular............................................ 16
(e) Opinion of Special Delaware Counsel for PNA and the Trust...................................................... 16
(f) Opinion of Counsel for ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association......................................... 16
(g) Opinion of Counsel for Underwriters............................................................................ 16
(h) Officers' Certificates......................................................................................... 17
(i) Accountant's Comfort Letter.................................................................................... 17
(j) Bring-down Comfort Letter...................................................................................... 17
(k) Maintenance of Rating.......................................................................................... 17
(l) Additional Documents........................................................................................... 17
(m) Termination of Agreement....................................................................................... 18
SECTION 6. Indemnification................................................................................................ 18
(a) Indemnification of Underwriters................................................................................ 18
(b) Indemnification of the Trust, Popular, PNA, Directors and Officers............................................. 19
(c) Actions against Parties; Notification.......................................................................... 19
SECTION 7. Contribution................................................................................................... 20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................................................. 21
SECTION 9. Termination of Agreement....................................................................................... 21
(a) Termination; General........................................................................................... 21
(b) Liabilities.................................................................................................... 22
SECTION 10. Default by One or More of the Underwriters................................................................... 22
SECTION 11. Notices...................................................................................................... 23
SECTION 12. Parties...................................................................................................... 23
SECTION 13. Governing Law and Time....................................................................................... 23
SECTION 14. Effect of Headings........................................................................................... 23
SECTION 15. Severability................................................................................................. 23
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SCHEDULES
Schedule A -- List of Underwriters............................................................................ Sch. A-1
EXHIBITS
Exhibit A -- Form of Opinion of Counsel to Popular and PNA....................................................... A-1
Exhibit B -- Form of Opinion of Puerto Rico Counsel for Popular and PNA.......................................... B-1
Exhibit C -- Form of Opinion of Special Delaware Counsel for PNA
and the Trust....................................................................................... C-1
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POPULAR, INC.
(a Puerto Rico corporation)
POPULAR NORTH AMERICA, INC.
(a Delaware Corporation)
POPULAR NORTH AMERICA CAPITAL TRUST I
(a Delaware statutory trust)
250,000 [-]% Capital Securities
(Liquidation Amount $1,000 Per Capital Security)
PURCHASE AGREEMENT
September [-], 2004
Credit Suisse First Boston LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as Representatives of the several Underwriters
c/o Credit Suisse First Boston LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Popular North America Capital Trust I (the "Trust"), a statutory
trust created under the Statutory Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12 of the Delaware Code, 12 Del. Sections 3801 et
seq.), Popular North America, Inc., a Delaware corporation ("PNA"), and Popular,
Inc., a Puerto Rico corporation ("Popular"), each confirms its agreement with
Credit Suisse First Boston LLC ("CSFB"), ▇.▇. ▇▇▇▇▇▇ Securities Inc.
("JPMorgan") and, the other Underwriters listed in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom CSFB and
JPMorgan are acting as Representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of 250,000 [-]%
Capital Securities (liquidation amount $1,000 per security) in the respective
numbers set forth in said Schedule A hereto (the "Capital Securities").
The Capital Securities will be guaranteed by Popular and PNA, to the
extent set forth in the Prospectus (as defined below), with respect to
distributions and amounts payable upon liquidation of the Trust or redemption of
the Capital Securities (collectively, the "Capital Securities Guarantees")
pursuant to the Capital Securities Guarantee Agreement (the "Guarantee
Agreement"), to be dated as of Closing Time (as defined below), executed and
delivered by Popular, PNA and ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association
(the "Guarantee Trustee"), a national banking association, not in its individual
capacity but solely as trustee, for the benefit of the holders from time to time
of the Capital Securities. The entire proceeds from the sale of the Capital
Securities will be combined with the entire proceeds from the sale by the Trust
to
PNA of its common securities (the "Common Securities") and will be used by
the Trust to purchase $257,732,000 aggregate principal amount of [-]% Junior
Subordinated Debentures due 2034 (the "Debentures") issued by PNA and guaranteed
(the "Debenture Guarantees") by Popular.
The Capital Securities and the Common Securities will be issued
pursuant to the Amended and Restated Trust Agreement, to be dated as of Closing
Time (the "Trust Agreement"), among Popular, PNA, as Depositor, ▇.▇. ▇▇▇▇▇▇
Trust Company, National Association, as property trustee (the "Property
Trustee"), Chase Manhattan Bank USA, National Association, as Delaware trustee
(the "Delaware Trustee"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual, and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, an individual, as administrative trustees (the "Administrative
Trustees," and together with the Property Trustee and the Delaware Trustee, the
"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Debentures and the Debenture Guarantees will be
issued pursuant to a Junior Subordinated Indenture (the "Indenture"), to be
dated as of the Closing Time, between PNA, as issuer, Popular, as guarantor, and
▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, as indenture trustee (the
"Indenture Trustee"). The Capital Securities, the Capital Securities Guarantees,
the Debentures and the Debenture Guarantees are collectively referred to herein
as the "Securities." This Agreement, the Trust Agreement, the Guarantee
Agreement, the Indenture and the Expense Agreement (as defined herein) are
collectively referred to as the "Operative Documents"). Capitalized terms used
herein without definition have the respective meanings specified in the
Prospectus.
Popular, PNA and the Trust each understands that the Underwriters
propose to make a public offering of the Capital Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
Popular, PNA and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-118197, ▇▇▇-▇▇▇▇▇▇-▇▇ and 333-118197 02), including the relevant forms of
prospectus and preliminary prospectus, covering the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations").
Promptly after execution and delivery of this Agreement, Popular, PNA and the
Trust will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the 1933 Act Regulations, if
applicable, and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations. The information included in such prospectus that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Any prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act and the Rule 430A Information, if any, at the time it became
effective, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference
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therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first
furnished to the Underwriters for use in connection with the offering of the
Capital Securities, is herein called the "Prospectus." For purposes of this
Agreement, all references to the Registration Statement, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated," or
words of similar import, in the Registration Statement, any preliminary
prospectus or the Prospectus shall include all such financial statements and
schedules and other information which is incorporated by reference in the
Registration Statement, any preliminary prospectus or the Prospectus, as the
case may be, prior to the execution and delivery of this Agreement; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall include the filing
of any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be, at or after the
execution and delivery of this Agreement.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by Popular, PNA and the Trust.
Popular, PNA and the Trust, jointly and severally, represent and warrant to each
Underwriter as of the date hereof and as of the Closing Time (each, a
"Representation Date"), and agree with each Underwriter, as follows:
(i) Due Incorporation and Qualification of Popular and PNA.
Each of Popular and PNA has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus. Each of Popular and PNA is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify
and be in good standing would not result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Trust, PNA or Popular
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse
Effect"). Each of Popular and PNA is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as
amended (the "Bank Holding Company Act").
(ii) Subsidiaries. Each subsidiary of Popular or PNA which is
a significant subsidiary (each, a "Significant Subsidiary"), as
defined in Rule 1-02 of Regulation S-X promulgated under the 1933
Act, has been duly incorporated and is validly existing as a
corporation or a bank in good standing under the laws of the
jurisdiction of its organization, has corporate or other
organizational power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus
and is duly
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qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify
and be in good standing would not have a Material Adverse Effect.
All of the issued and outstanding shares of capital stock of each
such Significant Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable (subject to the provisions
of Section 55 of Title 12 of the United States Code in the case of
Significant Subsidiaries which are national banking associations)
and, except as otherwise disclosed in the Prospectus and, except for
directors' qualifying shares, are owned by Popular or PNA, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity or, if such is
not the case, that any such security interest, mortgage, pledge,
lien, encumbrance, claim or equity, when exercised, enforced or
otherwise asserted, will not have a Material Adverse Effect.
(iii) Existence of Trust. The Trust has been duly created and
is validly existing in good standing as a statutory trust under the
Delaware Act, is and will be treated as a "grantor trust" for
federal income tax purposes under existing law, has the statutory
trust power and authority to conduct its business as presently
conducted and as described in the Prospectus and is not required to
be authorized to do business in any other jurisdiction.
(iv) Compliance with Registration Requirements. Popular, PNA
and the Trust meet the requirements for use of Form S-3 under the
1933 Act. The Registration Statement, including any Rule 462(b)
Registration Statement, has become effective under the 1933 Act and
no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of Popular, PNA and
the Trust, are contemplated by the Commission, and any request on
the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement and any
post-effective amendment thereto became effective and at each
Representation Date, the Registration Statement and each such
amendment complied, complies and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the Trust Indenture Act of 1939, as amended (the
"1939 Act"), and the rules and regulations of the Commission under
the 1939 Act (the "1939 Act Regulations") and did not, does not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus
nor any amendment or supplement thereto, at the time the Prospectus
or any such amendment or supplement was issued or at the Closing
Time, included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The representations and
warranties in this subsection shall not apply to (A) statements in
or omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Trust, PNA and Popular in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
the
4
Prospectus or (B) that part of the Registration Statement that
constitutes the Statements of Eligibility on Form T-1 (the "Forms
T-1") under the Trust Indenture Act of the Indenture Trustee, the
Property Trustee and the Guarantee Trustee.
The relevant forms of prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and any
preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with the offering of Capital
Securities was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(v) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in
the Prospectus, did not, does not and will not include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(vi) Independent Accountants. The independent registered
public accounting firm or firms who certified the financial
statements and supporting schedules included in the Registration
Statement and the Prospectus is or are, as the case may be,
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(vii) Financial Statements. The consolidated financial
statements and any supporting schedules included in the Registration
Statement and the Prospectus present fairly the consolidated
financial position of Popular and its consolidated subsidiaries as
of the dates indicated and the consolidated results of their
operations for the periods specified. Except as stated therein, said
financial statements have been prepared in conformity with generally
accepted accounting principles in the United States ("GAAP") applied
on a consistent basis during the periods involved. The supporting
schedules, if any, included in the Registration Statement and the
Prospectus present fairly the information required to be stated
therein. Neither pro-forma financial statements of Popular and its
subsidiaries nor audited financial statements of any entity other
than the consolidated financial statements of Popular and its
consolidated subsidiaries are required to be included in the
Registration Statement or the Prospectus in accordance with the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations.
(viii) Authorization of Trust Agreement. The Trust Agreement
has been duly authorized by each of Popular and PNA, is duly
qualified under the 1939 Act and, at the Closing Time, will be duly
executed and delivered by Popular, PNA and the Administrative
Trustees and, assuming the due authorization, execution and delivery
of the Trust Agreement by the Delaware Trustee and the Property
Trustee, will constitute a valid and legally binding instrument of
each of Popular, PNA and the Administrative
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Trustees, enforceable against each of Popular, PNA and the
Administrative Trustees in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfers, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(ix) Common Securities. The Common Securities have been duly
authorized by the Trust Agreement and, when issued and delivered by
the Trust to PNA in accordance with the terms of the Trust Agreement
and against payment therefor as described in the Prospectus, will be
validly issued and fully paid, will represent nonassessable
undivided beneficial interests in the assets of the Trust and will
be entitled to the benefits of the Trust Agreement. The issuance of
the Common Securities is not subject to preemptive or other similar
rights. No holder of Common Securities will be subject to personal
liability by reason of being such a holder. At the Closing Time, all
of the issued and outstanding Common Securities of the Trust will be
directly owned by PNA free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(x) Capital Securities. The Capital Securities have been duly
authorized by the Trust Agreement and, when authenticated in the
manner provided for in the Trust Agreement and issued and delivered
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid, will represent
nonassessable undivided beneficial interests in the assets of the
Trust and will be entitled to the benefits of the Trust Agreement
and the Guarantee Agreement. The issuance of the Capital Securities
is not subject to preemptive or other similar rights. Holders of
Capital Securities will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware.
(xi) Guarantee Agreement. The Guarantee Agreement has been
duly authorized by each of Popular and PNA, and at the Closing Time,
will be duly executed and delivered by Popular and PNA and, assuming
due authorization, execution and delivery of the Guarantee Agreement
by the Guarantee Trustee, will constitute a valid and legally
binding instrument of Popular and PNA, enforceable against Popular
and PNA in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfers, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The Guarantee
Agreement is duly qualified under the 1939 Act.
(xii) Authorization of Indenture. The Indenture has been duly
authorized by each of Popular and PNA, is duly qualified under the
1939 Act and, at the Closing Time, will be duly executed and
delivered by each of Popular and PNA and, assuming the due
authorization, execution and delivery of the Indenture by the
Indenture Trustee, will constitute a valid and legally binding
instrument of each of Popular and PNA, enforceable against each of
Popular and PNA in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfers, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
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(xiii) Authorization of Debentures. The Debentures have been
duly authorized by PNA and, when executed, authenticated, issued and
delivered in the manner provided for in the Indenture against
payment of the consideration contemplated in this Agreement, will
constitute valid and legally binding obligations of PNA entitled to
the benefits of the Indenture and the Debenture Guarantees and
enforceable against PNA in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfers, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(xiv) Authorization of Debenture Guarantees. The Debenture
Guarantees have been duly authorized by Popular and, when the
Debentures have been executed, authenticated, issued and delivered
by PNA, and the Debenture Guarantees are endorsed on the Debentures,
in the manner provided for in the Indenture against payment of the
consideration contemplated in this Agreement, will constitute valid
and legally binding obligations of Popular entitled to the benefits
of the Indenture and enforceable against Popular in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfers, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
(xv) Authorization of Expense Agreement. The Agreement as to
Expenses and Liabilities to be entered into between Popular, PNA and
the Property Trustee at the Closing Time (the "Expense Agreement")
has been duly authorized by each of Popular and PNA and, at the
Closing Time, will be duly executed and delivered by each of Popular
and PNA and will constitute a valid and legally binding instrument
of each of Popular and PNA, enforceable against each of Popular and
PNA in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfers, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
(xvi) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by each of Popular, PNA and the
Trust.
(xvii) Accuracy of Descriptions. The Securities and the
Operative Documents conform to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(xviii) No Material Changes. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein or contemplated
thereby, there has been no Material Adverse Effect.
(xix) No Defaults; Regulatory Approvals. None of Popular, PNA,
any of the Significant Subsidiaries or the Trust is in violation of
its charter or by-laws or other organizational documents, or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by
which it or any of them or their properties may be bound. The
execution, delivery and performance of the Operative Documents by
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Popular, PNA and the Trust, the issuance and delivery by Popular,
PNA and the Trust of their respective Securities and the
consummation of the transactions contemplated herein and therein do
not and will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of Popular, PNA, any of
the Significant Subsidiaries or the Trust pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by
which it or any of them is bound or to which any of their properties
is subject, nor will such action result in any violation of the
provisions of the charter, by-laws or other organizational documents
of Popular, PNA or any of the Significant Subsidiaries or the Trust
Agreement or any law, administrative regulation or administrative or
court order or decree which breach, default, creation, imposition or
violation would, in each case, have a Material Adverse Effect. No
consent, approval, authorization or order of, or qualification with,
any court or governmental body or agency is required for the
consummation of the transactions contemplated under this Agreement,
except such as have been already obtained and as may be required by
the securities or Blue Sky laws of the various states or the
securities laws of non-U.S. jurisdictions in connection with the
sale of the Capital Securities.
(xx) Legal Proceedings; Contracts. Except as may be set forth
in the Registration Statement and the Prospectus, there is no
action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the
knowledge of Popular, PNA or the Trust, threatened, against or
affecting Popular, PNA, any subsidiary of Popular or PNA or the
Trust, which might result in a Material Adverse Effect or which
might materially and adversely affect the consummation of the
transactions contemplated in this Agreement. There are no contracts
or documents of Popular, PNA, any subsidiary of Popular or PNA or
the Trust that are required to be filed or incorporated by reference
as exhibits to the Registration Statement by the 1933 Act or by the
1933 Act Regulations which have not been so filed or incorporated by
reference.
(xxi) Regulatory Certificates, Authorities and Permits.
Popular, PNA and the Significant Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them except for such
certificates, authorities or permits as are not material to the
business, operations, financial condition or income of Popular, PNA
or the Significant Subsidiaries. None of Popular, PNA or any of the
Significant Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result
in a Material Adverse Effect.
(xxii) Investment Company Act. None of Popular, PNA or the
Trust is, or upon the issuance and sale of their respective
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will be, an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act").
8
(b) Officers' Certificates. Any certificate signed by any officer of
Popular, PNA or the Trust delivered to Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by Popular, PNA or
the Trust, respectively, to each Underwriter as to the matters covered thereby
on the date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Capital Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Trust agrees to sell to each Underwriter, severally and not jointly,
and each Underwriter, severally and not jointly, agrees to purchase from the
Trust, at the purchase price of $1,000 per Capital Security, the number of
Capital Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Capital Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, subject, in each case, to such adjustments among the
Underwriters as they in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.
(b) Payment. As compensation to the Underwriters for their
commitments hereunder and in view of the fact that the proceeds of the sale of
the Capital Securities will be used to purchase the Debentures, PNA hereby
agrees to pay at the Closing Time to the Underwriters a commission of $10 per
Capital Security purchased by the Underwriters. Payment of the purchase price
for, and delivery of certificates for, the Capital Securities shall be made at
the offices of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ llp, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon by the Underwriters,
Popular, PNA and the Trust, at 9:00 A.M. (Eastern time) on the [-] ([-], if the
pricing occurs after 4:30 p.m. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriters, Popular, PNA and the Trust (such
time and date of payment and delivery being herein called the "Closing Time").
Payment shall be made to the Trust by wire transfer of immediately
available funds to the order of the Trust, against delivery to the Underwriters
of certificates for the Capital Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for the Capital Securities which it has agreed to purchase. CSFB and
JPMorgan, individually and not as Representatives of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Capital
Securities to be purchased by any Underwriter whose funds have not been received
by the Closing Time, but such payment shall not relieve such Underwriter from
its obligations hereunder.
At the Closing Time, PNA will pay, or cause to be paid, the
commission payable to the Underwriters at such time under this Section 2 to CSFB
on behalf of the Underwriters by wire transfer of immediately available funds.
(c) Denominations; Registration. Certificates for the Capital
Securities shall be in such denominations and registered in such names as the
Representatives may request in writing
9
at least two full business days before the Closing Time. The certificates for
the Capital Securities will be made available for examination and packaging by
the Representatives in The City of New York not later than 10:00 A.M. (Eastern
time) on the business day prior to the Closing Time.
SECTION 3. Covenants. (a) Popular, PNA and the Trust, jointly and
severally, covenant with each Underwriter as follows:
(i) Compliance with Securities Regulations and Commission
Requests. Popular, PNA and the Trust, subject to Section 3(b), will
comply with the requirements of Rule 424 or Rule 430A as applicable,
and will notify the Underwriters immediately (w) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (x) of the receipt of any comments
from the Commission, (y) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information and (z)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, any
prospectus, or of the suspension of the qualification of the Capital
Securities for offering or sale in any jurisdiction or of the
initiation or threatening of any proceedings for any of such
purposes. Popular, PNA and the Trust will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. Popular, PNA and the Trust will use
their reasonable efforts to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof.
(ii) Filing of Amendments. Popular, PNA and the Trust will
give the Representatives notice of their intention to file or
prepare any amendment to the Registration Statement (including any
filing under Rule 462(b)), any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to
the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents within a
reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which
the Representatives or counsel for the Representatives shall
reasonably object.
(iii) Delivery of Registration Statements. Popular has
furnished or will deliver to the Representatives and counsel for the
Representatives, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto
(including exhibits filed therewith and, upon request, documents
incorporated or deemed to be incorporated by reference therein), and
will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters
10
will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(iv) Delivery of Prospectus. Popular has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and Popular,
PNA and the Trust each hereby consents to the use of such copies for
purposes permitted by the 1933 Act. Popular will deliver to each
Underwriter, without charge, as many copies of the Prospectus and
any amendment or supplement thereto as such Underwriter reasonably
requests, and Popular, PNA and the Trust each hereby consents to the
use of such copies for purposes permitted by the 1933 Act. Popular
will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act
or the 1934 Act, such number of copies of the Prospectus (as amended
or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. Popular, PNA
and the Trust will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If, at any
time when a prospectus is required by law to be delivered in
connection with sales of the Capital Securities, any event shall
occur or condition shall exist as a result of which it is necessary,
in the reasonable opinion of counsel for the Underwriters, to amend
the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the reasonable opinion of such
counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, Popular,
PNA and the Trust will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such
requirements, and Popular will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(vi) Blue Sky Qualifications. Popular, PNA and the Trust will
endeavor, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign) as
the Representatives may reasonably designate and to maintain such
qualifications in effect for as long as may be required for the
distribution of the Capital Securities; provided, however, that none
of Popular, PNA or the Trust shall be obligated to file any general
consent to service of process in any jurisdiction. Popular will
promptly advise the Representatives of its receipt of any
notification with respect to the suspension of qualification of the
Securities for sale in any applicable jurisdiction or the initiating
or
11
threatening of any proceeding for such purpose. Popular, PNA and the
Trust will also supply the Underwriters with such information as is
necessary for the determination of the legality of the Capital
Securities for investment under the laws of such jurisdictions as
the Underwriters may reasonably request.
(vii) Reporting Requirements. Popular, PNA and the Trust,
during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to the 1934 Act within the
time period required by the 1934 Act and the 1934 Act Regulations.
(viii) Rule 158. Popular will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to the security holders of Popular as soon as practicable
an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(ix) DTC. The Trust, PNA and Popular will cooperate with the
Underwriters and use their best efforts to permit the Capital
Securities and, if applicable, the Debentures, to be eligible for
clearance, settlement and trading through the facilities of The
Depository Trust Company.
(x) Use of Proceeds. The Trust and PNA will use the proceeds
referred to in the Prospectus under "Use of Proceeds" in the manner
described therein.
(xi) Restriction on Sale of Securities. From the date hereof
until the Closing Time, none of Popular, PNA or the Trust will,
without the prior written consent of the Representatives, directly
or indirectly, sell, offer to sell, announce the offering of, grant
any option for sale of, or otherwise dispose of, any Capital
Securities, any security convertible into or exchangeable into or
exercisable for Capital Securities, or equity securities
substantially similar to the Capital Securities, in each case issued
in a transaction registered with the Commission under the 1933 Act.
The foregoing sentence shall not apply to the Capital Securities
contemplated to be issued hereunder and under the Prospectus.
(b) Each Underwriter, jointly and severally, covenants with Popular,
PNA and the Trust as follows:
(i) It has not offered, sold or delivered and will not offer,
sell or deliver any of the Capital Securities directly or
indirectly, or distribute the Prospectus or any other offering
material relating to the Capital Securities, in or from any
jurisdiction except under circumstances that will result in
compliance in all material respects with the applicable laws and
regulations thereof and that will not impose any obligations on
Popular, PNA or the Trust except as set forth in this Agreement.
(ii) (A) It has not offered or sold, and, prior to the
expiration of the period of six months from the Closing
Time, will not offer or sell any Capital Securities to
persons in the United Kingdom, except to those persons
whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as
principal or agent) for the purposes of their
12
businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public
in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, as amended;
(B) it has only communicated or caused to be
communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of
the Financial Services and Markets ▇▇▇ ▇▇▇▇ ("FSMA")
received by it in connection with the issue or sale of
the Capital Securities in circumstances in which Section
21(1) of the FSMA does not apply to the Trust, Popular
or PNA; and
(C) it has complied and will comply with all applicable
provisions of FSMA with respect to anything done by it
in relation to the Capital Securities in, from or
otherwise involving the United Kingdom.
(iii) It will not offer or sell any Capital Securities
directly or indirectly in Japan or to, or for the benefit of any
Japanese person or to others, for re-offering or re-sale directly or
indirectly in Japan or to any Japanese person, except in each case
pursuant to an exemption from the registration requirements of, and
otherwise in compliance with, the Securities and Exchange Law of
Japan and any other applicable laws and regulations of Japan. For
purposes of this paragraph (b)(iii), "Japanese person" means any
person resident in Japan, including any corporation or other entity
organized under the laws of Japan.
(iv) It and each of its affiliates have not issued or had in
its possession for the purposes of issue, and will not issue or have
in its possession for the purposes of issue, any invitation,
document or advertisement relating to Capital Securities in Hong
Kong or elsewhere, which is directed at, or the contents are likely
to be accessed or read by, the public in Hong Kong (unless permitted
to do so under the securities laws of Hong Kong) other than with
respect to Capital Securities intended to be disposed of outside
Hong Kong or only to "professional investors" within the meaning of
the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any
rules made thereunder.
(v) It understands and agrees that the Prospectus or any other
offering material relating to the Capital Securities has not been
and will not be registered as a prospectus with the Monetary
Authority of Singapore. It has agreed that it has not offered or
sold any Capital Securities or made any Capital Securities the
subject of an invitation for subscription or purchase, and it has
not circulated or distributed and will not circulate or distribute
the Prospectus or any other document or material in connection with
the offer or sale, or invitation for subscription or purchase, of
the Capital Securities, whether directly or indirectly, to the
public or any member of the public in Singapore other than (a) to an
institutional investor or other person falling within Section 274 of
the Securities and Futures Act (Chapter 289) of Singapore (the
"Singapore Securities and Futures Act"), (b) to a sophisticated
investor, and in accordance with the conditions, specified in
Section 275 of the Singapore Securities and Futures Act or (c)
otherwise
13
pursuant to, and in accordance with the conditions of, any other
applicable provision of the Singapore Securities and Futures Act.
(vi) It understands and agrees that no German selling
prospectus (Verkaufsprospekt) has been or will be published in
respect of the sale of the Capital Securities and that it will
comply with the Securities Sales Prospectus Act of the Federal
Republic of Germany (Wertpapier-Verkaufsprospektgesetz). It will not
engage in a public offering in the Federal Republic of Germany with
respect to any Capital Securities otherwise than in accordance with
the Securities Sales Prospectus Act and any other act replacing or
supplementing the Securities Sales Prospectus Act and all other
applicable laws and regulations.
(vii) It understands and agrees that the Capital Securities
are being issued and sold outside the Republic of France and that,
in connection with their initial distribution, it has not offered or
sold and will not offer or sell, directly or indirectly, any Capital
Securities to the public in the Republic of France, and that it has
not distributed and will not distribute or cause to be distributed
to the public in the Republic of France the Prospectus or any other
offering material relating to the Capital Securities, and that such
offers, sales and distributions have been and will be made in the
Republic of France only to (a) qualified investors (investisseurs
qualifies) and/or (b) a restricted group of investors (cercle
restreint d'investisseurs), all as defined in Article L.411-2 of the
Monetary and Financial Code and decret no. 98-880 dated 1st October,
1998.
(viii) It understands and agrees that the Capital Securities
may not be offered, sold, transferred or delivered in or from the
Netherlands as part of their initial distribution or at any time
thereafter, directly or indirectly, other than to banks, pension
funds, insurance companies, securities firms, investment
institutions, central governments, large international and
supranational institutions and other comparable entities, including,
among others, treasuries and finance companies of large enterprises,
which trade or invest in securities in the course of a profession or
trade. It understands and agrees that individuals or legal entities
who or which do not trade or invest in securities in the course of
their profession or trade may not participate in the offering of the
Capital Securities, and the Prospectus or any other offering
material relating to the Capital Securities may not be considered an
offer or the prospect of an offer to sell or exchange the Capital
Securities.
SECTION 4. Payment of Expenses.
(a) Expenses. PNA will pay all expenses incident to the performance
of the obligations of Popular, PNA and/or the Trust under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Capital Securities, (iii) the preparation, issuance
and delivery of the certificates for the Capital Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Capital Securities to the
Underwriters,
14
(iv) the fees and disbursements of counsel to Popular, PNA and the Trust, as
well as their accountants and other advisors, (v) the qualification of the
Securities under state securities laws in accordance with the provisions of
Section 3(a)(v) hereof, including filing fees and the fees and disbursements of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, if any, (vi) the
printing and delivery to the Underwriters of copies of any preliminary
prospectus and the Prospectus and any amendments or supplements thereto, (vii)
the fees and expenses of any transfer agent or registrar for the Capital
Securities, (viii) the fees and expenses of the Indenture Trustee, the Property
Trustee and the Guarantee Trustee, including the fees and disbursements of their
counsel, (ix) any fees payable in connection with the rating of the Capital
Securities and the Debentures, (x) the cost and charges associated with the
approval of the Capital Securities by The Depository Trust Company for
clearance, settlement and trading, and (xi) any filing fees required by, and the
fees and disbursements of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP relating to any review by, the
National Association of Securities Dealers, Inc.
(b) Termination of Agreement. If this Agreement is terminated in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, PNA shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of Popular, PNA and the Trust contained herein or
in certificates of any officer or representative of Popular, PNA, the Trust or
any Trustee delivered pursuant to the provisions hereof, to the performance by
Popular, PNA and the Trust of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus shall
have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective).
(b) Opinion of Counsel for Popular and PNA. At the Closing Time, the
Representatives shall have received the favorable opinion, dated the Closing
Time, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for Popular and PNA, together with
signed or reproduced copies of such letter for each of the other Underwriters,
to the effect set forth in Exhibit A hereto. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of Popular and PNA and
their respective subsidiaries and certificates of public officials and as to all
matters relating to the laws of the Commonwealth of Puerto Rico upon the opinion
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Esq., delivered pursuant to Section 5(c) hereof.
15
(c) Opinion of Puerto Rico Counsel for Popular and PNA. At the Closing
Time, the Representatives shall have received the favorable opinion, dated the
Closing Time, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Executive Vice President and Chief
Legal Officer for Popular, together with signed or reproduced copies of such
letter for each of the other Underwriters, to the effect set forth in Exhibit B
hereto. Such counsel may also state that, insofar as such opinion involves
factual matters, she has relied, to the extent she deems proper, upon
certificates of officers of Popular and PNA and their respective subsidiaries
and certificates of public officials and as to all matters relating to the laws
of the State of New York and the General Corporation Law of the State of
Delaware upon the opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, delivered pursuant to
Section 5(b) hereof.
(d) Opinion of United States Tax Counsel for the Trust, PNA and Popular.
At the Closing Time, the Representatives shall have received an opinion, dated
the Closing Time, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, United States tax counsel to the
Trust, PNA and Popular, that (i) the Debentures will be classified for United
States federal income tax purposes as indebtedness of PNA, (ii) the Debenture
Guarantees will be classified for U.S. federal income tax purposes as
indebtedness of Popular, (iii) the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation and (iv) although the discussion set forth in the Prospectus
under the heading "Certain Federal Income Tax Considerations" does not purport
to discuss all possible U.S. federal income tax consequences of the purchase,
ownership and disposition of the Capital Securities and, assuming that all of
the transaction documents, including the Indenture, the Trust Agreement and the
Guarantee Agreement, will be complied with in all material respects, such
discussion constitutes, in all material respects, a fair and accurate summary of
the United States federal income tax consequences of the purchase, ownership and
disposition of the Capital Securities under current law. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of Popular and PNA
and their respective subsidiaries and certificates of public officials.
(e) Opinion of Special Delaware Counsel for PNA and the Trust. At the
Closing Time, the Representatives shall have received the favorable opinion,
dated the Closing Time, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special Delaware
counsel to PNA and the Trust, together with signed or reproduced copies of such
letter for each of the Underwriters, to the effect set forth in Exhibit C
hereto.
(f) Opinion of Counsel for ▇.▇. ▇▇▇▇▇▇ Trust Company, National
Association. At the Closing Time, the Representatives shall have received an
opinion, dated the Closing Time, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., counsel to
▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, as Property Trustee, Indenture
Trustee and Guarantee Trustee, in form and substance satisfactory to the
Underwriters.
(g) Opinion of Counsel for Underwriters. At the Closing Time, the
Representatives shall have received the favorable opinion, dated the Closing
Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the validity of the Securities, the disclosure in
the Registration Statement and the Prospectus and such other matters as the
Underwriters may reasonably request. In giving such opinion such counsel may
rely, as to all matters governed by
16
the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Underwriters. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of Popular and their respective subsidiaries and
certificates of public officials.
(h) Officers' Certificates. At the Closing Time, since the date hereof or
since the respective dates as of which information is given in the Prospectus,
the Representatives shall have received a certificate of the President or any
Vice President of each of Popular and PNA, dated the Closing Time, to the effect
that (i) since the date of this Agreement or since the respective dates as of
which information is given in the Prospectus, there has been no Material Adverse
Effect, (ii) the representations and warranties contained herein are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, (iii) each of Popular, PNA and the Trust has complied with all
agreements and satisfied all conditions on their respective parts to be
performed or satisfied at or prior to the Closing Time and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending threatened
by the Commission.
(i) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and financial information contained in the
Registration Statement and the Prospectus.
(j) Bring-down Comfort Letter. At the Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (i) of this Section 5, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(k) Maintenance of Rating. At the Closing Time, the Capital Securities
shall be rated - by Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc., and - by ▇▇▇▇▇'▇ Investors Service, Inc., and PNA shall have delivered to
the Underwriters a letter, dated the Closing Time, from each such rating agency,
or other evidence satisfactory to the Representatives, confirming that the
Capital Securities have such rating; and since the execution of this Agreement,
there shall not have occurred a downgrading in or withdrawal of the rating
assigned to the Capital Securities or any preferred or debt securities of
Popular or PNA by any "nationally recognized statistical rating organization,"
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the 1933 Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Capital Securities or any
preferred or debt securities or Popular or PNA.
(l) Additional Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to render the opinion referred to
in Section 5(g), or in order to evidence the
17
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by Popular, PNA
and the Trust in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the
Underwriters.
(m) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriters by notice to Popular and PNA at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6 and 7 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. Each of Popular, PNA and the Trust,
jointly and severally, agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, if
applicable, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of
a material fact included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission if such settlement is effected with the written consent of
Popular and PNA; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Representatives),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information
18
furnished to Popular and PNA by any Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
This indemnity is subject to the conditions that, insofar as
it relates to any untrue statement or omission, or any alleged untrue statement
or omission, made in a preliminary prospectus or the Prospectus but eliminated
or remedied in the Prospectus or in an amended or supplemented Prospectus, as
the case may be, it shall not inure to the benefit of any Underwriter (or to the
benefit of any person who controls such Underwriter) if a copy of the Prospectus
or the Prospectus as amended or supplemented at the time of the sale of the
Capital Securities, as the case may be, excluding documents incorporated therein
by reference, was delivered by the Trust, Popular or PNA to the Representatives
a reasonable amount of time in advance of the delivery of written confirmations
by such Underwriter to investors but such Underwriter failed to deliver such
Prospectus or the Prospectus as amended or supplemented, as the case may be, to
the person in question at or prior to the time required by the 1933 Act and the
receipt of such Prospectus or the Prospectus as amended or supplemented, as the
case may be, would have constituted a sufficient defense to the claim asserted
by such person.
(b) Indemnification of the Trust, Popular, PNA, Directors and Officers.
Each Underwriter severally agrees to indemnify and hold harmless Popular, PNA
and the Trust, their respective directors or trustees, each of their respective
officers who signed the Registration Statement, and each person, if any, who
controls Popular, PNA or the Trust within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to Popular and PNA by such Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus, if any, or the Prospectus (or any amendment or
supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give prompt notice to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Representatives,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by Popular. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with
19
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by Popular, PNA and the
Trust, on the one hand, and the Underwriters, on the other hand, from the
offering of the Capital Securities pursuant to this Agreement or (ii) if the
allocation provided by 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 Popular, PNA and the
Trust, on the one hand, and the Underwriters, on the other hand, in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by Popular, PNA and the Trust, on the one
hand, and the Underwriters, on the other hand, in connection with the offering
of the Capital Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Capital Securities pursuant to this Agreement (before deducting expenses)
indirectly received by PNA and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus.
The relative fault of Popular, PNA and the Trust, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by Popular, PNA or the Trust or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
Popular, PNA, the Trust and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal
20
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Capital Securities set
forth opposite their respective names in Schedule A hereto and not joint.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Capital Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter and
the respective directors or trustees of Popular, PNA or the Trust, each officer
of Popular or PNA who signed the Registration Statement, and each person, if
any, who controls Popular, PNA or the Trust within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as Popular, PNA and the Trust.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of Popular or PNA or the Trustees of the Trust or any
of its other subsidiaries submitted pursuant hereto or thereto shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of
Popular, PNA or the Trust, and shall survive delivery of and payment for the
Capital Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to Popular, PNA and the Trust, at any time at or prior to
the Closing Time if (i) there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any Material Adverse Effect, (ii) there has occurred any material
adverse change in the financial markets in the United States, or any outbreak or
escalation of hostilities, or other national or international calamity or
crisis, in each case the effect of which is such as to make it, in the judgment
of the Representatives, impracticable to market the Capital Securities or to
enforce contracts for the sale of the Capital Securities, (iii) trading in any
securities of Popular or PNA has been suspended or materially limited by the
Commission or a national securities exchange, or if trading generally on the New
York Stock
21
Exchange or the American Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by either of
said exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
a material disruption has occurred in commercial general banking or securities
settlement or clearance services in the United States, (iv) a general banking
moratorium has been declared by U.S. federal, New York or Puerto Rico
authorities or (v) the rating assigned by any nationally recognized statistical
rating organization to the Capital Securities or any preferred or debt
securities of Popular or PNA as of the date of this Agreement shall have been
lowered or withdrawn since that date or if any such rating organization shall
have publicly announced that it has under surveillance or review (other than
with positive implications) its rating of the Capital Securities or any such
preferred or debt securities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6
and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Capital
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a)if the number of Defaulted Securities does not exceed 10% of the number
of Capital Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b)if the number of Defaulted Securities exceeds 10% of the number of
Capital Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or Popular and PNA shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
22
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to CSFB at Credit Suisse First Boston LLC,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of Transactions
Advisory Group, and ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attn: High Grade Syndicate Desk; notices to the Trust shall be
directed to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and notices to Popular or PNA shall be directed to
Popular, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, Popular, PNA and the Trust and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers, directors and trustees referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons and officers, trustees and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Capital Securities shall be deemed
to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. Specified
times of day refer to New York City time.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 15. Severability. In case any provisions in this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to Popular, PNA and the Trust a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, Popular, PNA and the Trust in
accordance with its terms.
Very truly yours,
POPULAR, INC.
By:
-------------------------------------
Name:
Title:
POPULAR NORTH AMERICA, INC.
By:
-------------------------------------
Name:
Title:
POPULAR NORTH AMERICA CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
24
The foregoing Purchase Agreement is hereby
confirmed and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
BY CREDIT SUISSE FIRST BOSTON LLC
By:
---------------------------------------
Name:
Title:
BY ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
---------------------------------------
Name:
Title:
25
SCHEDULE A
Number of
Name of Underwriter Capital Securities
-------------------------------------------------------- ------------------
Credit Suisse First Boston LLC..........................
▇.▇. ▇▇▇▇▇▇ Securities Inc..............................
Popular Securities, Inc.................................
------------------
Total..........................................
SCH-A-1