1
EXHIBIT 10.25
BANPONCE CORPORATION
MEDIUM-TERM NOTES DUE FROM
9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
October 6, 1995
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
North Tower
New York, New York 10281
CS FIRST BOSTON CORPORATION
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FIRST CHICAGO CAPITAL MARKETS, INC.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Ladies and Gentlemen:
BanPonce Corporation, a Puerto Rico corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, CS First Boston Corporation and First Chicago Capital
Markets, Inc. (each, an "Agent" and collectively, the "Agents") with respect to
the issue and sale by the Company of its Medium-Term Notes described herein (the
"Notes"). The Notes are to be issued pursuant to an Indenture, dated as of
February 15, 1995 (the "Indenture"), between the Company and The First National
Bank of Chicago, as trustee (the "Trustee").
As of the date hereof, the Company has authorized the issuance and sale
of Notes with an aggregate initial offering price of up to $1,000,000,000
through the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company may from time to time authorize the issuance of
additional Notes and that such additional Notes may be sold through or to the
Agents pursuant to the terms of this Agreement, all as though the issuance of
such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Note purchasers, and, as may from time to time be agreed
to by the Company and any Agent, to such Agent as principal for resale to
purchasers.
2
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 33-61601) for the registration
of debt securities, including the Notes, under the Securities Act of 1933, as
amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the SEC under the 1933
Act (the "1933 Act Regulations"). Such registration statement has been declared
effective by the SEC and the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement
(and any further registration statements which may be filed by the Company for
the purpose of registering additional Notes and in connection with which this
Agreement is included as an exhibit) and the prospectus constituting a part
thereof, and any prospectus supplements relating to the Notes, including all
documents incorporated therein by reference, as from time to time amended or
supplemented by the filing of documents pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred
to herein collectively as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be provided to the
Agents by the Company for use in connection with the offering of the Notes which
is not required to be filed by the Company pursuant to Rule 424(b) of the 1933
Act Regulations, the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to the Agents for such use.
SECTION 1. Appointment as Agents.
(a) Appointment of Agents. Subject to the terms and conditions
stated herein and subject to the reservation by the Company of the right to sell
Notes directly on its own behalf, the Company hereby appoints each Agent as its
agent for the purpose of soliciting purchases of the Notes from the Company by
others and agrees that, except as otherwise contemplated herein, whenever the
Company determines to sell Notes directly to an Agent as principal for resale to
others, it will enter into a Terms Agreement (hereafter defined) relating to
such sale in accordance with the provisions of Section 3(b) hereof. The Agents
are not authorized to appoint sub-agents or to engage the services of any other
broker or dealer in connection with the offer or sale of the Notes. The Company
agrees that, during the period that the Agents are acting as the Company's
agents hereunder, the Company will not contact or solicit potential investors
introduced to it by the Agents to purchase the Notes. Notwithstanding anything
to the contrary contained herein, the Company may, upon one day's prior written
notice to the Agents, authorize any other person, partnership or corporation (an
"Additional Agent") to act as its agent to solicit offers for the purchase of
all or part of the Notes of the Company. Unless the Agents otherwise agree, the
appointment of an Additional Agent shall be effected by the Company's addition
of the name and address of the Additional Agent to the signature page of a
2
3
counterpart of this Agreement, the execution of such counterpart by the
Additional Agent, and the delivery of executed copies of such counterpart to
each Agent and its counsel. Thereafter the term "Agents" as used in this
Agreement shall mean the Agents and such Additional Agent. At such time, the
Additional Agent shall specify its requirement for the delivery of certificates,
letters and opinions as are set forth in Section 5 hereof. It is understood that
if from time to time the Company is approached by a prospective agent offering
to solicit a specific purchase of Notes, the Company may engage such agent with
respect to such specific purchase, provided that (i) such agent is engaged on
terms substantially similar (including the same commission schedule as set forth
hereto as Schedule A) to the applicable terms of this Agreement and (ii) each
Agent is given notice of such purchase promptly, including the terms thereof and
a copy of the agreement setting forth the terms of engagement of such agent by
the Company, in each case after the purchase is agreed to.
(b) Reasonable Efforts Solicitations; Right to Reject Offers. Upon
receipt of instructions from the Company, each Agent will use its reasonable
efforts to solicit purchases of such principal amount of the Notes as the
Company and such Agent shall agree upon from time to time during the term of
this Agreement, it being understood that the Company shall not approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the principal amount
of Notes registered pursuant to the Registration Statement. The Agents will have
no responsibility for maintaining records with respect to the aggregate
principal amount of Notes sold, or of otherwise monitoring the availability of
Notes for sale under the Registration Statement. Each Agent will communicate to
the Company, orally or in writing, each offer to purchase Notes from such Agent,
other than those offers rejected by such Agent. Each Agent shall have the right,
in its discretion reasonably exercised, to reject any proposed purchase of
Notes, as a whole or in part, and any such rejection shall not be deemed a
breach of such Agent's agreement contained herein. The Company may accept or
reject any proposed purchase of the Notes, in whole or in part.
(c) Solicitations as Agent; Purchases as Principal. In soliciting
purchases of the Notes on behalf of the Company, each Agent shall act solely as
agent for the Company and not as principal. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company. No Agent shall have any liability to the Company in the event any such
purchase is not consummated for any reason, except in the event that such sale
is not consummated due to the failure of such Agent to perform its obligations
hereunder. No Agent shall have an obligation to purchase Notes from the Company
as principal, but any Agent may agree from time to time to purchase Notes as
principal. Any such purchase of Notes by an Agent as principal
3
4
shall be made pursuant to a Terms Agreement in accordance with Section 3(b)
hereof.
(d) Reliance. The Company and each Agent agree that any Notes the
placement of which such Agent arranges shall be placed by such Agent, and any
Notes purchased by an Agent shall be purchased in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties of the Company.
(a) The Company represents and warrants to the Agents as of the
date hereof, as of the date of each acceptance by the Company of an offer for
the purchase of Notes (whether through an Agent as agent or to an Agent as
principal), as of the date of each delivery of Notes (whether through an Agent
as agent or to an Agent as principal) (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall be amended
or supplemented (other than by an amendment or supplement providing solely for a
change in the interest rates of Notes or similar changes and other than an
amendment or supplement that relates to an offering of debt securities other
than the Notes) or there is filed with the SEC any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K
relating exclusively to the issuance of debt securities other than the Notes
under the Registration Statement) (each of the times referenced above being
referred to herein as a "Representation Date") as follows:
(i) Due Incorporation and Qualification. The Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Puerto Rico with
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; the Company
is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the "Bank Holding Company Act"); and
the Company is not required to register as a foreign corporation in any
jurisdiction in order to conduct the business presently conducted by
it.
(ii) Subsidiaries. Each subsidiary of the Company which is
a significant subsidiary as defined in Rule 405 of Regulation C of the
1933 Act Regulations (each, a "Significant Subsidiary") 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 incorporation, has
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business
4
5
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 on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and all of the issued and
outstanding capital stock of each such Significant Subsidiary has been
duly authorized and validly issued, is 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, is owned by the
Company, 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 on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise.
(iii) Registration Statement and Prospectus. At the time
the Registration Statement became effective, the Registration Statement
complied, and as of the applicable Representation Date will comply, in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and the 1939 Act and the rules and regulations of
the SEC promulgated thereunder. The Registration Statement, at the time
it became effective, did not, and at each time thereafter at which any
amendment to the Registration Statement becomes effective and any
Annual Report on Form 10-K is filed by the Company with the SEC and as
of each Representation Date 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; the
Prospectus, as of the date hereof does not, and as of each
Representation Date will not, contain an 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; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by the Agents expressly for use in the Registration
Statement or Prospectus.
5
6
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the SEC, complied or when so
filed will comply, as the case may be, in all material respects with
the requirements of the 1934 Act and the rules and regulations
promulgated thereunder (the "1934 Act Regulations"), and, when read
together and with the other information in the Prospectus, did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the
financial statements and supporting schedules included or incorporated
by reference in the Prospectus are independent public accountants
within the meaning of the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial
statements and any supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Company 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 applied on a consistent basis during the periods
involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein.
(vii) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company; the Indenture has been duly
authorized and is a valid and binding obligation of the Company
enforceable in accordance with its terms subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws of general applicability relating to or affecting
creditors rights and to general equity principles; the Notes have been
duly and validly authorized for issuance, offer and sale pursuant to
this Agreement and, when issued, authenticated and delivered pursuant
to the provisions of this Agreement and the Indenture against payment
of the consideration therefor specified in the Prospectus or pursuant
to any Terms Agreement, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws relating to or affecting creditors'
6
7
rights generally and to general equity principles; the Notes and the
Indenture will be substantially in the form heretofore delivered to the
Agents and conform in all material respects to all statements relating
thereto contained in the Prospectus; and the Notes will be entitled to
the benefits provided by the Indenture.
(viii) Material Changes or Material Transactions. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as may otherwise be stated therein
or contemplated thereby, there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business.
(ix) No Defaults; Regulatory Approvals. Neither the
Company nor any of the Significant Subsidiaries is in violation of its
charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other 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 this Agreement
and the Indenture and the consummation of the transactions contemplated
herein, therein and pursuant to any applicable Terms Agreement have
been duly authorized by all necessary corporate action 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 the Company or any of the Significant
Subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be
bound or to which any of the property or assets of the Company or any
such subsidiary is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any such subsidiary or any law, administrative regulation or
administrative or court order or decree which breach, default,
imposition or violation would, in each case, have a material adverse
effect on the Company and its subsidiaries taken as a whole; and no
consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such
as have already been obtained or as may be required under the 1933 Act
or the 1933 Act Regulations (which have been obtained), the 1939 Act or
state securities or Blue Sky laws.
7
8
(x) Legal Proceedings; Contracts. Except as may be set
forth in the Registration Statement, 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 the Company,
threatened against or affecting, the Company or any of its
subsidiaries, which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, or might materially and adversely affect the
consummation of this Agreement or any Terms Agreement; and there are no
contracts or documents of the Company or any of its subsidiaries which
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.
(xi) Regulatory Certificates, Authorities and Permits. The
Company 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 the Company or the Significant Subsidiaries; and
neither the Company nor 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 materially adversely affect the conduct of the
business, operations, financial condition or income of the Company and
its subsidiaries considered as one enterprise.
(b) Additional Certifications. Any certificate signed by any
officer of the Company and delivered to the Agents or to counsel for the Agents
in connection with an offering of Notes or the sale of Notes to an Agent as
principal shall be deemed a representation and warranty by the Company to the
Agents (or, in the case of a sale of Notes to an Agent as principal, to such
Agent) as to the matters covered thereby on the date of such certificate.
SECTION 3. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions herein
set forth, each Agent agrees, as agent of the Company, to use its reasonable
efforts to solicit offers to purchase the Notes upon the terms and conditions
set forth herein and in the Prospectus.
8
9
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agents, as agents, commencing
at any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will forthwith suspend solicitation of purchases
from the Company until such time as the Company has advised the Agents that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as set
forth in Schedule A hereto. Each such Agent may reallow any portion of the
commission payable pursuant hereto to dealers or purchasers in connection with
the offer and sale of any Notes.
The purchase price, interest rate, maturity date and other terms of the
Notes shall be agreed upon by the Company and each Agent and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of $1,000 and integral multiples thereof. All Notes sold through
any Agent as agent will be sold at 100% of their principal amount
unless otherwise agreed to by the Company and such Agent.
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Corporation and such Agent shall otherwise agree) pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, such Agent. Each such separate agreement
(which may be an oral agreement confirmed in writing) between such Agent and the
Company is herein referred to as a "Terms Agreement". Unless the context
otherwise requires, each reference contained herein to "this Agreement" shall be
deemed to include any applicable Terms Agreement between the Company and an
Agent. Each such Terms Agreement, whether oral or in writing, shall be with
respect to such information (as applicable) as is specified in Exhibit A hereto.
Each Agent's commitment to purchase Notes as principal pursuant to any Terms
Agreement or otherwise shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
specify the principal amount of Notes to be purchased by the Agent pursuant
thereto, the price to be paid to the Company for such Notes (which, if not so
specified in a Terms Agreement, shall be at a discount equivalent to the
applicable commission set forth in Schedule A hereto), the time and place of
delivery of and payment for such Notes and such other provisions (including
further terms of the Notes) as may be mutually agreed upon. Each Agent may
9
10
utilize a selling or dealer group in connection with the resale of the Notes
purchased. Unless expressly provided for in the Terms Agreement, no opinions,
letters or certificates shall be delivered by the Company in connection with the
sale of Notes to each Agent as principal.
(c) Administrative Procedures. Administrative procedures with
respect to the sale of Notes shall be agreed upon from time to time by the
Agents and the Company (the "Procedures"). The Agents and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify each Agent
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the filing of any supplement to the Prospectus relating to
the Notes or any document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the SEC with respect to the Registration Statement or the
Prospectus, (iv) of any request by the SEC for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (v) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company will use reasonable efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof.
(b) Notice of Certain Proposed Filings. Except as otherwise
provided in subsection (1) of this Section, the Company will give each Agent
notice of its intention to file or prepare any additional registration statement
with respect to the registration of additional Notes, any amendment to the
Registration Statement or any amendment or supplement to the Prospectus (other
than an amendment or supplement providing solely for a change in the interest
rates of Notes and other than an amendment or supplement that relates to an
offering of debt securities other than the Notes), whether by the filing of
documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish
each Agent with copies of any such amendment or supplement or other documents
proposed to be filed or prepared a reasonable time in advance of such proposed
filing or preparation, as the case may be, except for documents filed pursuant
to the 1934 Act, which the Company shall furnish to each Agent immediately after
the filing thereof, and will not file any such amendment or supplement other
than a document filed pursuant to the 1934 Act in a form to which you or your
counsel shall reasonably object.
10
11
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to each Agent as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as such Agent may
reasonably request. The Company will furnish each Agent with as many copies of
the Prospectus (as amended or supplemented) as such Agent shall reasonably
request so long as such Agent is required to deliver a Prospectus in connection
with sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare,
with respect to any Notes to be sold through the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes and will file such
Pricing Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than
the close of business of the SEC on the fifth business day after the date on
which such Pricing Supplement is first used.
(e) Revisions of Prospectus -- Material Changes. Except as
otherwise provided in subsection (l) of this Section, if at any time during the
term of this Agreement any event shall occur or condition exist as a result of
which it is necessary, to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances in which they were made, not misleading or if it
shall be necessary to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, immediate notice shall be given, and confirmed in writing, to
the Agents to cease the solicitation of offers to purchase the Notes in the
Agents' capacity as agents and to cease sales of any Notes any Agent may then
own as principal pursuant to a Terms Agreement, and the Company will promptly
prepare and file with the SEC such amendment or supplement, whether by filing
documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except
as otherwise provided in subsection (l) of this Section, on the date on which
there shall be released to the general public interim consolidated financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and promptly thereafter shall cause the
Registration Statement and the Prospectus to be amended or supplemented to
include or incorporate
11
12
by reference capsule financial information with respect to the results of
operations of the Company and its consolidated subsidiaries for such period.
(g) Prospectus Revisions -- Audited Financial Information. Except
as otherwise provided in subsection (l) of this Section, on the date on which
there shall be released to the general public financial information included in
the audited consolidated financial statements of the Company for the preceding
fiscal year, the Company shall cause the Registration Statement and the
Prospectus to be amended, whether by the filing of documents pursuant to the
1934 Act, the 1933 Act or otherwise, to include or incorporate by reference such
audited financial statements and the report or reports, and consent or consents
to such inclusion or incorporation by reference, of the independent accountants
with respect thereto, as well as such other information and explanations as
shall be necessary for an understanding of such financial statements or as shall
be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Company will make generally available
to the security holders of the Company as soon as practicable, but not later
than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 under the 1933 Act)
covering each twelve month period beginning, in each case, not later than the
first day of the Company's fiscal quarter next following the "effective date"
(as defined in such Rule 158) of the Registration Statement with respect to each
sale of Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agents and the Company shall agree and, unless the Company
otherwise notifies the Agents, will maintain such qualifications in effect for
as long as may be required for the distribution of the Notes; provided, however,
that the Company shall not be required to submit to general service of process
in any jurisdiction. The Company will promptly advise the Agents of their
receipt of any notification with respect to the suspension of the
qualification of the Notes for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the time
that Prospectus is required to be delivered under the 1933 Act, will file
promptly all documents required to be filed with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act.
(k) Stand-Off Agreement. If required pursuant to the terms of a
Terms Agreement between the Company and any Agent, between the date of any Terms
Agreement and the Settlement Date with respect to
12
13
such Terms Agreement, the Company will not, without such Agent's prior consent,
offer or sell, or enter into any agreement to sell, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such Terms
Agreement and commercial paper).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (b), (e), (f) or (g) of
this Section during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in their capacity as agents pursuant to a
request from the Company and (ii) no Agent shall then hold any Notes as
principal purchased pursuant to a Terms Agreement, to the time the Company shall
determine that solicitation of purchases of the Notes should be resumed or shall
subsequently enter into a new Terms Agreement with such Agent.
(m) Public Reports. The Company will furnish to the Agents, at the
earliest time the Company makes the same available to others, copies of their
annual reports and other financial reports furnished or made available to the
public generally.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to solicit offers to purchase the Notes
as agent of the Company, the obligations of any purchasers of the Notes sold
through such Agent as agent, and any obligation of an Agent to purchase Notes
pursuant to a Terms Agreement or otherwise will be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
and to the accuracy of the statements of the officers of the Company made in any
certificate furnished pursuant to the provisions hereof, to the performance and
observance by the Company of all their respective covenants and agreements
herein contained and to the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Counsel to the Company. The opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Counsel to the Company to the effect that:
(i) The Company is duly registered as a bank
holding company under the Bank Holding Act.
(ii) The Indenture has been duly authorized,
executed and delivered by the Company and duly qualified under
the Trust Indenture Act of 1939 and constitutes a valid and
legally binding obligation to the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer,
13
14
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(iii) The series of Notes has been duly authorized
and established in conformity with the Indenture, and, when
the terms of a particular Note and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, such Note
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and delivered against payment in
accordance with this Agreement, such Note will constitute a
valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(iv) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company on or prior to the date hereof under the federal laws
of the United States and the laws of the State of New York for
the issuance, sale and delivery of the Notes by the Company to
or through one or more Agents have been obtained or made;
provided, however, that such counsel need express no opinion
with respect to state securities laws.
(v) This Agreement has been duly authorized,
executed and delivered by the Company.
(vi) The execution and delivery by the Company of
the Indenture did not, and the execution and delivery by the
Company of this Agreement do not, and the preparation,
execution and issuance of each particular Note in accordance
with the Indenture, the sale by the Company of such Note in
accordance with this Agreement, and the performance by the
Company of its obligations under the Indenture, this Agreement
and the Notes will not (a) violate the articles of
incorporation or by-laws of the Company as in effect on the
date hereof, or (b) violate any existing federal law of the
United States applicable to the Company; provided, however,
that, for the purposes of this paragraph (xi), such counsel
need express no opinion with respect to federal or state
securities laws, other antifraud laws, fraudulent transfer
laws, the Employee Retirement Income Security Act of 1974 and
related laws, and laws that restrict transactions between
United States persons and certain foreign countries; provided,
further, that insofar as
14
15
performance by the Company of its obligations under the Indenture, this
Agreement and the Notes is concerned, such counsel need express no
opinion as to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights.
(vii) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, (i) no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act
and (ii) no proceedings therefor have been initiated or
threatened by the SEC.
(viii) As counsel to the Company such counsel has
reviewed the Registration Statement and the Prospectus,
participated in discussions with representatives of the
Agents, the Company and their accountants, and advised the
Company as to the requirements of the 1933 Act and the
applicable rules and regulations thereunder, and on the basis
of the information that such counsel gained in the course of
the performance of their services considered in the light of
their understanding of the applicable law, including the
requirements of Form S-3 and the character of the prospectus
contemplated thereby, and the experience they have gained
through their practice under the 1933 Act, such counsel
confirm that, in their opinion, each part of the Registration
Statement, when such part became effective, and the
Prospectus, as of the date of the prospectus supplement
forming part thereof, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the 1933 Act, the Trust Indenture Act, and the
applicable rules and regulations of the SEC thereunder; and
that nothing has come to their attention in the course of
their review that has caused them to believe that any part of
the Registration Statement, when such part became effective or
(if such opinion is being delivered in connection with a Terms
Agreement pursuant to Section 3(b) hereof) at the date of any
Terms Agreement and at the Settlement Date with respect
thereto, as the case may be, contains or contained any untrue
statement of a material fact or omits or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; or that the
Prospectus, on the date of the Prospectus Supplement forming
part thereof, or (if such opinion is being delivered in
connection with a Terms Agreement pursuant to Section 3(b)
hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be,
contains or contained any untrue statement of a material fact
or omits or omitted to state a
15
16
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Such counsel may say that the limitations inherent in the independent
verification of factual matters and the character of determinations
involved in the registration process are such that they do not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
except (i) for those made under the captions "Description of Debt
Securities and Guarantees" and "Plan of Distribution" and the
appropriate sections in any Prospectus Supplement describing the
securities offered thereby, insofar as they relate to provisions of
documents therein described and (ii) the accuracy of the descriptions
of the Federal laws of the United States contained in the Registration
Statement and Prospectus under the captions "Certain Regulatory
Matters" and "United States Taxation" and that they do not express any
opinion or belief as to the financial statements or other financial
data contained in the Registration Statement and the Prospectus, as to
the statement of the eligibility and qualification of the Trustee under
the Indenture; and that their letter is furnished as counsel for the
Company to the Agents and is solely for the benefit of the Agents.
Such counsel may base their opinions, as to certain questions of fact,
on certificates of officers of the Company and may rely as to all matters
relating to the laws of the Commonwealth of Puerto Rico upon the opinion of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, delivered pursuant to Section 5(b)(2) hereof.
(2) Opinion of Puerto Rico Counsel to the Company. The opinion of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Puerto Rico Counsel to the Company, to the effect
that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the Commonwealth of Puerto Rico.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement.
(iii) The Company is not required to register as a
foreign corporation in any jurisdiction in order to conduct
the business presently conducted by it.
(iv) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation or
16
17
a bank in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Registration Statement, and, to the best of
such counsel's knowledge and information, is duly qualified as
a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases
substantial properties or 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 on the Company and its subsidiaries taken as a
whole; and all of the issued and outstanding capital stock of
each such Significant Subsidiary has been duly authorized and
validly issued and is 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 for directors' qualifying
shares, is owned, directly or through such subsidiaries, by the
Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(v) This Agreement has been duly authorized,
executed and delivered by the Company.
(vi) The Indenture has been duly and validly
authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(vii) The series of Notes has been duly authorized
and established in conformity with the Indenture, and, when
the terms of a particular Note and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, such Note
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and delivered against payment in
accordance with this Agreement, such Note will constitute a
valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
17
18
(viii) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company on or prior to the date hereof under the federal laws
of the United States and the General Corporation Law of the
Commonwealth of Puerto Rico for the issuance, sale and
delivery of the Notes by the Company to or through one or more
Agents have been obtained or made; provided, however, that
such counsel need express no opinion with respect to state
securities laws.
(ix) To the best of such counsel's knowledge,
neither the Company nor any of the Significant Subsidiaries is
in violation of its charter or in default in the performance
or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage,
loan agreement, note or lease known to such counsel to which
it or any of them is a party or by which their properties may
be bound; the execution and delivery by the Company of the
Indenture and the Distribution Agreement and any Terms
Agreement do not, and the preparation, execution and issuance
of each particular Note in accordance with the Indenture, the
sale by the Company of such Note in accordance with the
Distribution Agreement, and the performance by the Company of
its respective obligations under the Indenture, the
Distribution Agreement, the Notes and any Terms Agreement will
not (a) violate the articles of incorporation or by-laws of
the Company, (b) violate any Federal law of the United States
or any law of the Commonwealth of Puerto Rico existing on the
date of such opinion or any administrative regulation or
administrative or court decree applicable to the Company or
any Significant Subsidiary or (c) conflict with or constitute
a breach of, or a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Significant
Subsidiaries pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument known to such
counsel to which the Company or any of the Significant
Subsidiaries is a party or by which any of them may be bound,
or to which any of the property or assets of the Company or
any of the Significant Subsidiaries is subject, which breach,
default, imposition or violation would, in each case, have a
material adverse effect on the Company and its subsidiaries
taken as a whole; provided, however, that such counsel need
express no opinion with respect to Federal securities laws,
other antifraud laws, fraudulent transfer laws, the Employee
Retirement Income Security Act of 1974 and related laws, and
laws that restrict
18
19
transactions between United States persons and citizens or
residents of certain foreign countries; provided, further, that
insofar as performance by the Company of its obligations under
the Indenture, the Distribution Agreement, any Terms Agreement
and the Notes is concerned, such counsel need express no
opinion as to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights.
(x) To the best of such counsel's knowledge and
information, there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in
the Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or to which any of its
property or assets is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business of the Company or any such
subsidiary, are, considered in the aggregate, not material.
(xi) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments or documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto; and the descriptions thereof or
references thereto are correct in all material respects.
(xii) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the SEC.
(xiii) At the time the Registration Statement
became effective, the Registration Statement (other than the
financial statements, schedules and other financial data
included or incorporated by reference therein as to which no
opinion need be rendered by such counsel) complied as to form
in all material respects with the requirements of the 1933
Act, the 1939 Act and the regulations under each of those
acts.
(xiv) Each document filed pursuant to the 1934 Act
and incorporated by reference in the Prospectus compiled
19
20
when filed as to form in all material respects with the 1934
Act and the 1934 Act Regulations thereunder.
(xv) As counsel to the Company such counsel has
reviewed the Registration Statement and the Prospectus,
participated in discussions with representatives of the
Agents, the Company and their accountants, and advised the
Company as to the requirements of the 1933 Act and the
applicable rules and regulations thereunder, and on the basis
of the information that such counsel gained in the course of
the performance of her services considered in the light of her
understanding of the applicable law, including the
requirements of Form S-3 and the character of the prospectus
contemplated thereby, such counsel confirms that, in her
opinion, each part of the Registration Statement, when such
part became effective, and the Prospectus, as of the date of
the prospectus supplement forming part thereof, appeared on
their face to be appropriately responsive in all material
respects to the requirements of the 1933 Act, the Trust
Indenture Act, and the applicable rules and regulations of the
SEC thereunder; and that nothing has come to her attention in
the course of her review that has caused her to believe that
any part of the Registration Statement, when such part became
effective (within the meaning of the 1933 Act) or (if such
opinion is being delivered in connection with a Terms
Agreement pursuant to Section 3(b) hereof) at the date of any
Terms Agreement and at the Settlement Date with respect
thereto, as the case may be, contains or contained any untrue
statement of a material fact or omits or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; or that the
Prospectus, on the date of the Prospectus Supplement forming
part thereof, or (if such opinion is being delivered in
connection with a Terms Agreement pursuant to Section 3(b)
hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be,
contains or contained any untrue statement of a material fact
or omits or omitted 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. Such
counsel may say that the limitations inherent in the
independent verification of factual matters and the character
of determinations involved in the registration process are
such that she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus except for
those made under the captions "Certain Regulatory Matters",
"Description of Debt Securities and Guarantees" and "Plan of
Distribution" and the appropriate sections in any
20
21
Prospectus Supplement describing the securities offered thereby
and under "Regulation and Supervision" in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, insofar as they relate to provisions of documents therein
described and that she does not express any opinion or belief
as to the financial statements or other financial data
contained in the Registration Statement and the Prospectus, as
to the statement of the eligibility and qualification of the
Trustee under the Indenture; and that her letter is furnished
as counsel for the Company to the Agents and is solely for the
benefit of the Agents.
Such counsel may base her opinion, as to certain questions of
fact, on certificates of officers of the Company and may rely as to all
matters relating to the laws of the State of New York upon the opinion
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, delivered pursuant to Section 5(a)(1).
(3) Opinion of Counsel to the Agents. The opinion of
▇▇▇▇▇ & ▇▇▇▇, counsel to the Agents, covering the matters referred to
in subparagraph (1) above under the subheadings (i), (v), (vi), (viii)
and (x) and in subparagraph (2) above under the subheading (xi).
(4) In giving its opinion required by subsection (a)(3)
of this Section, Brown & Wood shall additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement (other than the financial statements, schedules
and other financial data included or incorporated by reference therein
as to which no opinion need be rendered by such counsel), at the time
it became effective, and if an amendment to the Registration Statement
or an Annual Report on Form 10-K has been filed by the Company with the
SEC subsequent to the effectiveness of the Registration Statement, then
at the time such amendment became effective or at the time of the most
recent such filing, and at the date hereof, or (if such opinion is
being delivered in connection with a Terms Agreement pursuant to
Section 3(b) hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be, contains or
contained an untrue statement of a material fact or omits or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the
Prospectus (other than the financial statements, schedules and other
financial data included or incorporated by reference therein as to
which no opinion need be rendered by such counsel), as amended or
supplemented at the date hereof, or (if such opinion is being delivered
in connection with a Terms Agreement pursuant to Section 3(b) hereof)
at the date of any Terms Agreement and at the Settlement Date with
respect thereto, as the case may be,
21
22
contains an untrue statement of a material fact or omits 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.
(b) Officer's Certificates. At the date hereof, the Agents shall
have received certificates of the President or Vice President of the Company,
dated as of the date hereof, to the effect that (i) since the respective dates
as of which information is given in the Registration Statement and the
Prospectus or since the time that any applicable Terms Agreement was entered
into, there has not been any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) the other representations and
warranties of the Company contained in Section 2 hereof are true and correct
with the same force and effect as though expressly made at and as of the date of
such certificate, (iii) the Company has performed or complied with all
agreements and satisfied all conditions on their respective parts to be
performed or satisfied at or prior to the date of such certificate, and (iv)
that no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the SEC.
(c) Comfort Letter. The Agents on the date hereof (and any Agent
who is party to a Terms Agreement, on the Settlement Date with respect to such
Terms Agreement, if required by such Terms Agreement), shall receive a letter
from Price Waterhouse LLP, the Company's independent public accountants, dated
as of the date hereof or such Settlement Date, in form and substance reasonably
satisfactory to the Agents containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
contemplated by Statement of Auditing Standards No. 72 with respect to the
financial statements and certain financial information contained in or
incorporated by reference in the Registration Statement and the Prospectus, and
confirming that they are independent accountants within the meaning of the 1933
Act and the 1933 Act Rules.
(d) Other Documents. On the date hereof and on each Settlement
Date with respect to any applicable Terms Agreement, counsel to the Agents shall
have been furnished with such documents as such counsel may reasonably require
for the purpose of enabling such counsel to pass upon the issuance and sale of
Notes as herein contemplated and related proceedings and all proceedings taken
by the Company in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
22
23
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 Agents (or any applicable Terms Agreement may, at the option of the Agent
who is party to such Terms Agreement, be terminated by such Agent) by notice to
the Company at any time and any such termination shall be without liability of
any party to any other party, except that the covenant regarding provision of an
earnings statement set forth in Section 4(h) hereof, the provisions concerning
payment of expenses under Section 10 hereof, the indemnity and contribution
agreement set forth in Sections 8 and 9 hereof, the provisions of Section 11
hereof concerning the survival of representations, warranties and agreements
following delivery hereof, the provisions set forth under "Parties" of Section
15 hereof and the provisions of Section 16 hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through the Agents as agents shall be made by
the Company to the Agents for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the Agents shall promptly notify the Company and deliver
the Note to the Company, and, if the Agents have theretofore paid the Company
for such Note, the Company will promptly return such funds to the Agents. If
such failure occurred for any reason other than default by the Agents in the
performance of their obligations hereunder, the Company will reimburse the
Agents on an equitable basis for their loss of the use of the funds for the
period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Reaffirmation of Representations and Warranties. Each
acceptance by it of an offer for the purchase of Notes, and each delivery of
Notes to an Agent pursuant to a Terms Agreement, shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore delivered to the Agents or an
Agent, as the case may be, pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to the purchaser or his agent, or to the Agents or an Agent, as the case may be,
of the Note or Notes relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration
23
24
Statement and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of Notes or similar changes and other than by an amendment or supplement
which relates exclusively to an offering of debt securities other than the Notes
or an offering of preferred stock of the Company or its subsidiaries) or there
is filed with the SEC any document incorporated by reference into the Prospectus
(other than (i) any Current Report on Form 8-K relating exclusively to the
issuance of debt securities or preferred stock under the Registration Statement
or (ii) a document filed pursuant to Section 14 of the 1934 Act unless requested
by the Agents) or (if required pursuant to the terms of a Terms Agreement) the
Company sells Notes to an Agent pursuant to a Terms Agreement, the Company shall
furnish or cause to be furnished to the Agents (or, in the case of a sale of
Notes to an Agent pursuant to a Terms Agreement, to such Agent) forthwith
certificates dated the date of filing with the SEC of such supplement or
document, the date of effectiveness of such amendment, or the date of such sale,
as the case may be, in form satisfactory to the Agents or such Agent, as the
case may be, to the effect that the statements contained in the certificates
referred to in Section 5(b) hereof which were last furnished to the Agents are
true and correct at the time of such amendment, supplement, filing or sale, as
the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificates, certificates of the same tenor as the certificates referred to in
said Section 5(b), modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of such
certificates.
(c) Subsequent Delivery of Legal Opinions. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of the Notes or similar changes or solely for the inclusion of additional
financial information, and, unless the Agents shall otherwise specify, other
than by an amendment or supplement which relates exclusively to an offering of
debt securities other than the Notes or an offering of preferred stock of the
Company or its subsidiaries) or there is filed with the SEC any document
incorporated by reference into the Prospectus (other than (i) any Current Report
on Form 8-K or (ii) a document filed pursuant to Section 14 of the 1934 Act, in
each case, unless the Agents shall otherwise reasonably request), or (if
required pursuant to the terms of a Terms Agreement) the Company sells Notes to
an Agent pursuant to a Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to the Agents (or,
24
25
in the case of a sale of Notes to an Agent pursuant to a Terms Agreement, to
such Agent), with a copy to counsel to the Agents, a written opinion or opinions
of Puerto Rico Counsel to the Company satisfactory to the Agents or such Agent,
as the case may be, dated the date of filing with the SEC of such supplement or
document, the date of effectiveness of such amendment, or the date of such sale,
as the case may be, in form and substance satisfactory to the Agents or such
Agent, as the case may be, of the same tenor as the opinion referred to in
Section 5(a)(2) hereof, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion; or, in lieu of such opinion or opinions,
counsel last furnishing such opinion to the Agents or such Agent, as the case
may be, shall furnish the Agents or such Agent, as the case may be, with a
letter to the effect that the Agents or such Agent, as the case may be, may rely
on such last opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains additional
financial information (other than a Current Report on Form 8-K filed solely for
the purpose of incorporating a press release relating to the Company's interim
or annual financial statements or results of operations or filed in connection
with the issuance of preferred stock by the Company or its subsidiaries pursuant
to the Registration Statement) or (if required pursuant to the terms of a Terms
Agreement) the Company sells Notes to an Agent pursuant to a Terms Agreement,
the Company shall cause Price Waterhouse LLP forthwith to furnish the Agents
(or, in the case of a sale of Notes to an Agent pursuant to a Terms Agreement,
to such Agent) with a letter, dated the date of effectiveness of such amendment,
supplement or document with the SEC, or the date of such sale, as the case may
be, in form satisfactory to the Agents or such Agent, as the case may be, of the
same tenor as the portions of the letter referred to in Section 5(c) hereof but
modified to relate to the Registration Statement and Prospectus, as amended and
supplemented to the date of such letter; provided, however, that if the
Registration Statement or the Prospectus is amended or supplemented solely to
include financial information as of and for a fiscal quarter, Price Waterhouse
LLP may limit the scope of such letter to the unaudited financial statements
included in such amendment or supplement unless any other information included
therein of an accounting, financial or statistical nature is of such a nature
that, in the reasonable judgment of the Agents or such Agent, as the case may
be, such letter should cover such other information.
25
26
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify
and hold harmless each Agent and each person, if any, who controls such Agent
within the meaning of Section 15 of the 1933 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), 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 contained in 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,
unless such untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company by the Agents expressly for use in
the Registration Statement or the Prospectus;
(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 of 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 the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Agents),
reasonably incurred in investigating, preparing or defending against
any litigation, or 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.
The indemnity is subject to the condition that, insofar as it relates to any
untrue statement or omission, or any alleged untrue statement or omission, made
in the Prospectus but eliminated or remedied in an amended or supplemented
Prospectus at the time of the sale of the related Note, it shall not inure to
the benefit of any Agent (or to the benefit of any person who controls any such
Agent) if a copy of the Prospectus as amended or supplemented at the time of the
sale of such Note, excluding documents incorporated
26
27
therein by reference, was not sent or given to such person at or prior to the
time required by the 1933 Act and the receipt of such Prospectus as amended or
supplemented would have constituted a sufficient defense to the claim asserted
by such person.
(b) Indemnification of the Company. Each Agent agrees to indemnify
and hold harmless the Company, its directors, the officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 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) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto).
(c) General. 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. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel) for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 hereof
is for any reason held to be unavailable to or insufficient to hold harmless the
indemnified parties although applicable in accordance with its terms, the
Company and the Agents shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Agents, as incurred, in such
proportions that each Agent is responsible for that portion represented by the
percentage that the total commissions and underwriting discounts received by
such Agent to the date of such liability bears to the total sales price received
by the Company from the sale of Notes to the date of such liability, and the
Company is responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution
27
28
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Agent within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as the Agent, 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 1933 Act shall have the same
rights to contribution as the Company, as the case may be.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) The preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any
amendments or supplements thereto;
(ii) The preparation, filing and reproduction of this
Agreement;
(iii) The preparation, printing, issuance and delivery of
the Notes, including any fees and expenses relating to the use of
book-entry notes;
(iv) The fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any
calculation agent or exchange rate agent;
(v) The reasonable fees and disbursements of counsel to
the Agents incurred from time to time in connection with the
transactions contemplated hereby;
(vi) The qualification of the Notes under state securities laws
in accordance with the provisions of Section 4(i) hereof, including
filing fees and the reasonable fees and disbursements of legal counsel
in connection therewith and in connection with the preparation of any
Blue Sky Survey and any Legal Investment Survey;
(vii) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Agents of the Prospectus
and any amendments or supplements thereto in connection with
solicitations or confirmations of sales of the Notes;
(viii) The preparation, printing, reproducing and delivery
to the Agents of copies of each Indenture and all supplements and
amendments thereto;
28
29
(ix) Any fees charged by rating agencies for the rating of
the Notes;
(x) Any advertising and other out-of-pocket expenses of
the Agents incurred with the written approval of the Company;
(xi) The cost of preparing and providing any CUSIP or
other identification numbers for the Notes; and
(xii) The fees and expenses of any Depositary (as defined
in the Indentures) and any nominees thereof in connection with the
Notes.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of any Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
Terms Agreement) may be terminated for any reason, at any time by either the
Company or an Agent upon the giving of one day's written notice of such
termination to the other party hereto.
(b) Termination of a Terms Agreement. Any Agent may terminate any
Terms Agreement to which such Agent is a party, immediately upon notice to the
Company, at any time prior to the Settlement Date relating thereto (i) if there
has been, since the date of such Terms Agreement or since the respective dates
as of which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company or its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there shall have 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 the effect of
which is such as to make it, in the judgment of such Agent, impracticable to
market the Notes or enforce contracts for the sale of the Notes, or (iii) if
trading in any securities of the Company has been suspended by the SEC or a
national securities exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange shall have been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by
29
30
either of said exchanges or by order of the SEC or any other governmental
authority, or if a banking moratorium shall have been declared by either
Federal, New York or Puerto Rico authorities, or (iv) if the rating assigned by
any nationally recognized securities rating agency to any debt securities of the
Company as of the date of any applicable Terms Agreement shall have been lowered
since that date or if any such rating agency shall have publicly announced since
the time of the applicable Terms Agreement that it has placed any debt
securities of the Company on what is commonly termed a "watch list" for possible
downgrading.
(c) General. In the event of any such termination, no party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the Note
or Notes relating thereto has not occurred, the covenants set forth in Sections
4 and 7 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in Section 4(h)
hereof, the provisions of Section 5 hereof, the indemnity and contribution
agreements set forth in Sections 8 and 9 hereof, and the provisions of Sections
11, 14 and 16 hereof shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
BanPonce Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President
30
31
If to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10281-1310
10th Floor
Attention: MTN Product Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to CS First Boston Corporation:
CS First Boston Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Short and Medium-Term Note Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to First Chicago Capital Markets, Inc.:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-0327
Attention: Chief Credit Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company against one or more Agents in
connection with or arising under this Agreement shall be brought solely in the
state or federal court of appropriate jurisdiction located in the Borough of
Manhattan, The City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors.
31
32
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 and
directors referred to in Sections 8 and 9 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 respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Notes shall be deemed to be a successor by reason merely of such
purchase.
SECTION 16. Consent to Jurisdiction; Appointment of Agent to Accept
Service of Process.
(a) The Company irrevocably consents and agrees, for the benefit
of the holders from time to time of the Notes, the Agents and the other persons
referred to in Section 15 that any legal action, suit or proceeding against it
with respect to its obligations, liabilities or any other matter arising out of
or in connection with the Notes, this Agreement or any Terms Agreement may be
brought in the courts of the State of New York or the courts of the United
States of America located in The City of New York and, until all amounts due and
to become due in respect of all the Notes have been paid, or until any such
legal action, suit or proceeding commenced prior to such payment has been
concluded, hereby irrevocably consent and submit to the non-exclusive
jurisdiction of each such court in personam, generally and unconditionally with
respect to any action, suit or proceeding for themselves and in respect of their
properties, assets and revenues.
(b) The Company hereby irrevocably designates, appoints, and
empowers ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with offices currently at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, service of any and all legal process,
summons, notices and documents that may be served in any action, suit or
proceeding brought against the Company in any such United States or State court
with respect to their respective obligations, liabilities or any other matter
arising out of or in connection with this Agreement or any Terms Agreement and
that may be made on such designee, appointee and agent in accordance with legal
procedures prescribed for such courts. If for any reason the Designated Agent
shall cease to be available to act as such, the Company agrees to designate a
new designee, appointee and agent in The City of New York on the terms and for
the purposes of this Section 16 reasonably satisfactory to the Agents. The
Company further hereby irrevocably consents and agrees to the service of any and
all legal process, summons, notices and documents in any such action, suit or
proceeding against it by serving a copy thereof upon the relevant agent for
32
33
service of process referred to in this Section 16 (whether or not the
appointment of such agent shall for any reason prove to be ineffective or such
agent shall accept or acknowledge such service) or by mailing copies thereof by
the Company at its address specified in or designated pursuant to this
Agreement. The Company agrees that the failure of any such designee, appointee
and agent to give any notice of such service to it shall not impair or affect in
any way the validity of such service or any judgment rendered in any action or
proceeding based thereon. Nothing herein shall in any way be deemed to limit the
ability of the holders of the Notes, the Agents and the other persons referred
to in Section 15 to serve such legal process, summons, notices and documents in
any other manner permitted by applicable law or to obtain jurisdiction over the
Company or bring actions, suits or proceedings against the Company in such other
jurisdictions, and in such manner, as may be permitted by applicable law. The
Company hereby irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any of the aforesaid actions, suits or proceedings arising out of or
in connection with this Agreement brought in the United States federal courts
located in The City of New York or the courts of the State of New York located
in The City of New York and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.
(c) The provisions of this Section 16 shall survive any
termination of this Agreement, in whole or in part.
33
34
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to us a one or more counterparts hereof,
whereupon this instrument along with all counterparts will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
BANPONCE CORPORATION
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
Accepted:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
CS FIRST BOSTON CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
34
