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EXHIBIT (1)(b)
BANPONCE CORPORATION
MEDIUM-TERM NOTES DUE FROM
9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
October 6, 1995
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
North Tower
New York, New York 10281
CS FIRST BOSTON CORPORATION
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx 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.
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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
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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
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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
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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.
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(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'
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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.
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(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.
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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
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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.
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(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
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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
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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
Xxxxxxxx & Xxxxxxxx, 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,
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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
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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
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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
Xxxxxxxx Xxxxxx xx Xxxxxxx, delivered pursuant to Section 5(b)(2) hereof.
(2) Opinion of Puerto Rico Counsel to the Company. The opinion of
Xxxxxxxx Xxxxxx xx Xxxxxxx, 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
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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.
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(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
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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
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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
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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 Xxxxxxxx & Xxxxxxxx, delivered pursuant to Section 5(a)(1).
(3) Opinion of Counsel to the Agents. The opinion of
Xxxxx & Xxxx, 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,
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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.
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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
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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,
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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.
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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
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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
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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;
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(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
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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
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx,
Executive Vice President
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If to Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1310
10th Floor
Attention: MTN Product Management
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to CS First Boston Corporation:
CS First Boston Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Short and Medium-Term Note Department
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to First Chicago Capital Markets, Inc.:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0327
Attention: Chief Credit Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
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.
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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 Xxxxxxx Xxxxxx, with offices currently at 0 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 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
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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.
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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/ Xxxxx X. Xxxxxx, Xx.
------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: Executive Vice President
Accepted:
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
CS FIRST BOSTON CORPORATION
By:/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By:/s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
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EXHIBIT A
The following terms, if applicable, shall be agreed to by the Company
and any Agent which is a party to a Terms Agreement pursuant to such Terms
Agreement:
Principal Amount: $_______
(or principal amount of foreign currency or currency
unit)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Dates:
Interest Payment Dates:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Optional Repayment Date(s), if any:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b)
of the Distribution Agreement.
Legal Opinion pursuant to Section 7(c)of the
Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the
Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
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SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the Agents, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
PRINCIPAL
MATURITY RANGES AMOUNT
--------------- ----------
From 9 months but less than 1 year . . . . . . . . . . . . . . . .125%
From 1 year but less than 18 months . . . . . . . . . . . . . . . .150
From 18 months but less than 2 years . . . . . . . . . . . . . . .200
From 2 years but less than 3 years . . . . . . . . . . . . . . . .250
From 3 years but less than 4 years . . . . . . . . . . . . . . . .350
From 4 years but less than 5 years . . . . . . . . . . . . . . . .450
From 5 years but less than 6 years . . . . . . . . . . . . . . . .500
From 6 years but less than 7 years . . . . . . . . . . . . . . . .550
From 7 years but less than 8 years . . . . . . . . . . . . . . . .600
From 8 years but less than 9 years . . . . . . . . . . . . . . . .600
From 9 years but less than 10 years . . . . . . . . . . . . . . . .600
From 10 years but less than 15 years . . . . . . . . . . . . . . .625
From 15 years but less than 20 years . . . . . . . . . . . . . . .700
From 20 years to 30 years . . . . . . . . . . . . . . . . . . . . .750
