1
[__________] Shares
W HOLDING COMPANY, INC.
[_____] % Non-cumulative Monthly Income Preferred Stock, 2001 Series C
UNDERWRITING AGREEMENT
March __, 2001
UBS PAINEWEBBER INCORPORATED OF PUERTO RICO
As lead underwriter of the underwriters
named in Schedule 0
Xxxxxxxx Xxxxxxxxxxxxx Xxxxx, Penthouse Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Ladies and Gentlemen:
W HOLDING COMPANY, INC., a corporation organized under the laws of
Puerto Rico (the "Company"), proposes to sell an aggregate of __________
shares (the "Firm Shares") of the Company's [_____]% Non-cumulative Monthly
Income Preferred Stock, 2001 Series C (the "Series C Preferred Stock"), which
are to be issued and sold by the Company to you and the other underwriters
named in Schedule 1 hereto (collectively, the "Underwriters"), for whom you
are acting as representative (the "Representative"). The Company also has
agreed to grant you and the other Underwriters an option (the "Option") to
purchase up to an additional __________ shares of Series C Preferred Stock
(the "Option Shares") on the terms and for the purposes set forth in Section
1(b) hereto. The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The Company hereby confirms its agreements with the Representative
and the other Underwriters (the "Agreement") as follows.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties, and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter and
each Underwriter, severally and not jointly, agrees to purchase from the Company
at a purchase price of $__________ per share, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule 1 hereto, plus such
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additional number of Firm Shares which such Underwriter may become obligated to
purchase pursuant to Section 9 hereof.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the Underwriters to purchase,
severally and not jointly, the Option Shares at the same price per share as
the Underwriters shall pay for the Firm Shares. The Option may be exercised
only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time and from
time to time on or before the thirtieth (30th) day after the date of this
Agreement (or on the next business day if the thirtieth (30th) day is not a
business day), upon notice by the Representative to the Company (the "Option
Shares Notice"), in writing or by telephone (confirmed in writing), no later
than 5:00 p.m., New York city Time, at least two (2) and no more than five (5)
business days before the date specified for closing in the Option Shares
Notice (the "Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice and each
Underwriter will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing hereunder,
as adjusted by the Representative in such manner as it deems advisable to
avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representative for the accounts of the Underwriters at the office
of Xxxxxxxx Xxxxxxx & Xxxxxxxx, P.S.C., counsel to the Underwriters, Hato Rey
Tower, Suite 600, 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx Xxxx 00000, or
such other place as may be agreed upon by the Company and the Representative,
against payment of the purchase price by wire transfer of immediately
available funds to the bank account designated by the Company. Such payment
shall be made at 10:00 a.m., New York city time, on the third full business
day following the date of this Agreement, or at such other time on such other
date, not later than seven (7) business days after the date of this Agreement
as may be agreed upon by the Company and the Representative (such date is
hereinafter referred to as the "Closing Date"). Time shall be of the essence
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder.
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representative shall request at least two (2) business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written notice
to the Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection
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at least twenty-four (24) hours prior to the Closing Date or the Option
Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with
the issuance, sale, and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal, state, or Commonwealth of Puerto Rico
stamp and other transfer taxes, if any, which may be payable or determined to
be payable in connection with the original issuance, sale, or delivery to such
Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants, and covenants to each Underwriter that:
(a) If the offering of the Shares is a Delayed
Offering (as specified in Schedule I hereto), paragraph (i) below is
applicable and, if the offering of the Shares is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company and the Shares meet the requirements
for the use of Form S-3 under the Securities Act of 1933 (the "Act"), and the
Company has filed with the Securities and Exchange Commission (the "SEC") a
Registration Statement (as defined below) (the file number of which is set
forth in Schedule I hereto) on such Form, including a Basic Prospectus (as
defined below), for registration under the Act of the offering and sale of the
Shares. The Company may have filed one or more amendments thereto, and may
have used a Prospectus Supplement (as defined below), each of which has
previously been furnished to you. Such registration statement, as so amended,
has become effective. The offering of the Shares is a Delayed Offering and,
although the Basic Prospectus may not include all the information with respect
to the Shares and the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus (as defined below), the
Basic Prospectus includes all such information required by the Act and the
rules thereunder to be included therein as of the Effective Date (as defined
below). The Company will next file with the SEC pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus (the "Prospectus
Supplement") included in such registration statement relating to the Shares
and the offering thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Shares and the offering
thereof and, except to the extent the Representative shall agree in writing to
a modification, shall be in all substantive respects in the form furnished to
you prior to the Closing Date or, to the extent not completed at the Closing
Date, shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any Preliminary
Final Prospectus) as the Company has advised you, prior to the Closing Date,
will be included or made therein.
(ii) The Company and the Shares meet the requirements for
the use of Form S-3 under the Act and the Company has filed with the SEC a
registration statement (the file number of which is set forth in Schedule I
hereto) on such Form, including a basic prospectus, for registration under the
Act of the offering and sale of the Shares. The Company may have filed one or
more amendments thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will next file with
the SEC either (x) a final prospectus supplement relating to the Shares in
accordance with Rules 430A and 424(b)(1) or
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(4), or (y) prior to the effectiveness of such registration statement, an
amendment to such registration statement, including the form of final
prospectus supplement. In the case of clause (x), the Company has included in
such registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with respect to the Shares
and the offering thereof. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, with respect
to the Shares and the offering thereof and, except to the extent the
Representative shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Closing Date
or, to the extent not completed at the Closing Date, shall contain only such
specific additional information and other changes (beyond that contained in
the Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Closing Date, will be included or made therein.
(b) The term "Preliminary Prospectus" as used herein
means a preliminary prospectus relating to the Shares included at any time as
part of the foregoing registration statement or any amendment thereto before
it became effective under the Act and any prospectus filed with the Commission
by the Company pursuant to Rule 424(a) of the Rules and Regulations. Copies of
such registration statement and amendments and of each related Preliminary
Prospectus have been delivered to the Representative. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective, will be filed promptly by the
Company with the Commission. If such registration statement has become
effective, a final prospectus relating to the Shares containing information
permitted to be omitted at the time of effectiveness by Rule 430A will be
filed by the Company with the Commission in accordance with Rule 424(b) of the
Rules and Regulations promptly after execution and delivery of this Agreement.
The term "Registration Statement" means the registration statement as amended
at the time it becomes or became effective (the "Effective Date"), including
all financial statements and schedules and all exhibits, documents
incorporated therein by reference, and all information contained in any final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or in a term sheet described in Rule 434 of the Rules and
Regulations in accordance with Section 4 hereof and deemed to be included
therein as of the Effective Date by Rule 430A of the Rules and Regulations and
including any registration statement filed pursuant to Rule 462(b) of the
Rules and Regulations (a "Rule 462 Registration Statement") increasing the
size of the offering. The term "Prospectus" means the prospectus relating to
the Shares as first filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or, if no such filing is required, the form of final
prospectus relating to the Shares included in the Registration Statement at
the Effective Date. References herein to any document or other information
incorporated by reference in the Registration Statement shall include
documents or other information incorporated by reference in the Prospectus
(or, if the Prospectus is not in existence, in the most recent Preliminary
Prospectus). References herein to any Preliminary Prospectus or the Prospectus
shall be deemed to include all documents and information incorporated by
reference therein and shall be deemed to refer to and include any documents
and information filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, and so incorporated by reference, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
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(c) On the date that any Preliminary Prospectus was
filed with the Commission, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to
and including the Closing Date and, if later, the Option Closing Date, and
when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement, each Preliminary Prospectus, and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did or will comply with all applicable
provisions of the Act and the Rules and Regulations and did or will contain
all statements required to be stated therein in accordance with the Act and
the Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement or any such amendment did or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not or will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representative specifically for inclusion in the Registration Statement, each
Preliminary Prospectus or Prospectus or any amendment or supplement thereto.
There are no contracts or other documents required to be filed as exhibits to
the Registration Statement by the Act or the Rules and Regulations that have
not been so filed. The documents which are incorporated by reference in any
Preliminary Prospectus or the Prospectus or from which information is so
incorporated by reference, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects with the
requirements of the Act and the Rules and Regulations or the Exchange Act and
the rules and regulations thereunder, as applicable, and did not, when such
documents were so filed, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and any documents so filed and
incorporated by reference subsequent to the effective date of the Registration
Statement shall, when they are filed with the Commission, conform in all
material respects with the requirements of the Act, the Rules and Regulations,
and the Exchange Act and the rules and regulations thereunder, as applicable.
(d) The only directly or indirectly controlled
subsidiary of the Company is Westernbank Puerto Rico ("Westernbank" or the
"Subsidiary"). Except as set forth in the Prospectus (or, if the Prospectus is
not in existence, in the most recent Preliminary Prospectus) or as acquired in
connection with the exercise of its rights as a creditor, or pursuant to a
bona fide collateral pledge arrangement, neither the Company nor the
Subsidiary owns, nor at the Closing Date and the Option Closing Date, will own
an interest in any corporation, partnership, trust, joint venture, or other
business entity. The Company has been and, at the Closing Date and
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Option Closing Date, will be duly organized and validly existing as a
corporation under the laws of the Commonwealth of Puerto Rico and is and, at
the Closing Date and Option Closing Date, will be in good standing with the
Commonwealth of Puerto Rico. The Company is treated as a financial holding
company under the Bank Holding Company Act of 1956 and is and, at the Closing
Date and Option Closing Date will be in good standing with the Board of
Governors of the Federal Reserve System (the "Federal Reserve"). The
Subsidiary is and, at the Closing Date and Option Closing Date, will be a
commercial bank duly organized, validly existing, and in good standing under
the laws of its respective jurisdiction of incorporation. Each of the Company
and the Subsidiary is and, at the Closing Date and the Option Closing Date
will be, duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased, or licensed) or the nature or conduct of its business or use of its
property and assets makes such qualification necessary, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects, results of
operation, or business affairs of the Company and its Subsidiary taken as a
whole (each, a "Material Adverse Effect").
(e) The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable and are not subject to any preemptive or similar rights. The
Shares to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, validly issued, fully paid, and
non-assessable and will not be subject to any preemptive or similar rights.
The Company has, and, upon completion of the sale of the Shares, will have, an
authorized, issued, and outstanding capitalization as set forth in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The description of the
securities of the Company in or incorporated by reference in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) is, and at the Closing Date and Option
Closing Date, will be complete and accurate in all material respects. No
holders of securities of the Company are entitled to have such securities
registered under the Registration Statement, except where such rights have
been waived.
(f) The consolidated financial statements and the
related notes of the Company included in or incorporated therein by reference
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) present fairly the
financial condition of the Company and its Subsidiary as of the dates
indicated and the consolidated results of operations, and cash flows of the
Company and its Subsidiary for the periods covered thereby, all in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the entire periods involved. Xxxxxxxx & Touche LLP (the
"Accountants"), who have reported on those of such financial statements and
related notes which are audited, are independent accountants with respect to
the Company and its Subsidiary within the meaning of the Act and the
applicable and published rules and regulations.
(g) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to
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permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(h) Except as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and
prior to the Closing Date and Option Closing Date, (i) there has not been, and
will not have been, any material adverse change in the business, properties,
financial condition, net worth, or results of operations of the Company and
its Subsidiary considered as one enterprise; (ii) neither the Company nor its
Subsidiary has entered into, or will have entered into, any material
transactions other than pursuant to this Agreement; and (iii) the Company has
not, and will not have, paid or declared any dividends or other distributions
of any kind on any class of its capital stock, except for the payment or
declaration of monthly dividends on the Company's capital stock in the
ordinary course of its business.
(i) The Company and its Subsidiary have good and
marketable title to all properties and assets described in the Registration
Statement, including the documents incorporated by reference therein, and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), as owned by it, free and clear of all liens, security
interests, restrictions, pledges, encumbrances, charges, equities, claims,
easements, leases, and tenancies (collectively, "Encumbrances") other than
those described in the Registration Statement, including the documents
incorporated by reference therein, and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or those that
will not materially affect the value of such properties and assets or will not
interfere with the use made and proposed to be made of such properties and
assets. The Company and its Subsidiary have valid, subsisting, and enforceable
leases for the properties and assets described in the Registration Statement,
including the documents incorporated by reference therein, and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) as leased by them, free and clear of all Encumbrances, other than
those described in the Registration Statement, including the documents
incorporated by reference therein, and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), or those that
will not materially affect the value of such properties and assets or will not
interfere with the use made and proposed to be made of such properties and
assets.
(j) The Company and its Subsidiary are not required to
be registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(k) Except as set forth in the Registration Statement,
including the documents incorporated by reference therein, and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no actions, suits, arbitrations, claims, governmental
or other proceedings (formal or informal), or investigations pending or, or to
the Company's knowledge, threatened against or affecting the Company or its
Subsidiary or any
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directors, officers, or shareholders of the Company or its Subsidiary in their
respective capacities as such or any of the properties or assets owned or
leased by the Company or its Subsidiary, before or by any Federal, state, or
Commonwealth of Puerto Rico court, commission, regulatory body, administrative
agency, or other governmental body, domestic or foreign (collectively, a
"Governmental Body"), wherein an unfavorable ruling, decision, or finding
would have a Material Adverse Effect and would be required to be disclosed in
the Registration Statement, including the documents incorporated by reference
therein, and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). Neither the Company nor the Subsidiary is
in violation of, or in default with respect to, any law, rule, regulation,
order, judgment, or decree, except as described in the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus) or
such as in the aggregate do not now have and can reasonably be expected in the
future not to have a Material Adverse Effect; nor is the Company or the
Subsidiary presently required under any order, judgment, or decree to take any
action in order to avoid any such violation or default.
(l) The Company and Westernbank have and, at the
Closing Date and Option Closing Date, will have all governmental licenses,
permits, consents, orders, approvals, franchises, certificates, and other
authorizations (collectively, "Licenses") necessary to carry on their
respective businesses, except such as where the failure thereto would have a
Material Adverse Effect, and own or lease their respective properties as
contemplated in the Registration Statement, including the documents
incorporated by reference therein, and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), except such as
where the failure thereto would have a Material Adverse Effect. To the
Company's knowledge, the Company and the Subsidiary have and, at the Closing
Date and Option Closing Date, will have complied in all material respects with
all laws, regulations, and orders applicable to it or its business, assets,
and properties. To the Company's knowledge, neither the Company nor the
Subsidiary is nor, at the Closing Date and Option Closing Date, will be in
default (nor has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the due performance and observation of
any term, covenant, or condition of any indenture, mortgage, deed of trust,
voting trust, agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract, or other agreement or
instrument (collectively, a "contract or other agreement") to which they are a
party or by which their respective properties are bound or affected, the
violation of which would individually or in the aggregate have a Material
Adverse Effect. There are no governmental proceedings or actions pending or,
to the Company's knowledge, threatened for the purpose of suspending,
modifying, or revoking any License held by the Company and the Subsidiary.
(m) No consent, approval, authorization or order of,
or any filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in
connection with the issuance and sale of the Shares by the Company, except
such as have been obtained and such as may be required under state or
Commonwealth of Puerto Rico securities or blue sky laws or the By-laws and
rules of the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution by the Underwriters of the
Shares to be sold hereby.
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(n) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed, and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and contribution
may be limited by applicable laws. Except as disclosed in the Registration
Statement, including the documents incorporated by reference therein, and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the execution, delivery, and the performance of this
Agreement and the consummation of the transactions contemplated hereby will not
result in the creation or imposition of any Encumbrance upon any of the
properties or assets of the Company or the Subsidiary pursuant to the terms or
provisions of, or result in a breach or violation of, or conflict with any of
the terms or provisions of, or constitute a default under, or give any other
party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, (i) the Certificate of Incorporation or
By-laws of the Company, in each case as amended; (ii) any contract or other
agreement to which the Company or the Subsidiary is a party or by which it or
any of the respective assets or properties are bound or affected, the violation
of which would individually or in the aggregate have a Material Adverse Effect;
or (iii) any judgment, ruling, decree, order, law, statute, rule, or regulation
of any Governmental Body applicable to the Company or the Subsidiary or their
respective businesses or properties, the violation of which would individually
or in the aggregate have a Material Adverse Effect on the financial condition,
earnings, prospects, or business affairs of the Company and the Subsidiary.
(o) No statement, representation, or warranty made by
the Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representative was or will be when made,
inaccurate, untrue, or incorrect in any material respect. Each certificate
signed by an officer of the Company and delivered to the Representative or
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters covered thereby.
(p) Neither the Company nor any of its directors,
officers, or affiliates has taken, directly or indirectly, any action designed,
or which might reasonably be expected in the future, to cause or result in,
under the Act or otherwise, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares or otherwise.
(q) The Company has applied to list the Shares on the
Nasdaq Stock Market's National Market ("NASDAQ"), subject only to notice of
issuance.
(r) Neither the Company nor the Subsidiary nor, to the
Company's knowledge, any employee or agent of the Company or the Subsidiary has
made any payment of funds of the Company or the Subsidiary or received or
retained any funds of the Company or the Subsidiary in violation of any law,
rule, or regulation which payment, receipt, or retention of
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funds is of a character required to be disclosed in the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
(s) The business, operations, and facilities of the
Company and the Subsidiary have been and are being conducted in compliance
with all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations, or requirements relating to occupational
safety and health, pollution, or protection of health or the environment
(including, without limitation, those relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic substances, materials, or wastes into ambient air, surface water,
groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment storage, disposal, transport, or handling of
chemical substances, pollutants, contaminants, or hazardous or toxic
substances, materials, or wastes, whether solid, gaseous, or liquid in nature)
of any Governmental Body, and all applicable judicial or administrative agency
or regulatory decrees, awards, judgments, and orders relating thereto, except
where the failure to so comply would not have a Material Adverse Effect; and
neither the Company nor the Subsidiary has received any notice from any
Governmental Body or any third party alleging any violation thereof or
liability thereunder (including, without limitation, liability for costs of
investigating or remediating sites containing hazardous substances and/or
damages to natural resources), except where failure to so comply would not
have a Material Adverse Effect. The intended use and occupancy of each of the
facilities owned or operated by the Company and the Subsidiary complies in all
material respects with all applicable codes and zoning laws and regulations,
and there is no pending or threatened condemnation, zoning change,
environmental, or other proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction on, or
access to such facilities.
(t) The Company has filed all foreign, Federal, state,
and local tax returns that are required to be filed or has requested
extensions thereof and has paid all taxes required to be paid by it and any
other assessment, fine, or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any other fine assessment,
fine or penalty being contested in good faith and except for any failure to
file that would not have a Material Adverse Effect on the financial condition
of the Company.
(u) The Company meets the requirements for use of Form
S-3 under the Rules and Regulations.
(v) Customer deposit accounts in Westernbank are
insured by the Federal Deposit Insurance Corporation ("FDIC") to applicable
limits, and no proceeding for the termination or revocation of such insurance
is pending, or to the Company's knowledge, threatened. Westernbank is a member
in good standing of the Federal Home Loan Bank of New York.
(w) To the Company's knowledge, none of the Company,
the Subsidiary, or any of their respective directors or officers is subject to
any order or directive of, or party to any agreement with, any regulatory
agency having jurisdiction with respect to its business or
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operations except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, in the most recent Preliminary Prospectus).
4. Agreements of the Company. The Company covenants and
agrees with each of the several Underwriters as follows:
(a) The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus is required
by law to be delivered in connection with sales of the Shares by an
Underwriter or dealer, file any amendment or supplement to the Registration
Statement or the Prospectus, unless a copy thereof shall first have been
submitted to the Representative and the Representative shall not have objected
thereto in good faith.
(b) If the Registration Statement is not yet
effective, the Company will use its best efforts to cause the Registration
Statement to become effective not later than the time indicated in Section
6(a) hereof. The Company will notify the Representative promptly, and will
confirm such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective;
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information; (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof; (iv) of the happening of
any event during the period mentioned in the first sentence of Section 4(g)
that in the judgment of the Company makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or that requires
the making of any changes in the Registration Statement or the Prospectus in
order to make the statements therein, in light of the circumstances in which
they are made, not misleading; and (v) of receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Company, the Registration Statement, any
Preliminary Prospectus, or the Prospectus. If at any time the Commission shall
issue any order suspending the effectiveness of the Registration Statement,
the Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment. The Company will prepare the Prospectus
in a form approved by the Representative and will file such Prospectus
pursuant to Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A, the Company will use its best
efforts to comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and to notify the Representative
promptly of all such filings.
(c) If the Company elects to rely upon Rule 462(b) of
the Rules and Regulations, the Company shall file the Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) of the Rules and
Regulations by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing, either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
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give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) of the Rules and Regulations.
(d) If, at any time when a Prospectus relating to the
Shares is required to be delivered under the Act, any event occurs as a result
of which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, the Registration Statement or the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with the Act or the Rules
and Regulations, the Company will promptly notify the Representative thereof
and, subject to Section 4(b) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects such
statement or omission or effects such compliance.
(e) The Company will furnish to the Representative,
without charge, two (2) copies of the signed Registration Statement and of any
post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto and will furnish to the Representative,
without charge, for transmittal to each of the other Underwriters, copies of
the Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(f) The Company will comply with all the provisions of
all undertakings contained in the Registration Statement.
(g) On the Effective Date, and thereafter from time to
time for such period as the Prospectus is required by the Act to be delivered,
the Company will deliver to each of the Underwriters, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as the
Representative may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which in the
judgment of the Company or counsel to the Underwriters should be set forth in
the Registration Statement or the Prospectus in order to make any statement
therein, in the light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the Registration
Statement or the Prospectus to comply with law, the Company will forthwith
prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and deliver to each of the Underwriters, without charge,
such number of copies thereof as the Representative may reasonably request.
(h) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representative and its
counsel in connection with the registration or qualification of the Shares for
offer and sale under the securities or blue sky laws
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of such jurisdictions as the Representative may reasonably request; provided,
however, that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any
jurisdiction where it is not now so subject.
(i) During the period of five (5) years commencing on
the Effective Date, the Company will furnish to the Representative and each
other Underwriter who may so request copies of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and
will furnish to the Representative and each other Underwriter who may so
request a copy of each annual or other report it shall be required to file
with the Commission.
(j) The Company will make generally available to
holders of its securities, as soon as may be practicable, but in no event
later than the last day of the eighteenth (18th) full calendar month following
the calendar quarter in which the Effective Date falls, a consolidated
earnings statement (which need not be audited but shall be in reasonable
detail) for a period of twelve (12) months commencing after the Effective
Date, and satisfying the provisions of Section 11(a) of the Act (including at
the option of the Company, Rule 158 of the Rules and Regulations).
(k) The Company will apply the net proceeds from the
offering and sale of the Shares in the manner set forth in the Prospectus
under "Use of Proceeds."
(l) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected,
to cause or result in, or which will constitute, stabilization of the price of
the Shares to facilitate the sale or resale of any of the Shares.
5. Expenses.
(a) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Representative, all costs and expenses
incidental to the performance of the obligations of the Company under this
Agreement, including, but not limited to, costs and expenses of or relating to
(i) the preparation, printing, and filing by the Company of the Registration
Statement and amendments and exhibits thereto, each Preliminary Prospectus
prior to or during the period specified in the first sentence of Section 4(g)
but not exceeding nine (9) months after the Effective Date, and the Prospectus
and amendments or supplements thereto; (ii) the preparation and delivery of
certificates representing the Shares; (iii) the furnishing (including costs of
shipping and mailing) of such copies of the Registration Statement, the
Prospectus, and any Preliminary Prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be sold;
(iv) the listing of the Shares on the NASDAQ; (v) any filings required to be
made by the Underwriters with the NASD; (vi) the registration or qualification
of the Shares for offer and sale under the securities or blue sky laws of such
jurisdictions designated pursuant to Section 4(h) and the preparation and
printing of preliminary, supplemental, and final
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blue sky memoranda; (vii) counsel and accountants to the Company; and (viii)
the transfer agent for the Shares.
(b) If the transactions contemplated by this Agreement
are not consummated or if this Agreement is terminated by the Company pursuant
to any of the provisions hereof, the Company will reimburse the Representative
for all of their reasonable accountable out-of-pocket fees and expenses
(including the fees, disbursements, and other charges of their counsel)
incurred by them in connection herewith.
6. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Representative not later than 3:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representative and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A shall
have been made. If the Company has elected to rely upon Rule 462(b) of the
Rules and Regulations, the Company has filed the Rule 462(b) Registration
Statement by 10:00 p.m., Washington D.C. time, on the date of this Agreement.
(b) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or, to the Company's knowledge, threatened by the
Commission; (ii) no order suspending the effectiveness of the Registration
Statement or the qualification or registration of the Shares under the
securities or blue sky laws of any jurisdiction shall be in effect, and no
proceeding for such purpose shall be pending before or, to the Company's
knowledge, threatened or contemplated by the Commission or the authorities of
any such jurisdiction; (iii) any request for additional information on the
part of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities; and (iv) after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representative and the Representative did
not object thereto in good faith, and the Representative shall have received
certificates, dated the Closing Date and Option Closing Date and signed by the
Chief Executive Officer of the Company and the Chief Financial Officer of the
Company, to the effect of the foregoing clauses (i), (ii), and (iii).
(c) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) there shall not
have been a Material Adverse Effect whether or not arising from transactions
in the ordinary course of business; and (ii) the Company shall not have
sustained any material loss or interference with its business, assets, or
properties from fire, explosion, flood, or other casualty, or from any labor
dispute or any court, legislative, or other governmental action, order, or
decree, which is not set forth in the Registration Statement, including the
documents incorporated by reference therein, and the Prospectus.
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(d) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall have
been no litigation or other proceeding instituted against the Company or any
of its officers, directors, or shareholders in their capacities as such, or
any of its assets or properties, before or by any Governmental Body in which
litigation or proceeding an unfavorable ruling, decision, or finding would
result in a Material Adverse Effect.
(e) Each of the representations and warranties of the
Company contained herein shall be true and correct at the Closing Date and,
with respect to the Option Shares, at the Option Closing Date, as if made on
such date, and all covenants and agreements herein contained to be performed
on the part of the Company and all conditions herein contained to be fulfilled
or complied with by the Company at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date, shall
have been fully performed, fulfilled, or complied with in all material
respects.
(f) The Representative shall have received an opinion,
dated the Closing Date and Option Closing Date, from Xxxxx & Xxxxxxx, L.L.P.,
counsel for the Company in a form and substance reasonably satisfactory to
counsel for the Underwriters.
(g) The Representative shall have received an opinion,
dated the Closing Date and Option Closing Date, from Axtmayer Xxxxxxx &
Xxxxxxxx, P.S.C., counsel to the Underwriters, which opinion shall be
satisfactory in all respects to the Representative.
(h) Concurrently with the execution and delivery of
this Agreement, or, if the Company elects to rely on Rule 430A, on the date of
the Prospectus, the Accountants shall have furnished to the Representative a
letter, dated the date of its delivery (the "Original Letter"), addressed to
the Representative and in form and substance satisfactory to the
Representative to the following effect:
(i) They are independent accountants within
the meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the consolidated
financial statements of the Company and the Subsidiary audited by them and
incorporated by reference in the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the Act,
the Exchange Act, and the published rules and regulations thereunder with
respect to registration statements on Form S-3;
(iii) On the basis of limited procedures set
forth in detail in such letter, nothing has come to their attention (as of a
date not more than five (5) business days prior to the date of the delivery of
such letter) as a result of such procedures that caused them to believe that:
(1) the unaudited consolidated interim financial statements, if any,
incorporated by reference in the Registration Statement do not comply as to
form in all material respects with the applicable accounting requirements of
the Exchange Act and the published rules and regulations thereunder; (2) any
material modifications should be made to the unaudited consolidated interim
financial
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statements, if any, incorporated by reference in the Registration Statement
for them to be in conformity with generally accepted accounting principles;
(3) (i) at the date of the latest available interim financial data and at a
specified date not more than five (5) business days prior to the date of
delivery of the Original Letter there was any change in the capital stock,
notes payable, advances from Federal Home Loan Bank, federal funds purchased
and securities sold under repurchase agreements, and other short term
borrowings or any decreases in the consolidated stockholders' equity (only as
to the latest interim financial data) of the Company and the Subsidiary as
compared with amounts shown in the December 31, 2000 statement of financial
condition incorporated by reference in the Registration Statement, and (ii)
for the period from the latest interim financial statements incorporated by
reference in the Registration Statement, to the latest interim financial data
available which should be no later than forty (40) days prior to the date of
delivery of the Original Letter, there were any decreases, as compared with
the corresponding period in the preceding year, in consolidated net interest
income, non-interest income, income before taxes, or in the total or per share
amounts of net income, except in all instances for changes or decreases which
the Registration Statement discloses have occurred or may occur, or they shall
state any specific changes or decreases; and
(iv) The information set forth under the
captions "Prospectus Summary - Summary of Selected Consolidated Financial and
Other Information," "Prospectus Summary - Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends," "Capitalization," "Selected Consolidated
Financial and Other Information," and "Description of Capital Stock," which is
expressed in dollars (or percentages derived from such dollar amounts) and has
been obtained from accounting records which are subject to the internal
controls of the Company's accounting system or which has been derived directly
from such accounting records and analysis or computations, is in agreement
with such records or computations made therefrom.
At the Closing Date and, as to the Option Shares, the Option Closing
Date, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery, which shall confirm, on the basis of a review
in accordance with the procedures set forth in the Original Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in the
letter) not more than five (5) business days prior to the Closing Date or
Option Closing Date, as the case may be, which would require any change in the
Original Letter if it were required to be dated and delivered at the Closing
Date or the Option Closing Date, as the case may be.
In the event that the letters referred to above set forth any such
changes, decreases, or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by
a written explanation of the Company as to the significance thereof, unless
the Representative deems such explanation unnecessary; and (B) such changes,
decreases, or increases do not, in the sole judgment of the Representative,
make it impractical or inadvisable to proceed with the purchase and delivery
of the Shares as contemplated by the Registration Statement, as amended as of
the date hereof.
(i) At the Closing Date and, as to the Option Shares,
the Option Closing Date, there shall be furnished to the Representative an
accurate certificate, dated the date of its
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delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, in form and substance satisfactory to the
Representative, to the effect that to the best of their knowledge:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (y) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; and (B) since
the Effective Date no event has occurred as a result of which it is necessary
to amend or supplement the Prospectus in order to make the statements therein
not untrue or misleading, in any material respect;
(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct in all material
respects; each of the covenants required herein to be performed by the Company
on or prior to the date of such certificate has been duly, timely, and fully
performed in all material respects and each condition herein required to be
complied with by the Company on or prior to the delivery of such certificate
has been duly, timely, and fully complied with in all material respects; and
(iii) No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement or any amendment thereto or the Prospectus has been issued, and no
proceedings for that purpose have been instituted or to the Company's
knowledge, are threatened or are contemplated by the Commission.
(j) The Shares shall be qualified for sale in such
states and jurisdictions as the Representative may reasonably request, each
such qualification shall be in effect and not subject to any stop order or
other proceeding on the Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have
been accepted for listing on the NASDAQ, subject to official notice of
issuance.
(l) All filings required to be made with the NASD
shall have been made and the NASD shall have raised no objections to the terms
and arrangements presented in such filings.
(m) The Company shall have furnished to the
Representative such certificates, letters, and other documents, in addition to
those specifically mentioned herein, as the Representative may have reasonably
requested as to the accuracy and completeness at the Closing Date and Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and Option Closing Date of the
representations
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and warranties of the Company, as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions concurrent
and precedent to the obligations hereunder of the Underwriters.
All such opinions, certificates, letters, and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you. The Company will furnish you with such conformed copies
of such opinions, certificates, letters, and other documents as you shall
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees, and agents of each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, or liabilities, joint or several
(and actions in respect thereof), to which they, or any of them, may become
subject under the Act or other Federal, state, or Commonwealth of Puerto Rico
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in (A) any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any amendment or supplement to the
Registration Statement or the Prospectus, or (B) any application or other
document, or any amendment or supplement thereto, executed by the Company or
based upon written information furnished by or on behalf of the Company filed
in any jurisdiction in order to qualify the Shares under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each, an "Application"); or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus, or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating defending or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability, or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability based solely upon an untrue statement or omission or alleged untrue
statement or omission in any of such documents made in reliance upon and in
conformity with information relating to any Underwriter furnished in writing
to the Company by the Representative on behalf of any Underwriter expressly
for inclusion therein; and provided, further, that such indemnity with respect
to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any such other person) from whom the person asserting any such
loss, claim, damage, liability, or action purchased Shares which are the
subject thereof to the extent that any such loss, claim, damage, or liability
(A) results from the fact that such Underwriter failed to send or give a copy
of the Prospectus (as amended or supplemented) to such person at or prior to
the confirmation of the sale of such Shares to such person in any case where
such delivery is required by the Act, and (B) arises out of or is based upon
an untrue statement or omission of a material fact contained in such
Preliminary Prospectus
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that was corrected in the Prospectus (or any amendment or supplement thereto),
unless such failure to deliver the Prospectus (as amended or supplemented) was
the result of noncompliance by the Company with Section 4(g). This indemnity
agreement will be in addition to any liability that the Company might
otherwise have. The Company will not, without the prior written consent of
each Underwriter, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit, or proceeding in respect of
which indemnification may be sought hereunder (whether or not such Underwriter
or any person who controls such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to each claim, action,
suit, or proceeding), unless such settlement, compromise, or consent includes
an unconditional release of each Underwriter and each such other person from
all liability arising out of such claim, action, suit, or proceeding.
(b) Each Underwriter will indemnify and hold harmless
the Company, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company, and each officer of the Company who signed the
Registration Statement against any losses, claims, damages, or liabilities (or
actions in respect thereof) to which the Company and any such director,
officer, or controlling person may become subject under the Act or other
Federal, state, or Commonwealth of Puerto Rico statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement, the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus, or
any Application, or material fact required to be stated therein, or (ii) the
omission or the alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus, any amendment or supplement to the
Registration Statement or the Prospectus, or any Application, a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representative expressly for
use therein; and, subject to the limitation set forth immediately preceding
this clause, xxxx xxxxxxxxx, as incurred, any legal or other expenses
reasonably incurred by the Company and any such director, officer, or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability, or any action in respect thereof. The Company
acknowledges that, for all purposes under this Agreement, the statements set
forth under the heading "Underwriting" constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representative on behalf of the Underwriters expressly for inclusion in the
Registration Statement, any Preliminary Prospectus, or the Prospectus. This
indemnity agreement will be in addition to any liability that each Underwriter
might otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party or parties under this Section 7, notify such indemnifying
party or parties of the commencement thereof, but the omission so to notify
the indemnifying party or parties will not relieve it or them from any
liability which it or they may
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have to any indemnified party under the foregoing provisions of this Section 7
or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party and it notifies an
indemnifying party or parties of its commencement, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying
party shall not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses other
than reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
preceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the reasonable fees and
expenses of more than one separate counsel (in addition to the fees and
expenses of local counsel necessary in connection with any such proceedings)
in any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representative in the case of paragraph (a) of this Section
7, representing the indemnified parties under paragraph (a) who are parties to
such action or actions); or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the written consent of the indemnifying party, unless such indemnified
party waived its rights under this Section 7 in which case the indemnified
party may effect such a settlement without such consent.
(d) If the indemnification provided for in the
foregoing paragraphs of this Section 7 is unavailable or insufficient to hold
harmless an indemnified party under paragraph (a) or (b) above in respect of
any losses, claims, damages, or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, or liabilities (or actions in respect thereof) (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties, on the one hand, and the indemnified party, on
the other, from the offering of the Shares; or (ii) if, but only if, the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
indemnifying party or parties on the one hand, and the indemnified party, on
the other, in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims,
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damages, or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the other, shall be deemed
to be in the same proportion as the total proceeds from the offering of the
Shares (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. Relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representative on behalf of the Underwriters, the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 7(d) were
to be determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, and liabilities (or actions in respect thereof) referred to
above in this Section 7(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Underwriter shall be required to
contribute any amount in excess of the total underwriting discounts received
by it with respect to the Shares purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) will be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 7(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 7(d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act will have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
will have the same rights to contribution as the Company, subject in each case
to the provisions of this paragraph (d). Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit, or
proceeding against such party in respect of which a claim for contribution may
be made under this Section 7(d), notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other
obligation(s) it or they may have hereunder or otherwise than under this
paragraph (d) or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise
have. No party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements
contained in this Section 7 and the representations and warranties of the
Company contained in this Agreement shall remain
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operative and in full force and effect regardless of (i) any investigation
made by or on behalf of the Underwriters; (ii) acceptance of any of the Shares
and payment therefor; or (iii) any termination of this Agreement.
(f) In no case shall the indemnification provided in
this Section 7 be available to protect any person against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its or his
obligations or duties hereunder, or by reason of its or his reckless disregard
of its or his obligations and duties hereunder.
8. Termination. The obligations of the several Underwriters
under this Agreement may be terminated at any time prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representative, without liability on
the part of any Underwriter to the Company if, prior to delivery and payment
for the Firm Shares (or the Option Shares, as the case may be), in the sole
judgment of the Representative, (i) trading in the Common Stock or the Series
C Preferred Stock or securities generally shall have been suspended by the
Commission or by the NASDAQ; (ii) minimum or maximum prices shall have been
established for the Common Stock or the Series C Preferred Stock or securities
generally on the NASDAQ, or additional material governmental restrictions, not
in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by any of such market or exchange or by order of the
Commission or any court or other Governmental Body; (iii) a general banking
moratorium shall have been declared by the United States, State of New York,
or Commonwealth of Puerto Rico authorities; or (iv) any material adverse
change in the financial or securities markets in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, the effect of any of which is such as to make it, in the sole
judgment of the Representative, impracticable or inadvisable to market the
Shares on the terms and in the manner contemplated by the Prospectus. Any
termination pursuant to Section 8 shall be without liability of any party to
any other party except as provided in Sections 5(a) and 7.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Shares or Option Shares
hereunder and the aggregate number of such Shares that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent (10%)
or less of the aggregate number of Firm Shares or Option Shares to be
purchased by all of the Underwriters at such time hereunder, the other
Underwriters may make arrangements satisfactory to the Representative for the
purchase of such Shares by other persons (who may include one or more of the
nondefaulting Underwriters, including the Representative), but if no such
arrangements are made by the Closing Date or the related Option Closing Date,
as the case may be, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Firm
Shares or Option Shares that such defaulting Underwriter or Underwriters
agreed but failed to purchase. If one or more Underwriters so default with
respect to an aggregate number of Shares that is more than ten percent (10%)
of the aggregate number of Firm Shares or Option Shares, as the case may be,
to be purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representative are not made within thirty-six
(36) hours after such default for the purchase by other persons
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(who may include one or more of the nondefaulting Underwriters, including the
Representative) of the Shares with respect to which such default occurs, this
Agreement will terminate without liability on the part of any nondefaulting
Underwriter and the Company other than as provided in Section 10 hereof. In
the event of any default by one or more Underwriters as described in this
Section 9, the Representative shall have the right to postpone the Closing
Date or Option Closing Date, as the case may be, established as provided in
Section 9 hereof for not more than seven (7) business days in order that any
necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Firm Shares or Option Shares, as the case may be.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities, and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement shall remain in
full force and effect regardless of (i) any investigation made by or on behalf
of the Company, any of its officers or directors, any Underwriter, or any
controlling person referred to in Section 7 hereof; and (ii) delivery of and
payment for the Shares. The respective agreements, covenants, indemnities, and
other statements set forth in Sections 5 and 7 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Notices. Notices given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified, shall
be mailed or delivered:
(a) If to the Company, to:
W Holding Company, Inc.
00 Xxxx XxXxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Chief Financial Officer;
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx N.W.
Washington, D.C. 20004
Attention: Xxxxxx X. Xxxxx, Esq.
(b) If to the Underwriters, to:
UBS PaineWebber Incorporated of Puerto Rico
American International Plaza, Penthouse Floor
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000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Attention: Xxxx X. Xxxxx, First Vice President.
with a copy to:
Xxxxxxxx Xxxxxxx & Xxxxxxxx, P.S.C.
Hato Rey Tower-Suite 600
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Any such notice shall be effective only upon receipt. Any notice
under Section 7 or 8 may be made by telex or telephone, but if so made shall
be subsequently confirmed in writing.
12. Successors. This Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Company, and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy, or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for
the sole and exclusive benefit of such persons and for the benefit of no other
person except that (a) the indemnities of the Company contained in Section 7
of this Agreement shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act; and (b) the indemnities of the Underwriters contained
in Section 7 of this Agreement shall also be for the benefit of the directors
of the Company, the officers of the Company who have signed the Registration
Statement, and any person or persons who control the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Shares from any Underwriter shall be deemed a successor because
of such purchase. This Agreement shall not be assignable by either party
hereto without the prior written consent of the other party.
13. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
14. Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements,
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understandings, and negotiations, both written and oral, between the parties
with respect to the subject matter of this Agreement. No representation,
inducement, promise, understanding, condition or warranty not set forth herein
has been made or relied upon by either party hereto.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
W HOLDING COMPANY, INC.
By: _________________________
Name:
Title:
Confirmed as of the date first above mentioned:
UBS PAINEWEBBER INCORPORATED OF
PUERTO RICO
By: _________________________
Name: Xxxx X. Xxxxx
Title: First Vice President
Acting on its behalf and as lead underwriter of the several Underwriters named
in Schedule 1 hereof.
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SCHEDULE 1
UNDERWRITERS
Aggregate Number
of Shares to be
Purchased
UBS PaineWebber Incorporated of Puerto Rico.................... [__________]
__________________________________............................. [__________]
Total
[__________]
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