1
EXHIBIT 1
1,400,000 Shares
FIRST FINANCIAL CARIBBEAN CORPORATION
Common Stock
UNDERWRITING AGREEMENT
________________, 1995
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ SECURITIES INC.
As Representative of the
several Underwriters
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
FIRST FINANCIAL CARIBBEAN CORPORATION, a Puerto Rico
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Selling Stockholder")
propose to sell an aggregate of 1,400,000 shares (the "Firm Shares") of the
Company's common stock, par value $0.01 per share (the "Common Stock"), of
which 1,300,000 shares are to be issued and sold by the Company and 100,000
shares are to be sold by the Selling Stockholder, in each case to you and the
other underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as representative (the
"Representative"). The Company also has agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 210,000
shares of Common 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 and the Selling Stockholder hereby confirm as
follows their respective agreements with the Representative and the several
other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the respective
representations, warranties and agreements of the Company and the Selling
Stockholder herein contained and subject to all the terms and conditions of
this Agreement, (i) the Company agrees to sell to each Underwriter and each
Underwriter, severally and not jointly, agrees to purchase from the Company at
a purchase price of $[_____] per share, the number of Firm Shares set forth
opposite the name of such Underwriter in Column (1) of Schedule
2
II hereto, plus such additional number of Firm Shares which such Underwriter
may become obligated to purchase pursuant to Section 11 hereof, and (ii) the
Selling Stockholder agrees to sell to each Underwriter and each Underwriter,
severally and not jointly, agrees to purchase from such Selling Stockholder at
the same purchase price per Share, the number of Firm Shares set forth opposite
the name of such Underwriter in Column (2) of Schedule II, plus such additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to Section 11 hereof.
(b) Subject to all the terms and conditions of
this Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, the Option Shares at the same price per
share as the Underwriters shall pay for the Firm Shares. The option may be
exercised only to cover 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 30th day after the date of this Agreement (or on the
next business day if the 30th day is not a business day), upon notice (the
"Option Shares Notice") in writing or by telephone (confirmed in writing) by
the Representative to the Company no later than 5:00 p.m., New York City time,
at least two and no more than five business days before the date specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, 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 against
payment of the purchase price by certified or official bank checks payable in
New York Clearing House (next-day) funds to the order of each of the Company
and the Selling Stockholder (the "Closing") at the office of Stroock & Stroock
& ▇▇▇▇▇, counsel to the Underwriters, Seven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. Such payment shall be made at 10:00 a.m., New York City time, on the
third full business day following the date of this Agreement, or at such other
time on such other date, not later than seven business days after the date of
this Agreement, as may be agreed upon by the Company, the Selling Stockholder
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.
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To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representative shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection
with the issuance, sale and delivery of the Firm Shares and Option Shares by
the Company to the respective Underwriters shall be borne by the Company. The
Company and the Selling Stockholder 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 or state
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.
Certificates in negotiable form (endorsed in blank or
accompanied by stock powers in blank, with signatures appropriately guaranteed,
and any funds necessary for the purchase of stock transfer stamps) representing
all of the Shares to be sold by the Selling Stockholder have been placed in
custody under a custody agreement (the "Custody Agreement") with Chemical
Bank, as custodian (the "Custodian"), and the Selling Stockholder has duly
executed and delivered a power of attorney (a "Power of Attorney") appointing
[_______________] and [____________________], and each of them, as such Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute this Agreement and to deliver this Agreement on behalf of such Selling
Stockholder, to authorize the delivery of the Shares to be sold by such Selling
Stockholder hereunder and otherwise to act on behalf of such Selling
Stockholder in connection with the transactions contemplated by this Agreement
and such Custody Agreement. The Selling Stockholder agrees that the shares
represented by the certificates held in custody for the Selling Stockholder
under the Custody Agreement are subject to the interests of the Underwriters
hereunder and the arrangements made by such Selling Stockholder for such
custody, as well as the appointment by such Selling Stockholder of the
Attorneys-in-Fact, are, to that extent, irrevocable. The Selling Stockholder
specifically
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agrees that his obligations hereunder shall not be terminated, except as
otherwise provided herein, by any act of such Selling Stockholder, operation of
law or otherwise, whether by the death or incapacity of such Selling
Stockholder, or by the occurrence of any other event. If the Selling
Stockholder should die or become incapacitated, or if any other such event
should occur, before the delivery of the Shares hereunder, certificates
representing the Shares held in custody for the Selling Stockholder shall be
delivered pursuant to the terms and conditions of this Agreement and the
Custody Agreement, and the actions taken by the Attorneys-in-Fact pursuant to
the Power of Attorney shall be as valid as if such death, incapacity or other
event had not occurred, whether or not the Custodian or the Attorneys-in-Fact
shall have received notice of such death, incapacity or other event.
3. Representations and Warranties of the Company. The
Company represents, warrants and covenants to each Underwriter that:
(a) A registration statement on Form S-3
(Registration No. 33-_____) relating to the Shares, including a preliminary
prospectus relating to the Shares and such amendments to such registration
statement as may have been required to the date of this Agreement, has been
prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
Commission has not issued any order preventing or suspending the use of the
Prospectus (as defined below) or any Preliminary Prospectus (as defined below)
or instituted or, to the knowledge of the Company, threatened any proceeding
for that purpose. The term "Preliminary Prospectus" as used herein means a
preliminary prospectus relating to the Shares included at any time as part of
the foregoing registration statement or any amendment thereto before it became
effective under the Act and any prospectus filed with the Commission by the
Company pursuant to Rule 424(a) of the Rules and Regulations. Copies of such
registration statement and amendments and of each related Preliminary
Prospectus have been delivered to the 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
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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 5 hereof and deemed to be included
therein as of the Effective Date by Rule 430A of the Rules and Regulations.
The term "Prospectus" means the prospectus relating to the Shares as first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or, if no such filing is required, the form of final prospectus relating to the
Shares included in the Registration Statement at the Effective Date.
References herein to any document or other information incorporated by
reference in the Registration Statement shall include documents or other
information incorporated by reference in the Prospectus (or if the Prospectus
is not in existence, in the most recent Preliminary Prospectus). References
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
include all documents and information incorporated by reference therein and
shall be deemed to refer to and include any documents and information filed
after the date of such Preliminary Prospectus or Prospectus, as the case may
be, and so incorporated by reference, under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) On the date that any Preliminary Prospectus
was filed with the Commission, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to
and including the Closing Date and, if later, the Option Closing Date and when
any post-effective amendment to the Registration Statement becomes effective or
any amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement, each Preliminary Prospectus and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included in the Prospectus, did or will comply with all applicable provisions
of the Act and the Rules and Regulations and did or will contain all statements
required to be stated therein in accordance with the Act and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to
the Registration Statement becomes effective, no part of the Registration
Statement or any such amendment did or will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading. At the
Effective Date, the date the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
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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 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 Regulations that have not been so
filed. The documents which are incorporated by reference in any Preliminary
Prospectus or the Prospectus or from which information is so incorporated by
reference, when they became effective or were filed with the Commission, as the
case may be, complied in all material respects with the requirements of the Act
and the Rules and Regulations or the Exchange Act and the rules and regulations
thereunder, as applicable, and did not, when such documents were so filed,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and any documents so filed and incorporated by reference subsequent
to the effective date of the Registration Statement shall, when they are filed
with the Commission, conform in all material respects with the requirements of
the Act and the Rules and Regulations and the Exchange Act and the rules and
regulations thereunder, as applicable.
(c) The only subsidiaries of the Company (each, a
"Subsidiary" and collectively, the "Subsidiaries") are those listed on Exhibit
A hereto. Except as set forth in the Prospectus (or if the Prospectus is not
in existence, in the most recent Preliminary Prospectus) or as acquired in
connection with the exercise of its rights as a creditor, or pursuant to a bona
fide collateral pledge arrangement, neither the Company nor any Subsidiary
owns, nor at the Closing Date and the Option Closing Date, will own an interest
in any corporation, partnership, trust, joint venture or other business entity.
The Company has been and, at the Closing Date and Option Closing Date, will be
duly organized and validly existing as a corporation under the laws of the
Commonwealth of Puerto Rico and the United States and is and, at the Closing
Date and Option Closing Date, will be in good standing with the Commonwealth of
Puerto Rico. The Company is registered as a unitary savings and loan company
under the Home Owners Loan Act of 1933 ("HOLA") and is and, at the Closing Date
and Option Closing Date, will be in good standing with the Office of Thrift
Supervision ("OTS"). Each of the Subsidiaries is and, at the Closing Date and
Option Closing Date, will be a corporation duly organized, validly existing and
in good standing under the laws of its respective jurisdiction of
incorporation. Each of the Company and its Subsidiaries is and, at the Closing
Date and the Option Closing
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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, business affairs or
business prospects of the Company and its Subsidiaries taken as a whole.
(d) The outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights. The
Shares to be issued and sold by the Company will be, upon such issuance and
payment therefor, duly authorized, validly issued, fully paid and nonassessable
and will not be subject to any preemptive or similar rights. The Company has,
and, upon completion of the sale of the Shares, will have, an authorized,
issued and outstanding capitalization as set forth in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, in the
most recent Preliminary Prospectus). The description of the securities of the
Company in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) is, and at the
Closing Date and, if later, the Option Closing Date, will be, complete and
accurate in all respects. No holders of securities of the Company are entitled
to have such securities registered under the Registration Statement, except
where such rights have been waived.
(e) The consolidated financial statements and the
related notes of the Company included in the Registration Statement or
incorporated therein by reference and the Prospectus (or, if the Prospectus is
not in existence, in the most recent Preliminary Prospectus) present fairly the
financial condition of the Company and its Subsidiaries as of the dates
indicated and the consolidated results of operations, and cash flows of the
Company and its Subsidiaries for the periods covered thereby, all in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the entire periods involved. Price Waterhouse (the
"Accountants"), who have reported on those of such financial statements and
related notes which are audited, are independent accountants with respect to
the Company and its Subsidiaries within the meaning of the Act and the
applicable and published rules and regulations.
(f) The Company maintains a system of internal
accounting control sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary to permit
preparation of
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financial statements in conformity with GAAP and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(g) Except as set forth in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and, if later, the Option Closing Date, (i) there has not
been, and will not have been, any material adverse change in the business,
properties, prospects, condition (financial or otherwise), net worth or results
of operations of the Company and its Subsidiaries considered as one enterprise,
(ii) neither the Company nor any of its Subsidiaries has entered into, or will
have entered into any material transactions other than pursuant to this
Agreement, and (iii) the Company has not, and will not have, paid or declared
any dividends or other distributions of any kind on any class of its capital
stock, except for the payment or declaration of quarterly dividends in the
ordinary course of its business.
(h) The Company and each of its Subsidiaries have
good and marketable title to all properties and assets described in the
Registration Statement, including the documents incorporated by reference
therein, and Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), as owned by it, free and clear of all liens,
security interests, restrictions, pledges, encumbrances, charges, equities,
claims, easements, leases and tenancies (collectively, "Encumbrances") other
than those described in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or
those that will not materially affect the value of such properties and assets
or will not interfere with the use made and proposed to be made of such
properties and assets. The Company and each of its Subsidiaries have valid,
subsisting and enforceable leases for the properties and assets described in
the Registration Statement or in the documents incorporated by reference
therein, and Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) as leased by them, free and clear of all
Encumbrances, other than those described in the Registration Statement or in
the documents incorporated by reference therein, and Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), or
those that will not materially affect the value of such properties and assets
or will not interfere with the use made and proposed to be made of such
properties and assets.
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(i) The Company is not required to be registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(j) Except as set forth in the Registration
Statement, or incorporated therein by reference, and Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), there
are no actions, suits, arbitrations, claims, governmental or other proceedings
(formal or informal), or investigations pending or threatened against or
affecting the Company or any of its Subsidiaries, or any directors, officers or
shareholders of the Company or any of its Subsidiaries in their respective
capacities as such, or any of the properties or assets owned or leased by the
Company or any of its Subsidiaries, before or by any Federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign (collectively, a "Governmental Body"), wherein an
unfavorable ruling, decision or finding would adversely affect the business,
properties, prospects, condition (financial or otherwise), net worth or results
of operations of the Company and its Subsidiaries taken as a whole and would be
required to be disclosed in the Registration Statement and Prospectus (or if
the Prospectus is not in existence, in the most recent Preliminary Prospectus).
Neither the Company nor any Subsidiary is in violation of, or in default with
respect to, any law, rule, or regulation, or any order, judgment, or decree,
except as described in the Prospectus (or if the Prospectus is not in
existence, in the most recent Preliminary Prospectus) or such as in the
aggregate do not now have and can reasonably be expected in the future not to
have a material adverse effect upon the operations, business, properties, or
assets of the Company and its Subsidiaries taken as a whole; nor is the Company
or any Subsidiary presently required under any order, judgment or decree to
take any action in order to avoid any such violation or default.
(k) The Company and each of its Subsidiaries have
and, at the Closing Date and the Option Closing Date, will have all
governmental licenses, permits, consents, orders, approvals, franchises,
certificates and other authorizations (collectively, "Licenses") necessary to
carry on their respective businesses and own or lease their respective
properties as contemplated in the Registration Statement and Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
The Company and each of its Subsidiaries have and, at the Closing Date and the
Option Closing Date, will have complied in all material respects with all laws,
regulations and orders applicable to it or its business, assets and properties.
Neither the Company nor any of its Subsidiaries is, nor, at the Closing Date
and the Option Closing Date, will be in default (nor has any event occurred
which, with notice or lapse of time or both, would constitute a default) in the
due performance and observation of any term,
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covenant or condition of any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument (collectively, a
"contract or other agreement") to which they are a party or by which their
respective properties are bound or affected, the violation of which would
individually or in the aggregate have a material adverse effect on the
business, properties, prospects, condition (financial or otherwise), net worth
or results of operations of the Company and its Subsidiaries. There are no
governmental proceedings or actions pending or threatened for the purpose of
suspending, modifying or revoking any License held by the Company and its
Subsidiaries.
(l) No consent, approval, authorization or order
of, or any filing or declaration with, any Governmental Body is required for
the consummation of the transactions contemplated by this Agreement or in
connection with the issuance and sale of the Shares by the Company, except such
as have been obtained and such as may be required under state securities or
Blue Sky laws or the bylaws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Shares to be sold hereby.
(m) The Company has full power (corporate and
other) and authority to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes a valid
and binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as rights to indemnity and
contribution may be limited by federal or state securities laws or the public
policy underlying such laws. Except as disclosed in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the execution, delivery and the performance of this
Agreement and the consummation of the transactions contemplated hereby will not
result in the creation or imposition of any Encumbrance upon any of the
properties or assets of the Company or any of the Subsidiaries pursuant to the
terms or provisions of, or result in a breach or violation of or conflict with
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, (i) the Certificate of Incorporation or
By-laws of the Company, in each case as amended, or (ii) any contract or other
agreement to which the Company or any of the Subsidiaries is a party or by
which it or any of the respective assets or properties are bound or affected,
the violation of which would individually or in the aggregate have a material
adverse effect on the business, properties, prospects, condition (financial or
otherwise), net worth or results of operations of the Company and its
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Subsidiaries or (iii) any judgment, ruling, decree, order, law, statute, rule
or regulation of any Governmental Body applicable to the Company or any of the
Subsidiaries or their respective businesses or properties, the violation of
which would individually or in the aggregate have a material adverse effect on
the business, properties, prospects, condition (financial or otherwise), net
worth or results of operations of the Company and its Subsidiaries. The
Company has full power and authority to authorize, issue, offer and sell the
Shares, as contemplated by this Agreement, free of any preemptive rights.
(n) No statement, representation, warranty or
covenant 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.
(o) Neither the Company nor any of its directors,
officers or affiliates has taken, nor will he, she or it take, directly or
indirectly, any action designed, or which might reasonably be expected in the
future, to cause or result in, under the Act or otherwise, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise.
(p) The Shares have been approved for quotation
on the National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ NMS"), subject only to notice of issuance.
(q) Neither the Company nor any of its
Subsidiaries is involved in any collective labor dispute with its employees nor
is any such dispute threatened or imminent.
(r) Neither the Company nor any of its
Subsidiaries nor, to the Company's best knowledge, any employee or agent of the
Company or any Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds of the Company or any Subsidiary
in violation of any law, rule or regulation or of a character required to be
disclosed in the Registration Statement and 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 its Subsidiaries have been and are being conducted in compliance
with all applicable laws, ordinances, rules, regulations, Licenses, permits,
approvals, plans,
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authorizations or requirements relating to occupational safety and health, or
pollution, or protection of health or the environment (including, without
limitation, those relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or hazardous or toxic substances,
materials or wastes into ambient air, surface water, groundwater or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, gaseous or liquid in nature) of any governmental department, commission,
board, bureau, agency or instrumentality of the United States or any state or
political subdivision thereof, and all applicable judicial or administrative
agency or regulatory decrees, awards, judgments and orders relating thereto;
and neither the Company nor any of its Subsidiaries has received any notice
from any governmental instrumentality or any third party alleging any violation
thereof or liability thereunder (including, without limitation, liability for
costs of investigating or remediating sites containing hazardous substances
and/or damages to natural resources), except where failure to so comply would
not have a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
Subsidiaries taken as a whole. The intended use and occupancy of each of the
facilities owned or operated by the Company and its Subsidiaries complies in
all material respects with all applicable codes and zoning laws and
regulations, and there is no pending or threatened condemnation, zoning change,
environmental or other proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction on, or
access to such facilities.
(t) The Company filed all foreign, federal, state
and local tax returns that are required to be filed or has requested extensions
thereof and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable.
(u) The Company meets the requirements for use of
Form S-3 under the Rules and Regulations.
(v) The deposit accounts of Doral Federal Savings
Bank, a Subsidiary of the Company ("Doral Federal") are insured by the Savings
Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation ("FDIC") to the legal maximum, and no proceeding for the
termination or revocation of such insurance is pending or threatened. Doral
Federal is a member in good standing of the Federal Home Loan Bank of New York.
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(w) None of the Company, Doral Federal, their
affiliates, or any of their respective directors or officers is subject to any
order or directive of, or party to any agreement with, any regulatory agency
having jurisdiction with respect to its business or operations except as
disclosed in the Prospectus (or if the Prospectus is not in existence, in the
most recent Preliminary Prospectus).
4. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder represents, warrants and covenants to each Underwriter
that:
(a) Such Selling Stockholder has full power and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. All authorizations and consents
necessary for the execution and delivery by such Selling Stockholder of this
Agreement have been given. This Agreement has been duly authorized, executed
and delivered by or on behalf of such Selling Stockholder and constitutes a
valid and binding agreement of such Selling Stockholder and is enforceable
against such Selling Stockholder in accordance with the terms hereof, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws now or hereafter in effect relating to or affecting creditors'
rights generally or by general principles of equity relating to the
availability of remedies and except as rights to indemnity and contribution may
be limited by federal or state securities laws or the public policy underlying
such laws.
(b) Such Selling Stockholder has full power and
authority to enter into the Power of Attorney in the form heretofore furnished
to the Underwriters and the Custody Agreement in the form heretofore furnished
to the Underwriters and to carry out all the terms and provisions thereof to be
carried out by it. All authorizations and consents necessary for the execution
and delivery by such Selling Stockholder and of the Power of Attorney and the
Custody Agreement have been given. Each of the Power of Attorney and the
Custody Agreement has been duly authorized, executed and delivered by such
Selling Stockholder and is enforceable against such Selling Stockholder in
accordance with the terms thereof.
(c) Such Selling Stockholder now has, and at the
time of delivery thereof hereunder will have, (i) good and marketable title to
the Shares to be sold by such Selling Stockholder hereunder, free and clear of
all Encumbrances, and (ii) full legal right and power, and all authorizations
and approvals required by law, to sell, transfer and deliver the Shares to the
Underwriters hereunder and to make the representations, warranties and
agreements made by such Selling Stockholder herein.
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(d) On the Closing Date all stock transfer or other
taxes (other than income taxes) which are required to be paid in connection
with the sale and transfer of the Shares to be sold by such Selling Stockholder
to the several Underwriters hereunder will have been fully paid or provided for
by such Selling Stockholder and all laws imposing such taxes will have been
fully complied with.
(e) None of the execution, delivery or performance
of this Agreement, the Power of Attorney or the Custody Agreement and the
consummation of the transactions contemplated herein or therein by such Selling
Stockholder conflicts or will conflict with or results or will result in any
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any Encumbrance upon,
any property or assets of such Selling Stockholder pursuant to (i) the terms of
any contract or other agreement to which such Selling Stockholder is a party or
by which he is bound or to which any of his properties is subject; (ii) any
statute, rule or regulation of any Governmental Body having jurisdiction over
such Selling Stockholder or any of his activities or properties; or (iii) the
terms of any judgment, decree or order of any arbitration or Governmental Body
having such jurisdiction.
(f) No consent, approval, authorization or order of,
or any filing or declaration with, any Governmental Body is required for the
consummation by such Selling Stockholder of the transactions on his part
contemplated herein, except such as have been obtained and such as may be
required under state securities or Blue Sky laws or the bylaws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of
the Shares to be sold by such Selling Stockholder.
(g) The sale of the Shares proposed to be sold by
such Selling Stockholder is not prompted by such Selling Stockholder's
knowledge of any material non-public information concerning the Company.
(h) 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, all
information with respect to such Selling Stockholder included in 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), did or will comply with all applicable
provisions of the Act and the Rules and
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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 information regarding such Selling Stockholder
included in 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 information
regarding such Selling Stockholder included in 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.
(i) Such Selling Stockholder has no reason to
believe that the representations and warranties of the Company contained in
Section 3 are not true and correct in all material respects.
(j) Such Selling Stockholder has not distributed and
will not distribute the Registration Statement, any Preliminary Prospectus, the
Prospectus or any other offering material in connection with the offering and
sale of the Shares. Such Selling Stockholder has not taken, directly or
indirectly, any action designed, or which might reasonably be expected, to
cause or result in, under the Act or otherwise, or which has caused or resulted
in, stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
5. Representations and Warranties of the Underwriters. Upon
your authorization of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale to the public upon the terms set
forth in the Prospectus. The Representative represents and warrants to the
Company and the Selling Stockholder that, assuming compliance by the Company
with all relevant provisions of the Act in connection with the Registration
Statement, the Representative will conduct all offers and sales of the Shares
in compliance with the relevant provisions of the Act and the Regulations and
all applicable state securities laws and regulations.
6. Agreements of the Company and the Selling Stockholder.
The Company (as to Sections 6(a) - (j)) and the Selling Stockholder (as to
Sections 6(k) and (l)) 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
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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 within a reasonable period of time
prior to the filing thereof 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 7(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 second sentence of Section 6(f)
that in the judgment of the Company makes any statement 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, 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 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
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circumstances under which they were made, not misleading, or the Registration
Statement, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein not misleading, or if for any other reason it is necessary
at any time to amend or supplement the Prospectus or the Registration Statement
to comply with the Act or the Rules and Regulations, the Company will promptly
notify the Representative thereof and, subject to Section 5(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.
(d) The Company will furnish to the
Representative, without charge, two signed copies of the Registration Statement
and of any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto and will furnish to the 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.
(e) The Company will comply with all the
provisions of all undertakings contained in the Registration Statement.
(f) 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 Prospectus in order to make any statement therein, in the
light of the circumstances under which it was made, not misleading, or in the
Registration Statement in order to make any statement therein not misleading,
or if it is necessary to supplement or amend the Prospectus or the Registration
Statement to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto, and will
deliver to each of the Underwriters, without charge, such number of copies
thereof as the Representative may reasonably request.
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(g) 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 of such jurisdictions as
the Representative may reasonably request; provided, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(h) During the period of five 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.
(i) The Company will make generally available to
holders of its securities, as soon as may be practicable, but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, a consolidated earnings statement
(which need not be audited but shall be in reasonable detail) for a period of
12 months commencing after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(j) The Company will apply the net proceeds from
the offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(k) Neither the Company nor the Selling
Stockholder will at any time, directly or indirectly, take any action intended,
or which might reasonably be expected, to cause or result in, or which will
constitute, stabilization of the price of the shares of Common Stock to
facilitate the sale or resale of any of the Shares.
(l) The Selling Stockholder will deliver to the
Representative prior to or on the Effective Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu thereof).
7. Expenses.
(a) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company and
the Selling Stockholder will pay, or
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reimburse if paid by the Representative, all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholder under
this Agreement, including, but not limited to, costs and expenses of or
relating to (i) the preparation, printing and filing of the Registration
Statement and exhibits thereto, each Preliminary Prospectus, the Prospectus,
any amendment or supplement to the Registration Statement or the Prospectus,
the Custody Agreements and the Powers of Attorney, (ii) the preparation and
delivery of certificates representing the Shares, (iii) the printing of this
Agreement, the Agreement among Underwriters, any Dealer Agreements and any
Underwriters' Questionnaire, (iv) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
Preliminary Prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (v) the quotation of the
Shares on the NASDAQ NMS, (vi) any filings required to be made by the
Underwriters with the NASD, (vii) 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 6(g), including the reasonable
fees, disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (viii) counsel and accountants to
the Company and the Selling Stockholder and (ix) the transfer agent for the
Shares; provided, that, the aggregate maximum amount of legal fees (not
including disbursements) of counsel to the Underwriters which the Company and
Selling Stockholder will pay in connection with sub-sections (vi) and (vii) of
this paragraph (a) will be $15,000.
(b) Whether or not the transactions contemplated by
this Agreement are consummated or if this Agreement shall be terminated by the
Company or the Selling Stockholder pursuant to any of the provisions hereof,
the Company and the Selling Stockholder will reimburse the Representative for
all of its accountable out-of-pocket fees and expenses (including the fees,
disbursements and other charges of its counsel) incurred by it in connection
herewith, up to an aggregate amount of $165,000, which amount includes the
legal fees (but not disbursements) to be paid by the Company and the Selling
Stockholder relating to sub-sections (vi) and (vii) of paragraph (a) above.
8. 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
12:00 p.m., New York City time, on the date of this Agreement or at such later
date and time as shall be consented
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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.
(b) (i) No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or threatened by the Commission,
(ii) no order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect, and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities, and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representative and the
Representative did not object thereto in good faith, and the Representative
shall have received certificates, dated the Closing Date and the Option Closing
Date and signed by the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of the foregoing
clauses (i), (ii) and (iii).
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
there shall not have been a material adverse change in the general affairs,
business, business prospects, properties, management, condition (financial or
otherwise) or results of operations of the Company whether or not arising from
transactions in the ordinary course of business, and (ii) the Company shall not
have sustained any material loss or interference with its business, assets or
properties from fire, explosion, flood or other casualty, whether or not
covered by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in the judgment of the
Representative any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price.
(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
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unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, business prospects, condition (financial or
otherwise), net worth or results of operations of the Company.
(e) Each of the representations and warranties of
the Company contained herein shall be true and correct at the Closing Date and,
with respect to the Option Shares, at the Option Closing Date, as if made on
such date, and all covenants and agreements herein contained to be performed on
the part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date and, with respect
to the Option Shares, at or prior to the Option Closing Date, shall have been
fully performed, fulfilled or complied with.
(f) The Representative shall have received an
opinion, dated the Closing Date and the Option Closing Date, from ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, San ▇▇▇▇, Puerto Rico, counsel for the Company to the
following effect:
(i) The Company has been duly organized and
validly existing as a corporation under the laws of the
Commonwealth of Puerto Rico and the United States and is in
good standing with the Commonwealth of Puerto Rico. The
Company is registered as a savings and loan holding company
under HOLA and is in good standing with the OTS. Each of
Doral Mortgage Corporation ("Doral Mortgage") and Doral
Federal Savings Bank ("Doral Federal"), each a Subsidiary, is
a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation. Each of the Company, Doral Mortgage and Doral
Federal is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the
nature or conduct of its business or use of its property and
assets makes such qualification necessary, except where the
failure to so qualify 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 taken as a whole;
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(ii) The Company has an authorized capitalization as
set forth in the Prospectus; all of the outstanding shares of
Common Stock have been duly authorized and validly issued by
the Company, are fully paid and nonassessable and are free of
any preemptive or other rights to subscribe for any of the
Shares, except for the rights of BanPonce Corporation
("BanPonce") to acquire up to 200,000 additional shares of
Common Stock pursuant to Article 11 of a Debenture Purchase
Agreement dated September 25, 1995 between the Company and
BanPonce (the "Debenture Purchase Agreement"); the Company has
duly authorized the issuance and sale of the Shares to be
sold by it hereunder; such Shares, when issued by the Company
and paid for in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable and will conform
in all material respects to the description thereof contained
in the Prospectus and will not be subject to any preemptive,
subscription or other similar rights; the Shares have been
duly authorized for quotation on the NASDAQ NMS; and no
holders of securities of the Company are entitled to have
such securities registered under the Registration Statement,
except for the registration rights of BanPonce under Article
10 of the Debenture Purchase Agreement, which have been
waived;
(iii) The Registration Statement is effective under
the Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any
amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement or any
amendment thereto has been issued, and, to the best knowledge
of such counsel, no proceedings for that purpose have been
instituted or are pending or are threatened or contemplated
under the Act;
(iv) The Registration Statement originally filed
with respect to the Shares and each amendment thereto and the
Prospectus and, if any, each amendment and supplement thereto
(other than the documents incorporated therein by reference
and not including the financial statements, schedules and
other financial data contained therein, as to which such
counsel need not express any opinion), complied as to form in
all material respects with the requirements of the Act, the
Exchange Act and the related rules and regulations thereunder;
(v) The descriptions contained and summarized in the
Registration Statement, or incorporated therein by reference,
and the Prospectus of contracts and other documents are
accurate and fairly represent in all
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material respects the information required to be shown by the
Act and the Rules and Regulations; and the statements set
forth under the headings "Recent Developments," "Business,"
"Description of Capital Stock," "Certain Federal Income Tax
Considerations" and "Certain Puerto Rico Income Tax
Considerations" in the Prospectus, insofar as such statements
constitute a summary of legal matters, documents or
proceedings referred to therein, provide an accurate summary
of such legal matters, documents and proceedings;
(vi) To the knowledge of such counsel, there are no
contracts or documents which are required by the Act to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which
are not filed or incorporated therein by reference as required
by the Act and the Rules and Regulations;
(vii) To the knowledge of such counsel after
reasonable investigation, there is not pending or threatened
against the Company or any of the Subsidiaries any action,
suit, arbitration, claim governmental or other proceeding
(informal or formal) or investigation before or by any
Governmental Body of a character required to be disclosed in
the Registration Statement or the Prospectus which is not so
disclosed therein. To the knowledge of such counsel after
reasonable investigation, neither the Company nor any
Subsidiary is in violation of, or in default with respect to,
any law, rule, or regulation, or any order, judgment or
decree, except as described in the Registration Statement or
Prospectus or such as in the aggregate do not now have and can
reasonably be expected in the future not to have a material
adverse effect upon the operations, business, properties, or
assets of the Company and its Subsidiaries taken as a whole;
nor is the Company or any Subsidiary presently required under
any order, judgment or decree to take any action in order to
avoid any such violation or default;
(viii) The Company has full legal right, power, and
authority to enter into this Agreement and to consummate the
transactions provided for herein; this Agreement has been duly
authorized, executed and delivered by the Company; this
Agreement, assuming due authorization, execution and delivery
by each other party hereto, is a valid and binding agreement
of the Company, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in
effect relating to or affecting
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creditors' rights generally or by general principles of equity
relating to the availability of remedies and except as rights
to indemnity and contribution may be limited by federal or
state securities laws or the public policy underlying such
laws;
(ix) None of the Company's execution or delivery of
this Agreement, its performance hereof, its consummation of
the transactions contemplated herein or its application of the
net proceeds of the offering in the manner set forth under the
caption "Use of Proceeds," conflicts or will conflict with or
results or will result in any breach or violation of any of
the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any Encumbrance upon,
any property or assets of the Company pursuant to (A) the
terms of the Certificate of Incorporation or By-laws of the
Company, in each case as amended; (B) the terms of any
contract or other agreement to which the Company is a party or
by which it is or may be bound or to which any of its
properties is or may be subject and of which such counsel has
knowledge; (C) any statute, rule or regulation of any
Governmental Body having jurisdiction over the Company or any
of its activities or properties; or (D) the terms of any
judgment, decree or order of any arbitrator or Governmental
Body having such jurisdiction and of which such counsel has
knowledge; and no consent, approval, authorization or order of
any Governmental Body has been or is required for the
Company's performance of this Agreement or the consummation of
the transactions contemplated hereby, except such as have been
obtained under the Act or may be required under state
securities or blue sky laws in connection with the purchase
and distribution by the Underwriters of the Shares;
(x) To such counsel's knowledge after reasonable
investigation, the conduct of the respective businesses of the
Company and its Subsidiaries is not in violation of any
federal, state or local statute, administrative regulation or
other law, which violation is likely to have a material
adverse effect on the Company and its Subsidiaries taken as a
whole; and the Company and its Subsidiaries have obtained all
licenses as are necessary or required for the ownership,
leasing and operation of their respective properties and the
conduct of their businesses as presently conducted;
(xi) The Company is not required to be registered as
an investment company under the Investment Company Act;
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(xii) To the knowledge of such counsel, the Company
is not in any breach or violation of any of the terms or
provisions of, or in default under (nor has an event occurred
which with notice or lapse of time or both would constitute a
default or acceleration under), (A) the terms of its
Certificate of Incorporation or By-laws, in each case as
amended; (B) the terms of any contract or other agreement
known to such counsel after reasonable investigation to which
the Company is a party or by which the Company is or may be
bound or to which any of its properties or assets is or may be
subject; (C) any statute, rule or regulation of any
Governmental Body having jurisdiction over the Company or any
of its activities, assets or properties; or (D) the terms of
any judgment, decree or order, known to such counsel after
reasonable investigation, of any arbitrator or Governmental
Body having such jurisdiction, which breach, violation or
default could have a material adverse effect on the Company
and its Subsidiaries taken as a whole;
(xiii) To such counsel's knowledge after reasonable
investigation, no legal or governmental proceedings are
pending to which the Company or any of its Subsidiaries is a
party or by which the assets or property of the Company or any
of its Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and
are not described therein and to the knowledge of such
counsel, no such proceedings have been threatened against the
Company or any of its Subsidiaries or any of their respective
assets or properties;
(xiv) The deposit accounts of Doral Federal are
insured by the SAIF of the FDIC to the legal maximum, and no
proceeding for the termination or revocation of such insurance
is pending or threatened. Doral Federal is a member in good
standing of the Federal Home Loan Bank of New York; and
(xv) To the knowledge of such counsel, none of the
Company, Doral Federal, their affiliates, or any of their
respective directors or officers is subject to any order or
directive of, or party to any agreement with, any regulatory
agency having jurisdiction with respect to its business or
operations except as disclosed in the Registration Statement
or the Prospectus.
In addition, such counsel shall state that in the course of
the preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with
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officers and representatives of the Company and with the Accountants, at which
conferences such counsel made inquiries of such officers, representatives and
Accountants and discussed the contents of the Registration Statement and the
Prospectus and, on the basis of the foregoing, nothing has come to such
counsel's attention that causes such counsel to believe that the Registration
Statement as of the date it was declared effective and as of the date of such
opinion contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statement therein not misleading or that the Prospectus
as of the date thereof and as of the date of such opinion, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need not express any opinion
with respect to the financial statements, schedules and other financial data
included in the Registration Statement or the Prospectus).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to matters
involving the application of laws of any other jurisdiction than the
Commonwealth of Puerto Rico and the United States (to the extent satisfactory
in form and scope to counsel for the Underwriters) such counsel may rely upon
the opinion of local (including in-house) counsel to the Company. The
foregoing opinion shall also state that such counsel has no reason to believe
that the Underwriters are not justified in relying upon such opinion of local
counsel, and copies of such opinion shall be delivered to the Representative
and its counsel.
References to the Registration Statement and the Prospectus in
this paragraph (f) shall include any amendment or supplement thereto at the
date of such opinion.
(g) The Representative shall have received an
opinion, dated the Closing Date, from ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, San ▇▇▇▇,
Puerto Rico, counsel for the Selling Stockholder to the following effect:
(i) The Selling Stockholder has full legal right,
power and authority to enter into this Agreement and to sell,
assign, transfer and deliver in the manner provided herein the
Shares sold by such Selling Stockholder; this Agreement has
been duly authorized, executed and delivered by such Selling
Stockholder; and this Agreement, assuming due authorization,
execution and delivery by each other party hereto, is a valid
and binding agreement of such
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Selling Stockholder, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in
effect relating to or affecting creditors' rights generally or
by general principles of equity relating to the availability
of remedies and except as rights to indemnity and contribution
may be limited by federal or state securities laws or the
public policy underlying such laws;
(ii) The Selling Stockholder has full legal right,
power and authority to enter into the Custody Agreement and
Power of Attorney and to consummate the transactions provided
for therein; such Custody Agreement and Power of Attorney has
been duly authorized, executed and delivered by such Selling
Stockholder; and such Custody Agreement and Power of Attorney,
assuming due authorization, execution and delivery by each
other party hereto thereto, is a valid and binding agreement
of such Selling Stockholder, enforceable in accordance with
its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights
generally or by general principles of equity relating to the
availability of remedies and except as rights to indemnity and
contribution may be limited by federal or state securities
laws or the public policy underlying such laws;
(iii) To the knowledge of such counsel, none of the
execution, delivery or performance of this Agreement, the
Power of Attorney or the Custody Agreement and the
consummation of the transactions contemplated herein or
therein by the Selling Stockholder conflicts or will conflict
with or results or will result in any breach or violation of
any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any
Encumbrance upon, any property or assets of such Selling
Stockholder pursuant to (A) the terms of any contract or other
agreement known to such counsel after reasonable investigation
to which such Selling Stockholder is a party or by which he is
bound or to which any of his properties is subject; (B) any
statute, rule or regulation of any Governmental Body having
jurisdiction over such Selling Stockholder or any of his
activities or properties; or (C) the terms of any judgment,
decree or order known to such counsel after reasonable
investigation, of any arbitration or Governmental Body having
such jurisdiction; and
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(iv) Upon delivery of the Shares to be sold
hereunder by the Selling Stockholder and payment therefor in
accordance with the terms of this Agreement and assuming that
each of the Underwriters which has severally purchased such
Shares acquires such Shares in good faith without notice of
any adverse claim (within the meaning of the Uniform
Commercial Code), such Underwriter will have acquired all of
the rights of the Selling Stockholder to the Shares sold by
him hereunder, free and clear of any adverse claim.
(h) The Representative shall have received an
opinion, dated the Closing Date and the Option Closing Date, from Stroock &
Stroock & ▇▇▇▇▇, counsel to the Underwriters, which opinion shall be
satisfactory in all respects to the Representative. In rendering such opinion,
such counsel may rely as to all matters of law of the Commonwealth of Puerto
Rico upon the opinion of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, San ▇▇▇▇, Puerto Rico.
(i) 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 effect that:
(i) they are independent accountants within the
meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) in their opinion, the consolidated financial
statements of the Company and its Subsidiaries audited by them
and included in the Registration Statement comply as to form
in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the published
rules and regulations thereunder with respect to Registration
Statements on Form S-3;
(iii) on the basis of procedures (but not an audit
in accordance with generally accepted auditing standards)
consisting of: (a) reading the minutes of meetings of the
stockholders and the Board of Directors of the Company and its
Subsidiaries since December 31, 1994 as set forth in the
minute books through a specified date not more than five
business days prior to the date of delivery of the Original
Letter; (b) performing the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described
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in SAS No. 71, "Interim Financial Information," on the
unaudited condensed interim financial statements of the
Company and its Subsidiaries included in the Registration
Statement and reading the unaudited interim financial data for
the period from the date of the latest balance sheet included
in the Registration Statement to the date of the latest
available interim financial data; and (c) making inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters regarding the specific items
for which representations are requested below; nothing has
come to their attention as a result of the foregoing
procedures that caused them to believe that: (1) the unaudited
condensed interim financial statements, included 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 condensed interim financial statements, included
in the Registration Statement, for them to be in conformity
with generally accepted accounting principles; (3) (i) at the
date of the latest available interim financial data and at a
specified date not more than five business days prior to the
date of delivery of the Original Letter there was any change
in the capital stock, loans payable, or securities sold under
agreements to repurchase or any decreases in the consolidated
stockholders' equity of the Company and its Subsidiaries as
compared with amounts shown in the December 31, 1994 balance
sheet included in the Registration Statement or (ii) for the
period from January 1, 1995 to a specified date not more than
five business 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 revenues, 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," "Capitalization," "Selected Financial
Data" and "Business of the Company," 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
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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 days prior to the Closing Date or the Option Closing
Date, as the case may be, which would require any change in the Original Letter
if it were required to be dated and delivered at the Closing Date or the Option
Closing Date, as the case may be.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
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.
(j) 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 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;
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(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true
and correct in all respects; each of the covenants required
herein to be performed by the Company on or prior to the date
of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with by the
Company on or prior to the delivery of such certificate has
been duly, timely and fully complied with.
(iii) No stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by
reference in the Registration Statement or any amendment
thereto or the Prospectus has been issued, and no proceedings
for that purpose have been instituted or threatened or, to the
best of the Company's knowledge, are contemplated by the
Commission.
(k) The Shares shall be qualified for sale in
such states 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.
(l) Prior to the Closing Date, the Shares shall
have been accepted for quotation on the NASDAQ NMS.
(m) At the Closing Date, there shall be furnished
to the Representative an accurate certificate, dated the date of its delivery,
from the Selling Stockholder (which may be signed by an Attorney-in-Fact), in
form and substance satisfactory to the Representative, to the effect that:
(i) The Registration Statement and Prospectus and,
if any, each amendment and each supplement thereto contain all
statements required to be included therein regarding such
Selling Stockholder, and (A) as of the date of such
certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact regarding such Selling
Stockholder or omit to state a material fact regarding such
Selling Stockholder required to be stated therein or necessary
in order to make the statements therein regarding such Selling
Stockholder not misleading and (y) the Prospectus does not
contain any untrue statement of a material fact regarding such
Selling Stockholder or omit to state a material fact regarding
such Selling Stockholder required to be stated therein or
necessary in order to make the statements therein regarding
such
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Selling Stockholder, in the 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 regarding such Selling Stockholder
not untrue or misleading in any material respect;
(ii) Each of the representations and warranties
of such Selling Stockholder contained in this Agreement were,
when originally made, and are, at the time such certificate is
delivered, true and correct in all respects; and
(iii) Each of the covenants required herein to be
performed by such Selling Stockholder on or prior to the date
of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with such
Selling Stockholder on or prior to the delivery of such
certificate has been duly, timely and full complied with.
(n) The Company and the Selling Stockholder 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 the Option Closing Date of any statement
in the Registration Statement or the Prospectus, as to the accuracy at the
Closing Date and the Option Closing Date of the representations and warranties
of the Company or the Selling Stockholder, as to the performance by the Company
or the Selling Stockholder of their 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 and the Selling Stockholder will
furnish you with such conformed copies of such opinions, certificates, letters
and other documents as you shall reasonably request.
9. 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 or state
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33
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
made by the Company in Section 3 of this Agreement, (ii) any untrue statement
or alleged untrue statement of any material fact contained in (A) any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or (B)
any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Shares
under the securities or blue sky laws thereof or filed with the Commission or
any securities association or securities exchange (each, an "Application"), or
(iii) the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any amendment or supplement to
the Registration Statement or the Prospectus or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating, defending or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability based solely upon an untrue statement or omission or alleged untrue
statement or omission in any of such documents made in reliance upon and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representative on behalf of any Underwriter expressly for
inclusion therein; provided, further, that such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or
any such other person) from whom the person asserting any such loss, claim,
damage, liability or action purchased Shares which are the subject thereof to
the extent that any such loss, claim, damage or liability (i) results from the
fact that such Underwriter failed to send or give a copy of the Prospectus (as
amended or supplemented) to such person at or prior to the confirmation of the
sale of such Shares to such person in any case where such delivery is required
by the Act and (ii) arises out of or is based upon an untrue statement or
omission of a material fact contained in such Preliminary Prospectus that was
corrected in the Prospectus (or any amendment or supplement thereto), unless
such failure to deliver the Prospectus (as amended or supplemented) was the
result of noncompliance by the Company with Section 6(f). 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
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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) The Selling Stockholder 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 he may
become subject under the Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement made by such Selling
Stockholder in Section 4 of this Agreement, (ii) any untrue statement or
alleged untrue statement of any material fact contained in (A) any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or (B) any
Application executed by such Selling Stockholder or based upon written
information furnished by or on behalf of such Selling Stockholder, or (iii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating, defending or
appearing as a third- party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that such Selling Stockholder
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is 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; provided, further, that
such indemnity with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or any such other person) from whom the person
asserting any such loss, claim, damage, liability or action purchased Shares
which are the subject thereof to the extent that any such loss, claim, damage
or liability (i) results from the fact that such Underwriter failed to send or
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give a copy of the Prospectus (as amended or supplemented) to such person at or
prior to the confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act and (ii) arises out of or is based
upon an untrue statement or omission of a material fact contained in such
Preliminary Prospectus that was corrected in the Prospectus (or any amendment
or supplement thereto), unless such failure to deliver the Prospectus (as
amended or supplemented) was the result of noncompliance by the Company with
Section 6(f); and provided further, however, that such Selling Stockholder will
be liable in any such case only to the extent that such loss, claim, damage,
liability or action arises out of or is based upon any untrue statement or
omission or alleged untrue statement or omission made in the Registration
Statement or any amendment thereto or in the Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
information furnished to the Company by such Selling Stockholder. This
indemnity agreement will be in addition to any liability that such Selling
Stockholder might otherwise have. Such Selling Stockholder 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. The Company and such Selling Stockholder may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
(c) Each Underwriter will indemnify and hold
harmless the Company, the Selling Stockholder, each person, if any, who
controls the Company or the Selling Stockholder 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, the Selling Stockholder and any such director, officer or
controlling person may become subject under the Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or any Application, or material fact
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required to be stated therein or (ii) the omission or the alleged omission to
state in the Registration Statement, any Preliminary Prospectus or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or any Application, a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representative expressly for use therein; and, subject
to the limitation set forth immediately preceding this clause, will reimburse,
as incurred, any legal or other expenses reasonably incurred by the Company,
the Selling Stockholder 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 and the Selling
Stockholder acknowledge that, for all purposes under this Agreement, the
statements set forth under the heading "Underwriting" and the information in
the first paragraph on the inside front cover of any Preliminary Prospectus and
the Prospectus 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.
(d) Promptly after receipt by an indemnified
party under this Section 9 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 9, notify such indemnifying
party or parties of the commencement thereof; but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party under the foregoing
provisions of this Section 9 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
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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 9 for any legal or
other expenses other than reasonable costs of investigation subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) 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 9, representing the indemnified parties under
such 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 consent of the indemnifying
party, unless such indemnified party waived its rights under this Section 9 in
which case the indemnified party may effect such a settlement without such
consent.
(e) If the indemnification provided for in the
foregoing paragraphs of this Section 9 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, damages or liabilities (or
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38
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder, 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 and the Selling
Stockholder 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, the Selling Stockholder 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,
the Selling Stockholder and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 9(e) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities (or actions in respect thereof) referred to above in this
Section 9(e) 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 9(e), 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 9(e) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 9(e),
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 or the Selling Stockholder 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 and the Selling Stockholder, subject in
each case to the provisions of this paragraph (e). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such
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party in respect of which a claim for contribution may be made under this
Section 9(e), will notify any such party or parties from whom contribution may
be sought, but the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation(s) it or they
may have hereunder or otherwise than under this paragraph (e) or (y) 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).
(f) The indemnity and contribution agreements
contained in this Section 9 and the representations and warranties of the
Company and the Selling Stockholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any investigation made
by or on behalf of the Underwriters, (ii) acceptance of any of the Shares and
payment therefor or (iii) any termination of this Agreement.
10. 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 or the Selling Stockholder 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 securities generally shall have been suspended by the Commission or by
the NASDAQ NMS, (ii) minimum or maximum prices shall have been established for
the Common Stock or securities generally on either the NASDAQ NMS or the New
York Stock Exchange, or additional material governmental restrictions, not in
force on the date of this Agreement, shall have been imposed upon trading in
securities generally by any of such market or exchange or by order of the
Commission or any court or other governmental authority, (iii) a general
banking moratorium shall have been declared by the United States or New York
State 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 10
shall be without liability of any party to any other party except as provided
in Sections 7(a) and 9.
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11. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Shares or Option Shares hereunder
and the aggregate number of such Shares that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Shares or Option Shares to be purchased by all of the
Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representative for the purchase of such Shares
by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representative), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Shares or Option
Shares that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Shares that is more than ten percent of the aggregate number of Firm
Shares or Option Shares, as the case may be, to be purchased by all of the
Underwriters at such time hereunder, and if arrangements satisfactory to the
Representative are not made within 36 hours after such default for the purchase
by other persons (who may include one or more of the non-defaulting
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 non-defaulting Underwriter, the Company or the Selling Stockholder
other than as provided in Section 12 hereof. In the event of any default by
one or more Underwriters as described in this Section 11, the Representative
shall have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 11 hereof for not
more than seven business days in order that any necessary changes may be made
in the arrangements or documents for the purchase and delivery of the Firm
Shares or Option Shares, as the case may be. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under
this Section 11. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
12. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers, the Selling Stockholder 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, the Selling Stockholder, any Underwriter or any controlling person
referred to in Section 9 hereof and (ii) delivery of and payment for the
Shares. The respective agreements, covenants, indemnities and other statements
set forth in Sections 7 and 9 hereof shall remain in
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full force and effect, regardless of any termination or cancellation of this
Agreement.
13. Notices. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 1159
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇, (b) if to the Selling Stockholder, at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇, c/o
First Financial Caribbean Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, or (c) if to the Underwriters, to the
Representative at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ Securities Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: A. ▇▇▇▇▇ ▇▇▇▇▇▇. Any such
notice shall be effective only upon receipt. Any notice under Section 9 or 10
may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.
14. Successors. This Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Company, the Selling
Stockholder and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company and the Selling Stockholder contained in Section 9 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section
9 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 or the Selling Stockholder
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.
15. 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 STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an
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original, but all of which together shall constitute one and the same
instrument.
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Stockholder and the several
Underwriters.
Very truly yours,
FIRST FINANCIAL CARIBBEAN CORPORATION
By: _________________________________
Name:
Title:
SELLING STOCKHOLDER
▇▇▇▇▇▇▇ ▇▇▇▇▇
By: _________________________________
Name:
Confirmed as of the date first
above mentioned:
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ SECURITIES INC.
By: _______________________________
Name:
Title:
Acting on its behalf and
as the Representative of the
other several Underwriters
named in Schedule II hereof.
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SCHEDULE I
UNDERWRITERS
(1) (2) (3)
Number of Number of Aggregate
Firm Shares Firm Shares Number of
to be to be Firm
Purchased Purchased from Shares to
from the Selling be
the Company Stockholder Purchased
----------- -------------- ---------
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Securities Inc. . . . .
----------- -------------- ---------
Total . . . . . . .
=========== ============== =========
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EXHIBIT A
LIST OF SUBSIDIARIES
1. Doral Mortgage Corporation
2. RSC Corp.
3. Centro Hipotecario, Inc.
4. Doral Federal Savings Bank
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