EXHIBIT 1.1
EXECUTION COPY
$350,000,000
DORAL FINANCIAL CORPORATION
FLOATING RATE SENIOR NOTES DUE JULY 20, 2007
UNDERWRITING AGREEMENT
JULY 15, 2004
UNDERWRITING AGREEMENT
July 15, 2004
DEUTSCHE BANK SECURITIES INC.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Doral Financial Corporation, a Puerto Rico corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, an aggregate of $350,000,000 principal amount of
Floating Rate Senior Notes Due July 20, 2007 (the "Securities") of the Company.
The Securities will be issued under an indenture, dated as of May 14, 1999, as
amended (the "Indenture"), between the Company and Deutsche Bank Trust Company
Americas (formerly known as Bankers Trust Company), as trustee. The respective
principal amounts of the Securities to be purchased by each of the several
Underwriters are set forth opposite their names on Schedule A hereto. The
Securities are described in the Final Prospectus which is referred to below. To
the extent there are no additional Underwriters listed on Schedule A other than
you, the term Representatives as used herein shall mean you, as Underwriters,
and the terms Representatives and Underwriters shall mean either the singular or
plural as the context requires.
As used in this Agreement, the term (i) "Act" means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, (ii) "Basic Prospectus" means the prospectus contained in the
Registration Statement at the Effective Date; (iii) "Business Day" means a day
on which the New York Stock Exchange is open for trading; (iv) "Effective Date"
means the date and time that the Registration Statement as then amended became
effective; (v) "Final Prospectus" means the prospectus supplement to the Basic
Prospectus relating to the Securities that was first filed pursuant to Rule
424(b) under the Act after the Execution Time, together with the Basic
Prospectus; (vi) "Preliminary Final Prospectus" means any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus; (vii) "Registration Statement" means (1) the
registration statement no. 333-72740 and any amendments thereto and (2) any Rule
462(b) Registration Statement including, in each case, exhibits, financial
statements and information and documents deemed to be a part of each such
registration statement through incorporation by reference pursuant to Item 12 of
Form S-3; (viii) "Rule 462(b) Registration Statement" means a registration
statement and any amendments thereto filed pursuant to Rule 462(b) under the Act
relating to the offering covered by the registration statement no. 333-
72740, as amended; and (ix) "Significant Subsidiary" has the meaning given to it
in Rule 405 under the Act. Any reference herein to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were or will be filed under the
Exchange Act; any reference herein to information that is "contained,"
"included" or "stated" in the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus or other references of like
import, shall be deemed to mean and include all information that is incorporated
by reference in any of the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, the Final
Prospectus or any Preliminary Final Prospectus shall be deemed to include the
filing of any document under the Exchange Act after the Execution Time deemed to
be incorporated by reference in any of the foregoing documents. For purposes of
this Agreement, all references to the Registration Statement, the Basic
Prospectus, the Final Prospectus, any Preliminary Final Prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System ("▇▇▇▇▇"); each such document delivered to the
Underwriters for use in connection with the offering of the Securities will, at
the time of such delivery, be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T under the Act. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Final Prospectus and are authorized to distribute
the Final Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the Underwriters).
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms, conditions and agreements herein set
forth, the Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective principal amount of Securities set forth opposite the name of such
Underwriter in Schedule A hereto, in each case at a purchase price of 99.80% of
the principal amount thereof plus accrued interest, if any, from July 20, 2004
to the Time of Purchase. The Company is advised by you that the Underwriters
intend (i) to make a public offering of their respective portions of the
Securities as soon after the date of this Agreement as in your judgment is
advisable and (ii) initially to offer the Securities upon the terms set forth in
the Final Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
2. Payment and Delivery. Payment of the purchase price for
the Securities shall be made to the Company by Federal Funds wire transfer,
against delivery
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of the Securities to you through the facilities of The Depository Trust Company
("DTC") for the respective accounts of the Underwriters. Such payment and
delivery shall be made at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City time, on July 20,
2004 (unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are actually made is hereinafter sometimes
called the "Time of Purchase." The Company will deliver against payment of the
purchase price the Securities in the form of one or more permanent global
Securities in definitive form ("Global Securities") deposited with the Trustee
as custodian for DTC and registered in the name of Cede & Co., as nominee for
DTC. Interests in any permanent global Securities will be held only in
book-entry form through DTC, except in the limited circumstances described in
the Final Prospectus. For the purpose of expediting the checking of the
Securities by you, the Company agrees to make such Global Securities available
to you for such purpose, at such place as is designated by you, at least one
full Business Day preceding the Time of Purchase.
3. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, each of the Underwriters
that:
(a) the Company meets the requirements for the use of Form S-3
under the Act and has carefully prepared and filed in accordance with the
provisions of the Act, with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-3 (File No. 333-116388), which
includes the Basic Prospectus, for the registration under the Act of certain of
the Company's securities, which include the Securities. The Company may have
filed one or more amendments thereto and one or more Preliminary Final
Prospectuses, each of which has previously been furnished to you. The
Registration Statement incorporates by reference documents which the Company has
filed or will file in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively
called the "Exchange Act"). The Registration Statement has been declared
effective under the Act by the Commission and no stop order suspending the
effectiveness of the Registration Statement has been issued under the Act and no
proceedings for that purpose have been instituted or are pending or, to the best
of the Company's knowledge, are threatened by the Commission, and any request on
the part of the Commission for additional information has been complied with.
The Basic Prospectus and each Preliminary Final Prospectus filed before the
Execution Time complied when so filed in all material respects with the Act and
was filed in the manner and within the time period required by Rule 424(b) under
the Act, and no order of the Commission preventing or suspending the use of any
Preliminary Final Prospectus, and no proceedings for any such purpose have been
instituted or are pending or, to the best of the Company's knowledge, are
threatened by the Commission, and any request on the part of the Commission for
additional information has been complied with. The Company will next file with
the Commission the Final Prospectus in accordance with Rules 415 and 424(b)
under the Act. As filed, the Final Prospectus shall contain all required
information and, except to the extent the Representatives shall agree in writing
to a modification, shall be in all
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substantive respects in the form furnished to the Representatives prior to the
date and time that this Agreement is executed and delivered by the parties
hereto (the "Execution Time") or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
as the Company has advised the Representatives, prior to the Execution Time,
will be included or made therein. The Registration Statement, at the Execution
Time, meets the requirements set forth in Rule 415(a)(1)(x) under the Act;
(b) when first filed in accordance with Rule 424(b) under the Act,
the Final Prospectus complied or will comply in all material respects with the
applicable provisions of the Act. As of the Effective Date, the Execution Time,
the dates of the filing of each Preliminary Final Prospectus and the Final
Prospectus pursuant to Rule 424(b) under the Act and the Time of Purchase, the
Registration Statement complied or will comply in all material respects with the
applicable provisions of the Act and the Trust Indenture Act of 1939 ("Trust
Indenture Act"), and did not and will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and as of
the date of the filing pursuant to Rule 424(b) under the Act of the Final
Prospectus and as of the Time of Purchase, the Final Prospectus will 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; when any Preliminary Final Prospectus was first filed with the
Commission and when any amendment thereof or supplement thereto was first filed
with the Commission, such Preliminary Final Prospectus as amended or
supplemented did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however, that the Company
makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Final Prospectus in reliance upon and in
conformity with information concerning the Underwriters and furnished in writing
by or on behalf of any Underwriter through you to the Company expressly for use
in the Registration Statement or the Final Prospectus; the documents
incorporated by reference in the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus have been carefully
prepared by the Company and, at the time such documents incorporated by
reference became effective or were filed with the Commission, as applicable (or,
if a supplement or an amendment with respect to any such document was filed,
when such supplement or amendment was filed), complied in all material respects
with the applicable requirements of the Act and the Exchange Act, and do not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and such documents incorporated by reference have been timely filed
in conformity with the applicable requirements of the Act and the Exchange Act;
and the Company has not distributed any offering material in connection with the
offering or sale of the Securities other than the Registration Statement, the
Final Prospectus and any other materials, if any, permitted by the Act;
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(c) the Indenture has been duly authorized, executed and delivered
and has been duly qualified under the Trust Indenture Act; the Securities have
been duly authorized; and when the Securities are delivered and paid for at the
Time of Purchase, such Securities will have been duly executed, authenticated,
issued and delivered and will be in due and proper form and will conform to the
description thereof contained in the Final Prospectus and the Indenture and such
Securities will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles;
(d) the Company has an authorized capitalization as set forth
under the heading entitled "Actual" in the section of the Final Prospectus
entitled "Capitalization" and, as of the Time of Purchase, the Company shall
have an authorized capitalization as set forth under the heading entitled "As
Adjusted for this Offering" in the section of the Final Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable, have been issued in compliance with all federal, state and
Puerto Rico laws and were not issued in violation of any preemptive right,
co-sale right, resale right, right of first refusal or similar right;
(e) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth of Puerto
Rico, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and the Final Prospectus, to execute and deliver each of this Agreement and the
Indenture, to perform its obligations thereunder and to issue, sell and deliver
the Securities as therein contemplated;
(f) the Company has no subsidiaries within the meaning of Rule 405
under the Act other than those listed on Schedule B hereto (collectively, the
"Subsidiaries"); other than the Subsidiaries, the Company does not own or
control, directly or indirectly, any shares of stock of any corporation or any
other equity or have any equity interest in any firm, partnership, joint
venture, association, limited liability company or other entity (each, an
"Entity"); none of the Subsidiaries owns, directly or indirectly, any shares of
stock or any other equity securities of any Entity other than as listed on
Schedule B hereto; complete and correct copies of the certificates of
incorporation and of the bylaws of the Company and each of the Subsidiaries and
all amendments thereto have been delivered to you, and no changes therein will
be made subsequent to the Execution Time and prior to the Time of Purchase
without your prior written consent; each Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Final Prospectus; all of the outstanding
shares of capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, in each
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such case subject to no security interest, other encumbrance or adverse claims;
no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in any Subsidiary are outstanding; the
Company and each Subsidiary is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the nature of the
business conducted by it or location of the assets or properties owned, leased
or licensed by it requires such qualification, except for such jurisdictions
where the failure to so qualify would not have a material adverse effect on the
assets or properties, business, prospects, results of operations or financial
condition of the Company and the Subsidiaries taken as whole (a "Material
Adverse Effect"); and the Company and each Subsidiary is in compliance in all
material respects with the laws, orders, rules, regulations and directives
issued or administered by such jurisdictions;
(g) neither the Company nor any Subsidiary is in violation, breach
of, or in default under (nor has any event occurred which with notice, lapse of
time, or both would result in any breach of, or constitute a default under), its
charter or by-laws, and the execution, delivery and performance of this
Agreement and the Indenture, the issuance and sale of the Securities and the
consummation of the transactions contemplated hereby and thereby, and compliance
by the Company with its obligations hereunder, do not and will not conflict
with, or result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time, or both would result in any breach
of or constitute a default under), any provision of the charter or by-laws of
the Company or any Subsidiary; except for such violations, breaches or defaults
that would not have, individually or in the aggregate, a Material Adverse
Effect, neither the Company nor any Subsidiary is in violation, breach of, or in
default under (nor has any event occurred which with notice, lapse of time, or
both would result in any breach of, or constitute a default under), or has
failed to perform or observe, any obligation, agreement, covenant or condition
contained in any license, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any lease, contract or
any other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or any of their respective properties may be bound
or affected, and the execution, delivery and performance of this Agreement and
the Indenture, the issuance and sale of the Securities and the consummation of
the transactions contemplated hereby and thereby, and compliance by the Company
with its obligations hereunder and thereunder, do not and will not conflict
with, or result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time, or both would result in any breach
of or constitute a default under), any provision of any license, indenture,
mortgage, deed of trust, bank loan, credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company or any Subsidiary is a party or by which any of them or their
respective properties may be bound or affected, or under any federal, state,
Puerto Rico, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any Subsidiary;
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(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) no approval, authorization, consent or order of or filing with
any national, state, Puerto Rico or local governmental or regulatory commission,
board, body, authority or agency is required in connection with the issuance and
sale of the Securities, delivery and performance of this Agreement or the
consummation by the Company of the transaction contemplated hereby other than
registration (which has occurred) of the Securities under the Act, the
qualification (which has occurred) of the Indenture under the Trust Indenture
Act and any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Securities are being offered by the
Underwriters or under the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD");
(j) PricewaterhouseCoopers LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries is incorporated by
reference in the Registration Statement and the Final Prospectus, are, and
during the periods covered by their report, were independent public accountants
as required by the Act;
(k) the Company and each Subsidiary possesses all licenses,
authorizations, consents and approvals and has made all filings required under
any federal, state, Puerto Rico, local or foreign law, regulation or rule, and
possesses all licenses, authorizations, consents and approvals from other
persons, in order to conduct its respective businesses except for such licenses,
authorizations, consents and approvals that, if not so possessed, would not have
a Material Adverse Effect; such licenses, authorizations, consents and approvals
are valid and in full force and effect and neither the Company nor any
Subsidiary has received any notice of any proceeding relating to the revocation
or modification of any such license, authorization, consent or approval; neither
the Company nor any of the Subsidiaries is in violation of, or in default under,
any such license, authorization, consent or approval or any federal, state,
Puerto Rico, local or foreign law, regulation or rule or any directive, decree,
order or judgment applicable to the Company or any Subsidiary the effect of
which could have a Material Adverse Effect;
(l) all statutes, regulations, contracts, licenses, agreements,
leases or documents of a character required to be summarized or described in the
Registration Statement or the Final Prospectus or to be filed as an exhibit to
the Registration Statement have been so summarized, described or filed as
required; each such summary description accurately reflects in all material
respects the terms of the underlying statute, regulation, contract, license,
agreement, lease or document;
(m) there are no actions, suits, claims, investigations or
proceedings pending, threatened or contemplated to which the Company or any of
the Subsidiaries or any of their respective officers is a party or is subject,
or of which any of their respective properties is subject at law or in equity,
or before or by any federal, state, Puerto Rico, local or foreign governmental
or regulatory commission, board, body, authority or agency
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which could result in a judgment, decree or order having a Material Adverse
Effect, affect the consummation of the transactions contemplated hereby or are
required to be described in the Registration Statement or the Final Prospectus
but are not so described;
(n) the audited consolidated statements of financial condition of
the Company and the Subsidiaries (and the notes related thereto), incorporated
by reference in the Registration Statement and the Final Prospectus present
fairly the financial condition, results of operations, income, comprehensive
income, changes in stockholders' equity and cash flows of the entities purported
to be shown thereby in conformity with generally accepted accounting principles,
at the dates and for the periods indicated, and have been carefully prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the period or periods involved; and the supporting schedules,
if applicable, incorporated by reference in the Registration Statement and the
Final Prospectus present fairly the information required to be stated therein.
The unaudited consolidated financial statements of the Company and the
Subsidiaries (including all notes and schedules thereto), incorporated by
reference in the Registration Statement and the Final Prospectus present fairly
the financial position of the Company and the Subsidiaries at the dates and for
the periods indicated in conformity with generally accepted accounting
principles (except for the absence of notes) applied on a consistent basis
throughout the periods shown, subject to normally recurring charges, and have
been carefully prepared in accordance with the instructions to Form 10-Q under
the Exchange Act. The summary and selected financial data of the Company and the
Subsidiaries included in the Final Prospectus present fairly the information
shown therein as of the respective dates and for the respective periods
specified therein and the summary and selected financial data have been
presented on a basis consistent with the financial statements incorporated by
reference in the Registration Statement and the Final Prospectus;
(o) subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus (exclusive, in each
case, of any amendment thereof or supplement thereto filed after the Execution
Time), there has not been (i) any material adverse change, or any development
which is likely to cause a material adverse change, in the prospects, business,
properties, assets, results of operations, condition (financial or otherwise),
or operations of the Company and the Subsidiaries taken as a whole, (ii) any
transaction which is material to the Company or the Subsidiaries taken as a
whole, except transactions in the ordinary course of business, (iii) any
obligation, direct or contingent, which is material to the Company and the
Subsidiaries taken as a whole, incurred by the Company or the Subsidiaries,
except obligations incurred in the ordinary course of business, (iv) any change
in the capital stock of the Company or the Subsidiaries (other than any change
in the capital stock of the Company related to the exercise of stock options of
the Company outstanding at the Execution Time), (v) any change in the
outstanding indebtedness of the Company or the Subsidiaries (other than
indebtedness incurred in the ordinary course of the Company's or the
Subsidiaries' business) or (vi) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company (other than the
declaration or payment of
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(A) quarterly dividends on the Common Stock, (B) monthly dividends on the
Company's 7% Noncumulative Monthly Income Preferred Stock, Series A, the
Company's 8.35% Noncumulative Monthly Income Preferred Stock, Series B or the
Company's 7.25% Noncumulative Monthly Income Preferred Stock, Series C) or (C)
quarterly dividends on the Company's 4.75% Perpetual Cumulative Convertible
Preferred Stock or the Company's Floating Rate Senior Notes Due December 7,
2005. Neither the Company nor the Subsidiaries has any material contingent
obligation which is not disclosed in the Registration Statement and the Final
Prospectus (exclusive, in each case, of any amendment thereof or supplement
thereto filed after the Execution Time);
(p) the Company is not and, upon consummation of the transactions
contemplated by this Agreement, will not be an "investment company" or an entity
"controlled" by an "investment company" or a "promoter" or "principal
underwriter" for a "registered investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act");
(q) each of the Company and the Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses,
know-how and other similar rights and proprietary knowledge (collectively,
"Intangibles") described in the Registration Statement or the Final Prospectus
as being owned by it or necessary for the conduct of its business. Neither the
Company nor any of the Subsidiaries has received any notice of, or is aware of,
any infringement of or conflict with asserted rights of others with respect to
any Intangible;
(r) the Company and each Subsidiary owns, or has valid rights to
use, all items of real and personal property used in its business free and clear
of all liens, encumbrances and claims which may have a Material Adverse Effect;
(s) neither the Company nor any of the Subsidiaries is involved in
any labor dispute nor is any such dispute threatened, which dispute would have a
Material Adverse Effect. The Company is not aware of any existing or imminent
labor disturbance by the employees of any of the principal suppliers or
contractors of the Company or the Subsidiaries that would have a Material
Adverse Effect;
(t) no transaction has occurred between or among the Company and
any of its officers or directors or five percent shareholders or any affiliate
or affiliates of any such officer or director or five percent shareholders that
is required to be described in and is not described in the Registration
Statement and the Final Prospectus;
(u) the Company has not taken, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in, or which
has constituted or which might reasonably be expected to constitute, under the
Exchange Act or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities;
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(v) the Company and each of the Subsidiaries has filed all
federal, state, Puerto Rico, local and foreign tax returns which are required to
be filed through the date hereof, or has received extensions thereof, and has
paid all taxes shown on such returns and all assessments received by each of
them to the extent that the same are material and have become due. There are no
tax audits pending or any investigations pending which if adversely determined
would have a Material Adverse Effect. There are no material proposed additional
tax assessments against the Company or any of the Subsidiaries;
(w) the books, records and accounts of the Company and each of the
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and each of the Subsidiaries. The Company and each of
the Subsidiaries maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and to
maintain asset accountability, (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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(x) the Company and each of the Subsidiaries is insured in
accordance with industry standards against such losses and risks and in such
amounts as are customary in the businesses in which it is engaged; all policies
of insurance and fidelity or surety bonds insuring the Company or any of the
Subsidiaries or the Company's or any of the Subsidiaries' respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company and each of the Subsidiaries is in compliance with the terms of such
policies and instruments in all material respects; and neither the Company nor
any Subsidiary has reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect;
(y) except to the extent that would not have a Material Adverse
Effect (i) the Company and each Subsidiary is in compliance in all material
respects with all rules, laws and regulations relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment ("Environmental Laws") that are applicable to its business; (ii)
neither the Company nor any of the Subsidiaries has received any notice from any
governmental authority or third party of an asserted claim under Environmental
Laws; (iii) the Company and each Subsidiary has received all permits, licenses
or other approval required of it under applicable Environmental Laws to conduct
its business and is in compliance with all terms and conditions of any such
permit, license or approval; (iv) no facts currently exist that will require the
Company or any Subsidiary to make future material capital expenditures to comply
with Environmental Laws; (v) no property that is or has been owned, leased or
occupied by the
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Company or any Subsidiary has been designated as a Superfund site pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA 1980"), or
otherwise designated as a contaminated site under applicable state, Puerto Rico
or local law; and (vi) the Company has reasonably concluded that there are no
unanticipated associated costs and liabilities which would, singly or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been named as a "potentially responsible party" under CERCLA
1980;
(z) none of the Company, any Subsidiary or any other person
associated with or acting on behalf of the Company or any Subsidiary including,
without limitation, any director, officer, agent or employee of the Company or
any Subsidiary has, directly or indirectly, while acting on behalf of the
Company or any Subsidiary (i) received or retained any funds of the Company or
any Subsidiary in violation of any law, rule or regulation which payment,
receipt or retention of funds is of a character required to be disclosed in the
Final Prospectus or the Registration Statement; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; (iv) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; or (v) made any other unlawful
payment;
(aa) the certificates delivered pursuant to the terms of this
Agreement and all other documents delivered by the Company or its
representatives in connection with the issuance and sale of the Securities were
on the dates on which they were delivered, or will be on the dates on which they
are to be delivered, true and complete. Any certificate signed by an officer of
the Company and delivered to the Representatives or counsel for the Underwriters
in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to
the Underwriters;
(bb) the Company is registered with the Board of Governors of the
Federal Reserve System (the "Federal Reserve") as a bank holding company under
the Bank Holding Company Act of 1956, as amended (the "BHCA"); the Company is in
good standing with the Federal Reserve; the Company's election to be treated as
a financial holding company under the BHCA is in full force and effect; any
Subsidiary required to be registered with the Federal Reserve is so registered;
and each Subsidiary required to be so registered is in good standing with the
Federal Reserve;
(cc) the deposit accounts of Doral Bank ("Doral Bank") and Doral
Bank, FSB ("Doral FSB") are insured by the Savings Association Insurance Fund
(the "SAIF") of the Federal Deposit Insurance Corporation (the "FDIC") to the
legal maximum, and no proceeding for the termination or revocation of such
insurance is pending or threatened. Doral Bank and Doral FSB are members in good
standing of the Federal Home Loan Bank of New York;
-11-
(dd) none of the Company, Doral Bank, Doral FSB or their
affiliates, or any of their respective directors or officers, is subject to any
order or directive of, or is a party to any agreement with, any regulatory
agency having jurisdiction with respect to its business or operations except as
disclosed in the Registration Statement and in the Final Prospectus or as would
not have a Material Adverse Effect;
(ee) the Company is engaged in trade or business in Puerto Rico.
The Company derived more than 20% of its gross income from Puerto Rico sources
for the three-year period ending with the close of the Company's taxable year
end on December 31, 2003;
(ff) there are no contracts, agreements or understandings between
the Company and any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's fee or other
like payment;
(gg) the Company and each Subsidiary has fulfilled its respective
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company or any Subsidiary are
eligible to participate and each such plan is in compliance with the presently
applicable provisions of ERISA and such regulations and published
interpretations, except for any failure to fulfill any such obligations, or
failure to comply, that singly or in the aggregate would not have a Material
Adverse Effect. None of the Company or any Subsidiary has incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA, except for any such liability that would not have a Material Adverse
Effect; and
(hh) the Company is not a "passive foreign investment company"
("PFIC") within the meaning of Section 1296 of the United States Internal
Revenue Code of 1986, as amended, and does not anticipate that it will become a
PFIC in the foreseeable future.
4. Certain Covenants of the Company. The Company hereby
covenants and agrees with each of the Underwriters as follows:
(a) to furnish such information as may be required and otherwise
to arrange, if necessary, for the qualification of the Securities for offering
and sale under the laws of such jurisdictions as you may designate, and to
maintain such qualifications in effect so long as required for the distribution
of the Securities; provided that the Company shall not be required to qualify to
do business or to consent to the service of process under the laws of any such
jurisdiction where it is not now so qualified or subject (except for service of
process with respect to the offering and sale of the Securities); to promptly
advise you of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and to use
its best efforts to
-12-
prevent the suspension of any such qualification and, if so suspended, to obtain
as soon as possible the withdrawal thereof;
(b) to make available to the Underwriters in New York City as many
copies of each Final Prospectus and any supplement thereto or amendment thereof,
and, so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, to prepare and deliver to the Underwriters such amendments
and supplements to the Final Prospectus as are necessary for the Underwriters
and the dealers to comply with the requirements of the Act;
(c) not to file, prior to the termination of the offering of the
Securities, any amendment of the Registration Statement or supplement (including
the Final Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus, any Rule 462(b) Registration Statement or any document incorporated
by reference in any of the foregoing unless the Company has furnished you a copy
for your review prior to the filing, and the Company will not file any such
proposed amendment, supplement, Rule 462(b) Registration Statement, or any
document incorporated by reference into any of the foregoing, to which you
reasonably object. Subject to the foregoing sentence, the Company will cause the
Final Prospectus, properly completed, and any supplement thereto, to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the
Representatives (i) when the Final Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission, (ii)
when, prior to the termination of the offering of the Securities, any amendment
to the Registration Statement shall have been filed or become effective and
(iii) when any document incorporated by reference into any of the foregoing has
been filed;
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission or its staff for any amendment or supplement to
the Registration Statement, the Final Prospectus, or any document incorporated
by reference in any of the foregoing, or for any additional information with
respect thereto, or of notice of institution of proceedings for, or the issuance
of any stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceedings for that purpose; the Company
will use its best efforts to prevent the issuance of any such stop order and, if
the Commission should issue a stop order suspending the effectiveness of the
Registration Statement, to obtain the lifting or removal of such order as soon
as possible; to advise you promptly of any proposal to amend or supplement the
Registration Statement, the Final Prospectus, or any document incorporated by
reference in any of the foregoing, including by filing any documents that would
be incorporated therein by reference;
(e) subject to the provisions of Section 4(c) hereof, to file
promptly all reports and any definitive proxy or information statement required
to be filed by the Company
-13-
with the Commission in order to comply with the Exchange Act subsequent to the
date of the Final Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities, and to
promptly notify you of such filing;
(f) subject to the provisions of Section 4(c) hereof, to file any
Rule 462(b) Registration Statement if necessary or appropriate;
(g) to furnish to you, in each case as soon as such
communications, documents or information become available, and, upon request, to
each of the other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the Company
shall send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, and (iii) copies of documents or reports filed
with any national securities exchange on which any class of securities of the
Company is listed;
(h) to advise the Underwriters promptly of the happening of any
event within the time during which a prospectus relating to the Securities is
required to be delivered under the Act which would require the making of any
change in the Final Prospectus, as then being supplemented, or in the
information incorporated therein by reference, so that the Final Prospectus, as
then supplemented, would not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
shall be necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act, the Company promptly will
(1) notify the Representatives of such event, (2) prepare and file with the
Commission, subject to Section 4(c) hereof, an amendment or supplement which
will correct such statement or omission or effect such compliance and (3)
prepare and furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to the Final Prospectus as may be necessary to reflect
any such change in such quantities as you may request;
(i) subject to Section 4(c) hereof, to make generally available to
its security holders, and to deliver to you, an earnings statement or statements
of the Company (which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date of the
Registration Statement (as defined in Rule 158(c) of the Act) as soon as is
reasonably practicable after the termination of such twelve-month period but not
later than 45 days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date occurred (or
90 days if such 12-month period coincides with the Company's fiscal year);
(j) subject to Section 4(c) hereof, to furnish to its stockholders
as soon as practicable after the end of each fiscal year an annual report
(including a balance sheet
-14-
and statements of income, stockholders' equity and of cash flow of the Company
for such fiscal year, accompanied by a copy of the certificate or report thereon
of nationally recognized independent certified public accountants;
(k) to furnish to you two signed originals and two signed
photostatic copies of the Registration Statement, as initially filed with the
Commission, and of all amendments thereof (including all exhibits thereto and
documents incorporated by reference therein) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each of the
other Underwriters;
(l) to furnish to you as early as practicable prior to the Time of
Purchase, as the case may be, but not later than two business days prior
thereto, a copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiaries which have been read by
the Company's independent certified public accountants, as stated in their
letters to be furnished pursuant to Section 6(b) hereof;
(m) to apply the net proceeds from the sale of the Securities in
the manner set forth under the caption "Use of Proceeds" in the Final
Prospectus;
(n) for the period commencing from the date of this Agreement
until the Time of Purchase, without your prior written consent, not to sell,
offer or agree to sell, assign, contract to sell, pledge, grant any option to
sell or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company), directly or
indirectly, any United States dollar-denominated debt securities issued or
guaranteed by the Company having a maturity of more than one year from the date
of issue or permit the registration under the Act of any such debt securities
(other than a shelf registration statement that includes debt securities), or
publicly announce an intention to effect any such transaction, except for the
registration of the Securities and the sales to the Underwriters pursuant to
this Agreement;
(o) to pay all expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as set
forth under Section 5 hereof or (iii) or (iv) below) in connection with (i) the
preparation and filing of the Registration Statement, the Final Prospectus, and
any amendments or supplements thereto, and the printing and furnishing of copies
of each thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the issuance, sale and delivery of the Securities by the
Company, (iii) the word processing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Statements of Information and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (iv) the
qualification of the Securities for offering and sale under the laws of the
several jurisdictions as provided in Section 4(a) hereof and the determination
of their eligibility
-15-
for investment under the laws of such jurisdictions (including the legal fees
and filing fees and other disbursements of counsel to the Underwriters) and the
printing and furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) any listing of the Securities on
any securities exchange and any registration thereof under the Exchange Act,
(vi) the filing for review of the public offering of the Securities by the NASD,
(vii) any fees charged by investment rating agencies for the rating of the
Securities, and (viii) the performance of the Company's other obligations
hereunder; and
(p) not to take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in, or which might
reasonably be expected to constitute, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities.
5. Reimbursement of Underwriters' Expenses. If the
Securities are not delivered for any reason other than the termination of this
Agreement pursuant to Section 8 hereof, the Company shall, in addition to paying
the amounts described in Section 4(o) hereof, reimburse the Underwriters for all
of their out-of-pocket expenses, including the fees and disbursements of their
counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company when made at the
Execution Time and at and as of the Time of Purchase as if made at the Time of
Purchase, the performance by the Company of all covenants and agreements and the
satisfaction of all the conditions contained in this Agreement required to be
performed or satisfied by the Company on or before the Time of Purchase and to
the following additional conditions precedent:
(a) The Company shall furnish to you at the Time of Purchase an
opinion of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, addressed
to the Underwriters, and dated the Time of Purchase, with reproduced copies for
each of the other Underwriters, in form and substance satisfactory to you
stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Puerto Rico, and has the corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Final Prospectus, to
execute and deliver this Agreement, to perform its obligations
hereunder and to issue, sell and deliver the Securities as herein
contemplated;
(ii) the Company and each Subsidiary has obtained all
authorizations, licenses, directives and orders required by federal and
Puerto Rico banking, mortgage banking, insurance and securities laws
which are material to the conduct of its business and, to the best of
such counsel's knowledge, the Company and
-16-
each Subsidiary has obtained all authorizations, licenses, directives
and orders required by New York and Delaware banking, mortgage banking,
insurance and securities laws which are material to the conduct of its
business; to the best of such counsel's knowledge, the Company and each
Subsidiary is operating in compliance with all authorizations,
licenses, directives and orders required by federal, New York, Delaware
and Puerto Rico banking, mortgage banking, insurance and securities
laws which are material to the conduct of its business; to the best of
such counsel's knowledge, all such authorizations, licenses, directives
and orders are valid and in full force and effect and neither the
Company nor any Subsidiary has received any notice of any proceeding
relating to the revocation or modification of any such license,
directive, authorization or order; to the best of such counsel's
knowledge, neither the Company nor any of the Subsidiaries is in
violation of, or in default under, any license, authorization, consent
or approval or any federal, state, Puerto Rico, local or foreign law,
regulation or rule or any directive, decree, order or judgment
applicable to the Company or any Subsidiary the effect of which could
have a Material Adverse Effect; to the best of such counsel's
knowledge, none of the Company, Doral Bank, Doral FSB or their
affiliates, or any of their respective directors or officers, is
subject to any order or directive of, or is a party to any agreement
with, any regulatory agency having jurisdiction with respect to its
business or operations except as disclosed in the Registration
Statement and in the Final Prospectus or as would not have a Material
Adverse Effect;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the Trust
Indenture Act; the Securities have been duly authorized; the Securities
have been duly executed, authenticated, issued and delivered; the
Indenture and the Securities constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities conform to the description thereof contained in the Final
Prospectus and the Securities are in due and proper form;
(v) the Company has an authorized capitalization as set
forth under the heading entitled "As adjusted" in the section of the
Final Prospectus entitled "Capitalization"; all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable,
have been issued in compliance with all federal, state and Puerto Rico
laws and (A) were not issued in violation of any preemptive right,
co-sale right, resale right, right of first refusal or similar right
granted by applicable law or the Company's charter and (B) to the best
of the such counsel's knowledge,
-17-
were not issued in violation of any contractual preemptive right,
co-sale right, resale right, right of first refusal or similar right;
(vi) each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, and has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Final
Prospectus; the Company and each Subsidiary is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it
requires such qualification, except for such jurisdictions where the
failure to so qualify would not have a Material Adverse Effect; all of
the outstanding shares of capital stock of each Subsidiary are owned
directly or indirectly by the Company, in each case subject, to the
best of such counsel's knowledge, to no security interest, other
encumbrance or adverse claim; all of the outstanding shares of capital
stock of each Significant Subsidiary have been duly authorized and
validly issued and are fully paid and non-assessable; to the best of
such counsel's knowledge, all of the outstanding shares of capital
stock of each Subsidiary which is not a Significant Subsidiary have
been duly authorized and validly issued and are fully paid and
non-assessable; to the best of such counsel's knowledge, no options,
warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in any Subsidiary are outstanding;
and, to the best of such counsel's knowledge, the Company and each
Subsidiary is in compliance in all respects with the laws, orders,
rules, regulations and directives issued or administered by such
jurisdictions except for such non-compliance as would not have a
Material Adverse Effect;
(vii) the Registration Statement and the Final Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion) comply as to
form in all respects with the requirements of the Act and the Exchange
Act;
(viii) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act and any required filing of the Final Prospectus and any supplement
thereto pursuant to Rule 424(b) under the Act has been made in the
manner and within the time period required by such Rule 424(b);
(ix) no approval, authorization, consent or order of or
filing with any national, state, Puerto Rico or local governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance or
-18-
sale of the Securities, delivery and performance of this Agreement or
the consummation by the Company of the transactions contemplated hereby
other than those that have been obtained under the Act and the Trust
Indenture Act (except such counsel need express no opinion as to any
necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Securities are being offered by the
Underwriters);
(x) the execution, delivery and performance of the
Indenture, this Agreement by the Company, the issuance and sale of the
Securities by the Company and the consummation by the Company of the
transactions contemplated hereby, and compliance by the Company with
its obligations hereunder, have not, do not and will not conflict with,
or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both, would
result in any breach of or constitute a default under), (A) any
provision of the charter or by-laws of the Company or any Subsidiary,
(B) to the best of such counsel's knowledge, any provision of any
license, indenture, mortgage, deed of trust, bank loan, credit
agreement or other evidence of indebtedness, or any lease, contract or
other agreement, instrument, decree, judgment or order to which the
Company or any of the Subsidiaries is a party or by which any of them
or their respective properties may be bound or affected, (C) any
federal or Puerto Rico law, regulation or rule applicable to the
Company or any Subsidiary or (D) to the best of such counsel's
knowledge, any state, local or foreign law, regulation or rule
applicable to the Company or any Subsidiary;
(xi) to the best of such counsel's knowledge, neither the
Company nor any Subsidiary is in violation, breach of, or in default
under (nor has any event occurred which with notice, lapse of time, or
both would result in any breach of, or constitute a default under), its
charter or by-laws or the Indenture; to the best of such counsel's
knowledge, neither the Company nor any Subsidiary is in violation,
breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of, or
constitute a default under), or has failed to perform or observe, any
obligation, agreement, covenant or condition contained in any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or any other
agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or their respective properties may be
bound or affected or under any federal, state, Puerto Rico, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any Subsidiary whose violation, breach of
or default under would, individually or in the aggregate, have a
Material Adverse Effect;
(xii) all statutes and regulations and, to the best of such
counsel's knowledge, contracts, licenses, agreements, leases or
documents of a character required to be summarized or described in the
Registration Statement or the Final Prospectus or to be filed as an
exhibit to the Registration Statement have been so
-19-
summarized, described or filed as required; each such summary
description accurately reflects in all material respects the terms of
the underlying statute, regulation, contract, license, agreement, lease
or document;
(xiii) to the best of such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending,
threatened or contemplated to which the Company or any of the
Subsidiaries or any of their respective officers is a party or is
subject, or of which any of their respective properties is subject at
law or in equity, or before or by any federal, state, Puerto Rico,
local or foreign governmental or regulatory commission, board, body,
authority or agency which could result in a judgment, decree or order
having a Material Adverse Effect, affect the consummation of the
transactions contemplated hereby or are required to be described in the
Registration Statement or the Final Prospectus but are not so
described;
(xiv) the documents incorporated by reference in any of the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus and the Final Prospectus, at the time such documents became
effective or were filed with the Commission, as applicable (or, if a
supplement or an amendment with respect to any such document was filed,
when such supplement or amendment was filed), complied as to form in
all material respects with the Act or the Exchange Act, as applicable
(except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein as to which such counsel need express no opinion);
(xv) the Company is not and, upon consummation of the
transactions contemplated by this Agreement, will not be an "investment
company" or an entity "controlled" by an "investment company" or a
"promoter" or "principal underwriter" for a "registered investment
company", as such terms are defined in the Investment Company Act;
(xvi) the Company is registered with the Federal Reserve as
a bank holding company under the BHCA; the Company's election to be
treated as a financial holding company under the BHCA is in full force
and effect; and any Subsidiary required to be registered with the
Federal Reserve is so registered;
(xvii) the deposit accounts of Doral Bank and Doral FSB are
insured by the SAIF of the FDIC to the legal maximum and, to the best
of such counsel's knowledge, no proceeding for the termination or
revocation of such insurance is pending or threatened; and Doral Bank
and Doral FSB are members of the Federal Home Loan Bank of New York;
(xviii) to the best of such counsel's knowledge, no
transaction has occurred between or among the Company and any of its
officers or directors or five percent shareholders or any affiliate or
affiliates of any such officer or
-20-
director or five percent shareholder that is required to be described
in and is not described in the Registration Statement or the Final
Prospectus;
(xix) the information set forth in the Final Prospectus
under the caption "Tax considerations", to the extent that it
constitutes matters of law or legal conclusions, has been reviewed by
such counsel and is correct in all material respects and represents the
opinion of such counsel; and
(xx) such counsel have participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants of the Company and representatives
of the Underwriters at which the contents of the Registration Statement
and the Final Prospectus were discussed and, although such counsel is
not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Final Prospectus (except insofar as such
statements relate to such counsel), on the basis of the foregoing,
nothing has come to the attention of such counsel that causes them to
believe that the Registration Statement or any amendment thereto at the
time such Registration Statement or amendment became effective
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Final Prospectus or any
supplement thereto at the date of such Final Prospectus or such
supplement, and at all times up to and including the Time of Purchase,
contained or contains an 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 light of the circumstances
under which they were made, not misleading (it being understood that
such counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data
included or incorporated by reference in the Registration Statement or
the Final Prospectus).
(b) You shall have received from PricewaterhouseCoopers LLP
letters dated, respectively, the date of this Agreement and the Time of Purchase
and addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in form and substance satisfactory to you, to the effect that:
(i) they are independent certified public accountants
with respect to the Company within the meaning of the Act;
(ii) in their opinion, the consolidated financial
statements of the Company and the Subsidiaries audited by them and
incorporated by reference in the Registration Statement and the Final
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act;
(iii) on the basis of procedures (but not an audit in
accordance with U.S. generally accepted auditing standards) consisting
of (A)(1) reading the
-21-
minutes of meetings of the stockholders, (2) the Board of Directors and
(3) the committees appointed by the Board of Directors of the Company
and the Subsidiaries since December 31, 2003 as set forth in the minute
books through a specified date not more than five days prior to the
date of delivery of such letter; (B) performing the procedures
specified by the American Institute of Certified Public Accountants for
a review of interim financial information as described in SAS No. 100,
"Interim Financial Information," on the unaudited condensed
consolidated financial statements of the Company and the Subsidiaries
incorporated by reference in the Registration Statement and the Final
Prospectus and reading the interim financial data for the period from
the date of the latest unaudited condensed consolidated financial
statements incorporated by reference in the Registration Statement and
the Final Prospectus to the date of the latest available interim
financial data; (C) making inquiries of certain officials of the
Company who have responsibility for financial and accounting matters;
and (D) other specified procedures; nothing has come to their attention
(as of a date not more than five days prior to the date of the delivery
of such letter) as a result of the foregoing procedures that caused
them to believe that: (1) any material modifications should be made to
the unaudited condensed consolidated financial statements incorporated
by reference in the Registration Statement and the Final Prospectus for
them to be in conformity with U.S. generally accepted accounting
principles; (2) the unaudited condensed consolidated financial
statements of the Company and the Subsidiaries incorporated by
reference in the Registration Statement and the Final Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act; (3)(i) at the date of the
latest available interim financial data and at a specified date not
more than five days prior to the date of delivery of such letter, there
was any change in the capital stock, deposits, notes payable, loans
payable, advances from the Federal Home Loan Bank, Federal Funds
purchased and securities sold under repurchase agreements, and other
short-term borrowings or any decreases in the consolidated
stockholders' equity of the Company and the Subsidiaries as compared
with amounts shown in the latest unaudited condensed consolidated
financial statements incorporated by reference in the Registration
Statement and the Final Prospectus and (ii) for the period from the
latest unaudited condensed consolidated financial statements
incorporated by reference in the Registration Statement and the Final
Prospectus to the latest interim financial data available, of a date no
later than five days prior to the date of delivery of such letter,
there were any decreases, as compared with the corresponding period in
the preceding year, in consolidated net interest income, non-interest
income, income before taxes, or in the total or per share amounts of
net income, except in all instances for changes or decreases which the
Registration Statement and the Final Prospectus discloses have occurred
or may occur, or they shall state any specific changes or decreases;
and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information included or
-22-
incorporated by reference in the Registration Statement and the Final
Prospectus (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company, subject to the internal
controls of the Company's accounting system, as applicable, or are
derived directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to be
in agreement with such results, except as otherwise specified in such
letter.
In the event that any of 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 under this Agreement that (A) such
letters shall be accompanied by a written explanation of the Company as to the
significance thereof, unless the Underwriters deem such explanation unnecessary,
and (B) such changes, decreases, or increases do not, in the sole judgment of
the Underwriters, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities;
(c) you shall have received at the Time of Purchase such opinion
or opinions of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated the
Time of Purchase, with respect to the Securities, the Registration Statement and
the Final Prospectus, and such other related matters as you may reasonably
request, and the Company shall have furnished to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP such
documents as they may request for the purpose of enabling them to pass upon such
matters;
(d) no amendment or supplement to the Registration Statement, any
Preliminary Final Prospectus or the Final Prospectus, including documents deemed
to be incorporated by reference therein, shall have been filed after the
Execution Time and prior to the Time of Purchase in contravention of the terms
of Section 4(c) hereof;
(e) the Final Prospectus shall have been filed via ▇▇▇▇▇ with the
Commission pursuant to Rule 424(b) under the Act within the time period
permitted under the Act; provided, however, that the Company and you and any
group of Underwriters, including you, who have agreed hereunder to purchase in
the aggregate at least 50% of the principal amount of the Securities may from
time to time agree on a later date;
(f) prior to the Time of Purchase, (i) no order preventing or
suspending the use of any Preliminary Final Prospectus of the Final Prospectus
shall have been issued under the Act or proceedings initiated therefor; (ii) no
stop order with respect to the effectiveness of the Registration Statement shall
have been issued under the Act or proceedings initiated therefor; (iii) the
Registration Statement and all amendments thereto, or modifications thereof, if
any, shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iv) the Final Prospectus and all amendments
-23-
or supplements thereto, or modifications thereof, if any, shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading; and (v) any request
for additional information on the part of the Commission (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall have been
complied with;
(g) between the Execution Time and the Time of Purchase, (i) no
material and unfavorable change, financial or otherwise (other than as referred
to in the Registration Statement (exclusive of any amendment thereof or
supplement thereto filed after the Execution Time) and the Final Prospectus
(exclusive of any amendment thereof or supplement thereto filed after the first
filing of the Final Prospectus in accordance with the terms of Section 3(a)
hereof)), in the business, condition or prospects of the Company and the
Subsidiaries taken as a whole shall occur or become known and (ii) no
transaction which is material and unfavorable to the Company shall have been
entered into by the Company or any of the Subsidiaries;
(h) the Company will, at the Time of Purchase, deliver to you a
certificate of two of its executive officers to the effect that the
representations and warranties of the Company as set forth in this Agreement are
true and correct on and as of each such date as if made as of and on each such
date, that the Company has performed such of its obligations under this
Agreement as are to be performed at or before the Time of Purchase and the
conditions set forth in paragraphs (f) and (g) of this Section 6 have been met;
(i) the Company shall have furnished to you such other
information, documents and certificates as you or counsel to the Underwriters
may reasonably request;
(j) between the Execution Time and the Time of Purchase, there
shall not have occurred any downgrading, nor shall any notice or announcement
have been given or made of (i) any intended or potential downgrading or (ii) any
review or possible change that does not indicate an improvement, in the rating
accorded any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization", as that term is defined
in Rule 436(g)(2) under the Act;
(k) all corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Indenture, the
Securities, the Registration Statement, any Preliminary Final Prospectus, the
Final Prospectus and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in all respects to
counsel for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to ascertain such matters.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance satisfactory to
counsel for the Underwriters.
-24-
7. Effective Date of Agreement; Termination. This
Agreement shall become effective at the Execution Time.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the aggregate principal amount of the Securities, if,
since the Execution Time or the respective dates as of which information is
given in the Registration Statement and Final Prospectus, (y) there has been any
material adverse change, financial or otherwise (other than as referred to in
the Registration Statement (exclusive of any amendment thereof or supplement
thereto filed after the Execution Time) and the Final Prospectus (exclusive of
any amendment thereof or supplement thereto filed after the first filing of the
Final Prospectus pursuant to the terms of Section 3(a) hereof)), in the
operations, business, condition or prospects of the Company and the Subsidiaries
taken as a whole, which would, in your judgment or in the judgment of such group
of Underwriters, make it impracticable to market the Securities, or (z) there
shall have occurred any downgrading, or any notice shall have been given of (i)
any intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Act or, if, at any time prior to the Time of Purchase, trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market shall have been suspended or limitations or minimum
prices shall have been established on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market, or if a banking moratorium shall
have been declared either by the United States or New York State authorities, or
if there shall have been a material disruption of clearance and settlement
systems, or if the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on the financial markets of the United States
as, in your judgment or in the judgment of such group of Underwriters, to make
it impracticable to market the Securities.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly by letter or telegram.
If the sale to the Underwriters of the Securities, as
contemplated by this Agreement, is not carried out by the Underwriters for any
reason permitted under this Agreement or if such sale is not carried out because
the Company shall be unable to comply with any of the terms of this Agreement,
the Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(o), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
-25-
8. Increase in Underwriters' Commitments. Subject to
Sections 6 and 7, if any Underwriter shall default in its obligation to take up
and pay for the Securities to be purchased by it hereunder (otherwise than for
reasons sufficient to justify the termination of this Agreement under the
provisions of Section 5 hereof) and if the principal amount of Securities which
all Underwriters so defaulting shall have agreed but failed to take up and pay
for does not exceed 10% of the total principal amount of Securities, the
non-defaulting Underwriters shall take up and pay for (in addition to the
principal amount of Securities they are obligated to purchase pursuant to
Section 1 hereof) the principal amount of Securities agreed to be purchased by
all such defaulting Underwriters, as hereinafter provided. Such Securities shall
be taken up and paid for by such non-defaulting Underwriter or Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Securities
shall be taken up and paid for by all non-defaulting Underwriters pro rata in
proportion to the aggregate principal amount of Securities set forth opposite
the names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Securities hereunder unless all of the Securities are
purchased by the Underwriters (or by substituted Underwriters selected by you
with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five Business Days
in order that any necessary changes in the Registration Statement and Final
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed to purchase exceeds 10% of the
total principal amount of Securities which all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Company shall
make arrangements within the five Business-Day period stated above for the
purchase of all the Securities which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
-26-
9. Indemnity and Contribution.
(a) the Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable costs of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, common
law or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary
Final Prospectus, the Final Prospectus, or any amendment thereof or supplement
thereto, or arises out of or is based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements made therein not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of any Underwriter through
you to the Company expressly for use with reference to such Underwriter in the
Final Prospectus or that arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in the Final Prospectus or necessary to make such information not
misleading, provided, however, that the indemnity agreement contained in this
subsection (a) with respect to any Preliminary Final Prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such loss, damage, expense,
liability or claim purchased the Securities which is the subject thereof if the
Final Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Final Prospectus to such
person at or prior to the written confirmation of the sale of such Securities to
such person, unless the failure is the result of non-compliance by the Company
with paragraphs (b) and (h) of Section 4 of this Agreement.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such Underwriter or such person shall promptly notify the Company in writing of
the institution of such Proceeding and the Company shall assume the defense of
such Proceeding, including the employment of counsel satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge
-27-
of the defense of such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those available to
the Company (in which case the Company shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company shall not be liable for any settlement of any such
Proceeding effected without its written consent but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 Business Days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party;
(b) each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the Exchange
Act, or common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use with reference to such Underwriter in the Final
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated therein or necessary to make such information not misleading.
-28-
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability which such
Underwriter may have to the Company or any such person or otherwise. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by such Underwriter in connection with the defense of such Proceeding
or such Underwriter shall not have employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 Business Days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding;
-29-
(c) if the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above 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 Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters bear to the aggregate
public offering price of the Securities. The relative fault of the Company on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any claim or Proceeding.
(d) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by such Underwriter and distributed
to the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties, representations and agreements of the
Company contained
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Sections 3, 4 and 5 of this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, its
partners, directors and officers or any person (including each partner, officer
or director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, its directors or officers or any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the issuance and delivery
of the Securities. The Company and each Underwriter agree promptly to notify
each other of the commencement of any Proceeding against it and, in the case of
the Company, against any of the Company's officers or directors in connection
with the issuance and sale of the Securities, or in connection with the
Registration Statement, any Preliminary Final Prospectus or the Final
Prospectus.
10. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇,
Attention: Debt Capital Markets, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
if to the Company, shall be sufficient in all respects if delivered or sent to
the Company at the offices of the Company at 1451 ▇.▇. ▇▇▇▇▇▇▇▇▇ Avenue, Ninth
Floor, San ▇▇▇▇, Puerto Rico 00920-2717, Attention: Chief Executive Officer.
11. Governing Law; Construction. This Agreement and any
claim, counterclaim or dispute of any kind or nature whatsoever arising out of
or in any way relating to this Agreement ("Claim"), directly or indirectly,
shall be governed by, and construed in accordance with, the laws of the State of
New York. The section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except (i) as set forth
below or (ii) in the event such courts do not accept jurisdiction over the
adjudication of such matters, no Claim may be commenced, prosecuted or continued
in any court other than the courts of the State of New York located in the City
and County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Company consents to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
any of the Underwriters or any indemnified party. Each Underwriter and the
Company (on its behalf and, to the extent permitted by applicable law, on behalf
of its stockholders and affiliates) waives all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and
-31-
binding upon the Company and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
13. Parties at Interest. The Agreement herein set forth
has been and is made solely for the benefit of the Underwriters, the Company
and, to the extent provided in Section 9 hereof, the controlling persons,
directors and officers referred to in such Section 9, and their respective
successors, assigns, heirs, pursuant representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the
parties in one or more counterparts which together shall constitute one and the
same agreement among the parties.
15. Successors and Assigns. This Agreement shall be
binding upon the Underwriters and the Company and their successors and assigns
and any successor or assign of any substantial portion of the Company's and any
of the Underwriters' respective businesses and/or assets.
16. Miscellaneous. Deutsche Bank Securities Inc., an
indirect, wholly owned subsidiary of Deutsche Bank AG, is not a bank and is
separate from any affiliated bank, including any U.S. branch or agency of
Deutsche Bank AG. Because Deutsche Bank Securities Inc. is a separately
incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by Deutsche
Bank Securities Inc. are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of Deutsche Bank Securities Inc. may have
lending relationships with issuers of securities underwritten or privately
placed by Deutsche Bank Securities Inc. To the extent required under the
securities laws, prospectuses and other disclosure documents for securities
underwritten or privately placed by Deutsche Bank Securities Inc. will disclose
the existence of any such lending relationships and whether the proceeds of the
issue will be used to repay debts owed to affiliates of Deutsche Bank Securities
Inc.
-32-
If the foregoing correctly sets forth the understanding among
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
DORAL FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Executive
Vice President and
Treasurer
Accepted and agreed to as of the date
first above written, on behalf of
itself and the other several
Underwriters named in Schedule A
hereto
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
SCHEDULE A
Principal Amount
Underwriter of Securities
----------- ----------------
Deutsche Bank Securities Inc...................... $ 350,000,000
----------------
Total............................................. $ 350,000,000
----------------
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SCHEDULE B
Subsidiaries of Doral Financial Corporation
Name Jurisdiction of Organization
---- ----------------------------
Doral Mortgage Corporation Puerto Rico
Doral Securities, Inc. Puerto Rico
Doral Bank Puerto Rico
Doral Bank, FSB U.S.A.
Centro Hipotecario de Puerto Rico, Inc. Puerto Rico
Doral Properties, Inc. Puerto Rico
Sana Investment Mortgage Bankers, Inc.(1) Puerto Rico
Doral International, Inc.(2) Puerto Rico
Doral Money, Inc.(3) Delaware
Doral Insurance Agency, Inc. Puerto Rico
Doral Capital, Inc.(4) Delaware
-----------------------
(1) Sana Investment Mortgage Bankers, Inc. is a wholly-owned subsidiary of
Doral Mortgage Corporation.
(2) Doral International, Inc. is a wholly-owned subsidiary of Doral Bank.
(3) Doral Money is a wholly-owned subsidiary of Doral Bank.
(4) Inactive.
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