1
EXHIBIT 5(b)
Sullivan & Cromwell
125 Brand Street
New York, New York 10004
May 12, 1997
Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular International Bank, Inc.,
c/o Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular North America, Inc.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under the
Securities Act of 1933 (the "Act") of (i) senior debt securities (the "Popular
Senior Debt Securities"), subordinated debt securities (the "Popular
Subordinated Debt Securities") and shares of preferred stock, without par value
(the "Popular Preferred Stock"), of Popular, Inc., a Puerto Rico corporation
(the "Corporation"), (ii) senior debt securities (the "PNA Senior Debt
Securities") of Popular North America, Inc., a Delaware corporation ("PNA"),
bearing the unconditional guarantees (the "PNA Senior Debt Guarantees") of the
Corporation,
2
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -2-
subordinated debt securities of PNA (the "PNA Subordinated Debt Securities"),
bearing the unconditional guarantees (the "PNA Subordinated Debt Guarantees")
of the Corporation, and shares of preferred stock, par value $.0l per share, of
PNA (the "PNA Preferred Stock"), bearing the unconditional guarantees (the "PNA
Preferred Stock Guarantees") of the Corporation, and (iii) senior debt
securities (the "PIB Senior Debt Securities") of Popular International Bank,
Inc., a Puerto Rico corporation ("PIB"), bearing the unconditional guarantees
(the "PIB Senior Debt Guarantees") of the Corporation, subordinated debt
securities of PIB (the "PIB Subordinated Debt Securities"), bearing the
unconditional guarantees (the "PIB Subordinated Debt Guarantees") of the
Corporation and shares of preferred stock, par value $25.00 per share, of PIB
(the "PIB Preferred Stock"), bearing the unconditional guarantees (the "PIB
Preferred Stock Guarantees") of the Corporation (the Popular Senior Debt
Securities, the Popular Subordinated Debt Securities, the PNA Senior Debt
Securities, the PNA. Subordinated Debt Securities, the PIB Senior Debt
Securities and the PIB Subordinated Debt Securities are sometimes collectively
referred to herein as the "Debt Securities"; the PNA Senior Debt Guarantees,
the PNA Subordinated Debt
3
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -3-
Guarantees, the PNA Preferred Stock Guarantees, the PIB Senior Debt Guarantees,
the PIB Subordinated Debt Guarantees and the PIB Preferred Stock Guarantees are
sometimes collectively referred to herein as the "Guarantees"; and the Debt
Securities, the Popular Preferred Stock, the PNA Preferred Stock and the PIB
Preferred Stock are sometimes collectively referred to herein as the
"Securities"). The Securities are limited to an aggregate initial offering
price not to exceed $1,000,000,000. We, as your counsel, have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of this
opinion. On the basis of such examination, we advise you that, in our opinion:
(1) When the registration statement relating to the
Securities and the Guarantees (the "Registration Statement") has
become effective under the Act, the terms of the Popular Senior Debt
Securities and of their issuance and sale have been duly established
in conformity with the indenture relating to the Popular Senior Debt
Securities, as supplemented (the "Popular Senior Indenture"), so as
not to violate any applicable law or result in a default under or
breach of any
4
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -4-
agreement or instrument binding upon the Corporation and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Corporation, and the Popular Senior Debt Securities have
been duly executed and authenticated in accordance with the Popular Senior
Indenture and issued and sold as contemplated in the Registration Statement,
the Popular Senior Debt Securities will constitute valid and legally binding
obligations of the Corporation, 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.
(2) When the Registration Statement has become effective under the Act,
the terms of the Popular Subordinated Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to
the Popular Subordinated Debt Securities (the "Popular Subordinated Indenture")
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon the Corporation and so as to comply
with
5
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -5-
any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, and the Popular Subordinated Debt
Securities have been duly executed and authenticated in accordance with the
Popular Subordinated Indenture and issued and sold as contemplated in the
Registration Statement, the Popular Subordinated Debt Securities will
constitute valid and legally binding obligations of the Corporation, 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.
(3) When the Registration Statement has become effective under the Act,
the terms of the PNA Senior Debt Securities and of the PNA Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the indenture relating to the PNA Senior Debt Securities and
the PNA Senior Debt Guarantees, as supplemented (the "PNA Senior Indenture"),
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so
6
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -6-
as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over PNA or the Corporation, the PNA
Senior Debt Securities have been duly executed and authenticated and the PNA
Senior Debt Guarantees have been duly executed, each in accordance with the PNA
Senior Indenture, and the PNA Senior Debt Securities and the PNA Senior Debt
Guarantees have been issued and sold as contemplated in the Registration
Statement, the PNA Senior Debt Securities will constitute valid and legally
binding obligations of PNA and the PNA Senior Debt Guarantees will constitute
valid and legally binding obligations of the Corporation, in each case 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.
(4) When the Registration Statement has become effective under the Act,
the indenture relating to the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees (the "PNA Subordinated Indenture") has been duly
executed and delivered, the terms of the PNA Subordinated Debt Securities and
of
7
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -7-
the PNA Subordinated Debt Guarantees and of their issuance and sale have been
duly established in conformity with the PNA Subordinated Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PNA or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PNA or the Corporation, the PNA Subordinated Debt
Securities have been duly executed and authenticated and the PNA Subordinated
Debt Guarantees have been duly executed, each in accordance with the PNA
Subordinated Indenture, and the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees have been issued and sold as contemplated in the
Registration Statement, the PNA Subordinated Debt Securities will constitute
valid and legally binding obligations of PNA and the PNA Subordinated Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case 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.
8
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -8-
(5) When the Registration Statement has become effective under the Act, the
indenture relating to the PIB Senior Debt Securities and the PIB Senior Debt
Guarantees (the "PIB Senior Indenture") has been duly executed and delivered,
the terms of the PIB Senior Debt Securities and of the PIB Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the PIB Senior Indenture so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon PIB or the Corporation and so as to comply with any requirement
or restriction imposed by any court or governmental body having jurisdiction
over PIB or the Corporation, the PIB Senior Debt Securities have been duly
executed and authenticated and the PIB Senior Debt Guarantees have been duly
executed, each in accordance with the PIB Senior Indenture, and the PIB Senior
Debt Securities and the PIB Senior Debt Guarantees have been issued and sold as
contemplated in the Registration Statement, the PIB Senior Debt Securities will
constitute valid and legally binding obligations of PIB and the PIB Senior Debt
Guarantees will constitute valid and legally binding obligations
9
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -9-
of the Corporation, in each case 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.
(6) When the Registration Statement has become effective under the Act,
the indenture relating to the PIB Subordinated Debt Securities and the PIB
Subordinated Guarantees (the "PIB Subordinated Indenture") has been duly
executed and delivered, the terms of the PIB Subordinated Debt Securities and
of the PIB Subordinated Debt Guarantees and of their issuance and sale have
been duly established in conformity with the PIB Subordinated Indenture so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Guarantees have been duly executed, each in accordance with the PIB
Subordinated
10
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -10-
Indenture, and the PIB Subordinated Debt Securities and the PIB Subordinated
Debt Guarantees have been issued and sold as contemplated in the Registration
Statement, the PIB Subordinated Debt Securities will constitute valid and
legally binding obligations of PIB and the PIB Subordinated Debt Guarantees
will constitute valid and legally binding obligations of the Corporation, in
each case 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.
(7) When the Registration Statement has become effective under the Act, a
certificate of designations with respect to the PNA Preferred Stock has been
duly filed and recorded with the Secretary of State of the State of Delaware,
the terms of the PNA Preferred Stock and of its issue and sale have been duly
established in conformity with PNA's certificate of incorporation, as amended,
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so as to
comply with any requirement or restriction imposed by any court or governmental
body having
11
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -11-
jurisdiction over PNA or the Corporation, all regulatory consents or
approvals for the issuance and sale of the PNA Preferred Stock and for
the issuance of the PNA Preferred Stock Guarantees have been obtained,
and the PNA Preferred Stock and the PNA Preferred Stock Guarantees
have been duly issued and sold as contemplated by the Registration
Statement, the PNA Preferred Stock will be validly issued, fully paid
and nonassessable, and when the terms of the PNA Preferred Stock
Guarantees have been duly approved by the Board of Directors or other
authorized officials of the Corporation and the PNA Preferred Stock
Guarantees have been duly executed, the PNA Preferred Stock Guarantees
will constitute valid and legally binding obligations of the
Corporation, 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.
We note that, as of the date of this opinion, a judgment for money in
an action based on a Debt Security denominated in a foreign currency or
currency unit, or on a related Guarantee, in a Federal or state court in the
United
12
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -12-
States ordinarily would be enforced in the United States only in United States
dollars. The date used to determine the rate of conversion of the foreign
currency or currency unit in which a particular Debt Security is denominated
into United States dollars will depend on various factors, including which
court renders the judgment. In the case of a Debt Security denominated in a
foreign currency, or a related Guarantee, a state court in the State of New
York rendering a judgment on a Debt Security, or on a related Guarantee, would
be required under Section 27 of the New York Judiciary Law to render such
judgment in the foreign currency in which the Debt Security is denominated, and
such judgment would be converted into United States dollars at the exchange
rate prevailing on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United States,
the laws of the State of New York and the Commonwealth of Puerto Rico, and the
General Corporation Law of the State of Delaware, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction. With respect to
all matters of the laws of the Commonwealth of Puerto Rico, we have relied upon
the opinion, dated the date hereof, of Brunilda Santos de
13
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -13-
Alvarez, Counsel to the Corporation, and our opinion is subject to the same
assumptions, qualifications and limitations with respect to such matters as are
contained in such opinion of Brunilda Santos de Alvarez.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Corporation, PNA and PIB, and other sources
believed by us to be responsible, and we have assumed that each of the Popular
Senior Indenture, the Popular Subordinated Indenture and the PNA Senior
Indenture has been duly authorized, executed and delivered by the respective
Trustee thereunder, assumptions that we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Offered Securities" in the Prospectus contained in the Registration
Statement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell