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BANPONCE FINANCIAL CORP.
Medium-Term Notes Due From
9 Months to 30 Years from Date of Issue
Unconditionally Guaranteed as to Payment
of Principal, Premium, if any, and Interest by
BANPONCE CORPORATION
DISTRIBUTION AGREEMENT
October 11, 1991
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower, 23 Floor
New York, New York 10281-1323
Dear Sirs:
BanPonce Financial Corp., a Delaware corporation ( the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Agent") with respect to the issue and sale by the
Company of its Medium-Term Notes described herein (the "Notes"). The Notes will
be unconditionally guaranteed as to payment of principal, premium, if any, and
interest (the "Guarantees") by BanPonce Corporation (the "Guarantor"). The Notes
and the Guarantees are to be issued pursuant to an Indenture, dated as of
October 1, 1991 (the "Indenture"), among the Company, the Guarantor and
Citibank, N.A., as trustee (the "Trustee").
As of the date hereof, the Company has authorized the issuance and sale
of Notes with an aggregate initial offering price of up to $250,000,000 through
the Agent pursuant to the terms of this Agreement. It is understood, however,
that the Company may from time to time authorize the issuance of additional
Notes and that such additional Notes may be sold through or to the Agent
pursuant to the terms of this Agreement, all as though the issuance of such
Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agent will act as an agent of the
Company in soliciting Note purchasers,
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and (as may from time to time be agreed to by the Company and the Agent) to the
Agent as principal for resale to purchasers.
The Company and the Guarantor have filed with he Securities and
Exchange Commission ( the "SEC") a registration statement on Form S-3 (No.
33-41686) for the registration of debt securities, including the Notes and the
Guarantees, under the Securities Act of 1933, as amended (the "1933 Act"), and
the offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the SEC under the 1933 Act (the "1933 Act Regulations"). Such
registration statement has been declared effective by the SEC and the Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement (and any further registration statements
which may be filed by the Company and the Guarantor for the purpose of
registering additional Notes and related Guarantees and in connection with which
this Agreement is included as an exhibit) and the prospectus constituting a part
thereof, and any prospectus supplements relating to the Notes, including all
documents incorporated therein by reference, as from time to time amended or
supplemented by the filing of documents pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred
to herein collectively as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be provided to the
Agent by the Company for use in connection with the offering of the Notes and
related Guarantees which is not required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Agent for such use.
SECTION 1. Appointment as Agent
(a) Appointment of Agent. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby appoints the Agent as its agent
for the purpose of soliciting purchases of the Notes from the Company by others
and agrees that, except as otherwise contemplated herein, whenever the Company
determines to sell Notes directly to the Agent as principal for resale to
others, it will enter into a Terms Agreement (hereafter defined) relating to
such sale in accordance with the provisions of Section 3(b) hereof. The Agent is
not authorized to appoint sub-agents or to engage the services of any other
broker or dealer in connection with
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the offer or sale of the Notes. The Company agrees that, during the period that
the Agent is acting as the Company's agent hereunder, the Company will not
contact or solicit potential investors introduced to it by the Agent to purchase
the Notes. Notwithstanding anything to the contrary contained herein, the
Company may, upon one day's prior written notice to the Agent, authorize any
other person, partnership or corporation (an "Additional Agent") to act as its
agent to solicit offers for the purchase of all or part of the Notes of the
Company. Unless the Agent otherwise agrees, the appointment of an Additional
Agent shall be effected by the Company's addition of the name and address of the
Additional Agent to the signature page of a counterpart of this Agreement, the
execution of such counterpart by the Additional Agent, and the delivery of
executed copies of such counterpart to the Agent and its counsel. Thereafter the
term Agent as used in this Agreement shall mean the Agent and such Additional
Agent. At such time, the additional Agent shall specify its requirement for the
delivery of certificates, letters and opinions as are set forth in Section 5
hereof.
(b) Reasonable Efforts Solicitations; Right to Reject Offers. Upon
receipt of instructions from the Company, the Agent will use its reasonable
efforts to solicit purchases of such principal amount of the Notes as the
Company and the Agent shall agree upon from time to time during the term of this
Agreement, it being understood that the Company shall not approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the principal amount
of Notes registered pursuant to the Registration Statement. The Agent will have
no responsibility for maintaining records with respect to the aggregate
principal amount of Notes sold, or of otherwise monitoring the availability of
Notes for sale under the Registration Statement. The Agent will communicate to
the Company, orally or in writing, each offer to purchase Notes, other than
those offers rejected by the Agent. The Agent shall have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes, as a
whole or in part, and any such rejection shall not be deemed a breach of the
Agent's agreement contained herein. The Company may accept or reject any
proposed purchase of the Notes, in whole or in part.
(c) Solicitations as Agents; Purchases as Principal. In soliciting
purchases of the Notes on behalf of the Company, the Agent shall act solely as
agent for the Company and not as
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principal. The Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by the Agent and accepted by the Company. The Agent shall not have any
liability to the Company in the event any such purchase is not consummated for
any reason, except in the event that such sale is not consummated due to the
failure of the Agent to perform its obligation hereunder. The Agent shall not
have any obligation to purchase Notes from the Company as principal, but the
Agent may agree from time to time to purchase Notes as principal. Any such
purchase of Notes by the Agent as principal shall be made pursuant to a Terms
Agreement in accordance with Section 3(b) hereof.
(d) Reliance. The Company and the Agent agree that any Notes the
placement of which the Agent arranges shall be placed by the Agent, and any
Notes purchased by the Agent shall be purchased in reliance on the
representations, warranties, covenants and agreements of the Company and the
Guarantor contained herein and on the terms and conditions and in the manner
provided herein.
SECTION 2. Representations and Warranties of the Company the
Guarantor
(a) The Company and the Guarantor jointly and severally represent and
warrant to the Agent as of the date hereof, as of the date of each acceptance by
the Company of an offer for the purchase of Notes (whether through the Agent as
agent or to the Agent as principal), as of the date of each delivery of Notes
(whether through the Agent as agent or to the Agent as principal) (the date of
each such delivery to the Agent as principal being hereafter referred to as a
"Settlement Date"), and as of any time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment or
supplement providing solely for a change in the interest rates of Notes or
similar changes and other than an amendment or supplement that relates to an
offering of debt securities other than the Notes) or there is filed with the SEC
any document incorporated by reference into the Prospectus (other than any
Current Report on Form 8-K relating exclusively to the issuance of debt
securities other than the Notes under the Registration Statement) (each of the
times referenced above being referred to herein as a "Representation Date") as
follows:
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(i) Due Incorporation and Qualification. Each of the
Guarantor and the Company has duly incorporated and is validly existing
as a corporation in good standing under the laws of its respective
jurisdiction of incorporation with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; the Guarantor is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended
(the "Bank Holding Company Act"); and each of the Guarantor and the
Company is duly qualified as a foreign corporation to transact and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify and be
in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Guarantor and its subsidiaries considered as
one enterprise.
(ii) Subsidiaries. Each subsidiary of the Guarantor or the
Company which is a significant subsidiary (each, a "Significant
Subsidiary") as defined in Rule 405 of Regulation C of the 1933 Act
Regulations has been duly incorporated and is validly existing a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify and be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Guarantor and
its subsidiaries considered as one enterprise; and all of the issued
and outstanding capital stock of each such Significant Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable (subject to the provisions of Section 55 of Title 12 of
the United States Code in the case of Significant Subsidiaries which
are national banking associations) and, except as otherwise disclosed
in the Prospectus and except for directors'
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qualifying shares, is owned by the Company or the Guarantor, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity or, if such is not
the case, that any such security interest, mortgage pledge, lien,
encumbrance, claim or equity, when exercised, enforced or otherwise
asserted, will not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Guarantor and its subsidiaries considered as one
enterprise.
(iii) Registration Statement and Prospectus. At the time
the Registration Statement became effective, the Registration Statement
complied, and as of the applicable Representation Date will comply, in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and the 1939 Act and the rules and regulations of
the SEC promulgated thereunder. The Registration Statement, at the time
it became effective, did not, and at each time thereafter at which any
amendment to the Registration Statement becomes effective and any
Annual Report on Form 10-K is filed by the Guarantor with the SEC and
as of each Representation Date will not, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; the
Prospectus, as of the date hereof does not, and as of each
Representation Date will not, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that -------- ------- the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Agent expressly for use in
the Registration Statement or Prospectus.
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the SEC, complied or when so
filed will comply, as the case may be, in all material respects with
the requirements of the 1934 Act and the rules and regulations
promulgated thereunder (the "1934 Act
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Regulations"), and, when read together and with the other information
in the Prospectus, did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstance under which they were or are made, not
misleading.
(v) Accountants. The accountants who certified the
financial statements and supporting schedules included or incorporated
by reference in the Prospectus are independent public accountants
within the meaning of the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial
statements and any supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Guarantor and its
consolidated subsidiaries as of the dates indicated and the
consolidated results of their operations for the period specified;
except as stated therein, said financial statements have been prepared
in conformity with generally accepted accounting principles in the
United States applied on a consistent basis during the periods
involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein.
(vii) Authorization and Validity of this Agreement, the
Indentures, the Guarantees and the Notes. This Agreement has been duly
authorized, executed and delivered by the Guarantor and the Company;
the Indenture has been duly authorized and, upon execution and delivery
by the Trustee, will a be valid and binding obligation of the Company
and the Guarantor enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the Notes
have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor specified in
the Prospectus or pursuant to any Terms Agreement, will constitute
valid and legally binding
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obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws relating to or affecting creditors' rights
generally and to general equity principles; the Guarantees have been
duly authorized and, upon due issuance, authentication and delivery of
the related Notes and due endorsement of the Guarantees, the Guarantees
will have been duly executed, issued and delivered and will be valid
and legally binding obligations of the Guarantor enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws relating
to or affecting creditors' rights generally and to general equity
principles; the Notes, the Guarantees and the Indenture will be
substantially in the form heretofore delivered to the Agent and conform
in all material respects to all statements relating thereto contained
in the Prospectus; and the Notes and the Guarantees will be entitled to
the benefits provided by the Indenture.
(viii) Material Changes or Material Transactions. Since the
respective dates as of which information is given in the Registration
Statements and the Prospectus, except as may otherwise be stated
therein or contemplated thereby, there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company or the Guarantor
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business.
(ix) No Defaults; Regulatory Approvals. Neither the
Company, the Guarantor nor any of the Significant Subsidiaries is in
violation of its charter or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it or any of them
or their properties may be bound; the execution, delivery and
performance of this Agreement and the Indenture and the consummation of
the transactions contemplated herein, therein and pursuant to any
applicable Terms Agreement have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien,
charge
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or encumbrance upon any property or assets of the Company, the
Guarantor or any of the Significant Subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Guarantor or any of its
subsidiaries is a party or by which it or any of them may be bound or
to which any of the property or assets of the Company, the Guarantor or
any such subsidiary is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company,
the Guarantor or any such subsidiary or any law, administrative
regulation or administrative or court order or decree which breach,
default, imposition or violation would, in each case, have a material
adverse effect on the Guarantor and its subsidiaries taken as a whole;
and no consent, approval, authorization, order or decree of any court
or governmental agency or body is required for the consummation by the
Guarantor or the Company of the transactions contemplated by this
Agreement, except such as may be required under the 1933 Act or the
1933 Act Regulations (which have been obtained), the 1939 Act or state
securities or Blue Sky laws.
(x) Legal Proceedings; Contracts. Except as may be set
forth in the Registration Statement, there is no action, suit or
proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Guarantor
or the Company, threatened against or affecting, the Company, the
Guarantor or any of its subsidiaries, which might result in any
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Guarantor
and its subsidiaries considered as one enterprise, or might materially
and adversely affect the consummation of this Agreement or any Terms
Agreement; and there are no contracts or documents of the Company or
the Guarantor or any of its subsidiaries which are required to be filed
or incorporated by reference as exhibits to the Registration Statement
by the 1933 Act or by the 1933 Act Regulations which have not been so
filed or incorporated by reference.
(xi) Regulatory Certificates, Authorities and Permits. The
Company, the Guarantor and the Significant Subsidiaries possess
adequate certificates, authorities
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or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them except for such certificates, authorities or permits
as are not material to the business, operations, financial condition or
income of the Company, the Guarantor or the Significant Subsidiaries;
and neither the Company, the Guarantor nor any of the Significant
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the
conduct of the business, operations, financial condition or income of
the Guarantor and its subsidiaries considered as one enterprise.
(b) Additional Certificates. Any certificates signed by an officer of
the Guarantor or the Company and delivered to the Agent or to counsel for the
Agent in connection with an offering of Notes and related Guarantees or the sale
of Notes to the Agent as principal shall be deemed a representation and warranty
by the Company or the Guarantor, as the case may be, to the Agent as to the
matters covered thereby on the date of such certificate.
SECTION 3. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions set forth,
the Agent agrees, as an agent of the Company, to sue its reasonable efforts to
solicit offers to purchase the Notes upon the terms and conditions set forth
herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agent, as agent, commencing
at any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agent will forthwith suspend solicitation of purchases
from the Company until such time as the Company has advised the Agent that such
solicitation may be resumed.
The Company agrees to pay the Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by the Agent as set
forth in Schedule
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A hereto. The Agent may reallow any portion of the commission payable pursuant
hereto to dealers or purchasers in connection with the offer and sale of any
Notes.
The purchase price, interest rate, maturity date and other terms of the
Notes shall be agreed upon by the Company and the Agent and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of $1,000 and integral multiples thereof. All Notes sold through
the Agent as agent will be sold at 100% of their principal amount unless
otherwise agreed to by the Company and the Agent.
(b) Purchases as Principal. Each sale of Notes to the Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Corporation and the Agent shall otherwise agree) pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, the Agent. Each such separate agreement
(which may be an oral agreement) between the Agent and the Company is herein
referred to as a "Terms Agreement". Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed to include any
applicable Terms Agreement between the Company and the Agent. Each such Terms
Agreement, whether oral or in writing, shall be with respect to such information
(as applicable) as is specified in Exhibit A hereto. The Agent's commitment to
purchase Notes as principal pursuant to any Terms Agreement or otherwise shall
be deemed to have been made on the basis of the representation and warranties of
the Company and the Guarantor herein contained and shall be subject to the terms
and conditions herein set forth. Each Terms Agreement shall specify the
principal amount of Notes to be purchased by the Agent pursuant thereto, the
price to be paid to the Company for such Notes (which, if not so specified in a
Terms Agreement, shall be at a discount equivalent to the applicable commission
set forth in Schedule A hereto), the time and place of delivery of and payment
for such Notes and such other provisions (including further terms of the Notes)
as may be mutually agreed upon. The Agent may utilize a selling or dealer group
in connection with the resale of the Notes purchased. Unless expressly provided
for in the Terms Agreement, no opinions, letters or certificates shall be
delivered by the Company in connection with the sale of Notes to the Agent as
principal.
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(c) Administrative Procedures. Administrative procedures with respect
to the sale of Notes shall be agreed upon from time to time by the Agent, the
Company and the Guarantor (the "Procedures"). The Agent, on the one hand, and
the Company and the Guarantor, jointly and severally on the other hand, agree to
perform the respective duties and obligations specifically provided to be
performed by them in the procedure.
SECTION 4. Covenants of the Company and the Guarantor.
The Company and the Guarantor jointly and severally covenant with the
Agent as follows:
(a) Notice of Certain Events. The Company and the Guarantor will notify
the Agent immediately (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the filing of any supplement to the Prospectus
relating to the Notes or any document to be filed pursuant to the 1934 Act which
will be incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the SEC with respect to the Registration Statement or the
Prospectus, (iv) of any request by the SEC for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (v) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company and the Guarantor will use reasonable efforts to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof.
(b) Notice of Certain Proposed Filings. Except as otherwise provided in
subsection (1) of this Section, the Company and the Guarantor will give the
Agent notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes and related
Guarantees, any amendment to the Registration Statement or any amendment or
supplement to the Prospectus (other than an amendment or supplement providing
solely for a change in the interest rates of Notes and other than an amendment
or supplement that relates to an offering of debt securities other than the
Notes), whether by the filing of documents pursuant to the 1934 Act, the 1933
Act or otherwise, and will furnish the Agent with copies of any such amendment
or supplement or other documents proposed to be filed or prepared a reasonable
time in advance of such proposed filing
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or preparation, as the case may be, except for documents filed pursuant to the
1934 Act, which the Company or the Guarantor shall furnish to the Agent
immediately after the filing thereof, and will not file any such amendment or
supplement other than a document filed pursuant to the 1934 Act in a form to
which you or your counsel shall reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The
Company and the Guarantor will deliver to the Agent as many signed and conformed
copies of the Registration Statement (as originally filed) and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated by reference in the Prospectus) as the Agent may
reasonably request. The Company and the Guarantor will furnish the Agent with as
many copies of the Prospectus (as amended or supplement) as the Agent shall
reasonably request so long as the Agent is required to deliver a Prospectus in
connection with sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company and Guarantor will
prepare, with respect to any Notes to be sold through or to the Agent pursuant
to this Agreement, a Pricing Supplement with respect to such Notes and will file
such Pricing Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later
than the close of business of the SEC on the fifth business day after the date
on which Pricing Supplement is first used.
(e) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (1) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, to amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances in which they were made, not misleading or if it shall be
necessary to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, immediate notice shall be given, and confirmed in writing, to the
Agent to cease the solicitation of offers to purchase the Notes in the Agent's
capacity as agent and to cease sales of any Notes the Agent may then own as
principal pursuant to a Terms Agreement, and the Company and the Guarantor will
promptly prepare and file with the SEC such amendment or supplement, whether by
filing
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documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (1) of this Section, on the date on which there
shall be released to the general public interim consolidated financial statement
information related to the Guarantor with respect to each of the first three
quarters of any fiscal year or preliminary financial statement information with
respect to any fiscal year, the Guarantor shall furnish such information to the
Agent, confirmed in writing, and promptly thereafter shall cause the
Registration Statement and the Prospectus to be amended or supplemented to
include or incorporate by reference capsule financial information with respect
to the results of operations of the Guarantor and its consolidated subsidiaries
for such period.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (1) of this Section, on the date on which there
shall be released to the general public financial information included in the
audited consolidated financial statements of the Guarantor for the preceding
fiscal year, the Company and the Guarantor shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference such audited financial statements and the report or reports, and
consent or consents to such inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well as such other information
and explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Guarantor will make generally available to
the security holders of the Company as soon as practicable, but not later than
90 days after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 under the 1933 Act) covering each
twelve month period beginning, in each case, not later than the first day of the
Guarantor's fiscal quarter next following the "effective date" (as defined in
such Rule 158) of the Registration Statement with respect to each sale of Notes
and issuance of the related Guarantees.
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(i) Blue Sky Qualifications. The Company and the Guarantor will
endeavor, in cooperation with the Agent, to qualify the Notes and related
Guarantees for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as Agent and the Company
shall agree and, unless the Company otherwise notifies the Agent, will maintain
such qualifications in effect for as long as may be required for the
distribution of the Notes and related Guarantees; provided, however, that the
Company and the Guarantor shall not be required to submit to general service of
process in any jurisdiction. The Company and the Guarantor will promptly advise
the Agent of their receipt of any notification with respect to the suspension of
the qualification of the Notes and related Guarantees for sale in any such state
or jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(j) 1934 Act Filings. The Guarantor and the Company, during the period
when the time that Prospectus is required to be delivered under the 1933 Act,
will file promptly all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act.
(k) Stand-Off Agreement. If required pursuant to the terms of a Terms
Agreement, between the date of any Terms Agreement and the Settlement Date with
respect to such Terms Agreement, the Company and the Guarantor will not, without
the Agent's prior consent, offer or sell, or enter into any agreement to sell,
any debt securities of the Company or the Guarantor (other than the Notes that
are to be sold pursuant to such Terms Agreement and commercial paper).
(l) Suspension of Certain Obligations. The Company and the Guarantor
shall not be required to comply with the provisions of subsections (b), (e), (f)
or (g) of this Section during any period from the time (i) the Agent shall have
suspended solicitation of purchases of the Notes in its capacity as agent
pursuant to a request from the Company and the Guarantor and (ii) the Agent
shall not then hold any Notes as principal purchased pursuant to a Terms
Agreement, to the time the Company and the Guarantor shall determine that
solicitation of purchases of the Notes should be resumed or shall subsequently
enter into a new Terms Agreement with the Agent.
(m) Public Reports. The Company and the Guarantor will furnish to the
Agent, at the earliest time the Company and the
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Guarantor make the same available to others, copies of their annual reports and
other financial reports furnished or made available to the public generally.
SECTION 5. Conditions of Obligations.
The Obligations of the Agent to solicit offers to purchase the Notes as
agent of the Company, the obligations of any purchasers of Notes sold through
the Agent as agent, any obligation of the Agent to purchase Notes pursuant to a
Terms Agreement or otherwise will be subject to the accuracy of the
representations and warranties on the part of the Company and the Guarantor
contained herein and to the accuracy of the statements of the officers of the
Company and the Guarantor made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company and the
Guarantor of all their respective covenants and agreements herein contained and
to the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agent shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agent:
(1) Opinion of Counsel to the Company and the Guarantor. The
opinion of Sullivan & Cromwell, Counsel to the Guarantor and the
Company to the effect that:
(i) The Company has been duly incorporated and
is an existing corporation in good standing under the laws of
the State of Delaware.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing or property or
the conduct of business.
(iv) The Guarantor is duly registered as a bank
holding company under the Bank Holding Act.
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(v) The Indenture has been duly authorized,
executed and delivered by the Company and the Guarantor and
duly qualified under the Trust Indenture Act of 1939 and
constitutes a valid and legally biding obligation to the
Company and the Guarantor enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(vi) The series of Notes has been duly authorized
and established in conformity with the Indenture, and, when
the terms of a particular Note and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, such Note
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and delivered against payment in
accordance with this Agreement, such Note will constitute a
valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(vii) The issuance of the Guarantees has been duly
authorized and the Guarantees have been established in
conformity with the Indenture and, when the terms of a
particular Note and of its issuance and sale have been duly
authorized and established by all necessary corporate action
in conformity with the Indenture, such Note has been duly
prepared, executed, authenticated and issued in accordance
with the Indenture and delivered against payment in accordance
with this Agreement, the Guarantee endorsed on such Note will
constitute a valid and legally binding obligation of the
Guarantor enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or
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affecting creditors' rights and to general equity principals.
(viii) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company and the Guarantor on or prior to the date hereof under
the federal laws of the United States, the laws of the State
of New York and the General Corporation Law of the State of
Delaware for the issuance, sale and delivery of the Notes by
the Company to or through the Agent have been obtained or
made; provided, however, that such counsel need express no
opinion with respect to state securities laws.
(ix) This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor.
(x) The execution and delivery by the Company
and the Guarantor of the Indenture and this Agreement do not,
and the preparation, execution and issuance of each particular
Note and Guarantee in accordance with the Indenture, the sale
by the Company of such Note in accordance with this Agreement,
and the performance by the Company and the Guarantor of their
respective obligations under the Indenture, this Agreement,
the Notes and the Guarantees will not (a) violate the articles
of incorporation or by-laws of the Company as in effect on the
date hereof, or (b) violate any existing federal law of the
United States applicable to the Company or the Guarantor or
(c) violate the General Corporation law of the State of
Delaware; provided, however, that, for the purposes of this
paragraph (xi), such counsel need express no opinion with
respect to federal or state securities laws, other antifraud
laws, fraudulent transfer laws, the Employee Retirement Income
Security Act of 1974 and related laws, and laws that restrict
transactions between United States persons and certain foreign
countries; provided, further, that insofar as performance by
the Company and the Guarantor of their respective obligations
under the Indenture, this Agreement, the Notes and the
Guarantees is concerned, such counsel need express no opinion
as to bankruptcy, insolvency,
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reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights.
(xi) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, (i) no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act
and (ii) no proceedings therefor have been initiated or
threatened by the SEC. "Underwriting" and "Plan of
Distribution" and the appropriate sections in any Prospectus
Supplement describing the securities offered thereby, insofar
as they relate to provisions of documents therein described
and (ii) the accuracy of the descriptions of the Federal laws
of the United States contained in the Registration Statement
and Prospectus under the captions "Certain Regulatory Matters"
and "United States Taxation" and that they do not express any
opinion or belief as to the financial statements or other
financial data contained in the Registration Statement and the
Prospectus, as to the statement of the eligibility and
qualification of the Trustee under the Indenture; and that
their letter is furnished as counsel for the Company and the
Guarantor to the Agent and is solely for the benefit of the
Agent.
Such counsel may base their opinions, as to certain questions
of fact, on certificates of officers of the Company and the Guarantor
and may rely as to all matters relating to the laws of the Commonwealth
of Puerto Rico upon the opinion of Ernesto N. Mayoral, delivered
pursuant to Section 5(b)(2) hereof.
(2) Opinion of Puerto Rico Counsel to the Company and the
Guarantor. The opinion of Ernesto N. Mayoral, Puerto Rico Counsel to
the Guarantor, to the effect that:
(i) The Guarantor has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of Puerto Rico.
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(ii) The Guarantor has corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement.
(iii) The Guarantor is not required to register as
a foreign corporation in any jurisdiction in order to conduct
the business presently conducted by it.
(iv) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and conduct its business as
described in the Registration Statement, and, to the best of
their knowledge and information, is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases
substantial properties or in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business; except where the failure
to so qualify and be in good standing would not have a
material adverse effect on the Guarantor and its subsidiaries
taken as a whole; and all of the issued and outstanding
capital stock of each such Significant Subsidiary has been
duly authorized and validly issued and is fully paid and
non-assessable (subject to the provisions of Section 55 of
Title 12 of the United States code in the case of Significant
Subsidiaries which are national banking associations) and,
except for directors' qualifying shares, is owned, directly or
through such subsidiaries, by the Guarantor or the Company
free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(v) This Agreement has been duly authorized,
executed and delivered by the Guarantor.
(vi) This Agreement has been duly and validly
authorized, executed and delivered by the Guarantor and
constitutes a valid and legally binding obligation of the
Guarantor enforceable in
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accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(vii) The Guarantees have been duly authorized and
established in conformity with the Indenture and, when the
terms of a particular Note and of its issuance and sale have
been duly authorized and established by all necessary
corporate action in conformity with the Indenture, such Note
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and delivered against payment in
accordance with this Agreement, the Guarantee endorsed on such
Note will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Guarantees will be
entitled to the benefits of the Indenture.
(viii) To the best of such counsel's knowledge,
neither the Company, the Guarantor nor any of the Significant
Subsidiaries is in violation of its charter or in default in
the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note or lease known to
such counsel to which it or any of them is a party or by which
their properties may be bound; the execution and delivery by
the Guarantor of the Indenture and the Distribution Agreement
and any Terms Agreement do not, and the preparation, execution
and issuance of each particular Note and Guarantee in
accordance with the Indenture, the sale by the Company of such
Note in accordance with the Distribution Agreement, and the
performance by the Company and the Guarantor of their
respective obligations under the Indenture, the Distribution
Agreement, the Notes, any Terms Agreement and the Guarantees
will not (a) violate the articles of incorporation or by-laws
of the Company or the
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Guarantor, or (b) violate any Federal law of the United States
or any law or the Commonwealth of Puerto Rico existing on the
date of such opinion or any administrative regulation or
administrative or court decree applicable to the Company, the
Guarantor or any Significant Subsidiary or (c) conflict with
or constitute a breach of, or a default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the Guarantor or
any Significant Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument known to such counsel to which the Company, the
Guarantor or any of the Significant Subsidiaries is a party or
by which any of them may be bound, or to which any of the
property or assets of the Company, the Guarantor or any of the
Significant Subsidiaries is subject; provided, however, that
such counsel need express no opinion with respect to Federal
securities laws, other antifraud laws, fraudulent transfer
laws, the Employee Retirement Income Security Act of 1974 and
related laws, and laws that restrict transactions between
United States persons and citizens or residents of certain
foreign countries; provided, further, that insofar as
performance by the Company and the Guarantor of their
respective obligations under the Indenture, the Distribution
Agreement, any Terms Agreement, the Notes and the Guarantees
is concerned, such counsel need express no opinion as to
bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights.
(ix) To the best of such counsel's knowledge and
information, there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in
the Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the
Company, the Guarantor or any of its subsidiaries is a party
or to which any of its property or assets is subject which are
not described in the Registration Statement, including
ordinary routine litigation incidental to the business of the
Company, the Guarantor or any such
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subsidiary, are, considered in the aggregate, not material.
(x) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments or documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto; and the descriptions thereof or
references thereto are correct.
(xi) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the SEC.
(xii) At the time the Registration State ment
became effective the Registration Statement (other than the
financial statements, schedules and other financial data
included or incorporated by reference therein as to which no
opinion need be rendered by such counsel) complied as to form
in all material respects with the requirements of the 1933
Act, the 1939 Act and the regulations under each of those
acts.
(xiii) Each document files pursuant to the 1934 Act
and incorporated by reference in the Prospectus compiled when
filed as to form in all material respects with the 1934 Act
and the 1934 Act Regulations thereunder.
(xiv) As counsel to the Company and the Guarantor
such counsel has reviewed the Registration Statement and the
Prospectus, participated in discussions with representatives
of the Agent and those of the Guarantor, the Company and their
accountants, and advised the Company and the Guarantor as to
the requirements of the 1933 Act and the applicable rules and
regulations thereunder, and on the basis of the information
that such counsel gained in the course of the
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performance of his services considered in the light of his
understanding of the applicable law, including the
requirements of Form S-3 and the character of the prospectus
contemplated thereby, such counsel confirms that, in his
opinion, each part of the Registration Statement, when such
part became effective, and the Prospectus, as of the date of
the prospectus supplement forming part thereof, appeared on
their face to be appropriately responsive in all material
respects to the requirements of the 1933 Act, the Trust
Indenture Act, and the applicable rules and regulations of the
SEC thereunder; and that nothing has come to his attention in
the course of his review that has caused him to believe that
any part of the Registration Statement, when such part became
effective (within the meaning of the 1933 Act) or (if such
opinion is being delivered in connection with a Terms
Agreement pursuant to Section 3(b) hereof) at the date of any
Terms Agreement and at the Settlement Date with respect
thereto, as the case may be, contains or contained any untrue
statement of a material fact or omits or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; or that the
Prospectus, on the date of the Prospectus Supplement forming
part thereof, or (if such opinion is being delivered in
connection with a Terms Agreement pursuant to Section 3(b)
hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be,
contains or contained any untrue statement of a material fact
or omits or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
counsel may say that the limitations inherent in the
independent verification of factual matters and the character
of determinations involved in the registration process are
such that he does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus except for
those made under the captions "Certain Regulatory Matters",
"Description of Securities and Guarantee", "Underwriting" and
"Plan of
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Distribution" and the appropriate sections in any Prospectus
Supplement describing the securities offered thereby and under
"Regulation and Supervision" in the Guarantor's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990,
insofar as they relate to provisions of documents therein
described and that he does not express any opinion or belief
as to the financial statements or other financial data
contained in the Registration Statement and the Prospectus, as
to the statement of the eligibility and qualification of the
Trustee under the Indenture; and that his letter is furnished
as counsel for the Company and the Guarantor to the Agent and
is solely for the benefit of the Agent.
Such counsel may base his opinion, as to certain
questions of fact, on certificates of officers of the Company
and the Guarantor and may rely as to all matters relating to
the laws of the State of New York upon the opinion of Sullivan
& Cromwell, delivered pursuant to Section 5(a)(1).
(3) Opinion of Counsel to the Agent. The opinion of Brown &
Wood, counsel to the Agent, covering the matters referred to in
subparagraph (1) above under the subheadings (i) and (v) to (vii),
inclusive, and (ix) and (xi) and in subparagraph (2) above under the
subheading (xii).
(4) In giving its opinion required by subsection (a)(3) of
this Section, Brown & Wood shall additionally state that nothing has
come to their attention that would lead them to believe that (other
than the financial statements, schedules and other financial data
included or incorporated by reference therein as to which no opinion
need be rendered by such counsel) the Registration Statement, at the
time it became effective, and if an amendment to the Registration
Statement or an Annual Report on Form 10-K has been filed by the
Guarantor with the SEC subsequent to the effectiveness of the
Registration Statement, then at the time such amendment became
effective or at the time of the most recent such filing, and at the
date hereof, or (if such opinion is being delivered in connection with
a Terms Agreement pursuant to Section 3(b) hereof) at the date of any
Terms Agreement and at the Settlement Date with
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respect thereto, as the case may be, contains or contained an untrue
statement of a material fact or omits or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus, as amended or
supplemented at the date hereof, or (if such opinion is being delivered
in connection with a Terms Agreement pursuant to Section 3(b) hereof)
at the date of any Terms Agreement and at the Settlement Date with
respect thereto, as the case may be, contains an untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Officer's Certificates. At the date hereof, the Agent shall have
received certificates of the President or Vice President of each of the Company
and the Guarantor, dated as of the date hereof, to the effect that (i) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus or since the time that any applicable Terms Agreement was
entered into, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospectus of the Guarantor and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the other
representations and warranties of the Company and the Guarantor contained in
Section 2 hereof are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (iii) the Company and
the Guarantor have performed or complied with all agreements and satisfied all
conditions on their respective parts to be performed or satisfied at or prior to
the date of such certificate, and (iv) that no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the SEC.
(c) Comfort Letter. The Agent on the date hereof and the Settlement
Date with respect to any Terms Agreement, if required by such Terms Agreement,
shall receive a letter form Price Waterhouse, the Guarantor's independent public
accountants, dated as of the date hereof or such Settlement Date, in form and
substance reasonably satisfactory to the Agent containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
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certain financial information contained in or incorporated by reference in the
Registration Statement and the Prospectus, and confirming that they are
independent accountants within the meaning of the 1933 Act and the 1933 Act
Rules.
(d) Other Documents. On the date hereof and on each Settlement Date
with respect to any applicable Terms Agreement, counsel to the Agent shall have
been furnished with such documents as such counsel may reasonably require for
the purpose of enabling such counsel to pass upon the issuance and sale of Notes
and issuance of the related Guarantees as herein contemplated and related
proceedings and all proceedings taken by the Company or the Guarantor in
connection with the issuance and sale of Notes or issuance of the related
Guarantees, as the case may be, as herein contemplated shall be satisfactory in
form and substance to the Agent and to counsel to the Agent.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of the Agent, any applicable Terms Agreement) may be terminated by the
Agent by notice to the Company at any time and any such termination shall be
without liability of any party to any other party, except that the covenant
regarding provision or an earnings statement set forth in Section 4(h) hereof,
the provisions concerning payment of expenses under Section 10 hereof, the
indemnity and contribution agreement set forth in Sections 8 and 9 hereof, the
provisions concerning the representations, warranties and agreements to survive
delivery of Section 11 hereof, the provisions set forth under "Parties" of
Section 15 hereof and the provisions of Section 16 hereof shall remain in
effect.
SECTION 6. Delivery of and Payment for Notes Sold Through the
Agent.
Delivery of Notes sold through the Agent as agent shall be made by the
Company to the Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the Agent shall promptly notify the company and deliver
the Note to the Company, and, if the Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to the Agent. If such
failure occurred for any reason other than default by the Agent in the
performance of its obligations hereunder, the
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Company will reimburse the Agent on an equitable basis for its loss of the use
of the funds for the period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company and the
Guarantor.
The Company and the Guarantor jointly and severally covenant with the
Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
it or an offer for the purchase of Notes, and each delivery of Notes to the
Agent pursuant to a Terms Agreement, shall be deemed to be an affirmation that
the representations and warranties of the Company and the Guarantor contained in
this Agreement and in any certificate theretofore delivered to the Agent
pursuant hereto are true and correct at the time of such acceptance or sale, as
the case may be, and an undertaking that such representations and warranties
will be true and correct at the time of delivery to the purchaser or his agent,
or to the Agent, of the Note or Notes relating to such acceptance or sale, as
the case may be, as though made at and as of each such time (and it is
understood that such representations and warranties shall relate to the
Registration Statement and Prospectus as amended and supplemented to each such
time).
(b) Subsequent Delivery of Certificates. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of Notes or similar changes and other than by an amendment or supplement
which relates exclusively to an offering of debt securities other than the
Notes) or there is filed with the SEC any document incorporated by reference
into the Prospectus (other than (i) any Current Report on Form 8-K relating
exclusively to the issuance of debt securities under the Registration Statement
or (ii) a document filed pursuant to Section 14 of the 1934 Act unless requested
by the Agent) or (if required pursuant to the terms of a Terms Agreement) the
Company sells Notes to the Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished to the Agent forthwith certificates dated
the date of filing with the SEC of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form satisfactory to the Agent to the effect that the statements contained in
the certificates
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referred to in Section 5(b) hereof which were last furnished to the Agent are
true and correct at the time of such amendment, supplement, filing or sale, as
the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificates, certificates of the same tenor as the certificates referred to in
said Section 5(b), modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of such
certificates.
(c) Subsequent Delivery of Legal Opinions. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of the Notes or similar changes or solely for the inclusion of additional
financial information, and, unless the Agent shall otherwise specify, other than
by an amendment or supplement which relates exclusively to an offering of debt
securities other than the Notes) or there is filed with the SEC any document
incorporated by reference into the Prospectus (other than (i) any Current Report
on Form 8-K or Quarterly Report on Form 10-Q or (ii) a document filed pursuant
to Section 14 of the 1934 Act, in each case, unless the Agent shall otherwise
reasonably request), or (if required pursuant to the terms of a Terms Agreement)
the Company sells Notes to the Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the Agent, with a copy to
counsel to the Agent, a written opinion or opinions of Counsel to the Company
and the Guarantor satisfactory to the Agent, dated the date of filing with the
SEC of such supplement or document, the date of effectiveness of such amendment,
or the date of such sale, as the case may be, in form and substance satisfactory
to the Agent, of the same tenor as the opinion referred to in Section 5(a)(2)
hereof, but modified, as necessary, to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of delivery of such
opinion; or, in lieu of such opinion or opinions, counsel last furnishing such
opinion to the Agent shall furnish the Agent with a letter to the effect that
the Agent may rely on such last opinion to the same extent as though it was
dated the date of such letter authorizing reliance (except that statements in
such last opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of delivery of such
letter authorizing reliance).
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(d) Subsequent Delivery of Comfort Letters. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains additional
financial information (other than a Current Report on Form 8-K filed solely for
the purpose of incorporating a press release relating to the Guarantor's interim
or annual financial statements or results of operations) or (if required
pursuant to the terms of a Terms Agreement) the Company sells Notes to the Agent
pursuant to a Terms Agreement, the Guarantor shall cause Price Waterhouse
forthwith to furnish the Agent with a letter, dated the date of effectiveness of
such amendment, supplement or document with the SEC, or the date of such sale,
as they case may be, in form satisfactory to the Agent, of the same tenor as the
portions of the letter referred to in Section 5(c) hereof but modified to relate
to the Registration Statement and Prospectus, as amended and supplemented to the
date of such letter; provided, however, that if the Registration Statement or
the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Price Waterhouse may limit the scope
of such letter to the unaudited financial statements included in such amendment
or supplement unless any other information included therein of an accounting,
financial or statistical nature is of such a nature that, in the reasonable
judgment of the Agent, such letter should cover such other information.
SECTION 8. Indemnification.
(a) Indemnification of the Agent. The Company and the Guarantor jointly
and severally agree to indemnify and hold harmless the Agent and each person, if
any, who controls the Agent within the meaning of Section 15 of the 1933 Act as
follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
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supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
unless such untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company and the Guarantor by the Agent
expressly for use in the Registration Statement or the Prospectus;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company and the
Guarantor; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Agent),
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above.
The indemnity is subject to the condition that, insofar as it relates to any
untrue statement or omission, or any alleged untrue statement or omission, made
in the Prospectus but eliminated or remedied in an amended or supplemented
Prospectus at the time of the sale of the related Note, it shall not inure to
the benefit of the Agent (or to the benefit of any person who controls such
Agent) if a copy of the Prospectus as amended or supplemented at the time of the
sale of such Note, excluding documents incorporated therein by reference, was
not sent or given to such person at or prior to the time required by the 1933
Act and the receipt of such Prospectus as amended or supplemented would have
constituted a sufficient defense to the claim asserted by such person.
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32
(b) Indemnification of the Company and the Guarantor. The Agent agrees
to indemnify and hold harmless the Company and the Guarantor, their respective
directors, each of their officers who signed the Registration Statement, and
each person, if any, who controls the Company or the Guarantor within the
meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company or the Guarantor by the Agent expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel) for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 hereof
is for any reason held to be unavailable to or insufficient to hold harmless the
indemnified parties although applicable in accordance with its terms, the
Company, the Guarantor and the Agent shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the Guarantor and the Agent, as
incurred, in such proportions that the Agent is responsible for that portion
represented by the percentage that the total commissions and underwriting
discounts received by the Agent to the date of
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such liability bears to the total sales price received by the Company from the
sale of Notes to the date of such liability, and the Company and the Guarantor
are responsible for the balance; provided, however that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls the Agent within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Agent, and each director of
the Company or the Guarantor, each officer of the Company or the Guarantor who
signed the Registration Statement, and each person, if any, who controls the
Company or the Guarantor within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company or the Guarantor, as the
case may be.
SECTION 10. Payment of Expenses.
(i) The preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any
amendments or supplements thereto;
(ii) The preparation, filing and reproduction of this
Agreement;
(iii) The preparation, printing, issuance and delivery of
the Notes and the related Guarantees, including any fees and expenses
relating to the use of book-entry notes;
(iv) The fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any
calculation agent of exchange rate agent;
(v) The reasonable fees and disbursements of counsel to
the Agent incurred from time to time in connection with the
transactions contemplated hereby;
(vi) The qualification of the Notes and the related
Guarantees under state securities laws in accordance with the
provisions of Section 4(i) hereof, including filing fees and the
reasonable fees and disbursements of legal counsel in connection
therewith and in connection with the preparation of any Blue Sky Survey
and any Legal Investment Survey;
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34
(vii) The printing and delivery to the Agent in quantities
as hereinabove stated of copies of the Registration Statement and any
amendments or supplements thereto, and the delivery by the Agent of the
Prospectus and any amendments or supplements thereto in connection with
solicitations or confirmations of sales of the Notes;
(viii) The preparation, printing, reproducing and delivery
to the Agent of copies of each Indenture and all supplements and
amendments thereto;
(ix) Any fees charged by rating agencies for the rating of
the Notes;
(x) Any advertising and other out-of-pocket expenses of
the Agent incurred with the written approval of the Company and the
Guarantor;
(xi) The cost of preparing and providing any CUSIP or
other identification numbers for the Notes; and
(xii) The fees and expenses of any Depositary (as defined
in the Indentures) and any nominees thereof in connection with the
Notes.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or the Guarantor
submitted pursuant hereto or thereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the Agent or
any controlling person of the Agent, or by or on behalf of the Company or the
Guarantor, and shall survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any Terms
Agreement) may be terminated for any reason, at any time by either the Company
or the Agent upon the giving of one day's written notice of such termination to
the other party hereto.
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35
(b) Termination of a Terms Agreement. The Agent may terminate any Terms
Agreement, immediately upon notice to the Company and the Guarantor, at any time
prior to the Settlement Date relating thereto (i) if there has been, since the
date of such Terms Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Guarantor or its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there shall have occurred any material adverse change in the financial
markets in the United States or any outbreak or escalation of hostilities or
other national or international calamity or crisis the effect of which is such
as to make it, in the judgment of the Agent, impracticable to market the Notes
or enforce contracts for the sale of the Notes, or (iii) if trading in any
securities of the Company or the Guarantor has been suspended by the SEC or a
national securities exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange shall have been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the SEC or any other governmental authority, or if a banking moratorium
shall have been declared by either Federal, New York or Puerto Rico authorities,
or (iv) if the rating assigned by any nationally recognized securities rating
agency to any debt securities of the Company or the Guarantor as of the date of
any applicable Terms Agreement shall have been lowered since that date or if any
such rating agency shall have publicly announced since the time of the
applicable Terms Agreement that it has placed any debt securities of the Company
or the Guarantor on what is commonly termed a "watch list" for possible
downgrading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agent shall be
entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) the Agent shall own
any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the Note
or Notes relating thereto has not occurred, the covenants set forth in Sections
4 and 7 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may
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be, and (iii) the covenant set forth in Section 4(h) hereof, the provisions of
Section 5 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 16 hereof
shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company or the Guarantor:
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: David H. Chafey,
Executive Vice President
If to the Agent:
Merrill, Lynch & Co.
Merrill, Lynch, Pierce, Fenner & Smith
Incorporated
Merrill, Lynch World Headquarters
North Tower - 23rd Floor
World Financial Center
New York, New York 10281-1323
Attention: MTN Product Management,
J. Patrick Hannon
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company or the Guarantor against the Agent
in connection with or arising under this Agreement shall
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be brought solely in the state or federal court of appropriate jurisdiction
located in the Borough of Manhattan, The City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agent, the Company, the Guarantor and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and respective successors and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes shall be
deemed to be a successor by reason merely of such purchase.
SECTION 16. Consent to Jurisdiction; Appointment of Agent to
Accept Service of Process.
(a) The Guarantor irrevocably consents and agrees, for the benefit of
the holders from time to time of the Notes, the Agent and the other persons
referred to in Section 15 that any legal action, suit or proceeding against it
with respect to its obligations, liabilities or any other matter arising out of
or in connection with the Notes, this Agreement, any Terms Agreement or the
Guarantees may be brought in the courts of the State of New York or the courts
of the United States of America located in The City of New York and, until all
amounts due and to become due in respect of all the Notes or the Guarantees have
been paid, or until any such legal action, suit or proceeding commenced prior to
such payment has been concluded, hereby irrevocably consent and submit to the
non-exclusive jurisdiction of each such court in personam, generally and
unconditionally with respect to any action, suit or proceeding for themselves
and in respect of their properties, assets and revenues.
(b) The Guarantor hereby irrevocably designates, appoints, and empowers
Paul Carr, with offices currently at 7
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38
West 57th Street, New York, New York, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, service of any and all
legal process, summons, notices and documents that may be served in any action,
suit or proceeding brought against the Guarantor in any such United States or
State court with respect to their respective obligations, liabilities or any
other matter arising out of or in connection with this Agreement, any Terms
Agreement or the Guarantees and that may be made on such designee, appointee and
agent in accordance with legal procedures prescribed for such courts. If for any
reason the Designated Agent shall cease to be available to act as such, the
Guarantor agrees to designate a new designee, appointee and agent in The City of
New York on the terms and for the purposes of this Section 16 reasonably
satisfactory to the Agent. The Guarantor further hereby irrevocably consents and
agrees to the service of any and all legal process, summons, notices and
documents in any such action, suit or proceeding against it by serving a copy
thereof upon the relevant agent for service of process referred to in this
Section 16 (whether or not the appointment of such agent shall for any reason
prove to be ineffective or such agent shall accept or acknowledge such service)
or by mailing copies thereof by the Guarantor at its address specified in or
designated pursuant to this Agreement. The Guarantor agrees that the failure of
any such designee, appointee and agent to give any notice of such service to it
shall not impair or affect in any way the validity of such service or any
judgement rendered in any action or proceeding based thereon. Nothing herein
shall in any way be deemed to limit the ability of the holders of the Notes, the
Agent and the other persons referred to in Section 15 to serve such legal
process, summons, notices and documents in any other manner permitted by
applicable law or to obtain jurisdiction over the Guarantor or bring actions,
suits or proceedings against the Guarantor in such other jurisdictions, and in
such manner, as may be permitted by applicable law. The Guarantor hereby
irrevocably and unconditionally waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of venue of any of
the aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement or the Guarantees brought in the United States federal courts
located in The City of New York and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
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(c) The provisions of this Section 16 shall survive any termination of
this Agreement, in whole or in part.
If the foregoing is in accordance with the Agent's understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among the
Agent and the Company and the Guarantor in accordance with its terms.
Very truly yours,
BANPONCE FINANCIAL CORP.
By: /s/ David H. Chafey, Jr.
-----------------------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice President
BANPONCE CORPORATION
By: /s/ David H. Chafey, Jr.
-----------------------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice President
Accepted:
MERRILL LYNCH, PIERCE, FENNER & SMITH
By: /s/ Patrick Hannon
-----------------------------------
Name: Patrick Hannon
Title: Director
Accepted:
THE FIRST BOSTON CORPORATION
55 East 52nd Street
New York, New York 10055
By: /s/ Constance M. Kassouf
-----------------------------------
Name: Constance M. Kassouf
Title: Vice President
-39-
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AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
December 2, 1993
Reference is made to a Distribution Agreement, dated October 11, 1991
(the "Distribution Agreement"), among BanPonce Financial Corp. (the "Company"),
BanPonce Corporation (the "Guarantor") and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and CS First Boston Corporation (each, an "Agent and collectively,
the "Agents") relating to the issue and sale by the Company of its Medium-Term
Notes. The Company, the Corporation and each of the Agents hereby agree to amend
said Distribution Agreement by inserting the following at the end of Section
1(a) thereof:
It is understood that if from time to time the Company is approached by
a prospective agent offering to solicit a specific purchase of Notes,
the Company may engage such agent with respect to such specific
purchase, provided that (i) such agent is engaged on terms
substantially similar (including the same commission schedule as set
forth hereto as Schedule A) to the applicable terms of this Agreement
and (ii) each Agent is given notice of such purchase promptly,
including the terms thereof and a copy of the agreement setting forth
the terms of engagement of such agent by the Company, in each case
after the purchase is agreed to.
Except as otherwise expressly provided herein, the Distribution
Agreement is in all respects ratified and confirmed, and all the terms,
provisions and conditions thereof shall be and remain in full force and effect.
41
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By: /s/ Jose-Luis Lopez-Calderon
-------------------------------------
BANPONCE CORPORATION
By: /s/ Jose-Luis Lopez-Calderon
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------------
BANPONCE CORPORATION
By:
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/
-------------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------------
BANPONCE CORPORATION
By:
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
CS FIRST BOSTON CORPORATION
By: /s/ Martha Bailey
-------------------------------------
Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
-------------------------------------
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------------
BANPONCE CORPORATION
By:
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
By:/s/ Kimberley D. Shipla
-------------------------------------
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EXHIBIT A
The following terms, if applicable, shall be agreed to by the Agent and
the Company and the Guarantor pursuant to each Terms Agreement:
Principal Amount: $___________
(or principal amount of foreign currency or
currency unit)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Not:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Dates:
Interest Payment Dates:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Optional Repayment Date(s), if any:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b) of the
Distribution Agreement.
Legal Opinion pursuant to Section 7(c) of the
Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement.
Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
46
SCHEDULE A
As compensation for the services of the Agent hereunder, the Company
shall pay the Agent, on a discount basis, a commission for the sale of each Note
equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
PRINCIPAL
MATURITY RANGES AMOUNT
- --------------- ----------
From 9 months but less than 1 year........................ .125%
From 1 year but less than 18 months....................... .150
From 18 months but less than 2 years...................... .200
From 2 years but less than 3 years........................ .250
From 3 years but less than 4 years........................ .350
From 4 years but less than 5 years........................ .450
From 5 years but less than 6 years........................ .500
From 6 years but less than 7 years........................ .550
From 7 years but less than 8 years........................ .600
From 8 years but less than 9 years........................ .600
From 9 years but less than 10 years....................... .600
From 10 years but less than 15 years...................... .625
From 15 years but less than 20 years...................... .700
From 20 years to 30 years................................. .750
47
AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT
May 23, 1997
WHEREAS, the parties hereto have previously entered into a
Distribution Agreement, dated October 11, 1991, as amended by Amendment No. 1
thereto, dated December 2, 1993 and Amendment No. 2 thereto, dated October 6,
1995, and as supplemented on June 16, 1993, August 1, 1994 and on the date
hereof (the "Distribution Agreement"), among Popular North America, Inc. (the
"Company") (formerly BanPonce Financial Corp.), Popular, Inc. (the "Guarantor")
(formerly BanPonce Corporation) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities Inc., Credit Suisse First Boston Corporation and
First Chicago Capital Markets, Inc. (each, an "Agent and collectively, the
"Agents") relating to the issue and sale by the Company of its Medium-Term
Notes (the "Notes"); and
WHEREAS, the Company, the Guarantor and each of the Agents wish to
amend the Distribution Agreement to reflect the presumption that the Agents
will purchase the Notes as principal and that the Agents will act as agents of
the Company in soliciting offers to purchase Notes only when agreed upon by the
Company and the applicable Agent;
NOW, THEREFORE, the Company, the Guarantor and each of the Agents
hereby agree to amend the Distribution Agreement as follows:
1. Section 1(c) of the Distribution Agreement is hereby amended to
read as follows:
(c) Purchases as Principal; Solicitations as Agent. The Agents
shall not have any obligation to purchase Notes from the Company as
principal. However, absent an agreement between an Agent and the
Company that such Agent shall be acting solely as an agent for the
Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such
Agent. Accordingly, the Agents, individually or in a syndicate, may
agree from time to time to purchase Notes from the Company as
principal for resale to investors and other purchasers determined by
such Agents. Any purchase of Notes from the Company by an Agent as
principal shall be made in accordance with Section 3(b) hereof. If
agreed upon between an Agent and the Company, such Agent, acting
solely as an agent for the Company and not as principal, will solicit
offers for the purchase of Notes. Such Agent shall make reasonable
efforts to assist the Company in obtaining performance by each
purchaser whose offer for the purchase of Notes has
48
been solicited by it on an agency basis and accepted by the Company.
Such Agent shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason, except in
the event that such sale is not consummated due to the failure of such
Agent to perform its obligations hereunder.
2. The first paragraph of Section 3(a) of the Distribution
Agreement is hereby amended to read as follows:
On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, when agreed
upon by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase
the Notes upon the terms and conditions set forth herein and in the
Prospectus.
3. Except as otherwise expressly provided herein, the
Distribution Agreement is in all respects ratified and confirmed, and all the
terms, provisions and conditions thereof shall be and remain in full force and
effect.
2
49
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
3 to the Distribution Agreement to be executed on their behalf as of the day
and year first above written.
POPULAR NORTH AMERICA, INC.
By: /s/ Jorge A. Junquera
-------------------------------------
POPULAR, INC.
By: /s/ Jorge A. Junquera
-------------------------------------
Accepted:
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Richard N. Doyle
-------------------------
CHASE SECURITIES INC.
By: /s/ Susan Mangan-Dunn
-------------------------
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Michael E. Martin
-------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ John Roche
-------------------------
3