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EXECUTION COPY
POPULAR, INC.
MEDIUM-TERM NOTES DUE
9 MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
June 30, 2004
UBS SECURITIES LLC
677 Washington Blvd
Stamford, Connecticut 06901
BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, New York 10019
KEEFE, BRUYETTE & WOODS, INC.
787 Seventh Avenue
New York, New York 10019
POPULAR SECURITIES, INC.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Ladies and Gentlemen:
Popular, Inc., a Puerto Rico corporation (the "Company"), confirms
its
agreement with Credit Suisse First Boston
LLC, J.P. Morgan Securities Inc.,
Keefe, Bruyette & Woods, Inc., Merrill
Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Popular
Securities, Inc. and UBS Warburg LLC (each,
an "Agent," and collectively, the "Agents",
which term shall also include any
Agent acting as principal substituted as
hereinafter provided in Section 17
hereof) with respect to the issue and sale
by the Company of its Medium-Term
Notes described herein (the "Notes"). The
Notes are to be issued pursuant to an
Indenture, dated as of February 5, 1995, as
amended and supplemented from time
to time (the "Indenture"), between the
Company and J.P. Morgan Trust Company,
National Association (as successor to Bank
One, 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 $2,500,000,000 (or
the equivalent thereof in other currencies
or currency units) less an amount
equal to the aggregate proceeds from the
sale prior to or after the date hereof
of securities other than the Notes
registered under the Prospectus, dated
December 29, 2003, relating to debt
securities and preferred stock of the
Company, Popular International Bank, Inc.
and Popular North America, Inc. to or
through the Agents 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
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sold through or to the Agents 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 one or more Agents as principal
for resale to investors and other
purchasers and for the sale of the Notes by
the Company directly to investors
(as may from time to time be agreed to by
the Company and the applicable
Agent(s), in which case each applicable
Agent will act as an agent of the
Company in soliciting offers for the
purchase of Notes.
The Company has filed with the Securities and Exchange Commission
(the
"SEC") a registration statement on Form S-3
(Nos. 333-111007, 333-111007-01 and
333-111007-02) for the registration of debt
securities, including the Notes,
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"), and the Company has filed such
post-effective amendments thereto as may
be required prior to the Company's
acceptance of any offer for the purchase of
Notes and each such post-effective
amendment has been declared effective by the
SEC. Such registration statement (as so
amended, if applicable) is referred to
herein as the "Registration Statement"; and
the final prospectus and all
applicable amendments or supplements
thereto (including the final prospectus
supplement and pricing supplement relating
to the offering of Notes), in the
form first furnished to the applicable
Agent(s) for use in confirming sales of
Notes, are collectively referred to herein
as the "Prospectus"; provided,
however, that all references to the
"Registration Statement" and the
"Prospectus" shall also be deemed to
include all documents incorporated therein
by reference that are filed pursuant to the
Securities Exchange Act of 1934, as
amended (the "1934 Act"), prior to any
acceptance by the Company of an offer for
the purchase of Notes; provided further,
that if the Company files a
registration statement with the SEC
pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration
Statement"), then, after such filing,
all references to the "Registration
Statement" shall also be deemed to include
the Rule 462(b) Registration Statement. A
"preliminary prospectus" shall be
deemed to refer to any prospectus used
before the Registration Statement became
effective and any prospectus furnished by
the Company after the registration
statement became effective and before any
acceptance by the Company of an offer
for the purchase of Notes which omitted
information to be included upon pricing
of such Notes in a form of prospectus filed
with the SEC pursuant to Rule 424(b)
of the 1933 Act Regulations. For purposes
of this Agreement, all references to
the "Registration Statement," "Prospectus"
or "preliminary prospectus" or to any
amendment or supplement thereto shall be
deemed to include any copy filed with
the SEC pursuant to its Electronic Data
Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and
schedules
and other information which is "disclosed,"
"contained," "included" or "stated"
(or other references of like import) in the
Registration Statement, Prospectus
or preliminary prospectus or any amendment
or supplement thereto shall be deemed
to include all such financial statements
and schedules and other information
incorporated therein by reference at or
prior to the acceptance of any
particular offer for the purchase of Notes;
and all references in this Agreement
to amendments or supplements to the
Registration Statement, Prospectus or
preliminary prospectus shall be deemed
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to include the filing of any document under
the 1934 Act incorporated therein by
reference after the acceptance of any
particular offer for the purchase of
Notes.
SECTION 1.
Appointment as Agents.
(a) Appointment. 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 agrees
that Notes shall be sold exclusively
to or through the Agents. The Company
agrees that it will not appoint any other
agents to act on its behalf, or to assist
it, in the placement of the Notes.
Notwithstanding anything to the contrary contained herein, the
Company
may authorize any other person, partnership
or corporation (an "Additional
Agent") to act as its agent to solicit
offers for the purchase of all of the
Notes or a specific tranche of Notes.
Unless the Agents otherwise agree, 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 prompt delivery
of executed copies of such counterpart
and any other contractual arrangements
between the Company and such Additional
Agent relating thereto to the Agents and
their counsel. Thereafter, with respect
to all of the Notes or the specific tranche
of Notes, as the case may be, the
term "Agent" or "Agents," as used in this
Agreement, shall mean the Agents and
such Additional Agent. Upon its
appointment, the Additional Agent shall specify
its requirement for the delivery of
certificates, letters and opinions as are
set forth in Section 5 hereof.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of
Notes in excess of the amount which
shall be authorized by the Company from
time to time or in excess of the
aggregate initial offering price of Notes
registered for sale pursuant to the
Registration Statement. The Agents shall
have no responsibility for maintaining
records with respect to the aggregate
initial offering price of Notes sold, or
of otherwise monitoring the availability of
Notes for sale, under the
Registration Statement.
(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, shall 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 been solicited by it on an
agency basis and accepted by the Company.
Such Agent shall have the right, in
its discretion reasonably exercised, to
reject any offer for the purchase of
Notes, in whole or in part, and any such
rejection shall not be deemed a breach
of its agreement contained herein. Such
Agent shall not have any liability to
the Company in the event that any such
purchase is not consummated for
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any reason, except in the event that such
sale is not consummated due to the
failure of such Agent to perform its
obligations hereunder.
(d) Reliance. The Company and the Agents agree that any Notes
purchased
from the Company by one or more Agents as
principal shall be purchased, and any
Notes the placement of which an Agent
arranges as an agent of the Company shall
be placed by such Agent, in reliance on the
representations, warranties,
covenants and agreements of the Company
contained herein and on the terms and
conditions and in the manner provided
herein.
SECTION 2.
Representations and Warranties of the Company.
(a) The Company represents and warrants to the Agents 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 an Agent
as agent or to one or more Agents as
principal), as of the date of each delivery
of Notes (whether through an Agent
as agent or to one or more Agents as
principal) (the date of each such delivery
to one or more Agents 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 that
relates exclusively to an offering of
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 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:
(i) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in
good
standing under the laws of its 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
Company
is duly registered as a bank holding company under the Bank
Holding
Company Act of 1956, as amended (the "Bank Holding Company Act");
and
the Company is not required to register as a foreign corporation in
any
jurisdiction in order to conduct the business presently conducted
by
it.
(ii) Subsidiaries. Each subsidiary of the Company which is a
significant subsidiary (each, a "Significant Subsidiary"), as
defined
in Rule 1-02 of Regulation S-X promulgated under the 1933 Act, has
been
duly incorporated and is validly existing as a corporation or a
bank 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 Company and its subsidiaries considered
as
one enterprise; and all of the issued and outstanding shares of
capital
stock of each such Significant Subsidiary have been duly authorized
and
validly issued, are 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
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associations) and, except as otherwise disclosed in the Prospectus
and
except for directors' qualifying shares, are owned by the
Company,
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 Company and its subsidiaries considered
as
one enterprise.
(iii) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act; the
Registration Statement (or any Rule 462(b) Registration Statement)
has
become effective under the 1933 Act and no stop order suspending
the
effectiveness of the Registration Statement (or any Rule 462(b)
Registration Statement) has been issued under the 1933 Act and
no
proceedings for that purpose have been instituted or are pending
or, to
the knowledge of the Company, are contemplated by the SEC, and
any
request on the part of the SEC for additional information has
been
complied with; the Indenture has been duly qualified under the
1939
Act; at the respective times that the Registration Statement
(including
any Rule 462(b) Registration Statement) and any post-effective
amendment thereto (including the filing of the Company's most
recent
Annual Report on Form 10-K with the SEC (the "Annual Report on
Form
10-K")) became effective and at each Representation Date, the
Registration Statement (including any Rule 462(b) Registration
Statement but excluding any prospectus supplement with respect to
an
offering of securities other than the Notes that is contained
therein)
and any amendments thereto complied and 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
under the 1939 Act (the "1939 Act Regulations") and 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 to make
the
statements therein not misleading; each preliminary prospectus
and
prospectus filed as part of the Registration Statement (excluding
any
prospectus supplement with respect to an offering of securities
other
than the Notes that is contained therein) as originally filed or
as
part of any amendment thereto, or filed pursuant to Rule 424 under
the
1933 Act, complied when so filed in all material respects with the
1933
Act Regulations; each preliminary prospectus and the Prospectus
delivered to the applicable Agent(s) for use in connection with
the
offering of Notes are identical to any electronically
transmitted
copies thereof filed with the SEC pursuant to EDGAR, except to
the
extent permitted by Regulation S-T; and at the date hereof, at the
date
of the Prospectus and each amendment or supplement thereto and at
each
Representation Date, neither the Prospectus nor any amendment
or
supplement thereto included or will include an untrue statement of
a
material fact or omitted or will 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 the Prospectus made in reliance upon and in
conformity
with information furnished to the Company in writing by the
Agents
expressly for use in the Registration Statement or the
Prospectus.
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(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 Regulations"), and, when
read
together and with the other information in the Prospectus, did not
and
will not include 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
circumstances
under which they were or are made, not misleading.
(v) Independent Registered Public Accounting Firm. The
independent registered public accounting firm that 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 Prospectus present fairly the consolidated
financial
position of the Company and its consolidated subsidiaries as of
the
dates indicated and the consolidated results of their operations
for
the periods 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; the supporting schedules
included or
incorporated by reference in the Prospectus present fairly the
information required to be stated therein; and any pro forma
consolidated financial statements of the Company and its
consolidated
subsidiaries and the related notes thereto included in the
Prospectus
present fairly the information shown therein, have been prepared
in
accordance with the SEC's rules and guidelines with respect to
pro
forma financial statements and have been properly compiled on the
basis
described therein, and the assumptions used in the preparation
thereof
are reasonable and the adjustments used therein are appropriate to
give
effect to the transactions and circumstances referred to
therein.
(vii) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly
authorized,
executed and delivered by the Company; the Indenture has been
duly
authorized, executed and delivered by the Company and constitutes
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; 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
(as defined in Section 3(b)), will constitute valid and legally
binding
obligations of the Company enforceable in accordance with their
terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization,
moratorium and similar laws of general applicability relating to
or
affecting creditors' rights generally and to general equity
principles;
the Notes and the Indenture will be substantially in the form
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heretofore delivered to the Agent and conform in all material
respects
to all statements relating thereto contained in the Prospectus; and
the
Notes 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
Statement 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 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
nor any of the Significant Subsidiaries is in violation of its
charter
or by-laws 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 or encumbrance upon any property or assets of the Company or
any
of the Significant Subsidiaries pursuant to any contract,
indenture,
mortgage, loan agreement, note, lease or other instrument to which
the
Company 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 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 or any such subsidiary or any law, administrative
regulation or
administrative or court order or decree which breach, default,
creation,
imposition or violation would, in each case, have a material
adverse effect on the Company 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
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
proceeding
before or by any court or governmental agency or body, domestic
or
foreign, now pending, or, to the knowledge of the Company,
threatened
against or affecting, the Company 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 Company 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 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.
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(xi) Regulatory Certificates, Authorities and Permits. The
Company and the Significant Subsidiaries possess adequate
certificates,
authorities 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 or the Significant Subsidiaries;
and
neither the Company 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 Company
and
its subsidiaries considered as one enterprise.
(xii) 1940 Act. The Company is not, and upon the issuance and
sale of the Notes as herein contemplated and the application of the
net
proceeds therefrom as described in the Prospectus will not be,
an
"investment company" within the meaning of the Investment Company
Act
of
1940, as amended (the "1940 Act").
(b) Additional Certifications. Any certificate signed by any
officer of
the Company or a Significant Subsidiary and
delivered to the Agents or to
counsel for the Agents in connection with
an offering of Notes or the sale of
Notes to one or more Agents as principal
shall be deemed a representation and
warranty by the Company or such Significant
Subsidiary, as the case may be, to
the Agents as to the matters covered
thereby on the date of such certificate.
SECTION 3. Solicitations as Agents;
Purchases as Principal.
(a) Solicitations as Agents. 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.
The Company reserves the right, in its sole discretion, to
suspend
solicitation of purchases of the Notes
through the Agents, as agents, commencing
at any time for any period of time or
permanently. Upon receipt of instructions
from the Company, the Agents will forthwith
suspend solicitation of purchases
from the Company until such time as the
Company has advised the Agents that such
solicitation may be resumed.
The Company agrees to pay an 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 such Agent as set
forth in Schedule A hereto. The Agents 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 or formula, maturity date and
other
terms of the Notes shall be agreed upon by
the Company and the applicable 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
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Prospectus, the Notes will be issued in
denominations of $1,000 and integral
multiples thereof. All Notes sold through
an Agent as agent will be sold at 100%
of their principal amount unless otherwise
agreed to by the Company and such
Agent.
(b) Purchases as Principal. Each sale of Notes to one or more
Agents as
principal shall be made in accordance with
the terms contained herein and
(unless the Company and such Agent(s) 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, such
Agent(s). Each such separate agreement
(which may be an oral agreement) between
one or more Agents 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 applicable
Agent(s). 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.
Each 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
representations and warranties of the
Company 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 each applicable 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 Agents 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 one or more Agents as
principal.
(c) Administrative Procedures. Administrative procedures with
respect
to the sale of Notes shall be agreed upon
from time to time by the Agent and the
Company (the "Procedures"). The Agents, on
the one hand, and the Company on the
other hand, agree to perform the respective
duties and obligations specifically
provided to be performed by them in the
Procedures.
(d) Restrictions on Distribution in Puerto Rico. The Agents agree
that
Popular Securities, Inc. shall have the
sole right to solicit offers to purchase
the Notes as agent or to make any sales of
the Notes as principal, as the case
may be, in Puerto Rico.
(e) Restrictions on Sales to Discretionary Accounts. Each Agent
hereby
agrees to refrain from sales to
discretionary accounts under its supervision
except in accordance with procedures to
obtain the prior specific written
approval of the customer that have been
approved by the NASD in compliance with
NASD Conduct Rule 2720(l).
SECTION 4. Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the
Agents
immediately (i) of the effectiveness of any
amendment to the Registration
Statement, (ii) of the filing of any
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supplement to the Prospectus relating to
the Notes or any document 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 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 4, the
Company will give the Agents notice of its
intention to file or prepare any additional
registration statement with respect
to the registration of additional Notes,
any amendment to the Registration
Statement or any amendment or supplement to
the Prospectus (other than an
amendment or supplement providing
information solely with respect to the terms
of Notes (except with respect to the
applicable Agent(s)) and other than an
amendment or supplement that relates to an
offering of 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
Agents 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 or
preparation, as the case may be,
except for documents required to be filed
pursuant to the 1934 Act, which the
Company shall furnish to the Agents
immediately after the filing thereof, and
will not file any such amendment or
supplement other than a document required to
be 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 will deliver to the Agents 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 Agents may
reasonably request. The Company will
furnish the Agents with as many copies of
the Prospectus (as amended or supplemented)
as the Agents shall reasonably
request so long as the Agents are required
to deliver a Prospectus in connection
with sales or solicitations of offers to
purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare,
with
respect to any Notes to be sold through or
to the Agents pursuant to this
Agreement, a Pricing Supplement with
respect to such Notes in a form previously
approved by the Agents. The Company will
deliver such Pricing Supplement to the
applicable Agent(s) no later than 11:00 am,
New York City time, on the business
day following the date of the Company's
acceptance of the offer for the purchase
of such Notes and will file such Pricing
Supplement pursuant to the applicable
clause of Rule 424(b) under the 1933 Act in
accordance with the prescribed time
period therein.
(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
Registration Statement or the Prospectus
or any amendment or supplement thereto in
order that neither the Registration
Statement or the Prospectus nor any
amendment or supplement thereto will include
an untrue statement of a material fact or
omit to state any material fact
necessary in
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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 or any amendment or
supplement thereto 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 Agents to cease the
solicitation of offers to purchase the Notes
in the Agents' capacity as agents and to
cease sales of any Notes the Agents may
have purchased from the Company as
principal, and the Company will promptly
prepare and file with the SEC such
amendment or supplement, whether by filing
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 or
any amendment or supplement thereto
comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except
as
otherwise provided in subsection (1) of
this Section, on or prior to the date on
which there shall be released to the
general public interim consolidated
financial statement information related to
the Company 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 Company shall furnish such
information to the Agents, 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 Company and its
consolidated subsidiaries for such period
and corresponding information for the
comparable period of the preceding fiscal
year, as well as such other
information and explanations as shall be
necessary for an understanding thereof
or as shall be required by the 1933 Act or
the 1933 Act Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except
as
otherwise provided in subsection (1) of
this Section, on or prior to the date on
which there shall be released to the
general public financial information with
respect to the audited consolidated
financial statements of the Company for the
preceding fiscal year, the Company shall
furnish such information to the Agents,
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 such audited
consolidated financial statements and the
report or reports, and consent or consents
to such inclusion or incorporation by
reference, of the independent registered
public accounting firm with respect
thereto, as well as such other information
and explanations as shall be
necessary for an understanding of such
consolidated financial statements or as
shall be required by the 1933 Act or the
1933 Act Regulations.
(h) Earnings Statements. The Company will timely file such
reports
pursuant to the 1934 Act as are necessary
in order to make generally available
to the security holders of the Company as
soon as practicable an earnings
statement for the purposes of, and to
provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933
Act.
(i) Blue Sky Qualifications. The Company will endeavor, in
cooperation
with the Agents, to qualify the Notes for
offering and sale under the applicable
securities laws of such states and other
jurisdictions of the United States as
the Agents and the Company shall agree and,
unless the Company otherwise
notifies the Agents, will maintain such
qualifications in effect for as long as
may be required for the distribution of the
Notes; provided, however,
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<PAGE>
that the Company shall not be required to
submit to general service of process
in any jurisdiction. The Company will
promptly advise the Agents of its receipt
of any notification with respect to the
suspension of the qualification of the
Notes for sale in any such state or
jurisdiction or the initiating or
threatening of any proceeding for such
purpose.
(j) Reporting Requirements. The Company, during the period when
the
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 within
the time period prescribed by the 1934
Act and the 1934 Act Regulations.
(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 will not, without the consent of
the applicable Agent or Agents, offer or
sell, or enter into any agreement to
sell, any debt securities of the Company
(other than the Notes that are to be
sold pursuant to such Terms Agreement and
commercial paper).
(l) Suspension of Certain Obligations. The Company 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 Agents shall have suspended
solicitation of purchases of the Notes in
their capacity as agent pursuant to a
request from the Company and (ii) the
Agents shall not then hold any Notes
purchased from the Company as principal, to
the time the Company shall determine
that solicitation of purchases of the Notes
should be resumed or shall
subsequently enter into a new Terms
Agreement with one or more Agents.
(m) Public Reports. The Company will furnish to the Agents, at
the
earliest time the Company makes the same
available to others, copies of its
annual report and other financial reports
furnished or made available to the
public generally.
SECTION 5. Conditions of Obligations.
The
obligations of the Agents to solicit offers to purchase the
Notes
as agent of the Company, the obligations of
any purchasers of the Notes sold
through an Agent as agent, and any
obligation of an 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 contained herein
and to the accuracy of the statements of
the officers of the Company made in any
certificate furnished pursuant to the
provisions hereof, to the performance and
observance by the Company of all its
covenants and agreements herein contained
and to the following additional conditions
precedent:
(a) Legal Opinions. On the date hereof and, if required by any
applicable Terms Agreement, on the
Settlement Date with respect to such Terms
Agreement, the Agents shall have received
the following legal opinions, dated as
of the date hereof or such Settlement Date,
as the case may be, in form and
su
