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EXECUTION COPY
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM NOTES DUE
9 MONTHS OR MORE FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PAYMENT
OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY
POPULAR, INC.
DISTRIBUTION AGREEMENT
June 23, 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 North America, Inc., a Delaware corporation (the
"Company"),
confirms its agreement with UBS Securities
LLC, Banc of America Securities LLC,
Keefe, Bruyette & Woods, Inc. and
Popular Securities, Inc. (each, an "Agent,"
and collectively, the "Agents", which term
shall also include any Agent acting
as a 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 will be
unconditionally guaranteed as to payment
of principal, premium, if any, and interest
(the "Guarantees") by Popular, Inc.
(the "Guarantor"). The Notes and the
Guarantees are to be issued pursuant to an
Indenture, dated as of October 1, 1991, as
amended and supplemented from time to
time (the "Indenture"), among the Company,
the Guarantor 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
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to the date hereof of Notes and 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, Inc.
and Popular International Bank, 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 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 and the Guarantor have 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, and
guarantees thereof, including 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"), and the Company and the Guarantor
have 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 and the Guarantor file 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 and the Guarantor
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").
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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 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
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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
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 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 and the Guarantor.
(a) The Company and the Guarantor jointly and severally represent
and
warrant 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. Each of the Guarantor
and the Company has been 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; each of the Guarantor and 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
each of the Guarantor and 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 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 1-02 of
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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 Guarantor 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
associations) and, except as otherwise disclosed in the Prospectus
and
except for directors' qualifying shares, are 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. The Company and
the Guarantor meet 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 and the Guarantor, 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 Guarantor'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
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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.
(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 Guarantor 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 Guarantor 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, the Guarantees and the Notes. This Agreement has been
duly
authorized, executed and delivered by the
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Guarantor and the Company; the Indenture has been duly
authorized,
executed and delivered by the Guarantor and the Company and
constitutes
a valid and legally binding obligation of 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; 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 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 and similar laws of general
applicability
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
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 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 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,
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
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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,
creation, 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
proceeding
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 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.
(xii) 1940 Act. Neither the Company nor the Guarantor is, or
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 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 Guarantor, the Company or a Significant
Subsidiary and delivered to the
Agents or to counsel for the Agents in
connection with an offering of Notes and
related Guarantees or the sale of Notes to
one or more Agents as principal shall
be deemed a representation and warranty by
the Company, the Guarantor or such
Significant Subsidiary, as the case may be,
to the Agents as to the matters
covered thereby on the date of such
certificate.
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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 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 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 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.
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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, the
Company and the Guarantor (the
"Procedures"). The Agents, 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 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 and the
Guarantor.
The Company and the Guarantor jointly and severally covenant with
the
Agents as follows:
(a) Notice of Certain Events. The Company and the Guarantor will
notify
the Agents 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 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 4, the
Company and the Guarantor will give the
Agents 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
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
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1934 Act, which the Company or the
Guarantor 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 and the Guarantor 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 and the Guarantor 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 and Guarantor
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 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 and the Guarantor 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 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 Agents, confirmed in
writing, and promptly thereafter shall
cause the
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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 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 Guarantor for
the preceding fiscal year, the Guarantor
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 Guarantor 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 and the Guarantor will
endeavor, in cooperation with the Agents,
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 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 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 Agents 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) Reporting Requirements. The Guarantor and 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 and the Guarantor 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 or the Guarantor (other
than the Notes that are to be sold pursuant
to such Terms Agreement and
commercial paper).
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(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 Agents shall have
suspended solicitation of purchases of the
Notes in their capacity as agent
pursuant to a request from the Company and
the Guarantor and (ii) the Agents
shall not then hold any Notes purchased
from the Company as principal, 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 one or more
Agents.
(m) Public Reports. The Company and the Guarantor will furnish to
the
Agents, at the earliest time the Company
and the 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 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 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 first Settlement Date under a Terms
Agreement after the date hereof and,
thereafter, 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 substance
satisfactory to the Agents:
(1) Opinion of Counsel to the Company and the Guarantor. The
opinion of Sullivan & Cromwell LLP, counsel to the Company and
the
Guarantor, to
the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
S
