<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) XX
----
--------------------------------
BANCO SANTANDER PUERTO RICO
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
Puerto Rico 66-0312389
(Jurisdiction of incorporation) (IRS Employer ID Number)
221 Ponce de Leon Ave., Lobby 00918
Hato Rey, Puerto Rico (Zip Code)
(Address of principal executive offices)
</TABLE>
--------------------------------
Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Puerto Rico 66-0426994
(Jurisdiction of incorporation or organization) (IRS Employer ID Number)
c/o Government Development Bank 00911
for Puerto Rico (Zip Code)
Minillas Government Center
De Diego Avenue, Stop 22
Santurce, Puerto Rico
(Address of principal executive offices)
</TABLE>
--------------------------------
$104,000,000 Tourism Revenue Bonds
1998 Series A
(Title of the indenture securities)
<PAGE>
<PAGE>
GENERAL
1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject:
(i) Federal Deposit Insurance Corporation, Washington D.C.
(ii) Puerto Rico Commissioner of Financial Institutions, San
Juan, Puerto Rico
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15
The obligor is not currently in default under any of its outstanding
securities for which Banco Santander Puerto Rico is the Trustee. Accordingly,
responses to Items 3 through 15 of Form T-1 are not required under General
Instruction B.
<PAGE>
<PAGE>
16. LIST OF EXHIBITS
<TABLE>
<S> <C>
T-1.1 - A copy of the articles of incorporation of Banco Santander Puerto Rico
T-1.2 - A copy of the certificate of authority of Banco Santander Puerto Rico to
commence business.
T-1.3 - A copy of the authorization of Banco Santander Puerto Rico to exercise
corporate trust powers.
T-1-4 - A copy of the By-Laws, as amended, of Banco Santander Puerto Rico.
T-1.6 - The consent of the trustee required by Section 321(b) of the Trust Indenture
Act of 1939, as amended by the Trust Indenture Reform Act of 1990.
T-1.7 - A copy of the latest report of condition of the trustee pursuant to law or the
requirements of its supervising or examining authority.
</TABLE>
NOTE
As of January 12, 1999, the trustee had 38,622,651 shares of Common
Stock outstanding, which are owned as follows: 78.3% (approximately) by
Banco Santander, S.A.; 21.69% (approximately) is publicly held; and .01%
(approximately) by Santusa Holding, S.L.
In answering Item 2 in this statement of eligibility, as to matters
peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor and
will rely on information to be furnished by the obligor and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
<PAGE>
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Banco Santander Puerto Rico, a corporation organized and
existing under the laws of the Commonwealth of Puerto Rico, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of San Juan,
Puerto Rico, on the 12th day of January, 1999.
BANCO SANTANDER PUERTO RICO
By: S/sg.
---------------------------------------
Luis Fernandez Trinchet
Senior Vice President & Executive Trust Officer
<PAGE>
<PAGE>
EXHIBIT T-1.1
ARTICLES OF INCORPORATION
OF BANCO SANTANDER PUERTO RICO
FIRST
The name of this corporation is "Banco Santander Puerto Rico"
(hereinafter the "Bank").
SECOND
The principal office of the Bank shall be located at 207 Ponce de Leon
Avenue, Hato Rey, San Juan, Puerto Rico. The Bank's Resident Agent is Nicolas
Lopez with the same address above.
THIRD
The term of existence of the Bank is indefinite.
FOURTH
The Bank shall have all of the express, implied and incidental powers
conferred by the Puerto Rico Banking Law, 7 L.P.R.A., Section 1 et seq., (the
"Banking Act") and by all amendatory acts thereof and supplemental thereto, and
such other powers as may, from time to time, be granted by the laws of Puerto
Rico to corporations organized to carry on the business of banking. In addition,
the Bank shall have the general express powers and the incidental powers
conferred by law to corporations organized under the laws of Puerto Rico
necessary to carry on the business of banking.
FIFTH
(a) The business and activities of the Bank shall be under the
authority of a board of directors composed of the number of directors fixed from
time to time by resolution of an absolute
<PAGE>
<PAGE>
majority of the board of directors within the limits established in the By-Laws,
provided that the number of directors shall always be an odd number and not less
than five (5) nor more than eleven (11). The members of the board of directors
shall be elected annually by the stockholders and shall serve until their
successors are elected and qualified. A majority of the directors holding office
shall constitute a quorum at meetings of the board of directors.
(b) The directors, a majority of which shall be bona fide residents of
the Commonwealth of Puerto Rico, shall have such qualifications, shall be
subject to such responsibilities, shall comply with such requirement and shall
hold office pursuant to the provisions of the Banking Act the By-Laws of the
Bank.
(c) Any vacancy in the board of directors may be filled by a majority
of the votes of the directors in function. The directors so elected shall meet
all of the conditions and shall be subject to the same responsibilities of the
directors elected by the stockholders and shall remain in their office until the
next general meeting of stockholders is held and their successors have been duly
elected and are sworn in their office.
(d) The board of directors, by resolution approved by an absolute
majority, may appoint one or more Committees, each one composed of three (3) or
more directors of the Bank, and such executive or administrative officers as the
board of directors may assign. Such committees shall and may exercise those
powers that the board of directors may so delegate.
SIXTH
The authorized capital of the Bank shall be SEVEN HUNDRED FIFTY MILLION
DOLLARS ($750,000,000) represented by TWO HUNDRED MILLION (200,000,000) shares
of
2
<PAGE>
<PAGE>
common stock, TWO DOLLARS AND FIFTY CENTS ($2.50) par value per share, and
TEN MILLION (10,000,000) shares of Preferred Stock, TWENTY FIVE DOLLARS ($25.00)
par value per share. The shares may be issued by the Bank from time to time as
authorized by the board of directors without the further approval of
shareholders, except as otherwise provided in this Article Sixth or to the
extent that such approval is required by governing law, rule or regulations.
Subject to requirements established by these Articles of Incorporation,
the board of directors is expressly authorized to implement stock option plans
when it deems appropriate. However, no shares of capital stock (including shares
issuable upon conversion, exchange or exercise of other securities) shall be
issued, directly or indirectly, to directors, officers and employees of the Bank
other than as part of a general public offering or unless their issuance or the
plan (including stock option plans) under which they would be issued has been
approved by a majority of the total votes to be cast at a legal meeting of
stockholders.
Limited to the extent of authorized capital in these Articles of
Incorporation, the board of directors is expressly authorized to provide, when
it deems necessary, (i) for the issuance of shares of common stock in one or
more series or classes, and (ii) for the issuance of shares of preferred stock
in one or more series, with such voting powers, full or limited, but not to
exceed one vote per share, or without voting powers; and with such designations,
preferences, rights, qualifications, limitations or restrictions thereof, as
shall be expressed in the resolution or resolutions of the board of directors,
authorizing such issuance, including (but without limiting the generality of the
foregoing) the following:
(a) the designation of such series;
3
<PAGE>
<PAGE>
(b) the dividend rate of such series, the conditions and dates upon
which the dividends shall be payable, the preferences or relation which such
dividends shall bear to the dividends payable on any other class or classes of
capital stock of the Bank, and whether such dividends shall be cumulative or
non-cumulative;
(c) whether the shares of such series shall be subject to redemption by
the Bank, and if made subject to such redemption, the terms and conditions of
such redemption;
(d) the terms and amount of any sinking fund provided for the purchase
or redemption of the shares of such series;
(e) whether the shares of such series shall be convertible and if
provision be made for conversion, the terms of such conversion;
(f) the extent, if any, to which the holders of such shares shall be
entitled to vote; provided, however, that in no event, shall any holder of any
series of preferred stock be entitled to more than one vote for each such share;
(g) the restrictions and conditions, if any, upon the issue or re-issue
of any additional preferred stock ranking on a party with or prior to such
shares as to dividends or upon dissolution; and
(h) the rights of the holders of such shares upon dissolution of, or
upon distribution of assets of the Bank, which rights may be different in the
case of a voluntary dissolution.
SEVENTH
Except as the Board of Directors, in its discretion, may from time to
time determine, holders of any class of capital stock of the Bank shall not be
entitled as a matter of right to subscribe for or
4
<PAGE>
<PAGE>
purchase, or have any preemptive or preferential right of subscription with
respect to any part of any new or additional issue of stock of any class
whatsoever, or of securities convertible into any stock of any class whatsoever
of the Bank, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of a dividend.
EIGHTH
The Bank shall hold at least one general annual meeting of stockholders
each year, at such place and date prescribed by the By-Laws of the Bank, and
such other special meetings necessary in the opinion of the President or the
board of directors, or requested by stockholders representing twenty percent
(20%) of the paid-in capital.
The general annual meetings shall be convened by mailing a notice to
each stockholder at least (30) thirty days prior to the dates set forth for such
meeting, and in addition, said notice shall be published as required by law.
Notices of special meetings of stockholders shall contain the same
information as notices of general annual meetings of stockholders, but shall
also contain information in connection with the reasons for the call to the
meeting and in connection with the different matters to be considered and voted
upon at the meeting. Notices prepared in accordance with these provisions shall
be required in order to hold a valid stockholders' meeting, and dispensing
therewith shall be excused only by the written consent of the stockholders.
To form a quorum at general annual meetings and at special meetings,
more than half of the paid-in capital must be represented by shareholders in
person or by proxy. If no quorum is present a second call shall be made in
accordance with the Banking Act and the By-Laws.
5
<PAGE>
<PAGE>
Action shall be taken only by a majority vote of stockholders present,
by vote or proxy, except as otherwise provided in the preceding paragraph, and
in such other cases provided by law.
NINTH
The power to make or alter the By-Laws shall be vested at the regular
annual meeting of Stockholders, but the board of directors may supply any
matters not covered in the By-Laws, or amend them, adopting all such rules as
may be necessary for the conduct of the business of the Bank as circumstances
may require, all such rules or amendments to be submitted at the next regular
annual meeting of Stockholders for their ratification.
TENTH
At the time of its incorporation the name and residence of the
incorporators and the number of shares held by each of them, were:
<TABLE>
<CAPTION>
NAME: RESIDENCE: SHARES OWNED:
----- ---------- -------------
<S> <C> <C>
Gonzalo Corral San Juan, Puerto Rico 200
Joaquin Villamil San Juan, Puerto Rico 440
Sandra de Haro de la Torre Guaynabo, Puerto Rico 200
Arturo Gallardo San Juan, Puerto Rico 200
Arnaldo Villamil San Juan, Puerto Rico 200
</TABLE>
6
<PAGE>
<PAGE>
EXHIBIT T-1.2
GOVERNMENT OF PUERTO RICO
COMMISSIONER OF FINANCIAL INSTITUTIONS
SAN JUAN, PUERTO RICO
License
# 17-01
LICENSE
I CERTIFY THAT: BANCO SANTANDER PUERTO RICO is authorized to engage in banking
business in its Principal Office located at:
#207 Ponce de Leon Avenue
Hato Rey, Puerto Rico
pursuant to the provisions of Act No. 55 of May 12, 1933, as amended, known as
the Puerto Rico Banking Act.
This license shall be in effect until the same is surrendered, revoked or
canceled and while the grantee pays the corresponding annual fees on the date
prescribed by law.
Issued in San Juan, Puerto Rico, January 2, 1998.
S/sg.
Joseph P. O'Neill
Commissioner
SEAL
THIS LICENSE IS NOT TRANSFERABLE
PLACE VISIBLY
<PAGE>
<PAGE>
EXHIBIT T-1.3
COMMONWEALTH OF PUERTO RICO
COMMISSIONER OF FINANCIAL INSTITUTIONS
San Juan, Puerto Rico
LICENSE
TRUST DEPARTMENT
I CERTIFY THAT: BANCO SANTANDER DE PUERTO RICO
a banking corporation organized under the laws of Puerto Rico has complied and
consigned the bond required pursuant to Section 14(k) of Act No. 55 of May 12,
1933, as amended, known as the Puerto Rico Banking Act and Regulation No. 3,
regarding said Act, so that it is authorized to operate a Trust Department and
act as trustee in all those trusts granted or conferred to it.
Issued in San Juan, Puerto Rico, July 5, 1991.
S/sg.
Jose A. Sosa Llorens
Commissioner
SEAL
THIS LICENSE IS NOT TRANSFERABLE
PLACE VISIBLY
<PAGE>
<PAGE>
EXHIBIT T-1.4
BY-LAWS OF
BANCO SANTANDER PUERTO RICO
ARTICLE I
STOCKHOLDERS
SECTION 1. Place of Meetings. All annual and special meetings of
stockholders shall be held at the principal office of the Bank or at such other
place as the board of directors may determine.
SECTION 2. Annual Meeting. A meeting of the stockholders of the Bank for
the election of directors, the presentation of the financial statements of the
Bank and for the transaction of any other business of the Bank shall be held
annually within 120 days after the end of the Bank's fiscal year on such
date and at such time within such 120-day period as the board of directors may
determine.
SECTION 3. Special Meeting. Special meetings of the stockholders, for
any purpose or purposes, may be called at any time by the President or the board
of directors, and shall be called by the Chairperson of the Board, the President
or the Secretary upon the written request of the holders of not less than twenty
percent (20%) of the paid-in capital of the Bank entitled to vote at the
meeting. The written request specified above shall state the purpose or purposes
of the meeting and shall be delivered at the principal office of the Bank
addressed to the Chairperson of the Board, the President or the Secretary.
SECTION 4. Conduct of Meetings. Annual and special meetings shall be
conducted in accordance with the most current regulations of the board of
directors or these By-laws. The board
<PAGE>
<PAGE>
of directors shall designate, when present, either the Chairperson of the Board
or President to preside at such meetings.
SECTION 5. Notice of Meetings. Notice of the annual meeting of
stockholders shall be mailed to each stockholder of the Bank at least thirty
(30) days prior to the date for each such meeting, and in addition, a notice of
each such meeting of stockholders shall be published as required by law. Notice
for all other extraordinary meetings of stockholders shall be mailed to each
stockholder of the Bank at least twenty (20) days prior to the date for each
such meeting or any other shorter period the law may allow.
SECTION 6. Fixing of Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the board of directors shall fix in advance a date as the record
date for any such determination of stockholders. Such date in any case shall be
not more than fifty (50) days prior to the date on which the particular action,
requiring such determination of stockholders, is to be taken. When a
determination of stockholders entitled to vote at any meeting of stockholders
has been made as provided in this section 6, such determination shall apply to
any adjournment thereof.
SECTION 7. Voting Lists. At least ten (10) days before each meeting of
the stockholders, the officer or agent having charge of the stock transfer books
for shares of the Bank shall make a complete list of stockholders entitled to
vote at such meeting, or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each. This list of
stockholders shall be kept on file at the principal office of the Bank and shall
be subject to inspection
2
<PAGE>
<PAGE>
by any stockholder at any time during usual business hours for a period of ten
(10) days prior to such meeting. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any stockholder during the entire time of the meeting. The original stock
transfer book shall constitute prima facie evidence of the stockholders entitled
to examine such list or transfer books or to vote any meeting of stockholders.
SECTION 8. Quorum. A majority of the outstanding shares of the Bank
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of stockholders. If less than a majority of the outstanding shares
is represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice; provided that the date of
the adjourned meeting shall not be less than eight (8) days after the date for
which the first meeting was called. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been at the meeting as originally notified. The stockholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
SECTION 9. Proxies. At all meetings of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder or by his duly authorized
attorney in fact. Proxies solicited on behalf of the management shall be voted
as directed by the stockholder or, in the absence of such direction, as
determined by a majority of the board of directors. Proxies must be filed with
the Secretary of the Bank. No proxies shall be voted or acted upon after one
year from its date.
SECTION 10. Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, in the absence of written
instructions to the Bank to the
3
<PAGE>
<PAGE>
contrary, at any meeting of the stockholders of the Bank any one or more of such
stockholders may cast, in person or by proxy, all votes to which such ownership
is entitled. In the event an attempt is made to cast conflicting votes, in
person or by proxy, by the several persons in whose names shares of stock stand,
the vote or votes to which those persons are entitled shall be cast as directed
by a majority of those holding such and present in person or by proxy at such
meeting, but no votes shall be cast for such stock if a majority cannot agree.
SECTION 11. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by any officer, agent or proxy as the
by-laws of such corporation may prescribe or, in the absence of such provision,
as the board of directors of such corporations may determine. Shares held by an
administrator, executor, guardian or conservator may be voted by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name. Shares standing in the name of a receiver
may be voted by such receiver without the transfer thereof into his name if
authority to do so is contained in an appropriate order of the court or other
public authority by which the receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Bank nor shares
held by another corporation, if a majority of the shares entitled to vote for
the election of directors of such other
4
<PAGE>
<PAGE>
corporation are held by the Bank, shall be voted at any meeting or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting.
SECTION 12. Cumulative Voting. Stockholders shall not be entitled to
cumulate their votes for the election of directors.
SECTION 13. Inspector of Election. In advance of any meeting of
stockholders, the board of directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment
thereof. The number of inspectors shall be either one or three. Any such
appointment shall not be altered at the meeting. If inspectors of election are
not so appointed, the Chairperson of the Board or the President may, and at the
request of not fewer than ten percent (10%) of the votes represented at the
meeting shall, make such appointment at the meeting. If appointed at the
meeting, the majority of the votes present shall determine whether one or three
inspectors are to be appointed. In case any person appointed as inspector fails
to appear or fails or refuses to act, the vacancy may be filled by appointment
by the board of directors in advance of the meeting or at the meeting by the
Chairperson of the Board or the President.
The duties of such inspectors shall include: (i) determining the number
of shares of stock and the voting power of each share, the shares of stock
represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies; (ii) receiving votes, ballots or consents; (iii)
hearing and determining all challenges and questions in any way arising in
connection with the right to vote; (iv) counting and tabulating all votes or
consents; (v) determining the result; and (vi) such acts as may be proper to
conduct the election or vote with fairness to all stockholders.
5
<PAGE>
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the Bank shall be
under the direction of the board of directors. The board of directors shall
annually elect a Chairperson of the Board and one or more Vice Chairpersons of
the Board from among its members and shall designate, when present either the
Chairperson of the Board, any Vice Chairperson or the President of the Bank to
preside at its meeting.
SECTION 2. Number and Term. The board of directors shall consist of such
number of directors as established from time to time by resolution of the board
of directors approved by a majority of directors; provided that, the total
number of directors shall always be an odd number and not less than five (5) or
more than eleven (11). The members of the board of directors shall be elected
for a term of one year and until their successors are elected and qualified.
SECTION 3. Regular Meetings. All regular meetings of the board of
directors shall be held at the principal office of the Bank or in any other
office of the Bank within or without Puerto Rico or in any other place selected
by the board of directors as permitted by law. The board of directors shall hold
regular meetings monthly or as otherwise provided by law and on all other
occasions it may deem appropriate.
SECTION 4. Qualification. Each director shall be of legal age and a
majority of the directors shall be bona fide residents of Puerto Rico.
6
<PAGE>
<PAGE>
SECTION 5. Special Meetings. Special meetings of the board of directors
may be called by or at the request of the Chairperson of the Board, the
president or one-third of the directors, and at such place as the board of
directors shall designate.
SECTION 6. Notice. Written notice of any special meeting shall be given
to each director at least twenty-four (24) hours previous thereto if delivered
personally or by fax or telegram or at least five (5) days previous thereto if
delivered by mail at the address at which the director is most likely to be
reached. Such notice shall be deemed to be delivered when deposited in the U.S.
mail so addressed, with postage thereon prepaid if mailed or when delivered to
the telegraph company if sent by telegram. Any director may waive notice of any
meeting by a writing filed with the Secretary. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting of the board of directors need be specified in the notice of waiver of
notice of such meeting.
SECTION 7. Quorum. A majority of the directors shall constitute a
quorum for the transaction of business at any meeting of the board of directors,
but if less than such majority is present at a meeting, a majority of the
directors present may adjourn and postpone the meeting without further notice,
provided that the adjourned meeting shall be held within eight (8) days after
the date for which the first meeting was called. If the adjourned meeting cannot
be held within that period, notice of the adjourned meeting to the directors
shall be made in accordance with Section 6 of this Article II.
7
<PAGE>
<PAGE>
SECTION 8. Telephonic Meetings Permitted. Members of the board of
directors, or any committee designated by the board of directors, may
participate in a meeting thereof by means of telephone conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
Section 8 shall constitute presence in person at such meeting.
SECTION 9. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by applicable laws or
regulations or by these By-laws.
SECTION 10. Resignation. Any director may resign at any time by sending
a written notice of such resignation to the principal office of the Bank
addressed to the Chairperson of the Board or the President. Unless otherwise
specified therein, such resignation shall take effect upon receipt thereof by
the Chairperson of the Board or the President.
SECTION 11. Vacancies. Any vacancy occurring in the board of directors
may be filled by the affirmative vote of a majority of the remaining directors.
A director elected to fill a vacancy shall be elected to serve until the next
election of directors by the stockholders. Any directorship to be filled by
reason of an increase in the number of directors, may be filled by election by
the board of directors for a term of office continuing only until the next
election of directors by the stockholders.
SECTION 12. Compensation. Directors shall receive such reasonable
compensation as may be established from time to time by the board of directors
by resolution approved by an absolute majority thereof.
8
<PAGE>
<PAGE>
ARTICLE III
COMMITTEES
SECTION 1. Appointment. The board of directors, by resolution adopted by
a majority of the full board of directors, may, from time to time appoint, any
number of committees, composed of not less than three (3) directors and such
other administrative and executive officers as the board of directors may
determine.
SECTION 2. Authority. These committees shall and may exercise those
powers that the board of directors may so delegate and shall have the name or
names that from time to time the board of directors may determine by resolution.
SECTION 3. Appointment and Terms of Office. Members of the committees
shall be appointed by the board of directors annually. All members of the
committees shall serve at the pleasure of the board of directors.
SECTION 4. Quorum. A majority of the members of any committee shall
constitute a quorum. A majority of the votes cast shall decide every question or
matter submitted to a committee.
ARTICLE IV
OFFICERS
SECTION 1. Positions. The officers of the Bank shall be President, one
or more Vice Presidents, a Secretary and a Treasurer, each of whom shall be
elected by the board of directors. The board of directors may also designate the
Chairperson of the Board as an officer and any Assistant Secretary of the Bank
or Assistant Treasurer of the Bank it may deem appropriate. The President
9
<PAGE>
<PAGE>
shall be the Chief Executive Officer, unless the board of directors designates
the Chairperson of the Board as Chief Executive Officer. The offices of the
Secretary and Treasurer may be held by the same person and a Vice President may
also be either the Secretary or the Treasurer. The board of directors may also
elect or authorize the appointment of such other officers as the business of the
Bank may require. The officers shall have such authority and perform such duties
as the board of directors may from time to time authorize or determine. In the
absence of action by board of directors, the officers shall have such powers and
duties as generally pertain to their respective offices.
SECTION 2. Election and Term of Office. The President, the Secretary and
the Treasurer of the Bank shall be elected annually at the first meeting of the
board of directors held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held as
soon thereafter as possible and the President, the Secretary and the Treasurer
of the Bank shall continue to hold their respective office until said meeting is
held. All other officers not elected at the annual meeting shall continue to
hold office until a successor has been duly elected and qualified or until the
officer's death, resignation or removal in the manner hereinafter provided.
Election or appointment of an officer, employee or agent shall not itself create
contractual rights. The board of directors may authorize the Bank to enter into
an employment contract with any officer in accordance with regulations of the
board of directors; but no such contract shall impair the right of the board of
directors to remove any officers at any time in accordance with Section 3 of
this Article IV.
10
<PAGE>
<PAGE>
SECTION 3. Removal. Any officer may be removed by the board of
directors whenever, in its judgment, the best interest of the Bank will be
served thereby, but such removal, other than for cause, shall be without
prejudice to the contractual rights, if any, of the person so removed.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term.
ARTICLE V
STOCK, STOCK CERTIFICATES AND THEIR TRANSFER
SECTION 1. Registered Shares. All shares of stock of the Bank shall be
registered shares on the books of the Bank. Notwithstanding the above, a
stockholder of the Bank may request that the Bank issue a Certificate of Stock.
In such circumstances the stock certificates shall conform with section 3 of
this Article V.
SECTION 2. Transfer. Shares of stock shall be transferable on the books
of the Bank, and a transfer book shall be kept in which all transfer of stock
shall be recorded. Every person becoming a stockholder by such transfer shall,
in proportion to his or her shares, succeed to all rights and liabilities of the
prior holder of such shares.
SECTION 3. Stock Certificates. Certificates of stock shall bear the
signature of the Chairperson, the President or any Vice President (which may be
engraved, printed or impressed), and shall be signed manually or by facsimile
process by the Secretary or an Assistant Secretary, or any other officer
appointed by the board of directors for that purpose, to be known as an
Authorized Officer, and the seal of the Bank shall be engraved thereon. Each
certificate shall recite on its face
11
<PAGE>
<PAGE>
that the stock represented thereby, is transferable only upon the books of the
Bank properly endorsed.
SECTION 4. Owner of Record, Attachment, Pledge. Shares of stock are
transferable by all means recognized by law, if there is no attachment levied
against them under competent authority, but as long as the transfer is not
signed and recorded in the transfer books the Bank shall be entitled to consider
as owner thereof the party who appears as such in said books.
SECTION 5. Transfer Agent. The board of directors may designate any
person, whether or not an officer of the Bank, as stock transfer agent or
registrar of the Bank with respect to Stock Certificate or other securities
issued by the Bank.
ARTICLE VI
CORPORATE SEAL
SECTION 1. Seal. The board of directors shall provide a suitable seal,
bearing the name of the Bank, which shall be under the custody of the Secretary.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 1. Fiscal Year. The fiscal year of the Bank shall be the
calendar year.
SECTION 2. Dividends. The board of directors may from time to time
declare, and the Bank may pay dividends in cash or in shares of the capital
stock of the Bank, in the manner and upon the terms and conditions provided by
applicable laws and regulations and the Bank's Articles of Incorporation.
12
<PAGE>
<PAGE>
SECTION 3. Conflict with New Laws. The provisions of these By-laws in
conflict with any and all new statutes shall become revoked without affecting
the validity of the remaining provisions hereof.
SECTION 4. Unforeseen Cases and Events. Should cases and events not
provided for in these By-Laws arise, the board of directors shall decide on the
proper action to be taken in accordance with the authority and powers vested
upon it by Law, the Articles of Incorporation and these By-Laws.
SECTION 5. Amendments. These By-Laws may be altered, amended or
repealed and new By-Laws may be adopted at any annual or special meeting of
stockholders in accordance with applicable provisions of law and of the Bank's
Articles of Incorporation. Notwithstanding the above, the board of the directors
may supply any matters not covered by the By-Laws or amend the By-Laws, adopting
all such rules as may be necessary for the conduct of business of the Bank as
circumstances may require, all such rules or amendments to be submitted at the
next regular meeting of stockholders for their ratification.
13
<PAGE>
<PAGE>
EXHIBIT T-1.6
[Letterhead - Banco Santander Puerto Rico ]
January 12, 1999
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, Banco Santander Puerto Rico hereby consents that
reports of examination of U.S. Trust by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
Very truly yours,
BANCO SANTANDER PUERTO RICO
By: S/sg.
------------------------------
Luis Fernandez Trinchet
Senior Vice President
<PAGE>
<PAGE>
EXHIBIT T-1.7
I, Nicolas Lopez, Executive Vice President and Comptroller of Banco Santander
Puerto Rico do hereby declare that the attached Consolidated Balance Sheet has
been prepared in conformance with the instructions issued by the appropriate
regulatory authority and is true to the best of my knowledge and belief.
S/sg.
--------------------------------------
Nicolas Lopez
Executive Vice President & Comptroller
January 12, 1999
<PAGE>
<PAGE>
EXHIBIT T-1.7
BANCO SANTANDER PUERTO RICO AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS-DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1997
------------
<S> <C>
ASSETS
CASH AND CASH EQUIVALENTS:
Cash and due from banks $ 196,645
Interest bearing deposits 28,343
Federal funds sold and securities purchased
under agreements to resell 41,941
----------
Total cash and cash equivalents 266,929
INTEREST BEARING DEPOSITS 10,460
INVESTMENT SECURITIES AVAILABLE FOR SALE 186,162
INVESTMENT SECURITIES 1,744,457
LOANS, net 3,572,802
BANK PREMISES AND EQUIPMENT, net 71,760
CUSTOMERS' LIABILITIES ON ACCEPTANCES 5,885
ACCRUED INTEREST RECEIVABLE 41,941
OTHER ASSETS 103,464
----------
$6,003,860
----------
----------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
DEPOSITS:
Demand $ 789,055
Savings 1,234,684
Time 1,505,603
----------
Total deposits 3,529,342
FEDERAL FUNDS PURCHASED 329,000
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 706,332
COMMERCIAL PAPER ISSUED 372,644
SUBORDINATED CAPITAL NOTES 70,525
TERM NOTES 367,948
ACCEPTANCES OUTSTANDING 5,885
ACCRUED INTEREST PAYABLE 33,326
OTHER LIABILITIES 72,283
----------
5,487,285
----------
COMMITMENTS (see Notes 17 and 21)
STOCKHOLDERS' INVESTMENT:
Common stock, $5 par value; 50,000,000 shares authorized, 19,061,326
and 18,476,283 issued and outstanding in 1997 and 1996, respectively 95,307
Capital paid in excess of par value 62,489
Capital paid for the acquisition of stock -
Valuation adjustment to record investment securities available for sale
at fair value (488)
Retained earnings
Reserve fund 86,893
Redemption fund 31,563
Undivided profits 240,811
----------
Total stockholders' investment 516,575
----------
$6,003,860
----------
----------
</TABLE>
<PAGE>
