Exhibit 10.1
Execution Version
STOCK TRANSFER, RELEASE AND WAIVER AGREEMENT
This STOCK TRANSFER, RELEASE AND WAIVER AGREEMENT (the “Agreement”), dated as of
April 28, 2010, is entered into by and among, R&G Financial Corporation, a
corporation organized and existing under the laws of the Commonwealth of Puerto
Rico (hereinafter, “RGF”), R-G Premier Bank of Puerto Rico, a commercial bank
organized and existing under the laws of the Commonwealth of Puerto Rico
(hereinafter, “RGP” or the “Bank”), and R&G Mortgage Corp., a corporation
organized and existing under the laws of the Commonwealth of Puerto Rico
(hereinafter, “RGM”, and together with RGF and RGP, collectively, the
“Parties”).
WITNESSETH:
WHEREAS, on February 16, 1990, Guaynabo Federal Savings Bank, the predecessor
bank to RGP, entered into a Master Purchase, Servicing and Collection Agreement
with RGM, as amended (the “MPSCA”), which established that RGP would sell to RGM
all the rights, title and interest of RGP in and to the servicing rights
(“MSRs”) with respect to mortgage loans RGP held in its loan portfolio in
exchange for cash consideration;
WHEREAS, pursuant to an amendment made to the MPSCA on July 1, 1994, the MPSCA
provided that RGM’s obligation to pay for the sale of the MSRs would only be
payable when and if RGP sold the mortgage loans to a third party;
WHEREAS, between 2001 and 2005, RGM did not to make payments to RGP as to the
loans sold to third parties;
WHEREAS, on November 2, 2007, the Parties restated the accounting treatment of
the transactions made under the MPSCA which led to the recognition by RGP of an
intercompany account receivable (the “Intercompany Receivable”) from RGM in the
original amount of $50,509,000, and the Parties executed an Amended and First
Restated Master Loan Servicing Agreement on January 1, 2006;
WHEREAS, the original amount of the Intercompany Receivable was reduced on
December 23, 2009 to $42,109,847 after deducting the amount of $8,399,153 in tax
overpayments made by RGM from the original amount of the Intercompany
Receivable;
WHEREAS, RGM and RGP are both wholly-owned subsidiaries of RGF;
WHEREAS, the outstanding capital stock of RGM is accounted for in the books of
RGF at $45,299,051, after satisfaction of the Intercompany Receivable;
WHEREAS, in consideration of the full satisfaction and extinguishment of the
Intercompany Receivable, the Release and Waiver provided in Section 5 hereon,
and other good and valuable consideration, RGF has agreed to transfer 3,150,000
shares of common stock and 500,000 shares of preferred stock (the “Shares”) of
RGM (which represent all of the issued and outstanding shares of capital stock
of RGM) to the Bank; and,
WHEREAS, as a further benefit of the transfer of the Shares to RGP, RGM has an
additional intercompany receivable of $6,331,024, which was written off by RGP
following the 2008 Report

 

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of Examination, that upon transfer of the Shares, will increase RGP’s capital
when RGM is consolidated with RGP, with the aggregate result being that RGP’s
equity will increase by approximately $51 million on a consolidated basis.
NOW, THEREFORE, the Parties hereby agree as follows:
     1. Incorporation of Preamble.
          The preamble to this Agreement is hereby incorporated and made a part
hereof.
     2. Assumption of Indebtedness; Waiver of Right of Reimbursement.
          (a) RGF hereby assumes the indebtedness of RGM related to the
Intercompany Receivable as paid in capital contributed by RGF to RGM.
          (b) RGF hereby waives and agrees not to enforce against RGM or RGP any
right of reimbursement or subrogation that it may have under Article 1112 of the
Puerto Rico Civil Code, 31 L.P.R.A. Sec. 3162, as a result of the full
satisfaction of the Intercompany Receivable.
     3. Full Satisfaction and Extinguishment of Intercompany Receivable.
          (a) RGP hereby accepts the transfer of the Shares of RGM from RGF as
payment in full satisfaction of the Intercompany Receivable.
          (b) The Parties provide the Release and Waiver set forth in Section 5
hereof. RGF hereby transfers and conveys title to the Shares of RGM to RGP in
consideration of the full satisfaction and extinguishment of the Intercompany
Receivable and the Release and Waiver.
     4. Delivery of Stock Certificate.
          RGF hereby delivers to RGP the certificates evidencing ownership of
the Shares of RGM, duly endorsed to the order of RGP.
     5. Release and Waiver.
          In consideration of the transfer of the Shares of RGM by RGF and the
full satisfaction and extinguishment of the Intercompany Receivable, the Parties
hereby release and forever discharge each other, of and from any and all past,
present or future claims, demands, obligations, actions, suits, causes of
action, rights, defenses or counterclaims it may have or have had, damages,
losses, costs, expenses, attorneys’ fees, and compensation of any nature
whatsoever, which such Party now has, or which may hereafter accrue or otherwise
be acquired, on account of, or in connection with any acts or omissions growing
out or related to the Intercompany Receivable, including, without limitation,
any and all known or unknown claims and resulting damages and losses, and the
consequences thereof, sustained by such Party and any and all persons or
entities whose rights to claim for such damages and losses have been fully
vested upon such Party by way of subrogation, which have resulted or may result
from the Intercompany Receivable.

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     6. Representations, Warranties and Covenants.
          (a) RGF’s Representations and Warranties. RGF represents and warrants
to RGP as follows:
               (i) Organization of RGF. RGF is a corporation duly organized and
validly existing under the laws of the Commonwealth of Puerto Rico.
               (ii) Authorization of Transaction. RGF has full power and
authority (including full corporate or other entity power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of RGF,
enforceable in accordance with its terms and conditions. The Board of Directors
of RGF has approved the transactions contemplated in this Agreement and RGF has
obtained or received any and all approvals to the transactions contemplated in
this Agreement from any applicable department, agency, instrumentality, or other
entity exercising executive, legislative, judicial, regulatory, or
administrative functions of, or pertaining to, the government of the
Commonwealth of Puerto Rico or the United States of America, including, but not
limited to, any and all approvals from the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System, and the
Commissioner of Financial Institutions of Puerto Rico.
               (iii) No contravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) to RGF’s knowledge, violate any constitution, statute, regulation or
rule to which RGF is subject, (B) violate any injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which RGF is subject or any provision of its charter,
bylaws, or other governing documents, (C) conflict with, result in a material
breach of, constitute a material default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any material agreement, contract, lease, license,
instrument, or other arrangement to which the RGF is a party or by which it is
bound or to which any of its assets is subject, or (D) result in the imposition
or creation of a lien upon or with respect to the Shares.
               (iv) Shares of RGM. RGF holds of record and owns beneficially all
the Shares of RGM, free and clear of any restrictions on transfer, taxes, liens,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. RGF is not a party to any option, subscriptions, warrant, capital
or equity appreciation rights agreements, preemptive right, right of first
refusal, buy-sell, purchase right, or other contract, right or commitment of
whatever kind, whether or not vested or contingent that could require the RGF to
sell, transfer, or otherwise dispose of the Shares of RGM or any other shares or
securities evidencing any capital stock of RGM (other than this Agreement). RGF
is not a party to any voting trust, proxy, or other agreement or understanding
with respect to the voting of the Shares of RGM or any other shares or
securities evidencing any capital stock of RGM.
          (b) RGP’s Representations and Warranties. RGP represents and warrants
to RGF as follows:
               (i) Organization of RGP. RGP is a commercial bank duly organized
and validly existing under the laws of the Commonwealth of Puerto Rico.

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               (ii) Authorization of Transaction. RGP has full power and
authority (including full corporate or other entity power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of RGP,
enforceable in accordance with its terms and conditions. The Board of Directors
of RGP has approved the transactions contemplated in this Agreement and RGP has
obtained or received any and all approvals to the transactions contemplated in
this Agreement from any applicable department, agency, instrumentality, or other
entity exercising executive, legislative, judicial, regulatory, or
administrative functions of, or pertaining to, the government of the
Commonwealth of Puerto Rico or the United States of America, including, but not
limited to, any and all approvals from the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System, and the
Commissioner of Financial Institutions of Puerto Rico.
               (iii) No contravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which RGP is subject or any provision of its
charter, bylaws, or other governing documents or (B) conflict with, result in a
material breach of, constitute a material default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any material agreement, contract, lease,
license, instrument, or other arrangement to which RGP is a party or by which it
is bound or to which any of its assets is subject.
          (c) RGM Representations and Warranties. RGM represents to RGP as
follows:
               (i) Organization of RGM. RGM is a corporation duly organized and
validly existing under the laws of the Commonwealth of Puerto Rico.
               (ii) Financial Condition. RGM has delivered to RGP its unaudited
balance sheet as of March 31, 2010, copy of which is attached hereto as
Exhibit A, and hereby certifies and represents that such financial statement is
true and accurate in all respects and fairly present the financial position of
RGM as of the dates and for the periods therein set forth.
               (iii) Authorization of Transaction. RGM has full power and
authority (including full corporate or other entity power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of RGM,
enforceable in accordance with its terms and conditions. The Board of Directors
of RGM has approved the transactions contemplated in this Agreement and RGM has
obtained or received any and all approvals to the transactions contemplated in
this Agreement from any applicable department, agency, instrumentality, or other
entity exercising executive, legislative, judicial, regulatory, or
administrative functions of, or pertaining to, the government of the
Commonwealth of Puerto Rico or the United States of America, including, but not
limited to, any and all approvals from the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System, and the
Commissioner of Financial Institutions of Puerto Rico.
               (iv) No contravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other

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restriction of any government, governmental agency, or court to which RGM is
subject or any provision of the charter or bylaws of RGM or (ii) conflict with,
result in a material breach of, constitute a material default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material agreement, contract,
lease, license, instrument, or other arrangement to which RGM is a party or by
which it is bound or to which any of its assets is subject.
     7. Confidentiality.
          (a) The Parties shall maintain confidential (i) all provisions of this
Agreement, (ii) all the information acquired with respect to the other parties
during the negotiations conducted prior to the execution of this Agreement, and
(iii) all information acquired with respect to the other parties or exchanged
between the parties in connection with the provisions of this Agreement or
related to the transactions contemplated under this Agreement, and none of the
Parties shall reveal or publicly disclose any part of such information nor the
terms and conditions of this Agreement, without prior authorization from the
other Parties, except for:
               (i) any disclosure that is required as part of any notification
or request for approval that must be made to the any governmental authority; and
               (ii) any other disclosures required contractually or by
applicable law.
          (b) Each of the Parties shall also require its respective directors,
officers, employees, agents and any other person that obtains access to
information with respect to this Agreement to honor and comply with the
confidentiality obligations herein established.
     8. Exclusive Benefit of Parties; Assignment. This Agreement is for the
exclusive benefit of the Parties hereto and their respective successors and
permitted assigns and shall not be deemed to give any legal or equitable right
to any other person. Except as expressly provided herein, this Agreement and the
rights or obligations of the Parties hereunder may not be assigned by either
Party hereto without the prior written consent of the other Party, which consent
shall not be unreasonably withheld.
     9. Amendment; Waivers. This Agreement may be amended only by written
agreement of the Parties. Any forbearance, failure, or delay by a Party in
exercising any right, power, or remedy hereunder shall not be deemed to be a
waiver thereof, and any single or partial exercise by such Party of any right,
power or remedy hereunder shall not preclude the further exercise thereof. Every
right, power and remedy of a Party shall continue in full force and effect until
specifically waived by each Party in writing.
     10. Effect of Invalidity of Provisions. In case any one or more or part
thereof of the provisions contained in this Agreement should be or become
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
     11. Governing Law; Waiver of Jury Trial. All matters relating to this
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Puerto Rico. The Parties irrevocably agree to waive any rights
it may have to a jury trial in any action or proceeding against it arising out
of or relating in any manner to this Agreement.

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     12. Notices. All demands, notices, instructions and communications
hereunder shall be in writing and shall be sent to the Parties at the addresses
listed below (or such other address as may hereafter be furnished to the other
Party by notice given hereunder): (a) by hand delivery, with receipt of delivery
acknowledged; (b) by registered or certified mail, return receipt requested;
(c) by reputable overnight courier service, with receipt of delivery
acknowledged; or (d) by facsimile communication, with the original forwarded as
provided in (a), (b) or (c). Any such demand, notice, instruction or
communication hereunder shall be deemed to have been given on the date received
or on the date delivered and refused; provided, however, that a facsimile
transmission shall be deemed to be received when transmitted so long as the
transmitting machine has provided an electronic confirmation of such
transmission.

     
If to RGF:
  R&G Financial Corporation
290 Jesús T. Piñero, Hyde Park
San Juan, Puerto Rico 00918
Attention: Rolando Rodríguez, President and CEO
Fax: 787-625-5570
 
   
If to RGP:
  R-G Premier Bank of Puerto Rico
290 Jesús T. Piñero, Hyde Park
San Juan, Puerto Rico 00918
Attention: José A. Díaz, President
Fax: 787-766-8370
 
   
If to RGM:
  R&G Mortgage Corp.
290 Jesús T. Piñero, Hyde Park
San Juan, Puerto Rico 00918
Attention: Rolando Rodríguez, President
Fax: 787-625-5570

     13. Effectiveness. The transfer of the Shares of RGM to RGP shall be made
by RGF upon receipt of all regulatory approvals or non-objections. This
Agreement shall be deemed to be effective as of the date hereof upon signature
of the Parties.
     14. Entire Agreement. This Agreement together with all exhibits and
schedules hereto, contain the entire agreement between the Parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements between the Parties, oral or written, of any nature
whatsoever with respect to the subject matter hereof.
     15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date
first above written.

                              R&G FINANCIAL CORPORATION     R-G PREMIER BANK OF
PUERTO RICO    
 
                            By:   /s/ ROLANDO RODRÍGUEZ       By:   /s/ JOSÉ A.
DÍAZ                          
 
  Name:   Rolando Rodríguez           Name:   José A. Díaz    
 
  Title:   President and Chief Executive Officer           Title:   President  
 
 
                            R&G MORTGAGE CORP.                    
 
                            By:   /s/ ROLANDO RODRÍGUEZ                        
                     
 
  Name:   Rolando Rodríguez                    
 
  Title:   President                    

Affidavit Number 696
     Acknowledged and subscribed before me by Rolando Rodríguez, of legal age,
married, executive and resident of San Juan, Puerto Rico, as President and Chief
Executive Officer of R&G Financial Corporation and as President of R&G Mortgage
Corp.; and by José A. Díaz, of legal age, married, executive and resident of San
Juan, Puerto Rico, as President of R-G Premier Bank of Puerto Rico, both of whom
are personally known to me, in San Juan, Puerto Rico, this 28th day of April,
2010.

                  /s/ MARIA CRISTINA MENA IRIZARRY       Notary Public         
 

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Exhibit A
Unaudited Balance Sheet of RGM as of March 31, 2009

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