Exhibit 10.1

 

 

 

AMENDMENT NUMBER 1

to

SECURITIES PURCHASE AGREEMENT

by and among

R&G FINANCIAL CORPORATION,

R&G ACQUISITION HOLDINGS CORPORATION,

ELLIOTT ASSOCIATES, L.P.

and

FINANCIAL STOCKS CAPITAL PARTNERS IV L.P.

Dated as of

October 1, 2007

 

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AMENDMENT NO. 1

TO

SECURITIES PURCHASE AGREEMENT

THIS AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is made
as of October 1, 2007 by and among R&G Financial Corporation, a Puerto Rico
corporation (“RGF”), R&G Acquisition Holdings Corporation, a Florida corporation
(the “Company” or “RAC” and, along with RGF, the “Companies”), Elliott
Associates, L.P (“Elliott”), and Financial Stocks Capital Partners IV L.P., and,
along with Elliott, the “Majority Holders”), with the Majority Holders acting on
behalf of all of the investors (each, an “Investor” and collectively, the
“Investors”) listed on Schedule A to the Stock Purchase Agreement dated
March 27, 2006 between the Companies and such Investors (the “Agreement”). Terms
that are not otherwise defined herein shall have the meaning which is set forth
in the Agreement and the Operative Documents, as defined in the Agreement.

WHEREAS, pursuant to the terms and conditions set forth in the Agreement and the
Operative Documents, at the Closing, the Investors invested a total of $150
million in RAC by purchasing the following: (i) $150 million of RAC Series A
Preferred Stock; (ii) detachable RGF Warrants to purchase 10 million shares of
RGF Class B Common Stock, subject to adjustment as provided in such RGF
Warrants; and (iii) detachable Purchase Rights exercisable for shares of RGF
Class B Common Stock as specified in the Additional Purchase Rights Investment
Agreement (the “APRI”);

WHEREAS, the Companies and RG Crown Bank FSB (“Crown Bank”) entered into a Stock
Purchase Agreement with Fifth Third Financial Corporation dated May 20, 2007
(the “Sale Agreement”), which provides for a Change in Control of Crown Bank
pursuant to Section 5(c) of the RAC Series A Preferred Stock;

WHEREAS, the redemption of the RAC Series A Preferred Stock is a condition to
closing of the transactions contemplated by the Sale Agreement;

WHEREAS, the Companies have sought and obtained the permission of the Federal
Reserve to redeem all of the RAC Series A Preferred Stock subject to, and in
conjunction with the closing of the transactions contemplated by, the Sale
Agreement;

WHEREAS, since the Closing, RAC has timely made all required dividend payments
on the RAC Series A Preferred Stock;

WHEREAS, the Companies have obtained permission of their applicable regulators
to make the dividend payment required on the RAC Series A Preferred Stock for
the Dividend Period ending September 30, 2007;

WHEREAS, the Board of Directors of RAC have nonetheless been considering whether
or not to pay the dividend due to be paid on the RAC Series A Preferred Stock
for the Dividend Period through and including September 30, 2007, and in order
to induce RAC to make

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Exhibit 10.1

such dividend payment, the Majority Holders have agreed to the provisions set
forth in this Amendment and are willing to enter into this Amendment; and

WHEREAS, pursuant to Section 7.7 of the Agreement and Section 5.5 of the RGF
Warrants, the Majority Holders have the contractual authority, agreed upon by
all of the Investors, to amend the Agreement and the RGF Warrants, and to bind
all of the Investors by such actions, and it is the express intention of the
Majority Holders and the Companies that the Agreement and the RGF Warrants be
amended by this Amendment to bind all of the Investors by the terms set forth
herein.

NOW THEREFORE, BE IT RESOLVED, for good and valuable consideration, the receipt
and sufficiency of which are acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

1. Payment of Dividend on RAC Series A Preferred Stock for Dividend Period Due
September 30, 2007. The Board of Directors of RAC has authorized and declared
the payment in full of the dividend due to be paid on the RAC Series A Preferred
Stock for the Dividend Period ended September 30, 2007, which is in the
aggregate amount of $3,562,500, with such dividend to be paid subject to, and in
conjunction with, the signing of this Amendment.

2. Best Efforts with Respect to Payment of Dividend on RAC Series A Preferred
Stock for Dividend Period from October 1, 2007 through Closing Contemplated by
Sale Agreement. The Companies agree to promptly file with their applicable
regulators a request for permission to pay dividends on the RAC Series A
Preferred Stock for the period from October 1, 2007 through the date of the
closing contemplated by the Sale Agreement, and to use their best efforts to
obtain the permission from their applicable regulators to make such payment. The
Majority Holders agree, acknowledge and confirm that the Companies cannot and do
not assure that their applicable regulators will approve of such request, and
the failure to obtain such approval is not a condition to consummation of the
transactions contemplated by this Amendment.

3. Redemption of RAC Series A Preferred Stock and Sale of the RGF Warrants Upon
Consummation of the Transactions Contemplated by the Sale Agreement. Subject to
and upon the closing of the transactions contemplated by the Sale Agreement,
(i) RAC agrees to redeem the RAC Series A Preferred Stock in accordance with its
terms, at 110% of Stated Value; and (ii) RGF agrees to pay each Investor, upon
presentment of their RGF Warrants and in consideration for the sale and
relinquishment of each such RGF Warrants, a cash payment of $0.001 for each
share of RGF Common Stock subject to such RGF Warrants. The Majority Holders
agree, acknowledge and confirm that they each shall promptly present their RGF
Warrants for cancellation and payment in accordance with the terms hereof upon
confirmation that the transactions contemplated by the Sale Agreement have
closed. The Majority Holders further agree, acknowledge and confirm that the
actions agreed upon herein shall be deemed to constitute an amendment of the
terms of the RGF Warrants, as provided for and in accordance with the
requirements of, Section 5.5 thereof.

 

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Exhibit 10.1

4. Agreement of Majority Holders to Notify Investors. The Majority Holders
hereby agree, acknowledge and confirm that promptly following the execution of
this Amendment by the parties hereto, they shall notify all Investors of the
signing of this Amendment and shall provide each Investor with a copy of this
Amendment, and further, that promptly following the closing of the transactions
contemplated by the Sale Agreement, they shall so notify each Investor and
advise them of their rights under their RGF Warrants as modified and amended by
this Amendment.

5. Impact of Closing of Transactions Contemplated by Sale Agreement and Failure
to Close Such Transaction. The parties hereto agree, acknowledge and confirm
that upon the closing of the transactions contemplated by the Sale Agreement and
the payment of the amounts referenced in paragraphs 1, 2 (provided that the
payment in paragraph 2 hereof is required to be paid only to the extent that the
Companies have received approval to make such payment from their applicable
regulators), and 3 hereof, all obligations of RGF and RAC to the Investors under
the RAC Series A Preferred Stock, the RGF Warrants, the APRI, this Amendment,
the Agreement and the Operative Documents shall, in all respects and for all
purposes, be deemed terminated and of no further force or legal effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of
the date first above written by their respective undersigned officers thereunto
duly authorized.

 

R&G FINANCIAL CORPORATION By:   /s/ Rolando J. Rodriguez  

Name: Rolando J. Rodriguez

Title: President and Chief Executive Officer

 

 

Address:

R&G Tower Building

290 Jesus T. Pinero Ave

San Juan, PR 00918

 

 

R&G ACQUISITION HOLDINGS CORPORATION By:   /s/ Rolando J. Rodriguez  

Name: Rolando J. Rodriguez

Title: President and Chief Executive Officer

 

 

Address:

R&G Tower Building

290 Jesus T. Pinero Ave

San Juan, PR 00918

 

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Exhibit 10.1

 

FINANCIAL STOCKS CAPITAL
PARTNERS IV L.P.

By:

Its:

 

Finstocks Capital Management IV, LLC

Sole General Partner

 

 

By:   /s/ Steven N. Stein  

Name: Steven N. Stein

Title: Chairman and Chief Executive Officer

 

 

Address:

507 Carew Tower

441 Vine Street

Cincinnati, Ohio 45202

 

 

ELLIOTT ASSOCIATES, L.P.

By:

By:

 

Elliott Capital Advisors, L.P., as general partner

Braxton Associates, Inc., as general partner

By:   /s/ Elliott Greenberg  

Name: Elliott Greenberg

Title: Vice President

 

 

Address: C/o Elliott Management Corporation

712 5th Avenue

New York, NY 10019

 

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