**TABLE OF CONTENTS**     SECTION 1. ISSUANCE AND SALE OF SHARES  2 1.1. Funding; Deliveries of Each Purchaser  2 1.2. [Intentionally Omitted.]  2 1.3. Delivery of Shares; Release of Escrow Funds; Closing the Escrow Account  3 SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY  4 2.1. Organization and Qualification  4 2.2. Reporting Company; Form S-1  6 2.3. Capitalization; Authorized Capital Stock  6 2.4. Issuance, Sale and Delivery of the Shares  6 2.5. Stockholder Approval  8 2.6. Due Execution, Delivery and Performance of the Agreements  9 2.7. Accountants  10 2.8. No Defaults or Consents  10 2.9. No Actions  10 2.10. Properties  11 2.11. No Material Adverse Change  11 2.12. Reports  12 2.13. Taxes  12 2.14. Transfer Taxes  12 2.15. Investment Company  13 2.16. Offering Materials  13 2.17. Insurance  13 2.18. Additional Information  13 2.19. Price of Common Stock  14 2.20. Use of Proceeds  14 2.21. Use of Purchaser Name  14 2.22. Financial Statements  14 2.23. Listing Compliance  14 2.24. Internal Accounting Controls  15 2.25. Foreign Corrupt Practices  15 
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     2.26. Money Laundering  16 2.27. Employee Relations  16 2.28. ERISA  17 2.29. Environmental Matters  17 2.30. Integration; Other Issuances of Shares  17 2.31. Non-Public Information  18 2.32. Risk Management Instruments  18 2.33. Mortgage Banking Business  19 2.34. Shell Company Status  20 2.35. Solvency  20 2.36. Transactions With Affiliates and Employees  20 2.37. Application of Takeover Protections; Rights Agreements  20 2.38. Adequate Capitalization  20 2.39. FDIC Policy Statement  21 2.40. Compliance with Other Regulations  21 2.41. Substantially Similar Agreement  21 2.42. Ownership  21 2.43. Enforcement of Cooperation Agreement  21 SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH PURCHASER  21 3.1. Experience  21 3.2. Reliance on Exemptions  22 3.3. Confidentiality  22 3.4. Investment Decision  23 3.5. Risk of Loss  23 3.6. Legend  23 3.7. Transfer Restrictions  24 3.8. Residency  25 3.9. Public Sale or Distribution  25 3.10. Organization; Validity; Enforcements  25 3.11. Short Sales  26 3.12. Control  26 3.13. Prohibited Person  27 
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     3.14. Representation  27 3.15. Taxes on Escrow Account  27 SECTION 4. CONDITIONS PRECEDENT AND CLOSING DELIVERABLES  28 4.1. Purchasers’ Conditions Precedent to Funding  28 4.2. Bid Condition  28 4.3. Purchasers’ Conditions Precedent to the Closing Date of the Contingent Tranche  29 4.4. Company’s Conditions Precedent to the Closing Date  29 4.5. Closing Deliverables  29 SECTION 5. REGISTRATION OF THE OFFERED COMMON STOCK, CONVERSION SHARES AND HOLDINGS’ COMMON STOCK; COMPLIANCE WITH THESECURITIES ACT  29 5.1. Registration Procedures and Expenses  29 5.2. Additional Registration Statements  33 5.3. Transfer of Securities  33 5.4. Indemnification  34 5.5. Termination of Conditions and Obligations  37 5.6. Information Available  38 5.7. No Piggyback on Registrations  38 5.8. Delay in Filing or Effectiveness of Registration Statement  38 SECTION 6. BROKER’S FEE  39 SECTION 7. INDEPENDENT NATURE OF PURCHASERS’ OBLIGATIONS AND RIGHTS  39 SECTION 8. PURCHASERS’ RIGHTS WITH RESPECT TO THE COOPERATION AGREEMENT  40 SECTION 9. MISCELLANEOUS  40 9.1. Notices  40 9.2. Survival of Agreements  41 9.3. Changes  41 9.4. Headings  41 9.5. Severability  41 9.6. Governing Law; Venue  41 9.7. Counterparts  42 9.8. Entire Agreement  42 
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     9.9. Fees and Expenses  42 9.10. Parties  42 9.11. Further Assurances  42 
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**STOCK PURCHASE AGREEMENT**     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of the 19th day of April2010, by and between Doral Financial Corporation (the “Company”), a corporation organizedunder the laws of the Commonwealth of Puerto Rico, with its principal offices at 1451 Franklin D.Roosevelt Avenue, San Juan, Puerto Rico 00920-2717, and each of the purchasers whose names andaddresses are set forth on Schedule I hereto (collectively, the “Purchasers” and each a“Purchaser”).**RECITALS**     WHEREAS, pursuant to a Confidential Private Placement Memorandum, dated as of April13, 2010prepared by the Company (including all exhibits, supplements and amendments thereto, up to thesigning of this Agreement, the “Private Placement Memorandum”), the Company has offered(the “Offering”) shares of the Company’s Common Stock, $0.01 par value (the “OfferedCommon Stock”) and shares of the Company’s Mandatory Convertible Non-Cumulative Non-VotingConvertible Preferred Stock, $1.00 par value and $1,000 liquidation preference per share (the“Offered Preferred Stock” and, together with the Offered Common Stock, the“Shares”) for an aggregate consideration of $600,000,000, to the Purchasers, with BarclaysCapital acting as the placement agent (the “Placement Agent”);     WHEREAS, the Shares are being offered to the Purchasers in two tranches: (i) a tranche (the“Non-Contingent Tranche”) consisting of only Offered Preferred Stock, and (ii) a tranche(the “Contingent Tranche”) consisting of Offered Common Stock and Offered Preferred Stock,the issuance and sale of which is conditioned on the concurrent consummation of an Acquisition (asdefined herein) as described herein; the Offered Preferred Stock is convertible into shares of theCompany’s Common Stock (the “Conversion Shares”) in accordance with the terms andconditions of the Certificate of Designations (as defined herein);     WHEREAS, the Company and the Purchasers intend to complete the sale and delivery of a portionof the Non-Contingent Tranche following the delivery by the Company of the Funding Notice (asdefined herein), with the remaining portion to be delivered, if at all, concurrent with the returnof the Contingent Offering Proceeds (as defined herein) to the Purchasers if an Acquisition (asdefined herein) is not consummated in accordance with this Agreement, and the Company intends touse the cash proceeds from the Non-Contingent Tranche (the “Non-Contingent OfferingProceeds”) to provide additional capital to the Company to facilitate qualifying as a bidder(through Doral Bank, a Puerto Rico commercial bank and wholly owned subsidiary of the Company,“Doral Bank PR”) for the acquisition of certain assets and liabilities of one or morePuerto Rico banks from the Federal Deposit Insurance Corporation (the “FDIC”) as receiver,as further described in the Private Placement Memorandum;     WHEREAS, the cash proceeds of the Offering from the Contingent Tranche (the “ContingentOffering Proceeds”), which will be used to provide additional capital to the Company followingthe Acquisition if it is consummated, and a portion of the Offered Preferred Stock in theNon-Contingent Tranche (the “Escrow Securities”) will be deposited and held in one or moreescrow accounts (together, the “Escrow Account”) pursuant to an Escrow and Security
 

 
Agreement (the “Escrow Agreement”), dated as of date hereof, by and among the Companyand Mellon Investor Services LLC, a New Jersey limited liability company, as escrow agent (the“Escrow Agent”), in substantially the form attached hereto as Exhibit B;     WHEREAS, Doral Bank PR plans to bid to acquire certain assets and assume certain liabilitiesof one or more Puerto Rico banks from the FDIC as receiver, as further described in the PrivatePlacement Memorandum (the “Acquisition”), and if any bid is accepted, to complete theAcquisition pursuant to the terms of one or more purchase and assumption agreements to be enteredinto by Doral Bank, PR and the FDIC (the “Purchase and Assumption Agreement”); and     WHEREAS, if (i) the FDIC notifies the Company that Doral Bank PR will not be permitted toenter a bid for the Acquisition, (ii) each of Doral Bank PR’s bid or bids for the Acquisition arerejected by the FDIC, (iii) Doral Bank PR has not submitted a bid by the last time that bids may besubmitted in connection with an Acquisition, (iv) no bid by Doral Bank PR has been accepted by theFDIC by the date four weeks after the Funding Date, or (v) as of the close of business on theAcquisition Deadline (as defined in the Escrow Agreement), the Company has not delivered to theEscrow Agent a Disbursement Event Notice or a Failure Event Notice (each as defined in the EscrowAgreement) (each, a “Failure Event”), the Contingent Offering Proceeds will be releasedfrom escrow and returned to each Purchaser at the account specified by each Purchaser in the EscrowAgreement, together with the Escrow Securities.     NOW, THEREFORE, in consideration of the promises, mutual covenants and agreements containedherein, the parties hereto, intending to be legally bound, hereby agree as follows:          SECTION 1. Issuance and Sale of Shares.          1.1. Funding; Deliveries of Each Purchaser. Within one business day of the receipt of afunding notice from the Company (the “Funding Notice”), by facsimile, e-mail or otherwise,(such date, but not later than two weeks from the date hereof, the “Funding Date”), subjectto the execution and delivery of the Escrow Agreement and the satisfaction of the other conditionsset forth in Section 4 of this Agreement, each Purchaser shall, by wire transfer, (i) deliver theaggregate non-contingent purchase price adjacent to such Purchaser’s name on Schedule I pursuant tothe instructions contained in the Funding Notice and (ii) deposit the aggregate contingent purchaseprice adjacent to such Purchaser’s name on Schedule I pursuant to the instructions set forth in theEscrow Agreement; provided, however, that the Purchasers set forth under theheading “Investment Companies” on Schedule I hereto, will not be required to deliver the aggregatenon-contingent purchase price or the aggregate contingent purchase price, in each case, adjacent tosuch Purchaser’s name on Schedule I until such Purchaser’s receipt of Shares and notice of theEscrow Agent’s receipt of the Escrow Securities. The Contingent Offering Proceeds, plus allinterest, dividends and other distributions and payments thereon, if any, received by the EscrowAgent, less any funds distributed or paid in accordance with this Agreement, are collectivelyreferred to herein as the “Escrow Funds.”          1.2. [Intentionally Omitted.]
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          1.3. Delivery of Shares; Release of Escrow Funds; Closing the Escrow Account.               (a) Upon the receipt from a Purchaser of the aggregate non-contingent purchase price adjacentto such Purchaser’s name on Schedule I, the Company shall:                    (i) issue and sell to each Purchaser and each Purchaser, severally and not jointly, shall buyfrom the Company, upon the terms and conditions herein set forth the number of non-contingentshares of Offered Preferred Stock to be delivered as of the Funding Date set forth opposite eachPurchaser’s name in Schedule I to this Agreement at a purchase price of $1,000 per share;                    (ii) deliver to each Purchaser one or more stock certificates registered in the name of suchPurchaser, or in such nominee name(s) as designated by such Purchaser in writing, representing thenumber of shares of non-contingent Offered Preferred Stock to be delivered as of the Funding Dateset forth opposite such Purchaser’s name in Schedule I, or if such shares are to be held inbook-entry, to instruct the registrar to register such number of shares of non-contingent OfferedPreferred Stock in the book-entry register; provided, however, that any Purchaser set forth underthe heading “Investment Companies” on Schedule I hereto shall not be required to pay suchnon-contingent purchase price until it has first received such certificates or book-entry shares;and                    (iii) deliver into an escrow account established pursuant to the Escrow Agreement (the“Share Escrow Account”) certificates registered in the name of such Purchaser, or in suchnominee name(s) as designated by such Purchaser in writing, representing the number of shares ofEscrow Securities to be delivered into the Share Escrow Account set forth opposite such Purchaser’sname in Schedule I, or if such shares are to be held in book-entry, to instruct the registrar toregister such number of shares of Escrow Securities in the book-entry register.               (b) Concurrent with the closing of the Acquisition (the “Closing Date”), the Companyshall:                    (i) issue and sell to each Purchaser and each Purchaser, severally and not jointly, shall buyfrom the Company, upon the terms and conditions herein set forth, (i) the number of contingentshares of Offered Common Stock set forth opposite each Purchaser’s name in Schedule I to thisAgreement at a purchase price of $4.75 per share and (ii) the number of contingent shares ofOffered Preferred Stock set forth opposite each Purchaser’s name in Schedule I to this Agreement ata purchase price of $1,000 per share; provided, however, that Purchasers who indicate on thesignature page hereof that they are subject to HSR Approval or the Conversion Limit shall receiveshares of Offered Preferred Stock only. “HSR Approval” means, as to any Purchaser, to theextent applicable and required to permit such Purchaser to convert such Purchaser’s shares ofOffered Preferred Stock into common stock and to own such common stock without such Purchaser beingin violation of applicable law, rule or regulation, the receipt of approvals and authorizations of,filings and registrations with, notifications to, or expiration or termination of any applicablewaiting period under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and therules and regulations
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thereunder (the “HSR Act”). “Conversion Limit” means ownership, or deemed ownershipfor applicable bank regulatory purposes, or ownership or deemed ownership upon conversion by aPurchaser (together with its affiliates, which for purposes of this definition include all“affiliates” as defined in the BHC Act or Regulation Y of the Board of Governors of the FederalReserve) of more than 9.9% of the total number of any class of Voting Securities (as defined in theBHC Act and any rules or regulations promulgated thereunder) of the Corporation (4.9% for a holderthat is subject to the Bank Holding Company Act of 1956, as amended (the “BHC Act”); and                    (ii) deliver to each Purchaser one or more stock certificates registered in the name of suchPurchaser, or in such nominee name(s) as designated by such Purchaser in writing, representing thenumber of shares of Contingent Offered Common Stock and Contingent Offered Preferred Stock setforth opposite such Purchaser’s name in Schedule I, or if such shares are to be held in book-entry,to instruct the registrar to register such number of shares of Contingent Offered Common Stock andContingent Offered Preferred Stock in the book-entry register.               (c) Pursuant to the terms of the Escrow Agreement, upon notice of a Disbursement Event (asdefined in the Escrow Agreement), the Escrow Agent shall release the Escrow Funds to the Companyfrom the Escrow Account.               (d) Pursuant to the terms of the Escrow Agreement, upon notice of a Disbursement Event, theEscrow Agent shall release to the Company the aggregate number of shares of Escrow Securitiesdelivered into the Share Escrow Account and the Company shall cancel such shares of OfferedPreferred Stock.               (e) Upon the occurrence of a Failure Event, (i) the Escrow Agent will unwind the EscrowAccount and, subject to the terms and conditions of the Escrow Agreement, (A) release to eachPurchaser that has deposited funds into the Escrow Account a pro rata portion of the Escrow Funds,measured as of the date such funds are released by the Escrow Agent from the Escrow Account,according to the aggregate purchase price adjacent to each such Purchaser’s name on Schedule I and(B) release to each Purchaser the number of shares of Escrow Securities delivered into the ShareEscrow Account as set forth opposite such Purchaser’s name in Schedule I and (ii) no Offered CommonStock or Offered Preferred Stock will be issued hereunder with respect to the Contingent Tranche.          SECTION 2. Representations, Warranties and Covenants of The Company. The Company herebyrepresents and warrants to, and covenants with, each Purchaser as follows:          2.1. Organization and Qualification.               (a) The Company is a corporation duly organized, validly existing and in good standing underthe laws of its jurisdiction of incorporation with full corporate power and authority to own orlease, as the case may be, and operate its properties and conduct its business as described in thePrivate Placement Memorandum; the Company is (x) duly qualified in or licensed by, and is in goodstanding (or other similar concept that may exist in the applicable jurisdiction) in, eachjurisdiction in which the nature of its respective businesses requires such qualification orlicensing, and (y) in compliance with the applicable laws, orders, rules,
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regulations and directives issued or administered by such jurisdictions, except, with respectto (x) and (y), for any failure to be so qualified, so licensed, in good standing or in compliancewith the applicable laws, orders, rules, regulations and directives issued or administered by suchjurisdictions, as would not, individually or in the aggregate, have a material adverse effect onthe business, properties, financial condition or results of operations of the Company and theSubsidiaries taken as a whole or would not prevent or materially interfere with the consummation ofthe transactions contemplated hereby (the occurrence of any such effect or any such prevention orinterference or any such result being herein referred to as a “Material Adverse Effect”);and the Company is duly registered as a bank holding company under the BHC Act. The depositaccounts of Doral Bank PR are insured up to applicable limits by the FDIC, and all premiums andassessments required to be paid in connection therewith have been paid.               (b) The Company has no subsidiaries other than those listed on Schedule II of this Agreement(each a “Subsidiary” and collectively the “Subsidiaries”); the Company owns all ofthe issued and outstanding capital stock of each of the Subsidiaries; complete and correct copiesof the charters and the bylaws of the Company and each Subsidiary and all amendments thereto havebeen delivered to you, and no changes therein will be made on or after the date hereof through andincluding the Closing Date, except that the Company’s certificate of incorporation shall be amendedto include the Certificate of Designations for the Offered Preferred Stock; each Subsidiary is acorporation duly organized, validly existing and in good standing under the laws of thejurisdiction of its incorporation, with full corporate power and authority to own or lease, as thecase may be, and operate its properties and to conduct its business as described in the PrivatePlacement Memorandum; each Subsidiary is duly qualified in, or licensed by, and is in good standing(or other similar concept that may exist in the applicable jurisdiction) in each jurisdiction wherethe ownership or leasing of its properties or the conduct of its business requires suchqualification or licensing, except where the failure to be so qualified, licensed or in goodstanding would not have a Material Adverse Effect; all of the outstanding shares of capital stockof each of the Subsidiaries have been duly authorized and validly issued, are fully paid andnon-assessable, have been issued in compliance with all applicable securities laws, were not issuedin violation of any preemptive right, resale right, right of first refusal or similar right and areowned by the Company subject to no security interest, other encumbrance or adverse claims; and nooptions, warrants or other rights to purchase, agreements or other obligations to issue or otherrights to convert any obligation into shares of capital stock or ownership interests in theSubsidiaries are outstanding, except where such failure or violation would not reasonably beexpected to have a Material Adverse Effect.               (c) Each of the Company and the Subsidiaries has all necessary licenses, authorizations,consents and approvals and has made all necessary filings required under any applicable law,regulation or rule, and has obtained all necessary licenses, authorizations, consents and approvalsfrom other persons, in order to conduct their respective businesses; neither the Company nor any ofthe Subsidiaries is in violation of, or in default under, or has received notice of any proceedingsrelating to revocation or modification of, any such license, authorization, consent or approval orany federal, state, local (which, for all purposes of this Agreement, shall include theCommonwealth of Puerto Rico and any subdivision thereof) or foreign law, regulation or rule or anydecree, order or judgment applicable to the Company or any of the Subsidiaries or knows of anycondition, circumstance, or situation that would prohibit or otherwise materially interfere withthe ability of the Company
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from entering and performing any of its obligations under the Transaction Documents (asdefined below), except where such violation, default, revocation, modification, condition,circumstance or situation would not reasonably be expected to have a Material Adverse Effect.          2.2. Reporting Company; Form S-1. The Company is not an “ineligible issuer” (as defined inRule 405 promulgated under the Securities Act) and is eligible to register the Offered Common Stockand the Conversion Shares for resale by any Purchaser on a registration statement on Form S-1 (the“Registration Statement”) under the Securities Act. The Company is subject to thereporting requirements of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), and has filed all reports required thereby during the preceding twelve months on atimely basis or has received a valid extension of such time of filing and has filed any suchreports prior to the expiration of any such extension.          2.3. Capitalization; Authorized Capital Stock. The Company has an authorized andoutstanding capitalization as set forth under the heading “Capitalization” in the Private PlacementMemorandum prepared by the Company as of the date set forth therein. All of the outstanding sharesof capital stock of the Company have been duly and validly authorized and issued and are fully paidand non-assessable and were not issued in violation of any pre-emptive rights, resale rights,rights of first refusal or similar rights. No bonds, debentures, notes or other indebtednesshaving the right to vote on any matters on which the stockholders of the Company may vote areissued and outstanding. There are no securities or instruments containing anti-dilution or similarprovisions that will be triggered by the issuance of the Shares or the Conversion Shares. Exceptas disclosed in the Private Placement Memorandum, (i) there are no outstanding options, warrants,scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, orsecurities or rights convertible into, or exercisable or exchangeable for, any shares of capitalstock of the Company, or contracts, commitments, understandings or arrangements by which theCompany is or may become bound to issue additional shares of capital stock of the Company oroptions, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoeverrelating to, or securities or rights convertible into, or exercisable or exchangeable for, anyshares of capital stock of the Company, other than those issued or granted pursuant to equity orincentive plans or arrangements as set forth above; (ii) except for the registration rights grantedunder this Agreement, there are no agreements or arrangements under which the Company is obligatedto register the sale of any of their securities under the Securities Act; (iii) there are nooutstanding securities or instruments of the Company or which contain any redemption or similarprovisions, and there are no contracts, commitments, understandings or arrangements by which theCompany is or may become bound to redeem a security of the Company; (iv) the Company does not haveany stock appreciation rights or “phantom stock” plans or agreements or any similar plan oragreement and (v) there is no authorized and outstanding capital stock of the Company.          2.4. Issuance, Sale and Delivery of the Shares.               (a) The shares of Offered Common Stock have been duly authorized and, when issued, deliveredand paid for in the manner set forth in this Agreement, will be validly issued, fully paid andnonassessable, and will conform in all material respects to the description thereof set forth inthe Private Placement Memorandum.
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               (b) The shares of Offered Preferred Stock have been duly authorized and, when issued,delivered and paid for in the manner set forth in this Agreement, will be validly issued, fullypaid and nonassessable, and will conform in all material respects to the description thereof setforth in the Private Placement Memorandum.               (c) The holders of Offered Preferred Stock will be entitled to the rights and preferences setforth in the Certificate of Designations of the Offered Preferred Stock (the “Certificate ofDesignations”), a form of which is attached to this Agreement as Exhibit A, as furtherdescribed in the Private Placement Memorandum.               (d) The Company has reserved and at all times shall reserve and keep available, out of itsauthorized but unissued common stock, solely for the purpose of effecting the conversion of theOffered Preferred Stock (the “Conversion”), the full number of shares of common stockissuable upon the Conversion of all the Offered Preferred Stock from time to time outstanding. TheConversion Shares have been duly authorized, and when issued and delivered in the manner set forthin the Certificate of Designations, will be validly issued, fully paid and nonassessable.               (e) No preemptive rights, resale rights, rights of first refusal or similar rights tosubscribe for or purchase any shares of common stock or preferred stock of the Company exist withrespect to the issuance and sale of the Shares by the Company pursuant to this Agreement or theConversion Shares pursuant to the Certificate of Designations, in each case, which have not beenwaived or complied with or will be waived or complied with on or before the Funding Date.               (f) No further approval or consent by, or notice to, the stockholders or Board of Directors ofthe Company will be required for the issuance and sale of the Shares or the issuance of theConversion Shares, as contemplated herein, except:                    (i) pursuant to the Securityholders and Registration Rights Agreement, dated as of July 19,2007, between Doral Holdings Delaware LLC (“Holdings”) and the Company (the“Stockholders Agreement”), a 20-day written notice must be provided to Holdings prior to anissuance of common stock, so long as Holdings owns at least 25% of the outstanding voting power ofthe Company; and                    (ii) pursuant to New York Stock Exchange (the “NYSE”) Rule 312.03(c)(2), thestockholders of the Company must approve the issuance of common stock, or securities convertibleinto or exercisable for common stock, when such issuance will equal or exceed 20 percent of thenumber of shares of common stock outstanding before the issuance of common stock or securitiesconvertible into or exercisable for common stock and, pursuant to NYSE Rule 312.03(b)(3), thestockholders of the Company must approve the issuance of common stock or securities convertibleinto or exercisable for common stock, when such issuance involves issuances to a substantialsecurity holder (such common stockholder approvals being referred to herein as the “StockholderApproval”). Notwithstanding the foregoing, the issuance and sale of the Shares prior toreceipt of the Stockholder Approval will not contravene the rules and regulations of the NYSE.
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          2.5. Stockholder Approval.               (a) The Company will file a proxy statement in preliminary form with respect to a specialmeeting of stockholders of the Company (the “Stockholder Meeting”) to obtain StockholderApproval within 90 days following the Closing Date, and thereafter, will use its reasonable bestefforts to cause a definitive proxy statement (the “Proxy Statement”) to be available to bedistributed to stockholders. If the Company is notified by the U.S. Securities and ExchangeCommission (the “SEC”) that the proxy statement will not be subject to review or subject tofurther review, as the case may be, it will mail the Proxy Statement within five business daysafter such notification and hold the Stockholder Meeting within 25 business days after mailing theProxy Statement. The Proxy Statement shall solicit each such stockholder’s affirmative vote at theStockholder Meeting for approval of resolutions providing for the: (i) approval of the Conversionfor purposes of NYSE Rule 312.03(c)(2) and (ii) approval of the Conversion for purposes of NYSERule 312.03(b)(3). The Company shall use its reasonable best efforts to solicit its stockholders’approval of such resolutions and to cause the Board of Directors of the Company to recommend to thestockholders that they approve such resolutions.               (b) Notwithstanding Section 2.5(a) above, if a Failure Event occurs, the Company will file aproxy statement in preliminary form within 20 days following the return to the Purchasers of theEscrow Funds pursuant to the Escrow Agreement.               (c) If the Company is unable to obtain the Stockholder Approval at the Stockholder Meeting,the Company will undertake to obtain such approval at (i) a special meeting of the Company’sstockholders held 90 days after the Stockholder Meeting and (ii) at least once every 90 daysthereafter until Stockholder Approval is obtained.               (d) If the Offered Preferred Stock (other than shares of Offered Preferred Stock held byinvestors that cannot invest directly in the Company’s Common Stock prior to receipt of HSRApproval and shares of Offered Preferred Stock that are not converted due to the Conversion Limit)remains outstanding on the 180th day following the Closing Date, the Conversion Price (as definedin the Certificate of Designations) will be decreased by 1.0%, subject to a maximum decrease of10%, subject to adjustment, every 90 days thereafter (or the pro rata portion of such adjustmentsfor any partial period) until the Offered Preferred Stock is no longer outstanding (other thanshares of Preferred Stock held by investors that cannot invest directly in our Common Stock priorto receipt of HSR Approval and shares of Offered Preferred Stock that are not converted due to theConversion Limit). The decreased Conversion Price shall not be applied with respect to shares ofOffered Preferred Stock not previously converted due to the absence of an HSR Approval.               (e) On or prior to the Funding Date, the Company will enter into a cooperation agreement, insubstantially the form attached hereto as Exhibit C (the “Cooperation Agreement”), by andamong the Company, Holdings, Doral Holdings L.P., and Doral GP Ltd. (such individuals and entitiesreferred to as “Cooperation Agreement Stockholders”), committing each Cooperation AgreementStockholder, among other things, to (i) vote their shares in favor of the resolutions described inSection 2.5(a) above, (ii) not voluntarily dissolve Holdings and Doral Holdings L.P. or transferany of its shares of Common Stock prior to receipt of
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Stockholder Approval, and (iii) to dissolve Holdings and its direct and indirect parentcompanies after receipt of the Stockholder Approval;          2.6. Due Execution, Delivery and Performance of the Agreements.               (a) The Company has full legal right, corporate power and authority to enter into thisAgreement, the Escrow Agreement, and the Cooperation Agreement (the “TransactionDocuments”) and to perform the transactions contemplated hereby and thereby. The TransactionDocuments have been duly authorized, executed and delivered by the Company. The TransactionDocuments constitute (assuming the due authorization, execution and delivery by the other party orparties hereto and thereto) legal, valid and binding agreements of the Company, enforceable againstthe Company in accordance with their terms, except as enforceability may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or other laws of general application relating toor affecting the enforcement of creditors’ rights and the application of equitable principlesrelating to the availability of remedies, subject to 12 U.S.C. §1818(b)(6)(D) (or any successorstatute) and similar bank regulatory powers and to the application of principles of public policy,and except as rights to indemnity or contribution, including but not limited to, indemnificationprovisions set forth in Section 5.4 of this Agreement, may be limited by federal, state, or localsecurities law or the public policy underlying such laws and general equitable principles relatingto the availability of remedies. The execution of the Transaction Documents by the Company andperformance by the Company of its obligations under the Transaction Documents and the Certificateof Designations and the consummation of the transactions herein and therein contemplated will notviolate any provision of the charter or bylaws of the Company or the organizational documents ofany Subsidiary and will not result in the creation of any lien, charge, security interest orencumbrance upon any assets of the Company or any Subsidiary (provided, however,that nothing contained in this Agreement shall be construed as to prevent the Company from grantingthe Purchasers a security interest in the Escrow Funds pursuant to the terms of the EscrowAgreement) pursuant to the terms or provisions of, or will not conflict with, result in the breachor violation of, or constitute, either by itself or upon notice or the passage of time or both, adefault under any agreement, mortgage, deed of trust, lease, franchise, license, indenture, permitor other instrument to which any of the Company or any Subsidiary is a party or by which any of theCompany or any Subsidiary or their respective properties may be bound or affected, or any statuteor any authorization, judgment, decree, order, rule or regulation of any court or any regulatorybody, self-regulatory organization (including the NYSE) administrative agency or other governmentalagency or body applicable to the Company or any Subsidiary or any of their respective properties,and in each case that would have a Material Adverse Effect.               (b) No approval, authorization, consent or order of or filing with any federal, state, localor foreign governmental or regulatory commission, board, body, authority or agency, or of or withany self-regulatory organization or other non-governmental regulatory authority (including, withoutlimitation, the NYSE), or approval of the shareholders of the Company, is required for theexecution and delivery of this Agreement, the Transaction Documents or the consummation of thetransactions contemplated hereby, other than (i) the filing of the Certificate of Designations withthe Secretary of State of the Commonwealth of Puerto Rico; (ii) the registration of the OfferedCommon Stock, and the Conversion Shares, under the Securities Act, in accordance with Section 5hereof; (iii) solely with respect to the
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issuance of the Conversion Shares in accordance with the Certificate of Designations, suchapprovals, authorizations, consents, orders or filings, approvals required in connection with theStockholder Approvals, which will be effected in accordance with Section 2.5 above; or (iv) anynecessary qualification under the securities or blue sky laws of the various jurisdictions in whichthe Shares will be sold.          2.7. Accountants. PricewaterhouseCoopers LLP (“PWC”), who has expressed its auditopinion with respect to the consolidated financial statements contained in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2009, which has been incorporated by referencein the Private Placement Memorandum, is a registered independent public accounting firm, within themeaning of the Code of Professional Conduct of the American Institute of Certified PublicAccountants, as required by the Securities Act, and the rules and regulations promulgatedthereunder (the “1933 Act Rules and Regulations”), and by the rules of the Public CompanyAccounting Oversight Board.          2.8. No Defaults or Consents.               (a) Neither the Company nor any of the Subsidiaries is in breach or violation of or in defaultunder, nor has any event occurred which, with notice, lapse of time or both, would result in anybreach or violation of, constitute a default under, or give the holder of any indebtedness (or aperson acting on such holder’s behalf) the right to require the repurchase, redemption or repaymentof all or a part of such indebtedness under, (i) its charter or bylaws, (ii) any indenture,mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or anylicense, lease, contract or other agreement or instrument to which it is a party or by which it orany of its properties may be bound or affected, (iii) any federal, state, local or foreign law,regulation or rule, (iv) any rule or regulation of any self-regulatory organization or othernon-governmental regulatory authority (including, without limitation, the rules and regulations ofthe NYSE), or (v) any decree, judgment or order applicable to it or any of its properties, whichviolation or default would, in the case of clauses (ii), (iii), (iv) and (v) above, eitherindividually or in the aggregate with all other violations and defaults referred to in thisparagraph, result in a Material Adverse Effect.               (b) Neither the execution, delivery and performance of this Agreement by the Company nor theconsummation of any of the transactions contemplated hereby (including, without limitation, theissuance and sale by the Company of the Shares and the issuance of the Conversion Shares) will giverise to a right to terminate or accelerate the due date of any payment due under, or conflict withor result in the breach of any term or provision of, or constitute a default (or an event whichwith notice or lapse of time or both would constitute a default) under, except such defaults thatindividually or in the aggregate would not cause a Material Adverse Effect, or require any consentor waiver under, or result in the execution or imposition of any lien, charge or encumbrance uponany properties or assets of the Company or any Subsidiary pursuant to the terms of, any indenture,mortgage, deed of trust or other agreement or instrument to which the Company or any Subsidiary isa party or by which either the Company or any Subsidiary or any of their properties or businessesis bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulationapplicable to the Company or any of its Subsidiaries or violate any provision of the charter orbylaws of the
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Company or any of its subsidiaries, except for such consents or waivers which have alreadybeen obtained and are in full force and effect.          2.9. No Actions.               (a) There are no actions, suits, claims, investigations or proceedings pending or, to theCompany’s knowledge, threatened to which the Company or any of the Subsidiaries is a party or ofwhich any of their respective properties is or would be subject at law or in equity, before or byany federal, state, local or foreign governmental or regulatory commission, board, body, authorityor agency, or before or by any self-regulatory organization or other non-governmental regulatoryauthority (including, without limitation, the NYSE), except any such action, suit, claim,investigation or proceeding which, if resolved adversely to the Company or any Subsidiary, wouldnot, individually or in the aggregate, have a Material Adverse Effect.               (b) Neither the Company nor any Subsidiary is in violation of any rule or regulation of theSEC, the Office of Thrift Supervision (the “OTS”), the Federal Reserve or the FDIC, whichwould have, individually or in the aggregate, a Material Adverse Effect. Neither the Company norany Subsidiary is subject to any directive from the OTS, the Federal Reserve or the FDIC to makeany change in the method of conducting its business or affairs, and the Company and each Subsidiaryhave conducted their businesses in compliance with all applicable statutes and regulations(including, without limitation, all regulations, decisions, directives and orders of the OTS, theFederal Reserve and the FDIC), except where the failure to so comply would not have, individuallyor in the aggregate, a Material Adverse Effect.          2.10. Properties. The Company and each of the Subsidiaries have good and marketable titleto all property (real and personal) described in the Private Placement Memorandum as being owned byany of them, free and clear of all liens, claims, security interests or other encumbrances, exceptwhere the failure to so own such property would not have, individually or in the aggregate, aMaterial Adverse Effect; all the property described in the Private Placement Memorandum as beingheld under lease by the Company or any Subsidiary is held thereby under valid, subsisting andenforceable leases, except where the failure to so lease such property would not have, individuallyor in the aggregate, a Material Adverse Effect.          2.11. No Material Adverse Change.               (a) Except as described in or contemplated by the Private Placement Memorandum, from December31, 2009 until the date hereof, there has been no circumstance, effect, event or change that,individually or in the aggregate, has, or would reasonably be expected to have a Material AdverseEffect on the Company. The capitalization, assets, properties and business of the Company conformin all material respects to the descriptions thereof in the Private Placement Memorandum as of thedate specified.               (b) Except as described in or contemplated by the Private Placement Memorandum, from December31, 2009 until the date hereof, neither the Company nor any Subsidiary has issued any securities orincurred any liability or obligation, direct or contingent,
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for borrowed money, except borrowings in the ordinary course of business, or entered into anyother transaction not in the ordinary course of business, in each case, which is material in lightof the businesses and properties of the Company and the Subsidiaries, taken as a whole. Neitherthe Company nor any of its Subsidiaries has any material contingent liabilities of any kind, exceptas set forth in the Private Placement Memorandum.               (c) Except as described in or contemplated by the Private Placement Memorandum, from December31, 2009 until the date hereof, none of the Company or any of its Subsidiaries has declared or paidany dividend or distribution to any holder of its capital stock or other equity interests (otherthan any cash dividend or distribution from a wholly owned Subsidiary to another wholly ownedSubsidiary or the Company).          2.12. Reports. During the preceding twelve months, the Company and each Subsidiary havefiled all material reports, registrations, documents, filings, statements and submissions togetherwith any required amendments thereto, that it was required to file with any governmental agency orbody applicable to the Company or any Subsidiary (the foregoing, collectively, the “CompanyReports”) and have paid all material fees and assessments due and payable in connectiontherewith. The Company Reports were filed on a timely basis or the Company received a validextension and has filed any such Company Reports prior to the expiration of any such extension. Asof their respective filing dates, the Company Reports complied in all material respects with allstatutes and applicable rules and regulations of the applicable governmental agency or body, as thecase may be. To the knowledge of the Company, as of the date of hereof, there are no outstandingcomments from the SEC or any other governmental agency or body applicable to the Company or anySubsidiary with respect to any Company Report. The Company Reports, including the documentsincorporated by reference in each of them, each contained all of the information required to beincluded in it and, when it was filed and as of the date of each such Company Report filed with orfurnished to the SEC, such Company Report did not, as of its date or if amended prior to the datehereof, as of the date of such amendment, contain an untrue statement of a material fact or omit tostate a material fact necessary in order to make the statements made in it, in light of thecircumstances under which they were made, not misleading and complied as to form in all materialrespects with the applicable requirements of the Securities Act and the Exchange Act. No executiveofficer of the Company has failed in any respect to make the certifications required of him or herunder Section 302 or 906 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).          2.13. Taxes. Except as disclosed in the Private Placement Memorandum, all tax returnsrequired to be filed by the Company or any of the Subsidiaries have been timely filed (except inany case in which the failure so to file would not reasonably be expected to have a MaterialAdverse Effect), and to the Company’s knowledge, all such returns are true, correct and complete;all taxes and other assessments of a similar nature (whether imposed directly or throughwithholding) including any interest, additions to tax or penalties applicable thereto due orclaimed to be due from such entities have been timely paid, other than those being contested ingood faith and for which adequate reserves have been provided or as would not reasonably beexpected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary hasknowledge of any tax deficiency that has been or might be asserted or threatened against it thatcould have a Material Adverse Effect.
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          2.14. Transfer Taxes. All stock transfer or other taxes (other than income taxes) that arerequired to be paid in connection with the sale and transfer of the Shares to be sold to eachPurchaser hereunder, as set forth in Schedule I to this Agreement, will have been, fully paid orprovided for by the Company and all laws imposing such taxes will have been fully complied with.          2.15. Investment Company. Neither the Company nor any Subsidiary is, or after givingeffect to the transactions contemplated hereby, will be an “investment company,” as such term isdefined in the Investment Company Act of 1940, as amended.          2.16. Offering Materials. The Company has not distributed and will not distribute anyoffering material in connection with the offering and sale of the Shares other than the PrivatePlacement Memorandum or any amendment or supplement thereto (including filings made by the Companyunder the Exchange Act and incorporated by reference into the Private Placement Memorandum). TheCompany has not in the past nor will it hereafter take any action to sell, offer for sale orsolicit offers to buy any securities of the Company that could result in the initial sale of theShares not being exempt from the registration requirements of Section 5 of the Securities Act.          2.17. Insurance. The Company and each of its Subsidiaries maintain insurance underwrittenby insurers of recognized financial responsibility, of the types and in the amounts that theCompany reasonably believes is adequate for its and its Subsidiaries businesses, including, but notlimited to, insurance covering all real and personal property owned or leased by the Company or anySubsidiary against theft, damage, destruction, acts of vandalism and all other risks customarilyinsured against, with such deductibles as are customary for companies in the same or similarbusiness, all of which insurance is in full force and effect. Neither the Company nor any of itsSubsidiaries has received any notice of cancellation of any such insurance, except for suchcancellation as would not, individually or in the aggregate, have a Material Adverse Effect.          2.18. Additional Information. The information contained in the following documents, takenas a whole, which the Placement Agent has furnished to each Purchaser (it being understood that alldocuments publicly filed with or publicly furnished to the SEC shall be deemed “furnished” forpurposes of this Section 2.18) did not, as of the date hereof, contain an untrue statement of amaterial fact or omit to state a material fact required to be stated therein or necessary to makethe statements therein in light of the circumstances in which they were made not misleading:               (a) the Private Placement Memorandum, including all addenda and exhibits thereto and anydocument incorporated by reference therein, other than this Agreement and appendices and exhibitshereto; and               (b) the investor presentation distributed to potential Purchasers, including all addenda andexhibits thereto.     The documents incorporated by reference in the Private Placement Memorandum or attached asexhibits thereto, at the time they became effective or were filed with the SEC, as the
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case may be, complied in all material respects with the requirements of the Exchange Act, asapplicable, and the rules and regulations of the SEC thereunder (the “1934 Act Rules andRegulations” and, together with the 1933 Act Rules and Regulations, the “Rules andRegulations”).          2.19. Price of Common Stock. The Company has not taken, and will not take, directly orindirectly, any action designed to cause or result in, or that has constituted or that mightreasonably be expected to constitute, the stabilization or manipulation of the price of the commonstock to facilitate the sale or resale of the Shares.          2.20. Use of Proceeds. The Company shall use the proceeds from the sale of the Shares asdescribed under “Use of Proceeds” in the Private Placement Memorandum.          2.21. Use of Purchaser Name. Except as otherwise required by applicable law or regulation,the Company shall not use any Purchaser’s name or the name of any of such Purchaser’s affiliates orinvestment advisers in any advertisement, announcement, press release or other similar publiccommunication unless it has received the prior written consent of the Purchasers for the specificuse contemplated; provided that, to the extent such disclosure (i) is required to be disclosedunder any law or regulation, (ii) is required to be disclosed or requested by, or necessary underthe rules of, any court, any governmental agency or other regulatory authority (including, withoutlimitation, any stock exchange or self-regulatory organization), or (iii) is necessary inconnection with any action, investigation or proceeding (including, without limitation, as part ofany interrogatory, court order, subpoena, administrative proceeding, civil investigatory demand, ineach case whether oral or written, or any other legal or regulatory process), the Company shallprovide such Purchaser with prior written notice of such disclosure to the extent practicable.          2.22. Financial Statements. The financial statements incorporated by reference in thePrivate Placement Memorandum, together with the related notes and schedules, present fairly theconsolidated financial position of the Company and the Subsidiaries as of the dates indicated andthe consolidated results of operations, cash flows and changes in “stockholder” equity of theCompany and the Subsidiaries for the periods specified and have been prepared in compliance in allmaterial respects with the requirements of the Securities Act and Exchange Act and in conformitywith U.S. generally accepted accounting principles applied on a consistent basis during the periodsinvolved. There is no transaction, arrangement, or other relationship between the Company (or anySubsidiary) and an unconsolidated or other off balance sheet entity that is required to bedisclosed by the Company in its Exchange Act filings and is not so disclosed therein or in thePrivate Placement Memorandum.          2.23. Listing Compliance.               (a) The Company is in compliance with the requirements of the NYSE for continued listing ofthe Company’s common stock thereon. The Company has taken no action designed to, or, to itsknowledge, likely to have the effect of, terminating the registration of the Company’s common stockunder the Exchange Act or the listing of the Company’s common stock on the NYSE, nor has theCompany received any notification that the SEC or the NYSE is contemplating terminating suchregistration or listing. The transactions contemplated
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by this Agreement will not contravene the rules and regulations of the NYSE. The Company willcomply with all requirements of the NYSE with respect to the issuance of the Conversion Shares andshall use its reasonable best efforts to cause the Offered Common Stock and Conversion Shares to belisted on the NYSE.               (b) The Company hereby undertakes to file, and use reasonable best efforts to cause to beapproved, a supplemental listing application with NYSE for the Offered Common Stock and ConversionShares          2.24. Internal Accounting Controls.               (a) The Company and each of the Subsidiaries maintain a system of internal accounting controlsmeeting the requirements of Section 13(b)(2) of the Exchange Act and sufficient to providereasonable assurance that (i) transactions are executed in accordance with management’s general orspecific authorization; (ii) transactions are recorded as necessary to permit preparation offinancial statements in conformity with U.S. generally accepted accounting principles and tomaintain accountability for the Company’s assets; (iii) access to assets is permitted only inaccordance with management’s general or specific authorization; and (iv) the recordedaccountability for assets is compared with existing assets at reasonable intervals and appropriateaction is taken with respect to any differences.               (b) The Company maintains a system of internal accounting controls it has established andmaintains and evaluates “disclosure controls and procedures” (as such term is defined in Rule13a-15 and 15d-15 under the Exchange Act) and “internal control over financial reporting” (as suchterm is defined in Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure controls andprocedures are designed to ensure that (i) material information relating to the Company and itsSubsidiaries is made known to the management of the Company by others within those entities asappropriate to allow timely decisions regarding required disclosure and to make the certificatesrequired by the Exchange Act with respect to documents required to be filed by the Company with theSEC, and (ii) the Company has disclosed, based on its most recent evaluation prior to the datehereof, to the Company’s auditors and the audit committee of the Company’s Board of Directors (A)any significant deficiencies in the design or operation of internal controls which could adverselyaffect in any material respect the Company’s ability to record, process, summarize and reportfinancial data and have identified for the Company’s auditors any material weaknesses in internalcontrols and (B) any fraud, whether or not material, that involves management or other employeeswho have a significant role in the Company’s internal controls; since the date of the most recentevaluation of such disclosure controls and procedures and internal controls, there have been nosignificant changes in internal controls or in other factors that could significantly affectinternal controls, including any corrective actions with regard to significant deficiencies andmaterial weaknesses. The principal executive officers (or their equivalents) and principalfinancial officers (or their equivalents) of the Company have made all certifications required bythe Sarbanes-Oxley Act and any related rules and regulations promulgated by the SEC, and thestatements contained in each such certification are complete and correct; the Company, theSubsidiaries and the Company’s directors and officers are each in compliance in all materialrespects with all applicable effective provisions of the Sarbanes-Oxley Act and the rules andregulations of the SEC and the NYSE promulgated thereunder.
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          2.25. Foreign Corrupt Practices. Neither the Company, nor any Subsidiary, nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any Subsidiary has in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “Foreign Corrupt Practices Act”); or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. The Company and its Subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance with the Foreign Corrupt Practices Act.          2.26. Money Laundering. The operations of the Company and the Subsidiaries are and havebeen conducted at all times in compliance with applicable financial recordkeeping and reportingrequirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended (the“Bank Secrecy Act”), the money laundering statutes of all jurisdictions, the rules andregulations thereunder and any related or similar rules, regulations or guidelines, issued,administered or enforced by any governmental agency (collectively, the “Money LaunderingLaws”); and no action, suit or proceeding by or before any court or governmental agency,authority or body or any arbitrator or non-governmental authority involving the Company or any ofits Subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’sknowledge, threatened. Neither the Company nor any of its Subsidiaries nor, to the knowledge ofthe Company, any director, officer, agent, employee or affiliate of the Company or any of theSubsidiaries is currently subject to any U.S. sanctions administered by the Office of ForeignAssets Control of the U.S. Treasury Department (“OFAC”), and the Company will not knowinglydirectly or indirectly use the proceeds of the sale of the Shares, or lend, contribute or otherwisemake available such proceeds to any Subsidiary, joint venture partner or other Person or entity,towards any sales or operations in any country sanctioned by OFAC or for the purpose of financingthe activities of any Person currently subject to any U.S. sanctions administered by OFAC.          2.27. Employee Relations.               (a) Except for matters which would not, individually or in the aggregate, have a MaterialAdverse Effect, (i) neither the Company nor any of the Subsidiaries is engaged in any unfair laborpractice; (ii) there is (A) no unfair labor practice complaint pending or, to the Company’sknowledge, threatened against the Company or any of the Subsidiaries before the National LaborRelations Board, and no grievance or arbitration proceeding arising out of or under collectivebargaining agreements is pending or, to the Company’s knowledge, threatened, (B) no strike, labordispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened against theCompany or any of the Subsidiaries, (C) no union representation dispute or collective bargainingagreement currently existing concerning the employees of the Company or any of the Subsidiaries,(iii) to the Company’s knowledge, no union organizing activities are currently taking placeconcerning the employees of the Company or any of the Subsidiaries, and (iv) there has been noviolation of any federal, state, local or foreign law relating to discrimination in the hiring,promotion or pay of employees, any
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applicable wage or hour laws or any provision of the Employee Retirement Income Security Actof 1974, as amended, including regulations and published interpretations thereunder(“ERISA”), as amended, or the rules and regulations promulgated thereunder concerning theemployees of the Company or any of the Subsidiaries.          2.28. ERISA. Except as would not reasonably be expected to have, individually or in theaggregate, a Material Adverse Effect, the Company and each of the Subsidiaries or their “ERISAAffiliates” (as defined below) are in compliance in all material respects with all presentlyapplicable provisions of ERISA; no “reportable event” (as defined in ERISA) has occurred withrespect to any “employee benefit plan” (as defined in ERISA) for which the Company or any of itsSubsidiaries or ERISA Affiliates would have any liability; the Company and each of its Subsidiariesor their ERISA Affiliates have not incurred and do not expect to incur liability under (i) Title IVof ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or(ii) Sections 412, 4971, 4975 or 4980B of the United States Internal Revenue Code of 1986, asamended, and the regulations and published interpretations thereunder (collectively, the“Code”); and each “employee benefit plan” for which the Company and each of itsSubsidiaries or any of their ERISA Affiliates would have any liability that is intended to bequalified under Section 401(a) of the Code is so qualified in all material respects and nothing hasoccurred, whether by action or by failure to act, which would reasonably be expected to cause theloss of such qualification. “ERISA Affiliate” means, with respect to the Company or a Subsidiary,any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Codeor Section 400(b) of ERISA of which the Company or such Subsidiary is a member.          2.29. Environmental Matters. Except as would not, individually or in the aggregate, have aMaterial Adverse Effect, (i) none of the Company, its Subsidiaries or any of their respectiveproperties, assets and operations are in violation of any Environmental Laws (as defined below) and(ii) neither the Company nor any of its Subsidiaries are required to hold any permits or obtain anyauthorizations under any Environmental Laws (as defined below) (as used herein, “EnvironmentalLaw” means any federal, state, local or foreign law, statute, ordinance, rule, regulation,order, decree, judgment, injunction, permit, license, authorization or other binding requirement,or common law, relating to health, safety or the protection, cleanup or restoration of theenvironment or natural resources, including those relating to the distribution, processing,generation, treatment, storage, disposal, transportation, other handling or release or threatenedrelease of Hazardous Materials, and “Hazardous Materials” means any material (including,without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) that isregulated by or may give rise to liability under any Environmental Law).          2.30. Integration; Other Issuances of Shares. Neither the Company nor any Subsidiary orany affiliates, nor any person acting on its or their behalf, has issued any Shares or shares ofany other series of common or preferred stock, or other securities or instruments convertible into,exchangeable for or otherwise entitling the holder thereof to acquire shares of capital stock whichwould be integrated with the sale of the Shares to the Purchasers for purposes of the SecuritiesAct or of any applicable stockholder approval provisions, including, without limitation, under therules and regulations of the NYSE, nor will the Company or its Subsidiaries or affiliates or anyperson acting on behalf of the Company take any action or steps that would require registration ofany of the Shares under the Securities Act or cause the offering of the
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Shares to be integrated with other offerings. Assuming the accuracy of the representations andwarranties of Purchasers, the initial offer and sale of the Shares by the Company to the Purchaserspursuant to this Agreement will be exempt from the registration requirements of the Securities Act.          2.31. Non-Public Information.               (a) The Company confirms that neither it nor any of its officers or directors nor any otherPerson acting on its or their behalf has provided, and it has not authorized the Placement Agent toprovide, any Purchaser or its respective agents or counsel with any information that it believesconstitutes or could reasonably be expected to constitute material, non-public information exceptinsofar as the existence, provisions and terms of this Agreement and the proposed transactionshereunder or contemplated herein (including, the Acquisition) may constitute such information.               (b) The Company shall use its reasonable best efforts to (i) issue a press release announcingthe signing of this Agreement prior to 9:30 a.m., New York City Time, on the first business dayafter the date hereof (which press release will disclose both the Non-Contingent Tranche and theContingent Tranche, and describing, without naming the targets, that the proceeds of the ContingentTranche are being held in escrow to support Doral Bank PR’s efforts related to a possible assistedtransaction, and will be returned to investors if the transaction is not completed), (ii) file aCurrent Report on Form 8-K describing the material terms of the transactions contained in thisAgreement, (iii) issue a press release announcing the closing of an Acquisition or the occurrenceof a Failure Event prior to 8:30 a.m., New York City time, on the first business day after theClosing Date or the second business day after the occurrence of the Failure Event, as the case maybe, and (iv) file a Current Report on Form 8-K describing the material terms of the transactionscontained in any Acquisition agreements, and attaching as an exhibit to such Form 8-K theAcquisition agreements (the “Closing 8-K Filing”) prior to 5:30 p.m., New York City time,on the first business day after the Closing Date.               (c) After giving effect to the filing of the Closing 8-K Filing or the filing of a CurrentReport on Form 8-K after the occurrence of a Failure Event, the Purchasers will not be inpossession of any material non-public information relating to the Company and its Subsidiaries.Notwithstanding the foregoing, nothing contained in this Section 2.31(c) shall require the Companyto release information covered by a confidentiality agreement with the FDIC, if any.               (d) The Company shall not, and shall cause each of its Subsidiaries and its and each of theirrespective officers, directors, employees and agents, not to, provide any Purchaser with anymaterial, non-public information regarding the Company or any of its Subsidiaries from and afterthe earlier of (i) the filing of the Closing 8-K Filing with the SEC; and (ii) the unwinding of theEscrow Account following a Failure Event, without the prior express written consent of suchPurchaser.          2.32. Risk Management Instruments. Except as would not reasonably be expected to have,individually or in the aggregate, a Material Adverse Effect, any and all material interest rateswaps, caps, floors, option agreements (other than employee stock options)
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and other interest risk management arrangements, whether entered into for the account of theCompany or one of its Subsidiaries or for the account of a customer of the Company or one of itsSubsidiaries, were entered into in the ordinary course of business and in accordance withapplicable laws, rules, regulations and policies of all applicable regulatory agencies. TheCompany and each of its Subsidiaries have duly performed in all material respects all of theirobligations thereunder to the extent that such obligations to perform have accrued, and there areno material breaches, violations or defaults or allegations or assertions of such by any partythereunder          2.33. Mortgage Banking Business. Except as has not had and would not reasonably beexpected to have a Material Adverse Effect:               (a) The Company and each Subsidiary has complied with, and all documentation in connectionwith the origination, processing, underwriting and credit approval of any mortgage loan originated,purchased or serviced by the Company or any Subsidiary satisfied, (i) all applicable federal, stateand local laws, rules and regulations with respect to the origination, insuring, purchase, sale,pooling, servicing, subservicing, or filing of claims in connection with mortgage loans, includingall laws relating to real estate settlement procedures, consumer credit protection, truth inlending laws, usury limitations, fair housing, transfers of servicing, collection practices, equalcredit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligationsrelating to mortgage loans set forth in any agreement between the Company or any Subsidiary and anyAgency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooksand other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions ofany mortgage or other collateral documents and other loan documents with respect to each mortgageloan; and               (b) No Agency, Loan investor or Insurer has (i) claimed in writing that the Company or anySubsidiary has violated or has not complied with the applicable underwriting standards with respectto mortgage loans sold by the Company or any Subsidiary to a Loan Investor or Agency, or withrespect to any sale of mortgage servicing rights to a Loan Investor, (ii) imposed in writingrestrictions on the activities (including commitment authority) of the Company or any Subsidiary or(iii) indicated in writing to the Company or any Subsidiary that it has terminated or intends toterminate its relationship with the Company or any Subsidiary for poor performance, poor loanquality or concern with respect to the Company’s or any Subsidiary’s compliance with laws.               (c) For purposes of this Section 2.33:                    (i) “Agency” shall mean the Federal Housing Administration, the Federal Home LoanMortgage Corporation, the Farmers Home Administration (now known as Rural Housing and CommunityDevelopment Services), the Federal National Mortgage Association, the United States Department ofVeterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any otherfederal or state agency with authority to (A) authority to determine any investment, origination,lending or servicing requirements with regard to mortgage loans originated, purchased or servicedby the Company or any Subsidiary or (B) originate, purchase, or service mortgage loans, orotherwise promote mortgage lending, including without limitation, state and local housing financeauthorities.
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                    (ii) “Loan Investor” shall mean any person (including an Agency) having a beneficialinterest in any mortgage loan originated, purchased or serviced by the Company or any Subsidiary ora security backed by or representing an interest in any such mortgage loan; and                    (iii) “Insurer” means a person who insures or guarantees for the benefit of themortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loansoriginated, purchased or serviced by the Company or any Subsidiary, including the Federal HousingAdministration, the United States Department of Veterans’ Affairs, the Rural Housing Service of theU.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title orother insurance with respect to such mortgage loans or the related collateral.          2.34. Shell Company Status. The Company is not, and has never been, an issuer of the typedescribed in Rule 144(i)(l) under the Securities Act.          2.35. Solvency. The Company and each of its Subsidiaries do and will after giving effectto the transactions contemplated hereby to occur (i) own assets the fair saleable value of whichare (A) greater than the total amount of its liabilities (including known contingent liabilities)and (B) greater than the amount that will be required to pay the probable liabilities of itsexisting debts as they become absolute and matured considering the financing alternativesreasonably available to it, and (ii) not have capital that will be unreasonably small in relationto its business as presently conducted or contemplated. The Company has no knowledge of any factsor circumstances which lead it to believe that it or any of its Subsidiaries will be required tofile for reorganization or liquidation under the bankruptcy or reorganization laws of anyjurisdiction, and has no present intent to so file.          2.36. Transactions With Affiliates and Employees. Except as set forth in the PrivatePlacement Memorandum and other than the grant of stock options or other equity awards that are notindividually or in the aggregate material in amount, none of the officers or directors of theCompany and, to the Company’s knowledge, none of the employees of the Company, is presently a partyto any transaction with the Company or to a presently contemplated transaction (other than forservices as employees, officers and directors) that would be required to be disclosed pursuant toItem 404 of Regulation S-K promulgated under the Securities Act.          2.37. Application of Takeover Protections; Rights Agreements. The Company has notadopted any stockholder rights plan or similar arrangement relating to accumulations of beneficialownership of Common Stock or a change in control of the Company. The Company and its Board ofDirectors have taken all necessary action, if any, in order to render inapplicable any controlshare acquisition, business combination, poison pill (including any distribution under a rightsagreement) or other similar anti-takeover provision under the Company’s articles of incorporationor other organizational documents or the laws of the jurisdiction of its incorporation or otherwisewhich is or could become applicable to any Purchaser solely as a result of the transactionscontemplated by this Agreement, including, without limitation, the Company’s issuance of the Sharesand any Purchaser’s ownership of the Shares or the Conversion Shares.
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          2.38. Adequate Capitalization. As of December 31, 2009, the Company’s Subsidiaryinsured depository institutions meet or exceed the standards necessary to be considered “adequatelycapitalized” under the FDIC’s regulatory framework for prompt corrective action.          2.39. FDIC Policy Statement. The Company and Doral Bank PR are not subject to, and donot expect that, as a result of the issuance of Shares provided herein or otherwise arising inconnection with the Acquisition, they will become subject to, the FDIC Statement of Policy onQualifications for Failed Bank Acquisitions (August 26, 2009) (the “FDIC PolicyStatement”).          2.40. Compliance with Other Regulations. The Company has no knowledge of any factsand circumstances, and has no reason to believe that any facts or circumstances exist, that wouldcause any of its Subsidiary banking institutions: (i) to be deemed not to be in satisfactorycompliance with the Community Reinvestment Act (“CRA”) and the regulations promulgatedthereunder or to be assigned a CRA rating by federal or state banking regulators of lower than“satisfactory”; (ii) to be deemed to be operating in violation, in any material respect, of theBank Secrecy Act, the Patriot Act, any order issued with respect to anti-money laundering by theU.S. Department of the Treasury’s Office of Foreign Assets Control, or any other anti-moneylaundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance,in any material respect, with all applicable privacy of customer information requirements containedin any federal and state privacy laws and regulations as well as the provisions of all informationsecurity programs adopted by the Subsidiaries.          2.41. Substantially Similar Agreement. Except as disclosed in the Private PlacementMemorandum or the Transaction Documents, the Company has no other agreements with any Purchaser topurchase Offered Shares on terms that are not substantially similar to the Purchasers hereunder.          2.42. Ownership. Based on the stock register of the Company, Holdings is the owner ofa majority of the shares of the Company’s Common Stock.          2.43. Enforcement of Cooperation Agreement. The Company agrees that it shall use itsreasonable best efforts to enforce its rights under the Cooperation Agreement, including Section3.05 thereof.          SECTION 3. Representations, Warranties and Covenants of Each Purchaser. EachPurchaser, severally and not jointly, represents and warrants to, and covenants with, the Companythat:          3.1. Experience. (i) Such Purchaser is knowledgeable, sophisticated and experienced infinancial and business matters, in making, and is qualified to make, decisions with respect toinvestments in shares representing an investment decision like that involved in the purchase of theShares, including investments in securities issued by the Company and comparable entities, has theability to bear the economic risks of an investment in the Shares and has reviewed carefully thePrivate Placement Memorandum and has requested, received, reviewed and considered all informationit deems relevant in making an informed decision to
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purchase the Shares, including all information it deems relevant as the intended use of proceedsand resulting impact on the Company; (ii) Purchaser is acquiring up to the number of Shares setforth in Schedule I in the ordinary course of its business and for its own account and with nopresent intention of distributing any of the Shares, or Conversion Shares, or any arrangement orunderstanding with any other persons regarding the distribution of such Shares, or ConversionShares (it being understood and agreed that this representation and warranty does not limit thePurchaser’s rights to sell or otherwise transfer shares pursuant to the Registration Statement orin compliance with the Securities Act and the Rules and Regulations or to transfer Shares to itspartners or members in compliance with the Securities Act and the Rules and Regulations); (iii) the Purchaser will not, directly or indirectly, offer, sell, pledge, transfer orotherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledgeof) any of the Shares, or Conversion Shares, nor will the Purchaser engage in any short sale thatresults in a disposition of any of the Shares, or Conversion Shares by the Purchaser, except incompliance with the Securities Act and the Rules and Regulations and any applicable statesecurities laws; (iv) the Purchaser has completed or caused to be completed, or will complete orcause to be completed promptly after the date hereof but in any event within fifteen (15) daysafter the date hereof, the Registration Statement Questionnaire attached hereto as part of AppendixI, for use in preparation of the Registration Statement, and the answers thereto are or will betrue and correct as of the date it is so completed, and will be confirmed promptly by the Purchaseron written request of the Company (failure of the Purchaser to respond within two business days ofreceipt to be taken as confirmation); (v) the Purchaser has, in connection with its decision topurchase the number of Shares set forth in Schedule I, relied solely upon the Private PlacementMemorandum and the representations and warranties of the Company contained herein and thePurchaser’s own investigation of the Company (including the intended use of proceeds and resultingimpact on the Company); (vi) the Purchaser has had an opportunity to discuss this investment withrepresentatives of the Company and ask questions of them; and (vii) the Purchaser is one of (A) an“institutional accredited investor” as defined in clauses (1), (2), (3), (4), (7) and (8) ofRule 501(a) of Regulation D promulgated under the Securities Act, (B) an “accredited investor” thatis also a direct or indirect investor in Holdings or (C) an “accredited investor” who is also adirector or executive officer of the Company.          3.2. Reliance on Exemptions. The Purchaser understands that the Shares are being offeredand sold to it in reliance upon specific exemptions from the registration requirements of theSecurities Act, the Rules and Regulations and state securities laws and that the Company is relyingupon the truth and accuracy of, and the Purchaser’s compliance with, the representations,warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein inorder to determine the availability of such exemptions and the eligibility of the Purchaser toacquire the Shares.          3.3. Confidentiality. For the benefit of the Company, the Purchaser previously agreed withthe Placement Agent to keep confidential all information concerning this private placement,including without limitation, the assets that the Company may acquire pursuant to the Acquisition.The Purchaser understands that the information contained in the Private Placement Memorandum isstrictly confidential and proprietary to the Company and is being submitted to the Purchaser solelyfor such Purchaser’s confidential use. The Purchaser agrees to use the information contained inthe Private Placement Memorandum for the sole purpose of evaluating a possible investment in theShares and the Purchaser acknowledges that it is prohibited from
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reproducing or distributing the Private Placement Memorandum, this Agreement, or any other offeringmaterials or other information provided by the Company in connection with the Purchaser’sconsideration of its investment in the Company, in whole or in part, or divulging or discussing anyof their contents, except to its financial, investment or legal advisors and its custodians andadministrators in connection with its proposed investment in the Shares. Further, the Purchaserunderstands that the existence and nature of all conversations and presentations, if any, regardingthe Company and this offering must be kept strictly confidential, except as provided in the priorsentence. The Purchaser understands that the federal securities laws impose restrictions ontrading based on information divulged in connection with this Offering. The obligations set forthin this Section 3.3 will terminate upon the earlier of the filing by the Company of the Closing 8-KFiling with the SEC or the filing of a Current Report on Form 8-K after the occurrence of a FailureEvent. The foregoing agreements shall not apply to any information that (i) is or becomes publiclyavailable through no fault of the Purchaser, (ii) is required to be disclosed under any law orregulation, (iii) is required to be disclosed or requested by, or necessary under the rules of, anycourt, any governmental agency or other regulatory authority (including, without limitation, anystock exchange or self-regulatory organization), or (iv) is necessary in connection with anyaction, investigation or proceeding (including, without limitation, as part of any interrogatory,court order, subpoena, administrative proceeding, civil investigatory demand, in each case whetheroral or written, or any other legal or regulatory process); provided, however, that if thePurchaser is, subject to the exceptions in the immediately preceding sentence, legally required todisclose any information as provided in clauses (ii) – (iv) above, such Purchaser shall provide theCompany with prior written notice of such disclosure to the extent practicable. To the extentlegally permissible, the Purchaser will (at the Company’s expense) cooperate with the Company tothe extent the Company may seek to limit such disclosure or avoid the requirement for suchdisclosure, including cooperating with the Company’s efforts to seek an order or other reliableassurance that confidential treatment will be afforded to the disclosed information.          Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shouldbe considered to impose on the Purchaser any limitation on disclosure of the tax treatment or taxstructure of the transactions or matters described herein.          3.4. Investment Decision. The Purchaser understands that nothing in this Agreement or anyother materials presented to the Purchaser in connection with the purchase and sale of the Shares,including the Private Placement Memorandum, constitutes legal, tax or investment advice. ThePurchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, hasdeemed necessary or appropriate in connection with its purchase of the Shares.          3.5. Risk of Loss. The Purchaser understands that its investment in the Shares involves asignificant degree of risk, including a risk of total loss of the Purchaser’s investment, and thePurchaser has full cognizance of and understands all of the risk factors related to the Purchaser’spurchase of the Shares, including, but not limited to, those set forth as “Risk Factors” in thePrivate Placement Memorandum and the risks involved in acquiring assets from an institution in FDICreceivership. The Purchaser understands that the market price of the Company’s common stock hasbeen volatile, that there is no existing market for the Offered Preferred Stock and that norepresentation is being made as to the future value of the Shares or
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the future value or performance of any of the assets that the Company may acquire pursuant to theAcquisition.          3.6. Legend. The Purchaser understands that, until such time as the Registration Statement hasbeen declared effective, or the Shares or Conversion Shares may be sold pursuant to Rule 144 underthe Securities Act without any restriction as to the number of securities as of a particular datethat can then be immediately sold and without the requirement for the Company to be in compliancewith the current public information required under Rule 144(c)(1), the Shares and Conversion Shareswill bear a restrictive legend in substantially the following form (the “Transfer Legend”):“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT), THE PUERTO RICOUNIFORM SECURITIES ACT (THE “PRUSA”) OR THE SECURITIES LAWS OF ANY STATE OROTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISETRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER EACH OF THESECURITIES ACT AND THE PRUSA OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENTUNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH THE PRUSA AND ALLAPPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, ANDIN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HASRECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTIONDOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT, THE PRUSA AND SUCH OTHERAPPLICABLE LAWS.”          3.7. Transfer Restrictions. (a) Until the earlier of (i) the Closing Date and(ii) unwinding of the Escrow Account following a Failure Event, the shares of Offered PreferredStock issued in the Non-Contingent Tranche may not be offered, sold, pledged or otherwisetransferred by a Purchaser except transfers to (A) the Company or its affiliates, (B) affiliates ofsuch Purchaser, (C) persons that share a common discretionary investment adviser with suchPurchaser or (D) for estate planning. Any such transfer must include the right to receive acorresponding portion of the Escrow Securities.               (b) Consistent with the Transfer Legend set forth in Section 3.6, the Shares, and ConversionShares, may only be disposed of in compliance with federal, state, or local securities laws. Inconnection with any transfer of Shares, or Conversion Shares, other than pursuant to theRegistration Statement, the Company may require the transferor to provide to the Company an opinionof counsel selected by the transferor and reasonably acceptable to the Company, the form andsubstance of which opinion shall be reasonably satisfactory to the Company, to the effect that suchtransfer does not require registration of the transferred Shares, or Conversion Shares, under theSecurities Act. As a condition of such transfer (unless effected pursuant to the RegistrationStatement or under Rule 144), any such transferee shall agree in writing to be bound by the termsof this Agreement and shall have the rights of a Purchaser under
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this Agreement. The certificates representing the Shares, or Conversion Shares, may besubject to a stop transfer order for the purpose of enforcing the foregoing provisions, and theCompany will instruct the transfer agent to transfer Shares, or Conversion Shares, to a transfereeif the foregoing provisions are complied with and if, in the case of a transfer pursuant to theRegistration Statement, the transferor causes the Prospectus (as defined in Section 3.9) to bedelivered to the transferee (whether physically or through compliance with Rule 172 under theSecurities Act or any similar rule). At such time as the Shares, or Conversion Shares, are nolonger required to bear a Transfer Legend, the Company agrees that it will, no later than three (3)business days after delivery by the Purchaser to the Company or its transfer agent of a certificate(in the case of a transfer, in the proper form for transfer) representing Shares, or ConversionShares, issued with the foregoing Transfer Legend, deliver or cause to be delivered to thePurchaser a certificate representing such Shares, or Conversion Shares, that is free from allrestrictive and other legends. The Company shall not make any notation on its records or giveinstructions to its transfer agent that enlarge the restrictions on transfer set forth in thisSection 3.7.          3.8. Residency. The Purchaser’s principal executive offices are in the jurisdiction setforth immediately below the Purchaser’s name on the signature pages hereto.          3.9. Public Sale or Distribution. The Purchaser hereby covenants with the Company not tomake any sale of the Shares, or Conversion Shares, under the Registration Statement withoutcomplying with the provisions of this Agreement and without effectively causing the prospectusdelivery requirement under the Securities Act to be satisfied (whether physically or throughcompliance with Rule 172 under the Securities Act or any similar rule). The Purchaser acknowledgesthat there may occasionally be times when the Company must suspend the use of the prospectus (the“Prospectus”) forming a part of the Registration Statement (a “Suspension”) untilsuch time as an amendment to the Registration Statement has been filed by the Company and declaredeffective by the SEC, or until such time as the Company has filed an appropriate report with theSEC pursuant to the Exchange Act. Without the Company’s prior written consent, which consent shallnot be unreasonably withheld, conditioned or delayed, the Purchaser shall not use any writtenmaterials to offer the Shares, or Conversion Shares, for resale other than the Prospectus,including any “free writing prospectus” as defined in Rule 405 under the Securities Act. ThePurchaser covenants that it will not sell any Shares, or Conversion Shares, pursuant to saidProspectus during any period when the Purchaser’s use of the Prospectus is suspended pursuant tothe last paragraph of Section 5.1 hereof. So long as the Purchaser holds Registrable Securities,on written request of the Company the Purchaser agrees to notify the Company of the sale of all ofsuch Registrable Securities.          3.10. Organization; Validity; Enforcements. To the extent the Purchaser is not a naturalperson, the Purchaser is duly organized, validly existing and in good standing under the laws ofits jurisdiction of organization. The Purchaser further represents and warrants to, and covenantswith, the Company that (i) the Purchaser has full right, power, authority and capacity to enterinto this Agreement and to consummate the transactions contemplated hereby and has taken allnecessary action to authorize the execution, delivery and performance of this Agreement, (ii) themaking and performance of this Agreement by the Purchaser and the consummation by the Purchaser ofthe transactions herein contemplated will not violate any provision of the organizational documentsof the Purchaser (to the extent the Purchaser is not a
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natural person) or conflict with, result in the breach or violation of, or constitute, either byitself or upon notice or the passage of time or both, a default under any material agreement,mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to whichthe Purchaser is a party or, any statute or any authorization, judgment, decree, order, rule orregulation of any court or any regulatory body, administrative agency or other governmental agencyor body applicable to the Purchaser, (iii) except for HSR Approval in the case of Purchasers thatindicate on the signature page hereof that they are subject to HSR Approval, no consent, approval,authorization or other order of any court, regulatory body, administrative agency or othergovernmental agency or body is required on the part of the Purchaser for the execution and deliveryby the Purchaser of this Agreement or the consummation by the Purchaser of the transactionscontemplated by this Agreement, (iv) upon the execution and delivery of this Agreement, thisAgreement shall (assuming the due authorization, execution and delivery by the Company and theother parties hereto) constitute a legal, valid and binding obligation of the Purchaser,enforceable in accordance with its terms, except as such enforceability may be limited byapplicable bankruptcy, insolvency, reorganization, moratorium or other laws of general applicationrelating to, or the enforcement of creditor’s rights and the application of equitable principlesrelating to, the availability of remedies, and except as rights to indemnity or contribution,including, but not limited to, the indemnification provisions set forth in Section 5.4 of thisAgreement, may be limited by federal, state, or local securities laws or the public policyunderlying such laws, and (v) there is not in effect any order enjoining or restraining thePurchaser from entering into or engaging in any of the transactions contemplated by this Agreement.          3.11. Short Sales. After the date the Purchaser entered into a confidentiality undertakingwith the Placement Agent with respect to the transactions contemplated hereby, the Purchaser hasnot taken, and prior to the earlier of (i) the public announcement of the Acquisition or (ii) theunwinding of the Escrow Account, the Purchaser shall not take, any action that has caused or willcause the Purchaser to have, directly or indirectly, sold or agreed to sell any shares of OfferedCommon Stock, effected any short sale of Offered Common Stock, whether or not against the box,established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) withrespect to the Offered Common Stock, granted any other right (including, without limitation, anyput or call option) with respect to the Offered Common Stock or with respect to any security thatincludes, relates to or derived any significant part of its value from the Offered Common Stock.          3.12. Control. Assuming the accuracy of the representations and warranties of the Companyand the other Purchasers, and the performance of the covenants and agreements of the Companycontained herein, after giving effect to the purchase of the Shares set forth opposite eachPurchaser’s name in Schedule I, a Purchaser, either acting alone or together with any other personor entity that to its knowledge may be affiliated with such Purchaser, or deemed to be acting inconcert with such Purchaser pursuant to 12 C.F.R. Part 303, Subpart E, or 12 C.F.R. § 225.41, willnot own, control or have the power to vote in excess of, (a) other than the Purchaser(s) listed onSchedule III hereto, if such Purchaser is or is controlled by a company registered under the BHCAct (a “BHC”), 4.9% of the shares of the Company’s voting stock outstanding, or (b) if suchPurchaser is not a BHC, 9.9% of the shares of the Company’s voting stock outstanding, in each caseimmediately after giving effect to the issuance of all of the Shares offered by the PrivatePlacement Memorandum. Without limiting the foregoing, each Purchaser
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represents and warrants that it does not have control and has no present intention of acquiringcontrol of the Company, as “control” is defined in 12 C.F.R. Part 303, Subpart E or 12 C.F.R. §225.2 and interpreted in the Federal Reserve Board’s “Policy Statement on Equity Investments inBanks and Bank Holding Companies” found in 12 C.F.R. §225.144.          3.13. Prohibited Person. Neither the Purchaser, nor any person controlling, controlled by,or under common control with the Purchaser, nor, to such Purchaser’s knowledge, any person having abeneficial interest in the Purchaser, nor any other person on whose behalf a subscriber is acting,is any of the following (each a “Prohibited Person”):               (a) a person whose name appears on the List of Specially Designated Nationals and BlockedPersons maintained by OFAC; “designated national” other than an “unblocked national” asdefined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515;               (b) a person with whom a United States citizen or entity is prohibited from transactingbusiness, whether such prohibition arises under United States law, regulation, executive order,anti-money laundering laws, regulations or orders, or as a result of any list published by the U.S.Department of Commerce, the U.S. Department of Treasury, or the U.S. Department of State includingany agency or office thereof;               (c) a person who has funded or supported terrorism or suspected terrorist organizations or whohas engaged in, or derived funds from, activities that relate to the laundering of the proceeds ofillegal activity;               (d) a non-U.S. shell bank (a bank without a physical presence in any country) or a personproviding banking services indirectly to a non-U.S. shell bank;               (e) a senior non-U.S. political figure or an immediate family member or close associate ofsuch figure or an entity owned or controlled by such a figure; or               (f) a person who, to the knowledge of the Purchaser, will result in, by reason of suchperson’s participation in the Offering or ownership of shares of Company common stock, theviolation of any law, regulation, or governmental order (including banking or other financialinstitution regulatory laws, regulations or orders) to which the Company is subject.               (g) If the Purchaser is a financial institution that is subject to the Bank Secrecy Act, thePurchaser has met and will continue to meet all of its obligations under the Bank Secrecy Act.               (h) The funds to be used by the Purchaser to purchase the Shares are derived from legitimateand legal sources and not from any Prohibited Person.          3.14. Representation. The Purchaser understands and agrees that Skadden, Arps, Slate,Meagher & Flom LLP represents the Placement Agent and not any Purchaser individually or thePurchasers collectively. The Purchaser further understands and agrees that the interest of thePlacement Agent may be different than the interests of the Purchasers.
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          3.15. Taxes on Escrow Account. Purchaser shall be treated for tax purposes as owning theirpro rata portion of the assets held in the Escrow Account until the earlier of: (1) the date of theconsummation of the Acquisition, or (2) the date upon which the funds held in the Escrow Accountare returned to Purchaser. Until such date, Purchaser must include their pro rata portion of allitems of income, deduction, and credit of the Escrow Account.          SECTION 4. Conditions Precedent and Closing Deliverables.          4.1. Purchasers’ Conditions Precedent to Funding. Each Purchaser’s obligation to (a) pay theaggregate non-contingent purchase price and accept delivery of stock certificate(s) (or shares inbook-entry form) to finalize the sale of the aggregate number of non-contingent Shares set forthadjacent to such Purchaser’s name on Schedule I and (b) fund the contingent purchase price to theEscrow Account shall be subject to the following conditions: (i) the Company shall have filed theCertificate of Designations with the Secretary of State of the Commonwealth of Puerto Rico pursuantto the Puerto Rico General Corporations Law; (ii) the Company’s representations and warranties inthis Agreement (considered collectively), and each of these representations and warranties(considered individually), must be accurate as of the date hereof and as of the Funding Date, asthough made on and as of such date, except for those representations and warranties explicitly madeas of a different date (which shall be accurate on and as of such date); (iii) the Company shallhave entered into the Escrow Agreement in substantially the form provided as Exhibit B whereby theEscrow Agent shall have executed and delivered to the Company the Escrow Agreement and shallexecute and deliver to the Company a receipt for the escrow funds; (iv) the Company shall haveentered into the Cooperation Agreement in substantially the form provided as Exhibit C whereby theCooperation Agreement Stockholders covenant to vote all of their existing securities in favor ofall resolutions related to the Conversion; (v) the delivery to the Purchasers by counsel to theCompany of a legal opinion (which may be relied upon by the Placement Agent as if such opinion wereaddressed to it) substantially in the form attached hereto as Exhibit D-I; (vi) the delivery to thePurchasers by the Company’s counsel in Puerto Rico of a legal opinion (which may be relied upon bythe Placement Agent as if such opinion were addressed to it) in the form attached hereto as ExhibitD-II; (vii) receipt by the Purchasers of a certificate (which may be relied upon by the PlacementAgent as if such certificate were addressed to it) executed by the chief executive officer and thechief financial or accounting officer of the Company, dated as of the Funding Date, to the effectthat the representations and warranties of the Company set forth herein were true and correct as ofthe date hereof and are true and correct as of the Funding Date and that the Company has compliedwith all the agreements and satisfied all the conditions herein on its part to be performed orsatisfied on or prior to the Funding Date; (viii) such Purchaser shall not have been made subjectto the FDIC Policy Statement solely as a result of its purchase of Shares hereunder; and (ix) theCompany shall have received subscriptions for Shares aggregating at least $600 million (subject toreduction due to rounding).          4.2. Bid Condition. Prior to Doral Bank PR submitting a bid, or any material change to abid previously submitted, the Company shall certify to the Escrow Agent that it has determined thatsuch bid constitutes a Qualified Acquisition (as defined herein). A “Qualified Acquisition” is onein which the Company would, on a pro forma basis as of December 31, 2009, have (a) a Tier 1risk-based capital ratio as determined in accordance with 12 C.F.R. part 225, appendix A, of notless than 16.0%, and (b) a tangible book value per share of not less than $7.69.
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Tangible book value per share for these purposes shall be calculated by deducting from book valueper share, as determined in accordance with generally accepted accounting principles, goodwillresulting from purchase accounting and the core deposit intangible that would result from theAcquisition. In determining whether a bid is a Qualified Acquisition, the Company shall beentitled to include any disposition of assets or repayment or satisfaction of liabilities if suchaction has been consummated or if the Company has entered into a binding contract with acounterparty ((which contract may be subject to conditions) and the Company must expect thecontract to be consummated within 30 days after the Acquisition). Any variance between the proforma metrics included in the Qualified Acquisition and the corresponding actual metrics, includingany variance between estimates underlying the pro forma metrics and actual results will not, in theabsence of bad faith on the part of the Company, result in any liability to the Company.          4.3. Purchasers’ Conditions Precedent to the Closing Date of the Contingent Tranche. Therelease of funds from the Escrow Account and each Purchaser’s obligation to accept delivery ofstock certificate(s) to finalize the sale of the aggregate number of contingent Shares set forthadjacent to such Purchaser’s name on Schedule I, on the Closing Date shall be subject to theCompany having delivered to the Escrow Agent a certificate confirming that a Disbursement Event hasoccurred and instructing the Escrow Agent to release the Escrow Funds.          4.4. Company’s Conditions Precedent to the Closing Date. The Company’s obligation tocomplete the purchase and sale of the Shares and deliver such stock certificate(s) (or shares inbook-entry form) to each Purchaser at the Closing Date shall be subject to prior receipt by theEscrow Agent of funds in the full amount of the aggregate purchase price adjacent to suchPurchaser’s name on Schedule I hereto.          4.5. Closing Deliverables. On the Closing Date the Company shall deliver, or cause to bedelivered, to each Purchaser a legal opinion of Company’s counsel in Puerto Rico (which may berelied upon by the Placement Agent as if such opinion were addressed to it) in the form attachedhereto as Exhibit D-III.          SECTION 5. Registration of the Offered Common Stock, Conversion Shares and Holdings’ CommonStock; Compliance with the Securities Act.          5.1. Registration Procedures and Expenses. The Company shall:          (a) as soon as practicable, but in no event later than 90 days following the Closing Date (the“Initial Filing Deadline”), prepare and file with the SEC a Registration Statement on FormS-1 (the “Initial Registration Statement”) relating to the resale of RegistrableSecurities; provided, however, that if a Failure Event occurs (or the EscrowAgreement has otherwise been terminated), the Initial Filing Deadline shall be 20 days followingthe return to the Purchasers of the Escrow Funds pursuant to the Escrow Agreement.“Registrable Securities” means the Offered Common Stock and the Conversion Shares(including shares of common stock issuable as a result of an anti-dilution adjustment to theConversion Price (as defined in the Certificate of Designation)), the shares of Common Stock ownedas of the date hereof by Holdings and any capital stock of the Company issued with respect to theShares or such shares owned by Holdings as a result of any stock split, stock dividend,recapitalization, exchange or
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similar event or otherwise, provided that Offered Common Stock, Conversion Shares, shares ofCommon Stock owned by Holdings or other capital stock shall not be Registrable Securities when (i)it is sold pursuant to an effective registration statement under the Securities Act or pursuant toRule 144 under the Securities Act, (ii) on and after the one-year anniversary of the Closing Dateor, if none, the Funding Date, or (iii) it has ceased to be outstanding;          (b) use its reasonable best efforts, subject to receipt of necessary information from theHolders (as defined herein), to cause the SEC to declare the Initial Registration Statementeffective within 180 days of the Closing Date; provided, however, that if a FailureEvent occurs or the Escrow Agreement has otherwise been terminated, the Company shall use itsreasonable best efforts, subject to receipt of necessary information from the Holders (including acompleted Registration Statement Questionnaire (in the form attached hereto as part of Appendix I),to cause the SEC to declare the Initial Registration Statement effective within 110 days of theFunding Date) and in any event no later than five business days following notification from the SECthat the Initial Registration Statement will not be subject to review or that the SEC has nofurther comments to the Initial Registration Statement;          (c) include in the Initial Registration Statement such information regarding each Holder fromwhich the Company has received a completed Registration Statement Questionnaire to allow suchHolder to deliver the prospectus to purchasers of Registrable Securities;          (d) notify the Holders via facsimile or electronic mail of a “.pdf” format data file of theeffectiveness of a Registration Statement within one (1) business day of the effective date of suchRegistration Statement. The Company shall, on the first business day after the effective date of aRegistration Statement, file a final Prospectus with the SEC under Rule 424(b);          (e) promptly prepare and file with the SEC such amendments and supplements to any RegistrationStatement and the Prospectus used in connection therewith as may be necessary to keep suchRegistration Statement effective until such time as there are no Registrable Securities remaining(the “Registration Period”);          (f) provide to each Holder who has returned a completed Registration Statement Questionnaire(in the form attached hereto as part of Appendix I) to the Company, a copy of any disclosureregarding the plan of distribution or the selling stockholders, in each case, with respect to suchHolder, at least two business day in advance of any filing with the SEC of any RegistrationStatement or any amendment or supplement thereto that includes such information (failure of theHolder to respond within two business days of receipt to be taken as confirmation that suchinformation with respect to such Holder constitutes written information furnished to the Company byor on behalf of such Holder expressly for use in such Registration Statement for purposes ofSection 5.4);          (g) furnish to any Holder with respect to the Registrable Securities registered under aRegistration Statement (and to each underwriter, if any, of such Registrable Securities) suchnumber of copies of Prospectuses and such other documents as such Holder may reasonably
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request, in order to facilitate the public sale or other disposition of all or any of theRegistrable Securities by such Holder;          (h) file documents required of the Company for Blue Sky clearance in states specified inwriting by any Holder of Registrable Securities; provided, however, that the Company shall not berequired to qualify to do business or consent to service of process in any jurisdiction in which itis not now so qualified or has not so consented;          (i) in order to enable the Holders to sell the Registrable Securities under Rule 144 under theSecurities Act, for a period of one year from the Closing Date or the unwinding of the EscrowAccount following a Failure Event, as the case may be, use its reasonable best efforts to complywith the requirements of Rule 144, including, without limitation, using its reasonable best effortsto comply with the requirements of Rule 144(c)(1) with respect to public information about theCompany and to timely file all reports required to be filed by the Company under the Exchange Act;          (j) ensure that each Registration Statement (including any amendments or supplements theretoand prospectuses contained therein) shall not contain any untrue statement of a material fact oromit to state a material fact required to be stated therein, or necessary to make the statementstherein (in the case of prospectuses, in the light of the circumstances in which they were made)not misleading;          (k) subject to the “black-out” provisions in the last paragraph of this Section 5.1, notifythe Holders in writing of the happening of any event, as promptly as practicable after becomingaware of such event, as a result of which the Prospectus included in a Registration Statement, asthen in effect, includes an untrue statement of a material fact or omission to state a materialfact required to be stated therein or necessary to make the statements therein, in the light of thecircumstances under which they were made, not misleading (provided that such notice shallnot contain any material, non-public information), and promptly prepare a supplement or amendmentto such Registration Statement to correct such untrue statement or omission;          (l) notify the Holders as promptly as practicable when any post-effective amendment has becomeeffective;          (m) use its reasonable best efforts to prevent the issuance of any stop order or othersuspension of effectiveness of a Registration Statement, or the suspension of the qualification ofany of the Registrable Securities for sale in any jurisdiction and, if such an order or suspensionis issued, to obtain the prompt withdrawal of such order or suspension and to notify each Holder ofRegistrable Securities being sold of the issuance of such order and the resolution thereof or itsreceipt of actual written notice of the initiation or written threat of any proceeding for suchpurpose;          (n) include in the “Plan of Distribution” section of any Registration Statement disclosuresubstantially to the effect that: “The selling stockholders may enter into derivative transactionswith third parties, or sell securities not covered by this prospectus to third parties in privatelynegotiated transactions”;
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          (o) upon receipt of a completed Registration Statement Questionnaire (in the form attachedhereto as part of Appendix I) after the date on which the Registration Statement becomes effective,together with any other information the Company may reasonably request, within 15 business days ofreceipt, or within 15 business days of the end of any period during which the Company has suspendeduse of the Registration Statement, file any amendments to the Registration Statement or supplementsto the related prospectus as are necessary and permitted to allow any Holder from which the Companyhas received a completed Registration Statement Questionnaire to deliver the prospectus topurchasers of Registrable Securities; provided that the Company will not be obligated to file morethan one post-effective amendment in any 60-calendar day period;          (p) bear all expenses in connection with the procedures in paragraphs (a) through (o) of thisSection 5.1, as well as Section 5.2, and the registration of the Registrable Securities pursuant toany Registration Statement, other than fees and expenses, if any, of counsel or other advisers tothe Holders or underwriting discounts, brokerage fees and commissions incurred by the Holders, ifany, in connection with the offering of the Registrable Securities pursuant to any suchRegistration Statement; and          (q) use its reasonable best efforts to list the Common Stock and the Conversion Shares on theNYSE by the effective date of the Initial Registration Statement or, if earlier, 180 days after theClosing Date or the unwinding of the Escrow Account following a Failure Event, as the case may be.     The Company understands that each Holder disclaims being an underwriter, but any such Holderbeing deemed an underwriter shall not relieve the Company of any obligations it has hereunder. Ifthe SEC requires that any Holder be named as an underwriter in any Registration Statement, suchHolder may (and the Company will use its reasonable best efforts to allow such Holder to) withdrawits Shares from such Registration Statement. A draft of the proposed form of the RegistrationStatement Questionnaire related to a Registration Statement to be completed by each Holder(including the Purchasers) is attached hereto as Appendix I.     As used herein, “Holder” means any Purchaser, Holdings (or any intended direct orindirect transferee of Holdings pursuant to its dissolution or other pro rata distribution of theShares of the Company’s Common Stock held by Holdings), and any other holder of RegistrableSecurities to which the registration rights conferred by this Agreement have been transferred incompliance with Section 5 hereof.     The Company may suspend (such period of time, a “Suspension Period”) the Holders’ useof any Registration Statement for a maximum of 45 calendar days in any 180 day period (an“Allowable Suspension Period”), if the Company, in its reasonable judgment, believes that(i) such Registration Statement, prospectus or prospectus supplement contains or may contain anuntrue statement of a material fact or omits to state a material fact required to be stated thereinor necessary to make the statements therein not misleading or (ii) circumstances exist that makethe use of such Registration Statement, prospectus or prospectus supplement inadvisable. However,if the Company determines in good faith that it would be materially detrimental to the Company orits securityholders for such use of such Registration Statement not to be suspended at such time,the Company may extend the Suspension Period from 45 calendar days to 90 calendar
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days; provided that the Company shall extend the Suspension Period (i) only if it generallyexercises similar black-out rights against holders of similar securities that have registrationrights and (ii) not more than once in any 12-month period. The Company will not specify the natureof the event giving rise to a Suspension Period in any notice to Holders of the existence of such aSuspension Period.          5.2. Additional Registration Statements. If for any reason the SEC does not permitall Registrable Securities to be included in the Initial Registration Statement (such that theInitial Registration Statement may be used for resales in a manner that does not constitute, in theSEC’s view, an offering by the Company and that permits the continuous resale at the market by theHolders participating therein without being named therein as “underwriters”), then:          (a) The Company shall promptly notify Holders and (i) first, exclude the shares held by anyofficer or director of the Company; (ii) second, exclude the Existing Shares (as defined herein)held by any Holder that is not an affiliate of the Company, any managing member of Doral GP Ltd. orany of such managing member’s affiliates; and (iii) third, reduce the number of RegistrableSecurities to be included in such Registration Statement by the Holders until such time as the SECshall so permit such Registration Statement to become effective and be used for resales in a mannerthat does not constitute an offering by the Company and that permits the continuous resale at themarket by the Holders participating therein without being named therein as “underwriters.” Inmaking such reduction, the Company shall reduce the number of shares to be included by all suchHolders on a pro rata basis (based upon the number of Registrable Securities otherwise required tobe included for each such Holder). In no event shall a Holder be required to be named as an“underwriter” in a Registration Statement without such Holder’s prior written consent; and          (b) The Company shall prepare and file with the SEC one or more separate RegistrationStatements that meet the criteria set forth in the first sentence of this Section 5.2 with respectto any such Registrable Securities not included in the Initial Registration Statement. The Companywill then use its reasonable best efforts at the first opportunity that is permitted by the SEC,but in no event later than the later of (i) 60 days from the date substantially all of theRegistrable Securities registered under the Registration Statement have been sold by the Holders or(ii) six (6) months from the date the Initial Registration Statement was declared effective, toregister for resale the Registrable Securities that have been excluded from being registered(provided such Registration Statement meets the criteria set forth in the first sentence ofthis Section 5.2). The Company shall use its reasonable best efforts to cause any suchRegistration Statement to be declared effective within 60 days following the filing thereof (and inany event no later than five business days following notification from the SEC that theRegistration Statement will not be subject to review or that the SEC has no further comments to theRegistration Statement) and to remain continuously effective for the Registration Period. In theevent the SEC raises objections to any such subsequent Registration Statement, the procedures setforth in this Section 5.2 shall again be followed.          5.3. Transfer of Securities. Each Purchaser agrees that it will not effect anydisposition of the Shares or its right to purchase the Shares that would constitute a sale withinthe meaning of the Securities Act or pursuant to any applicable state securities laws, except ascontemplated by a Registration Statement referred to in Section 5.1 or Section 5.2 or as
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otherwise permitted by law and in accordance with Section 3.7, and that it will promptlynotify the Company of any changes in the information set forth in any Registration Statementregarding the Purchaser or its plan of distribution.          The rights of each Purchaser to registration of Registrable Securities pursuant to Section 5may be assigned by any Purchaser to a transferee or assignee, or to the transferees of Holdings’shares referred to above of Registrable Securities if such transfer is permitted under the termshereof; provided, however, that the Company shall have no obligations with respectto such transferee or assignee until such time as such Purchaser or such transferee or assigneeshall have furnished to the Company written notice of the name and address of such transferee orassignee and the number and type of Registrable Securities that are being assigned and suchtransferee or assignee shall have completed the Registration Statement Questionnaire attachedhereto as part of Appendix I.          5.4. Indemnification.               (a) For the purpose of this Section 5.4:                    (i) the term “Holder/Affiliate” shall mean any affiliate of any Purchaser, including atransferee who is an affiliate of the Holder, and any person who controls the Holder or anyaffiliate of the Holder within the meaning of Section 15 of the Securities Act or Section 20 of theExchange Act; and                    (ii) the term “Registration Statement” shall include any preliminary prospectus, finalprospectus, free writing prospectus, exhibit, supplement or amendment included in or relating to,and any document incorporated by reference in, any Registration Statement referred to inSection 5.1 or Section 5.2.               (b) The Company agrees to indemnify and hold harmless such Holder and each Holder/Affiliate,against any losses, claims, damages, liabilities or expenses, joint or several, to which suchHolder or Holder/Affiliates may become subject, under the Securities Act, the Exchange Act, or anyother federal, state, or local statutory law or regulation, or at common law or otherwise(including in settlement of any litigation, if such settlement is effected with the consent of theCompany, which consent shall not be unreasonably withheld, conditioned or delayed), insofar as suchlosses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplatedbelow) are based on any untrue statement or alleged untrue statement of any material fact containedin the Registration Statement, including the Prospectus, financial statements and schedules, andall other documents filed as a part thereof, as amended at the time of effectiveness of theRegistration Statement, including any information deemed to be a part thereof as of the time ofeffectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rules 430B, 430C or 434, ofthe Rules and Regulations, or the Prospectus, in the form first filed with the SEC pursuant toRule 424(b) of the Rules and Regulations, or filed as part of the Registration Statement at thetime of effectiveness if no Rule 424(b) filing is required, or any amendment or supplement thereto,or arise out of or are based upon the omission or alleged omission to state in any of them amaterial fact required to be stated therein or necessary to make the statements in the RegistrationStatement or any amendment or supplement thereto not misleading or in the Prospectus or anyamendment or supplement thereto, not misleading in light
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of the circumstances under which they were made, and will promptly reimburse each Holder andeach Holder/Affiliate for any reasonable legal and other expenses as such expenses are incurred bysuch Holder or such Holder/Affiliate in connection with investigating, defending or preparing todefend, settling, compromising or paying any such loss, claim, damage, liability, expense oraction; provided, however, that the Company will not be liable for amounts paid in settlement ofany such loss, claim, damage, liability or action if such settlement is effected without theconsent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed,and the Company will not be liable in any such case to the extent that any such loss, claim,damage, liability or expense arises out of or is based upon (i) an untrue statement or allegeduntrue statement or omission or alleged omission made in the Registration Statement, the Prospectusor any amendment or supplement thereto in reliance upon and in conformity with written informationthat relates to such Holder or such Holder/Affiliate’s proposed method of distribution to theextent that such information was furnished to the Company by or on behalf of such Holder orHolder/Affiliate expressly for use therein or (ii) any statement or omission in any Prospectus thatis corrected in any subsequent Prospectus that was delivered to any Holder/Affiliate prior to thepertinent sale or sales by such Holder/Affiliate. All payments made by the Company pursuant tothis Section 5.4(b) shall be made free and clear of, and without withholding or deduction for or onaccount of any present or future tax, duty, levy, impost, assessment or other governmental charge(including penalties, interest, and other liabilities related thereto) (collectively,“Taxes) imposed or levied by or on behalf of any taxing jurisdiction unless the Company isrequired to withhold or deduct Taxes by law or by the official interpretation or administrationthereof. If the Company is so required to withhold or deduct any amount for, or on account of,Taxes other than taxes or similar governmental charges imposed on net income or imposed other thanby withholding from any payment made pursuant to this Section 5.4(b), the Company shall pay suchadditional amounts (“Additional Amounts”) as may be necessary so that the net amountreceived by any Holder or Holder/Affiliates, as the case may be (including Additional Amounts),after such withholding or deduction shall not be less than the amount such Holder orHolder/Affiliates, as the case may be, would have received if such Taxes had not been required tobe withhold or deducted.               (c) Each Holder will severally and not jointly indemnify and hold harmless the Company, eachof its directors, each of its officers who signed the Registration Statement and each person, ifany, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20of the Exchange Act, against any losses, claims, damages, liabilities or expenses to which theCompany, each of its directors, each of its officers who signed the Registration Statement orcontrolling person may become subject, under the Securities Act, the Exchange Act, or any otherfederal, state, or local statutory law or regulation, or at common law or otherwise (including insettlement of any litigation, but only if such settlement is effected with the consent of suchHolder, which consent shall not be unreasonably withheld, conditioned or delayed) insofar as suchlosses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplatedbelow) arise out of or are based upon any untrue or alleged untrue statement of any material factcontained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, orarise out of or are based upon the omission or alleged omission to state therein a material factrequired to be stated therein or necessary to make the statements in the Registration Statement orany amendment or supplement thereto not misleading or in the Prospectus or any amendment orsupplement thereto not misleading in the light of the circumstances under which they were made, ineach case to the
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extent, but only to the extent, that such untrue statement or alleged untrue statement oromission or alleged omission was made in the Registration Statement, the Prospectus, or anyamendment or supplement thereto, in reliance upon and in conformity with written information thatrelates to such Holder or Holder/Affiliate or such Holder’s or Holder/Affiliate’s proposed methodof distribution to the extent that such information was furnished to the Company by or on behalf ofsuch Holder or Holder/Affiliate expressly for use therein; and will reimburse the Company, each ofits directors, each of its officers who signed the Registration Statement or controlling person forany reasonable legal and other expense incurred by the Company, each of its directors, each of itsofficers who signed the Registration Statement or controlling person in connection withinvestigating, defending, settling, compromising or paying any such loss, claim, damage, liability,expense or action; provided, however, that (x) such Holder will not be liable for amounts paid insettlement of any such loss, claim, damage, liability or action if such settlement is effectedwithout the consent of the Holder, which consent shall not be unreasonably withheld, and (y) suchHolder’s aggregate liability under this Section 5 shall not exceed the amount of net proceedsreceived by such Holder on the sale of the Shares pursuant to the Registration Statement withrespect to which the claim for indemnification hereunder is being made.               (d) Promptly after receipt by an indemnified party under this Section 5.4 of notice of thethreat or commencement of any action, such indemnified party will, if a claim in respect thereof isto be made against an indemnifying party under this Section 5.4 notify the indemnifying party inwriting thereof, but the omission to notify the indemnifying party will not relieve it from anyliability that it may have to any indemnified party for contribution or otherwise under theindemnity agreement contained in this Section 5.4 to the extent it is not materially prejudiced asa result of such failure. In case any such action is brought against any indemnified party andsuch indemnified party seeks or intends to seek indemnity from an indemnifying party, theindemnifying party will be entitled to participate in, and, to the extent that it may wish, jointlywith all other indemnifying parties similarly notified, to assume the defense thereof with counselreasonably satisfactory to such indemnified party; provided, however, if the defendants in any suchaction include both the indemnified party, and the indemnifying party and the indemnified partyshall have reasonably concluded, based on the written advice of counsel, which counsel isreasonably satisfactory to the indemnifying party, that there may be a conflict of interest betweenthe positions of the indemnifying party and the indemnified party in conducting the defense of anysuch action or that there may be legal defenses available to it and/or other indemnified partiesthat are different from or additional to those available to the indemnifying party, the indemnifiedparty or parties shall have the right to select separate counsel to assume such legal defenses andto otherwise participate in the defense of such action on behalf of such indemnified party orparties. Upon receipt of notice from the indemnifying party to such indemnified party of itselection to assume the defense of such action and approval by the indemnified party of counsel, theindemnifying party will not be liable to such indemnified party under this Section 5.4 for anylegal or other expenses subsequently incurred by such indemnified party in connection with thedefense thereof unless (i) the indemnified party shall have employed such counsel in connectionwith the assumption of legal defenses in accordance with the proviso to the preceding sentence (itbeing understood, however, that the indemnifying party shall not be liable for the expenses of morethan one separate counsel, reasonably satisfactory to such indemnifying party, representing all ofthe indemnified parties who are parties to such action) or (ii) the indemnifying party shall nothave employed counsel reasonably satisfactory to the indemnified party to represent the indemnifiedparty within
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a reasonable time after notice of commencement of action, in each of which cases thereasonable fees and expenses of counsel shall be at the expense of the indemnifying party. Theindemnifying party shall not be liable for any settlement of any action without its consent, whichconsent shall not be unreasonably withheld. In no event shall any indemnifying party be liable inrespect of any amounts paid in settlement of any action unless the indemnifying party shall haveapproved in writing the terms of such settlement; provided that such consent shall not beunreasonably withheld. No indemnifying party shall, without the prior written consent of theindemnified party, effect any settlement of any pending or threatened proceeding in respect ofwhich any indemnified party is a party unless such settlement includes a complete release of theindemnified party from all liability on claims that are the subject matter of such proceeding.               (e) If a claim for indemnification under Section 5.4(b) or 5.4(c) is unavailable to anindemnified party or insufficient to hold an indemnified party harmless for any losses, claims,damages, liabilities or expenses to the extent provided in Section 5.4(b) or 5.4(c), as the casemay be (“Losses”), then each indemnifying party, in lieu of indemnifying such indemnifiedparty, shall contribute to the amount paid or payable by such indemnified party as a result of suchLosses, in such proportion as is appropriate to reflect the relative fault of the indemnifyingparty and indemnified party in connection with the actions, statements or omissions that resultedin such Losses as well as any other relevant equitable considerations. The relative fault of suchindemnifying party and indemnified party shall be determined by reference to, among other things,whether any action in question, including any untrue or alleged untrue statement of a material factor omission or alleged omission of a material fact, has been taken or made by, or relates toinformation supplied by, such indemnifying party or indemnified party, and the parties’ relativeintent, knowledge, access to information and opportunity to correct or prevent such action,statement or omission. The amount paid or payable by a party as a result of any Losses shall bedeemed to include, subject to the limitations set forth in this Agreement, any reasonableattorneys’ or other reasonable fees or expenses incurred by such party in connection with anyproceeding to the extent such party would have been indemnified for such fees or expenses if theindemnification provided for in this Section 5.4 was available to such party in accordance with itsterms.     The parties hereto agree that it would not be just and equitable if contribution pursuant tothis Section 5.4(e) were determined by pro rata allocation or by any other method of allocationthat does not take into account the equitable considerations referred to in the immediatelypreceding paragraph. Notwithstanding the provisions of this Section 5.4(e), no Holder shall berequired to contribute, in the aggregate, any amount in excess of the net proceeds actuallyreceived by such Holder from the sale of the Registrable Securities subject to the proceeding. Noperson guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of theSecurities Act) shall be entitled to contribution from any person who was not guilty of suchfraudulent misrepresentation.               (f) The indemnity and contribution agreements contained in this Section 5.4 are in addition toany liability that the indemnifying parties may have to the indemnified parties.          5.5. Termination of Conditions and Obligations. The restrictions imposed bySection 3.7 or Section 5.3 upon the transferability of the Registrable Securities shall cease and
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terminate as to any particular number of the Registrable Securities upon the earlier of(i) the passage of one year from the Closing Date or unwinding of the Escrow Account following aFailure Event, as the case may be, covering such Registrable Securities and (ii) at such time as anopinion of counsel satisfactory in form and substance to the Company shall have been rendered tothe effect that such conditions are not necessary in order to comply with the Securities Act.          5.6. Information Available. The Company, upon the reasonable request of anyPurchaser, shall make available for inspection by each Purchaser, any underwriter participating inany disposition pursuant to the Registration Statement and any attorney, accountant or other agentretained by such Purchaser or any such underwriter, all financial and other records, pertinentcorporate documents and properties of the Company, and cause the Company’s officers, employees andindependent accountants to supply all information reasonably requested by such Purchaser or anysuch underwriter, attorney, accountant or agent in connection with the Registration Statement.          5.7. No Piggyback on Registrations. Neither the Company nor any of its securityholders that is not a Holder may include securities of the Company in a Registration Statementhereunder.          5.8. Delay in Filing or Effectiveness of Registration Statement. If:               (a) any Registration Statement is not filed with the SEC on or prior to the applicable filingdeadline as described in Section 5.1 or Section 5.2;               (b) any Registration Statement is not declared effective by the SEC (or otherwise does notbecome effective) for any reason on or prior to applicable effectiveness deadline as described inSection 5.1 or Section 5.2;               (c) after the SEC has declared any Registration Statement effective, (a) such RegistrationStatement ceases for any reason (including, without limitation, by reason of a stop order, or theCompany’s failure to update such Registration Statement) to remain continuously effective as to allRegistrable Securities for which it is required to be effective, or (b) the Holders are notpermitted to utilize the Prospectus therein to resell such Registrable Securities (in each case of(a) and (b), other than during an Allowable Suspension Period);               (d) a Suspension Period exceeds the length of an Allowable Suspension Period; or               (e) after the date six months following the Closing Date or, if no bid with regard to anAcquisition has been accepted by the FDIC or the Escrow Agreement has otherwise been terminated,the Funding Date, and only in the event a Registration Statement is not effective or available tosell all Registrable Securities, the Company fails to file with the SEC any required reports underSection 13 or 15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(1), as aresult of which the Holders that are not affiliates of the Company are unable to sell RegistrableSecurities without restriction under Rule 144 (or any successor thereto);
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(any such failure or breach in clauses (a) through (e) above being referred to as an“Event,” and, for purposes of clauses (a), (b), (c or (e), the date on which such Eventoccurs, or for purposes of clause (d, the date on which such Allowable Suspension Period isexceeded, being referred to as an “Event Date”), then in addition to any other rights theHolders may have hereunder or under applicable law, on each such Event Date and on each monthlyanniversary of each such Event Date (if the applicable Event shall not have been cured by suchdate) until the applicable Event is cured, the Company shall pay to each Holder (other than anyHolder that is an officer or director of the Company) an amount in cash, as liquidated damages andnot as a penalty (“Liquidated Damages”), equal to 0.5% of (A) with respect to RegistrableSecurities that are Offered Common Stock (if any) and Conversion Shares, the aggregate purchaseprice paid by such Holder pursuant to this Agreement for any such Registrable Securities held bysuch Holder on the Event Date; and (B) with respect to Registrable Securities that are shares ofCommon Stock owned as of the date hereof by Holdings and any capital stock of the Company issuedwith respect to such shares as a result of any stock split, stock dividend, recapitalization,exchange or similar event or otherwise (the “Existing Shares”), the Purchase PriceEquivalent (as defined herein) of such Existing Shares held by such Holder on the Event Date;provided, however, that the aggregate amount of Liquidated Damages shall not exceed5.0% of the aggregate purchase price (in the case of (A) above) or 5.0% of the Purchase PriceEquivalent (in the case of (B) above). For purposes of this Section 5.8, “Purchase PriceEquivalent” means, with respect to any Holder as of any Event Date (x) the number of ExistingShares owned by such Holder on such Event Date multipliedby (y) the aggregatepurchase price paid for the Offered Common Stock (if any) and the Offered Preferred Stockdividedby the sum of the Offered Common Stock (if any) and Conversion Shares. Theparties agree that notwithstanding anything to the contrary herein, no Liquidated Damages shall bepayable (i) if, as of the relevant Event Date (or any applicable monthly anniversary of such EventDate), the Registrable Securities may be sold by non-affiliates without volume or manner of salerestrictions under Rule 144 and the Company is in compliance with the current public informationrequirements under Rule 144(c)(1), as determined by counsel to the Company pursuant to a writtenopinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agentor (ii) with respect to any period after the expiration of the Registration Period (it beingunderstood that this sentence shall not relieve the Company of any Liquidated Damages accruingprior to the expiration of the Registration Period). The Liquidated Damages pursuant to the termshereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of anEvent, except in the case of the first Event Date, in which case Liquidated Damages shall apply asfrom the Event Date.          SECTION 6. Broker’s Fee. Each Purchaser acknowledges that the Company intends to pay tothe Placement Agent a fee in respect of the sale of the Shares to the Purchasers upon release ofthe Escrow Funds from the Escrow Account, subject to the terms and conditions of Section 5 thereof.Each Purchaser and the Company agree that no Purchaser shall be responsible for such fee and thatthe Company will indemnify and hold harmless each Purchaser and its affiliates against any losses,claims, damages, liabilities or expenses, joint or several, to which such Purchaser or Purchaser’saffiliates may become subject with respect to such fee. Each of the parties hereto representsthat, on the basis of any actions and agreements by it, there are no other brokers or findersentitled to compensation in connection with the sale of the Shares to the Purchasers.
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          SECTION 7. Independent Nature of Purchasers’ Obligations and Rights. The obligations ofthe Purchasers under this Agreement are several and not joint with the obligations of any otherPurchaser, and no Purchaser shall be responsible in any way for the performance of the obligationsof any other Purchaser under this Agreement. The decision of each Purchaser to purchase the Sharespursuant to this Agreement has been made by such Purchaser independently of any other Purchaser.Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser inconnection with making its investment hereunder and that no Purchaser will be acting as agent ofsuch Purchaser in connection with monitoring its investment in the Shares or enforcing its rightsunder this Agreement. Each Purchaser shall be entitled to independently protect and enforce itsrights, including without limitation the rights arising out of this Agreement, and it shall not benecessary for any other Purchaser to be joined as an additional party in any proceeding for suchpurpose.          SECTION 8. Purchasers’ Rights with respect to the Cooperation Agreement. The Companyacknowledges and agrees that the Purchasers shall be third party beneficiaries to Section 3.01 andSection 3.02 of the Cooperation Agreement and a Majority in Interest of the Purchasers shall havethe right to enforce such sections of the Cooperation Agreement directly to the extent a Majorityin Interest of the Purchasers deems such enforcement necessary or advisable to protect the rightsof the Purchasers thereunder. In addition, the Company agrees not to consent to any amendment ofSection 3.01 and Section 3.02 of the Cooperation Agreement that materially and adversely affectsthe rights of the Purchasers thereunder without the prior written consent of a Majority in Interestof the Purchasers. For purposes of this Section 8, “Majority in Interest of thePurchasers” means a majority in interest of all Shares (calculated on an as-converted basis)other than Shares owned by Holdings or a direct or indirect investor in Holdings and theirrespective affiliates.          SECTION 9. Miscellaneous.          9.1. Notices. All notices, requests, consents and other communications hereunder shall bein writing, shall be mailed by first-class registered or certified airmail, e-mail, confirmedfacsimile or nationally recognized overnight express courier, postage prepaid, and shall be deemedgiven when so mailed and shall be delivered as addressed as follows:               (a) if to the Company, to:Doral Financial Corporation