Document:

exv10w1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this “Agreement”) is dated as of April 23, 2010, by and
among Oriental Financial Group Inc., a financial holding company and corporation organized in the
Commonwealth of Puerto Rico (the “Company”), and each purchaser identified on the signature pages
hereto (each, including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).

RECITALS

     A. The Company and each Purchaser is executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by
the United States Securities and Exchange Commission (the “Commission”) under the Securities Act.

     B. Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of
the Company’s mandatorily convertible non-cumulative non-voting perpetual preferred stock, $1,000
liquidation preference per share (the “Preferred Stock”), set forth below such Purchaser’s name on
the signature page of this Agreement (which aggregate amount for all Purchasers together shall be
200,000 shares of Preferred Stock and shall be collectively referred to herein as the “Preferred
Shares”). When purchased, the Preferred Stock will have the terms set forth in a certificate of
designations for the Preferred Stock in the form attached as Exhibit A hereto (the
“Certificate of Designations”) made a part of the Company’s Certificate of Incorporation, as
amended, by the filing of the Certificate of Designations with the Secretary of State of the
Commonwealth of Puerto Rico (the “Secretary of State”). The Preferred Stock will be convertible
into shares of common stock, par value $1.00 per share (the “Common Stock”), of the Company (the
“Underlying Shares” and, together with the Preferred Shares, the “Securities”), subject to and in
accordance with the terms and conditions of the Certificate of Designations.

     C. The Company has engaged Keefe, Bruyette & Woods, Inc. as its exclusive placement agent (the
“Placement Agent”) for the offering of the Securities.

     D. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the form attached hereto
as Exhibit B (the “Registration Rights Agreement”), pursuant to which, among other things,
the Company will agree to provide certain registration rights with respect to the Securities under
the Securities Act and the rules and regulations promulgated thereunder and applicable state
securities laws.

     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the Company and the Purchasers hereby agree as follows:

 

 

ARTICLE 1:

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms shall have the meanings indicated in this Section
1.1:

     “Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending or, to the
Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their
respective properties or any officer, director or employee of the Company or any Subsidiary acting
in his or her capacity as an officer, director or employee before or by any federal, state, county,
local or foreign court, arbitrator, governmental or administrative agency, regulatory authority,
stock market, stock exchange or trading facility.

     “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, Controls, is controlled by or is under common control with such
Person, as such terms are used in and construed under Rule 405 under the Securities Act.

     “Agreement” shall have the meaning ascribed to such term in the Preamble.

     “AST” has the meaning set forth in Section 2.1(b).

     ”AST Escrow Agreement” has the meaning set forth in Section 2.1(b).

     “Bank” has the meaning set forth in Section 6.17.

     “BHCA” has the meaning set forth in Section 3.1(b).

     “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City
are open for the general transaction of business.

     “Certificate of Designations” has the meaning set forth in the Recitals.

     “Certificate of Incorporation” means the Certificate of Incorporation of the Company and all
amendments and certificates of determination thereto, as the same may be amended from time to time.

     “Closing” means the closing of the purchase and sale of the Preferred Shares pursuant to this
Agreement.

     “Closing Date” means the Trading Day when all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all of the conditions set forth in Sections
2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as the parties may agree.

     “Code” means the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder.

     “Commission” has the meaning set forth in the Recitals.

     “Common Stock” has the meaning set forth in the Recitals, and also includes any securities
into which the Common Stock may hereafter be reclassified or changed.

     “Company Deliverables” has the meaning set forth in Section 2.2(a).

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     “Company Puerto Rican Counsel” means McConnell Valdes LLC.

     “Company Reports” has the meaning set forth in Section 3.1(kk).

     “Company U.S. Counsel” means Skadden, Arps, Slate, Meagher & Flom LLP.

     “Company’s Knowledge” means with respect to any statement made to the knowledge of the
Company, that the statement is based upon the actual knowledge of the executive officers of the
Company having responsibility for the matter or matters that are the subject of the statement after
reasonable investigation.

     “Control” (including the terms “controlling”, “controlled by” or “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

     “Custodian” has the meaning set forth in Section 2.1(b).

     “Custodian Agreement” has the meaning set forth in Section 2.1(b).

     “DTC” means The Depository Trust Company.

     “Effectiveness Date” has the meaning set forth in Section 6.16.

     “Environmental Laws” has the meaning set forth in Section 3.1(l).

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder.

     “ERISA Affiliate”, as applied to the Company, means any Person under common control with the
Company, who together with the Company, is treated as a single employer within the meaning of
Section 414(b), (c), (m) or (o) of the Code.

     “Escrow Agent” has the meaning set forth in Section 2.1(b).

     “Escrow Agreement” has the meaning set forth in Section 2.1(b).

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

     “Failed Bank” has the meaning set forth in Section 6.17.

     “FDIC” means the Federal Deposit Insurance Corporation.

     “FRB” means the Board of Governors of the Federal Reserve System.

     “GAAP” means U.S. generally accepted accounting principles, as applied by the Company.

     “Indemnified Person” has the meaning set forth in Section 4.8(b).

     “Intellectual Property” has the meaning set forth in Section 3.1(r).

     “Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal,
preemptive right or other restrictions of any kind.

     “Material Adverse Effect” means any of (i) a material and adverse effect on the legality,
validity or enforceability of this Agreement, the Registration Rights Agreement, the Certificate of
Designations or the Escrow Agreement, (ii) a material and adverse effect on the results of
operations, assets, properties, business, condition (financial or otherwise) of the Company and the

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Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s ability to perform
in any material respect on a timely basis its obligations under this Agreement, the Registration
Rights Agreement, the Certificate of Designations or the Escrow Agreement; provided, that in
determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to
the extent resulting from the following: (A) changes, after the date hereof, in U.S. GAAP or
regulatory accounting principles generally applicable to banks, savings associations or their
holding companies, (B) changes, after the date hereof, in applicable laws, rules and regulations or
interpretations thereof by any court, administrative agency or other governmental authority,
whether federal, state, local or foreign, or any applicable industry self-regulatory organization,
(C) actions or omissions of the Company expressly required by the terms of this Agreement or taken
with the prior written consent of an affected Purchaser, (D) changes, after the date hereof, in
general economic, monetary or financial conditions, (E) changes in the market price or trading
volumes of the Common Stock (but not the underlying causes of such changes), (F) changes in global
or national political conditions, including the outbreak or escalation of war or acts of terrorism
and (G) the public disclosure of this Agreement or the transactions contemplated hereby; except,
with respect to clauses (A), (B), (D) and (F), to the extent that the effects of such changes have
a disproportionate effect on the Company and the Subsidiaries, taken as a whole, relative to other
similarly situated banks, savings associations or their holding companies generally.

     “Material Contract” means any contract of the Company that was filed as an exhibit to the SEC
Reports pursuant to Item 601 of Regulation S-K.

     “Material Permits” has the meaning set forth in Section 3.1(p).

     “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to
which the Company or any ERISA Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions within the preceding six (6)
years.

     “New York Court” means the courts of the State of New York and the United States District
Courts located in the city of New York.

     “NYSE” means the New York Stock Exchange.

     “OCFI” means the Office of the Commissioner of Financial Institutions of Puerto Rico.

     “P&A Agreement” has the meaning set forth in Section 6.17.

     “P&A Closing” has the meaning set forth in Section 6.17.

     “Pension Plan” means any employee pension benefit plan within the meaning of Section 3(2) of
ERISA, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA and which (i) is maintained for employees of the
Company or any of its ERISA Affiliates or (ii) has at any time during the last six (6) years been
maintained for the employees of the Company or any current or former ERISA Affiliate.

     “Person” means an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization or governmental authority.

     “Placement Agent” has the meaning set forth in the Recitals.

     “Preferred Shares” has the meaning set forth in the Recitals.

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     “Preferred Stock” has the meaning set forth in the Recitals.

     “Principal Trading Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date,
shall be the NYSE.

     “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

     “Purchase Price” means $1,000 per Preferred Share.

     “Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

     “Purchaser Party” has the meaning set forth in Section 4.8(a).

     “Registration Rights Agreement” has the meaning set forth in the Recitals.

     “Registration Statement” means a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable
Securities (as defined in the Registration Rights Agreement).

     “Regulation D” has the meaning set forth in the Recitals.

     “Regulatory Agreement” has the meaning set forth in Section 3.1(mm).

     “Required Approvals” has the meaning set forth in Section 3.1(e).

     “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

     “Scheduled Date” has the meaning set forth in Section 6.16.

     “SEC Reports” has the meaning set forth in Section 3.1(h).

     “Secretary of State” has the meaning set forth in the Recitals.

     “Section 2.1(c)(iii) Purchaser” has the meaning set forth in Section 2.1(c)(iii).

     “Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(v).

     “Securities” has the meaning set forth in the Recitals.

     “Securities Act” has the meaning set forth in the Recitals.

     “Stockholder Approvals” has the meaning set forth in Section 4.11.

     “Stockholder Proposals” has the meaning set forth in Section 4.11.

     “Subscription Amount” means with respect to each Purchaser, the aggregate amount to be paid
for the Preferred Shares purchased hereunder as indicated on such Purchaser’s signature page to
this Agreement next to the heading “Aggregate Purchase Price (Subscription Amount)”.

     “Subsidiary” means any entity in which the Company, directly or indirectly, owns sufficient
capital stock or holds a sufficient equity or similar interest such that it is consolidated with
the Company in the financial statements of the Company.

     “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its
Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is

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not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock
is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices); provided , that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.

     “Trading Market” means whichever of the NYSE, the NYSE Amex, the NASDAQ Global Select Market,
the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.

     “Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the
Registration Rights Agreement, the Certificate of Designations, the Escrow Agreement and any other
documents or agreements executed in connection with the transactions contemplated hereunder.

     “Transfer Agent” means The Registrar and Trust Company, or any successor transfer agent for
the Company.

     “Underlying Shares” has the meaning set forth in the Recitals.

ARTICLE 2:

PURCHASE AND SALE

     2.1 Closing.

          (a) Purchase of Preferred Shares. Subject to the terms and conditions set forth in
this Agreement, at the Closing the Company shall issue and sell to each Purchaser, and each
Purchaser shall, severally and not jointly, purchase from the Company, the number of Preferred
Shares set forth below such Purchaser’s name on the signature page of this Agreement at a per
Preferred Share price equal to the Purchase Price.

          (b) Escrow. Unless Purchaser is a Section 2.1(c)(iii) Purchaser, concurrent with the
signing hereof, (i) each Purchaser has (A) deposited the Subscription Amount with American Stock
Transfer & Trust Company, LLC, as Escrow Agent (“AST” and, collectively with any Custodians, the
“Escrow Agent”), pursuant to that certain Escrow Agreement (in the form attached hereto as
Exhibit I) between the Company and AST (as it may be amended or otherwise modified from
time to time, the “AST Escrow Agreement”, and collectively with any Custodian Agreements, the
“Escrow Agreement”) or (B) segregated cash equal to the Subscription Amount in an account with a
custodian (a “Custodian”) of funds held on behalf of an “investment company” under the Investment
Company Act of 1940, as amended, pursuant to binding escrow instructions (“Custodian Agreements”)
for release of such funds by such Custodian to the Company, at the direction of the Company, upon
the satisfaction of conditions set forth in the AST Escrow Agreement, and (ii) the Company has
issued instructions to the Transfer Agent authorizing the issuance, in book-entry form, of the
number of Preferred Shares specified on such Purchaser’s signature page hereto (or, if the Company
and such Purchaser shall have agreed, as indicated on such Purchaser’s signature page hereto, that
such Purchaser will receive Preferred Shares in certificated form, then the Company shall instead
instruct the Transfer Agent to issue such specified Preferred Shares in certificated form (the
“Stock Certificates”), or as otherwise set forth on the

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Stock Certificate Questionnaire included as Exhibit C-2 hereto) concurrent with the
Escrow Agent’s release of the Subscription Amount to the Company pursuant to the Escrow Agreement.

          (c) Closing.

               (i) The Closing of the purchase and sale of the Preferred Shares shall take place at 10:00
a.m., New York City time, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, on the
Closing Date or at such other locations or remotely by facsimile transmission or other electronic
means as the parties may mutually agree. The “Closing Date” shall be April 30, 2010, unless the
FDIC shall have notified the Company that the P&A Closing will not occur on April 30, 2010. In the
event that the FDIC notifies the Company that the P&A Closing will not occur on April 30, 2010 (or
any other Scheduled Date as contemplated by this paragraph), the Company will provide each
Purchaser notice thereof. Upon notice from the FDIC of a different Scheduled Date for the P&A
Closing, the Company shall promptly provide each Purchaser notice thereof. Unless the FDIC shall
have notified the Company that the P&A Closing will not occur on a particular Scheduled Date, then
the “Closing Date” shall mean such Scheduled Date. The “Closing” means the release of funds and
issuance of Preferred Shares as contemplated hereby.

               (ii) Unless Purchaser is a Section 2.1(c)(iii) Purchaser, pursuant to the terms of the Escrow
Agreement, on the Closing Date, the Escrow Agent shall release the Subscription Amount to the
Company and the Transfer Agent shall issue the Preferred Shares to each Purchaser as provided in
the instructions referred to in paragraph (b) above. If Purchaser and the Company have previously
agreed (as indicated on such Purchaser’s signature page hereto) that such Purchaser may rely on
Section 2.1(c)(iii) instead of on Sections 2.1 (c)(i) and (ii), such Purchaser is a “Section
2.1(c)(iii) Purchaser”.

               (iii) If Purchaser is prohibited by the terms of its organizational or constituent documents
to enter into an escrow agreement and has provided the Company with documented evidence of such
prohibition (any such Purchaser, a “Section 2.1(c)(iii) Purchaser”), then with respect to
such Purchaser Section 2.1(c)(ii) shall not apply and shall have no force and effect, and this
Section 2.1(c)(iii) shall apply instead. This Section 2.1(c)(iii) shall not apply and shall have no
force or effect for any Purchaser that is not a Section 2.1(c)(iii) Purchaser. If a Purchaser is a
Section 2.1(c)(iii) Purchaser, then at 9:00 a.m., New York City time, on the Closing Date (i)
Purchaser shall pay the Subscription Amount by wire transfer of immediately available funds to an
account designated by the Company and (ii) the Company shall issue instructions to the Transfer
Agent to issue in book-entry form the number of Preferred Shares specified on such Purchaser’s
signature page hereto (or, if the Company and such Purchaser shall have agreed, as indicated on
such Purchaser’s signature page hereto, that such Purchaser will receive Preferred Shares in
certificated form, then the Company shall instead instruct the Transfer Agent to issue such
specified Preferred Shares in Stock Certificates, or as otherwise set forth on the Stock
Certificate Questionnaire included as Exhibit C-2 hereto) concurrent with such Purchaser’s
payment of the Subscription Amount to the Company.

     2.2 Closing Deliveries.

          (a) On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to
each Purchaser the following (the “Company Deliverables”):

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               (i) this Agreement, duly executed by the Company;

               (ii) as the Company and such Purchaser agree, the Company shall cause the Transfer Agent to
issue, in book-entry form the number of Preferred Shares specified on such Purchaser’s signature
page hereto (or, if the Company and such Purchaser shall have agreed, as indicated on such
Purchaser’s signature pages hereto, that such Purchaser will receive Stock Certificates for their
Preferred Shares, then the Company shall instead instruct the Transfer Agent to issue such
specified Stock Certificates registered in the name of such Purchaser or as otherwise set forth on
the Stock Certificate Questionnaire);

               (iii) a legal opinion of Company Puerto Rican Counsel, dated as of the Closing Date and in the
form attached hereto as Exhibit D, executed by such counsel and addressed to the
Purchasers;

               (iv) a legal opinion of Company U.S. Counsel, dated as of the Closing Date and in the form
attached hereto as Exhibit E, executed by such counsel and addressed to the Purchasers;

               (v) the Registration Rights Agreement, duly executed by the Company (which shall be delivered
on the date hereof);

               (vi) the AST Escrow Agreement, duly executed by the Company and AST (which shall be delivered
on the date hereof);

               (vii) a certificate of the Secretary of the Company, in the form attached hereto as
Exhibit F (the “Secretary’s Certificate”), dated as of the Closing Date, (a) certifying the
resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof
approving the transactions contemplated by this Agreement and the other Transaction Documents and
the issuance of the Securities, (b) certifying the current versions of the Certificate of
Incorporation, as amended, and by-laws, as amended, of the Company and (c) certifying as to the
signatures and authority of persons signing the Transaction Documents and related documents on
behalf of the Company; and

               (viii) the Compliance Certificate referred to in Section 5.1(f).

          (b) Each Purchaser shall deliver or cause to be delivered to the Company or the Escrow Agent,
as applicable, the following (the “Purchaser Deliverables”):

               (i) On or prior to the date hereof:

                    a) this Agreement, duly executed by such Purchaser;

                    b) the Registration Rights Agreement, duly executed by such Purchaser;

                    c) a Custodian Agreement, if applicable, duly executed by such Purchaser;

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                    d) a fully completed and duly executed Accredited Investor Questionnaire, reasonably
satisfactory to the Company, and the Stock Certificate Questionnaire in the forms attached hereto
as Exhibits C-1 and C-2 , respectively; and

                    e) if such Purchaser is not a Section 2.1(c)(iii) Purchaser, its Subscription Amount, in
United States dollars and in immediately available funds, in the amount indicated below such
Purchaser’s name on the applicable signature page hereto under the heading “Aggregate Purchase
Price (Subscription Amount)” by wire transfer to the Escrow Account in accordance with the Escrow
Agent’s written instructions.

               (ii) On or prior to the Closing Date:

                    a) if such Purchaser is a Section 2.1(c)(iii) Purchaser, then such Purchaser shall deliver or
cause to be delivered to the Company on or prior to the Closing Date, its Subscription Amount, in
United States dollars and in immediately available funds, in the amount indicated below such
Purchaser’s name on the applicable signature page hereto under the heading “Aggregate Purchase
Price (Subscription Amount)” by wire transfer in accordance with the Company’s written
instructions.

ARTICLE 3:

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. The Company hereby represents and
warrants as of the date hereof and the Closing Date (except for the representations and warranties
that speak as of a specific date, which shall be made as of such date), to each of the Purchasers
that:

          (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than as set
forth in Exhibit H. The Company owns, directly or indirectly, all of the capital stock or
comparable equity interests of each Subsidiary free and clear of any and all Liens, and all the
issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

          (b) Organization and Qualification. The Company and each of its “Significant
Subsidiaries” (as defined in Rule 1-02 of Regulation S-X) is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization (as applicable), with the requisite power and authority to own or
lease and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Significant Subsidiary is in violation of any of the provisions of its
respective articles or certificate of incorporation, bylaws or other organizational or charter
documents. The Company and each of its Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not in the reasonable
judgment of the Company be expected to have a Material Adverse Effect. The Company is duly
registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the
“BHCA”), and a financial holding company under the Gramm-Leach-Bliley Act of 1999, as amended. The

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Company’s depository institution Subsidiary’s deposit accounts are insured up to applicable
limits by the FDIC. The Company has conducted its business in compliance with all applicable
federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable
stock exchange requirements, including all laws and regulations restricting activities of bank
holding companies and banking organizations, except for any noncompliance that, individually or in
the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect.

          (c) Authorization; Enforcement; Validity. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions contemplated by each of the
Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder
and thereunder, including, without limitation, to issue the Preferred Shares in accordance with the
terms hereof and, subject to the Stockholder Approvals, to issue the Underlying Shares in
accordance with the Certificate of Designations. The Company’s execution and delivery of each of
the Transaction Documents to which it is a party and the consummation by it of the transactions
contemplated hereby and thereby (including, but not limited to, the sale and delivery of the
Preferred Shares and the Underlying Shares) have been duly authorized by all necessary corporate
action on the part of the Company, and no further corporate action is required by the Company, its
Board of Directors or its stockholders in connection therewith other than in connection with the
Required Approvals. Each of the Transaction Documents to which it is a party has been (or upon
delivery will have been) duly executed by the Company and is, or when delivered in accordance with
the terms hereof, will constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law. Except for
Material Contracts, there are no stockholder agreements, voting agreements, or other similar
arrangements with respect to the Company’s capital stock to which the Company is a party or, to the
Company’s Knowledge, between or among any of the Company’s stockholders.

          (d) No Conflicts. The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party and the consummation by the Company of the
transactions contemplated hereby or thereby (including, without limitation, the issuance of the
Preferred Shares and the Underlying Shares) do not and will not (i) conflict with or violate any
provisions of the Company’s or any Subsidiary’s articles or certificate of incorporation, bylaws or
otherwise result in a violation of the organizational documents of the Company or any Subsidiary,
(ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both
would result in a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including federal and state securities laws and
regulations and the rules and regulations, assuming the correctness of the representations and
warranties made by the Purchasers herein, of any self-regulatory organization to which the Company
or its securities are subject, including all applicable Trading Markets), or by which any property
or asset of the Company is

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bound or affected, except in the case of clauses (ii) and (iii) such as would not have or
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          (e) Filings, Consents and Approvals. Neither the Company nor any of its Subsidiaries
is required to obtain any consent, waiver, authorization or order of, give any notice to, or make
any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents (including, without limitation, the issuance of the Preferred Shares
and the Underlying Shares), other than (i) obtaining the Stockholder Approvals to issue the
Underlying Shares in accordance with the terms of the Certificate of Designations, (ii) the filing
of the Certificate of Designations with the Secretary of State, (iii) the filing with the
Commission of one or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, (iv) filings required by applicable state securities laws, (v) the
filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the
Securities Act, (vi) the filing of any requisite notices and/or application(s) to the Principal
Trading Market for the issuance and sale of the Underlying Shares and the listing of the Underlying
Shares for trading or quotation, as the case may be, thereon in the time and manner required
thereby, (vii) the filings required in accordance with Section 4.6 of this Agreement and (viii)
those that have been made or obtained prior to the date of this Agreement (collectively, the
“Required Approvals”).

          (f) Issuance of the Preferred Shares. The issuance of the Preferred Shares has been
duly authorized and the Preferred Shares, when issued and paid for in accordance with the terms of
the Transaction Documents, will be duly and validly issued, fully paid and non-assessable and free
and clear of all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights. The issuance of the Underlying Shares has been duly authorized and the Underlying
Shares, when issued in accordance with the terms of the Certificate of Designations, will be duly
and validly issued, fully paid and non-assessable and free and clear of all Liens, other than
restrictions on transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights. Assuming the accuracy
of the representations and warranties of the Purchasers in this Agreement, the Securities will be
issued in compliance with all applicable federal and state securities laws.

          (g) Capitalization. The number of shares and type of all authorized, issued and
outstanding capital stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of the Company) has
been set forth in the SEC Reports and has changed since the date of such SEC Reports only due to
(i) the sale and issuance of 8,740,000 shares of Common Stock in March 2010, and (ii) stock grants
or other equity awards or stock option and warrant exercises that do not, individually or in the
aggregate, have a material effect on the issued and outstanding capital stock, options and other
securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and non-assessable, have been issued in compliance in all material
respects with all applicable federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any
capital stock of the Company. Except as specified in the SEC Reports: (i) no shares of the
Company’s outstanding capital stock are subject to preemptive rights or any other similar rights;
(ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever

11

 

relating to, or securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of capital stock of the
Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any shares of capital stock of the Company, other than those issued or granted pursuant to
Material Contracts or equity or incentive plans or arrangements described in the SEC Reports; (iii)
there are no material outstanding debt securities, notes, credit agreements, credit facilities or
other agreements, documents or instruments evidencing indebtedness of the Company or by which the
Company is bound; (iv) except for the Registration Rights Agreement, there are no agreements or
arrangements under which the Company is obligated to register the sale of any of its securities
under the Securities Act; (v) there are no outstanding securities or instruments of the Company
that contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to redeem a security of
the Company; (vi) the Company does not have any stock appreciation rights or “phantom stock” plans
or agreements or any similar plan or agreement; and (vii) the Company has no liabilities or
obligations required to be disclosed in the SEC Reports but not so disclosed in the SEC Reports,
which, individually or in the aggregate, will have or would reasonably be expected to have a
Material Adverse Effect. There are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities.

          (h) SEC Reports. The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, since January 1, 2009 (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being collectively referred to herein as
the “SEC Reports”), on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension. As of their
respective filing dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made, not
misleading. On March 19, 2010, the Company issued 8,740,000 shares of Common Stock pursuant to a
prospectus supplement and an accompanying prospectus, each filed with the Commission pursuant to
Rule 424(b); such prospectus supplement and the accompanying prospectus contain important
information about the Company’s Common Stock and certain other material information about the
Company. The Company advises any Purchaser to read such prospectus supplement and accompanying
prospectus, in particular the sections entitled “Risk Factors,” “Description of Capital Stock” and
“Material United States Federal Income Tax Consideration.”

          (i) Financial Statements. The financial statements of the Company and its Subsidiaries
included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all material respects the balance
sheet of the

12

 

Company and its consolidated Subsidiaries taken as a whole as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments, which would not be material, either
individually or in the aggregate.

          (j) Tax Matters. The Company and each of its Subsidiaries has (i) filed all material
foreign, U.S. federal, Puerto Rico and local tax returns, information returns and similar reports
that are required to be filed, and all such tax returns are true, correct and complete in all
material respects, and (ii) paid all material taxes required to be paid by it and any other
material assessment, fine or penalty levied against it other than taxes (x) currently payable
without penalty or interest, or (y) being contested in good faith by appropriate proceedings.

          (k) Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as disclosed in subsequent SEC Reports filed prior to the
date hereof, (i) there have been no events, occurrences or developments that have had or would
reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect,
(ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A)
trade payables, accrued expenses and other liabilities incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered materially its method of accounting or the manner in
which it keeps its accounting books and records, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or
made any agreements to purchase or redeem any shares of its capital stock (other than in connection
with repurchases of unvested stock issued to employees of the Company and a quarterly cash dividend
of $0.04 per share of Common Stock on April 15, 2010), (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except (A) Common Stock issued pursuant to
existing Company option plans or equity based plans disclosed in the SEC Reports and (B) 8,740,000
shares of Common Stock issued in March 2010, and (vi) there has not been any material change or
amendment to, or any waiver of any material right by the Company under, any Material Contract under
which the Company or any of its Subsidiaries is bound or subject. Except for the transactions
contemplated by this Agreement (including, for the avoidance of doubt, the execution of any P&A
Agreement and the consummation of any of the transactions contemplated thereunder, including any
purchase of the Failed Bank or portion thereof), no event, liability or development has occurred or
exists with respect to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made that has not been publicly
disclosed at least one Trading Day prior to the date that this representation is made.

          (l) Environmental Matters. Except as disclosed in the SEC Reports, neither the Company
nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”), (ii) is liable for any off-site disposal or contamination pursuant to any Environmental
Laws, or (iii) is subject to any claim relating to any Environmental Laws; in each case, which
violation, contamination, liability or claim has had or would reasonably be expected to have,
individually or in

13

 

the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is no pending
or threatened investigation that might lead to such a claim.

          (m) Litigation. There is no Action which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the issuance of the
Preferred Shares or (ii) except as disclosed in the SEC Reports, is reasonably likely to have a
Material Adverse Effect, individually or in the aggregate, if there were an unfavorable decision.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and to the Company’s
knowledge there is not pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company.

          (n) Employment Matters. No material labor dispute exists or, to the Company’s
Knowledge, is imminent with respect to any of the employees of the Company which would have or
reasonably be expected to have a Material Adverse Effect. To the Company’s Knowledge, no executive
officer is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant in favor of a third party, and to the
Company’s Knowledge, the continued employment of each such executive officer does not subject the
Company or any Subsidiary to any liability with respect to any of the foregoing matters. The
Company is in compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance would not have or reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

          (o) Compliance. Neither the Company nor any of its Subsidiaries (i) is in default
under or in violation of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or any of its Subsidiaries under),
nor has the Company or any of its Subsidiaries received written notice of a claim that it is in
default under or that it is in violation of, any Material Contract (whether or not such default or
violation has been waived), (ii) is in violation of any order of which the Company has been made
aware in writing of any court, arbitrator or governmental body having jurisdiction over the Company
or its properties or assets, or (iii) is in violation of, or in receipt of written notice that it
is in violation of, any statute, rule or regulation of any governmental authority applicable to the
Company, or which would have the effect of revoking or limiting FDIC deposit insurance, except in
each case as would not have or reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

          (p) Regulatory Permits. The Company and each of its Subsidiaries possess or have
applied for all certificates, authorizations, consents and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective
businesses as currently conducted and as described in the SEC Reports, except where the failure to
possess such permits, individually or in the aggregate, has not and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”),
and (i) neither the Company nor any of its Subsidiaries has received any notice in writing of
proceedings relating to the revocation or material adverse modification of any such Material
Permits

14

 

and (ii) the Company is unaware of any facts or circumstances that would give rise to the revocation or
material adverse modification of any Material Permits.

          (q) Title to Assets. The Company and its Subsidiaries have good and marketable title
to all real property and tangible personal property owned by them which is material to the business
of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all Liens
except such as do not materially affect the value of such property or do not interfere with the use
made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company and any of its Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

          (r) Patents and Trademarks. The Company and its Subsidiaries own, possess, license, or
can acquire on reasonable terms, or have other rights to use all foreign and domestic patents,
patent applications, trade and service marks, trade and service mark registrations, trade names,
copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of
their respective businesses as now conducted, except where the failure to own, possess, license or
have such rights would not have or reasonably be expected to have a Material Adverse Effect. Except
as set forth in the SEC Reports and except where such violations or infringements would not have or
reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect,
(a) there are no rights of third parties to any such Intellectual Property; (b) there is no
infringement by third parties of any such Intellectual Property; (c) there is no pending or
threatened action, suit, proceeding or claim by others challenging the Company’s and its
Subsidiaries’ rights in or to any such Intellectual Property; (d) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or scope of any such
Intellectual Property; and (e) there is no Proceeding by others that the Company and/or any
Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others.

          (s) Insurance. The Company and each of the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as the
Company believes to be prudent and customary in the businesses and locations in which the Company
and the Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has received any
notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any
Subsidiary be unable to renew their respective existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.

          (t) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports
and other than the grant of stock options or other equity awards that are not individually or in
the aggregate material in amount, none of the officers or directors of the Company and, to the
Company’s Knowledge, none of the employees of the Company, is presently a party to any transaction
with the Company or to a presently contemplated transaction (other than for services as employees,
officers and directors) that would be required to be disclosed pursuant to Item 404 of Regulation
S-K promulgated under the Securities Act.

15

 

          (u) Internal Control Over Financial Reporting. Except as set forth in the SEC Reports,
the Company maintains internal control over financial reporting (as such term is defined in Rule
13a-15(f) under the Exchange Act) designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and such internal control over
financial reporting was effective as of the date of the most recent SEC Report.

          (v) Sarbanes-Oxley; Disclosure Controls. The Company is in compliance in all material
respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it.
Except as disclosed in the SEC Reports, the Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such
disclosure controls and procedures are effective.

          (w) Certain Fees. No person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or a
Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than the Placement Agent with
respect to the offer and sale of the Preferred Shares (which placement agent fees are being paid by
the Company). The Company shall indemnify, pay, and hold each Purchaser harmless against, any
liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket
expenses) arising in connection with any such right, interest or claim.

          (x) Private Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2 of this Agreement and the accuracy of the information disclosed
in the Accredited Investor Questionnaires, no registration under the Securities Act is required for
the offer and sale of the Securities by the Company to the Purchasers under the Transaction
Documents. The issuance and sale of the Preferred Shares hereunder does not contravene the rules
and regulations of the Principal Trading Market and, upon the receipt of the Stockholder Approvals,
the issuance of the Underlying Shares in accordance with the Certificate of Designations will not
contravene the rules and regulations of the Principal Trading Market.

          (y) Registration Rights. Other than each of the Purchasers, no Person has any right to
cause the Company to effect the registration under the Securities Act of any securities of the
Company other than those securities which are currently registered on an effective registration
statement on file with the Commission.

          (z) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to
terminate the registration of the Common Stock under the Exchange Act nor has the Company received
any notification that the Commission is contemplating terminating such registration. The Company
has not, in the 12 months preceding the date hereof, received written notice from any Trading
Market on which the Common Stock is listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance
in all material respects with the listing and maintenance requirements for continued trading of the
Common Stock on the Principal Trading Market.

16

 

          (aa) Investment Company. Neither the Company nor any of its Subsidiaries is required
to be registered as, and immediately following the Closing will not be required to register as, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended.

          (bb) Unlawful Payments. Neither the Company nor any of its Subsidiaries, nor to the
Company’s Knowledge, any directors, officers, employees, agents or other Persons acting at the
direction of or on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company: (a) directly or indirectly, used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or
domestic political activity; (b) made any direct or indirect unlawful payments to any foreign or
domestic governmental officials or employees or to any foreign or domestic political parties or
campaigns from corporate funds; (c) violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (d) made any other unlawful bribe, rebate, payoff, influence payment, kickback
or other material unlawful payment to any foreign or domestic government official or employee.

          (cc) Application of Takeover Protections; Rights Agreements. The Company has not
adopted any stockholder rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company. The Company and its Board of
Directors have taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s Certificate of
Incorporation or other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise which is or could become applicable to any Purchaser solely as a result
of the transactions contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and any Purchaser’s ownership of the Securities.

          (dd) Disclosure. The Company confirms that neither it nor, to the Company’s Knowledge,
any of its officers or directors nor any other Person acting on its or their behalf has provided,
including the Placement Agent to provide, any Purchaser or its respective agents or counsel with
any information that it believes constitutes or could reasonably be expected to constitute
material, non-public information except insofar as the existence, provisions and terms of the
Transaction Documents and the proposed transactions hereunder may constitute such information, all
of which will be disclosed by the Company in the Press Release as contemplated by Section 4.6
hereof. The Company understands and confirms that each of the Purchasers will rely on the
representations in this Section 3.1(dd) in effecting transactions in securities of the Company. No
event or circumstance has occurred or information exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed, except for the announcement of this
Agreement and related transactions and as may be disclosed on the Form 8-K filed pursuant to
Section 4.6.

          (ee) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not
so disclosed and would have or reasonably be expected to have a Material Adverse Effect.

17

 

          (ff) Acknowledgment Regarding Purchasers’ Purchase of Preferred Shares. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated thereby and any advice given by any of the Purchasers or any of
their respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Preferred
Shares.

          (gg) Absence of Manipulation. The Company has not, and to the Company’s Knowledge no
one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities.

          (hh) OFAC. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any
director, officer, agent, employee, Affiliate or Person acting on behalf of the Company or any
Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not knowingly use the
proceeds of the sale of the Preferred Shares, towards any sales or operations in Cuba, Iran, Syria,
Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the
activities of any Person currently subject to any U.S. sanctions administered by OFAC.

          (ii) Money Laundering Laws. The operations of each of the Company and any Subsidiary
are in compliance in all material respects with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any applicable governmental agency
(collectively, the “Money Laundering Laws”) and to the Company’s Knowledge, no action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company and/or any Subsidiary with respect to the Money Laundering Laws is pending or
threatened.

          (jj) Reports, Registrations and Statements. Since December 31, 2008, the Company and
each Subsidiary have filed all material reports, registrations and statements, together with any
required amendments thereto, that it was required to file with the FRB, the FDIC, the OCFI and any
other applicable federal or state securities or banking authorities, except where the failure to
file any such report, registration or statement would not have or reasonably be expected to have a
Material Adverse Effect. All such reports and statements filed with any such regulatory body or
authority are collectively referred to herein as the “Company Reports.” As of their respective
dates, the Company Reports complied as to form in all material respects with all the rules and
regulations promulgated by the FRB, the FDIC, the OCFI and any other applicable foreign, federal or
state securities or banking authorities, as the case may be.

          (kk) Adequate Capitalization. As of December 31, 2009, the Company’s Subsidiary
insured depository institutions meet or exceed the standards necessary to be considered

18

 

“adequately capitalized” under the Federal Deposit Insurance Company’s regulatory framework
for prompt corrective action.

          (ll) Agreements with Regulatory Agencies; Compliance with Certain Banking Regulations.
Neither the Company nor any Subsidiary is subject to any cease-and-desist or other similar order
or enforcement action issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or similar undertaking to,
or is subject to any capital directive by, or since December 31, 2007, has adopted any board
resolutions at the request of, any governmental entity that currently restricts in any material
respect the conduct of its business or that in any material manner relates to its capital adequacy,
its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk
management or compliance policies, its internal controls, its management or its operations or
business (each item in this sentence, a “Regulatory Agreement”), nor has the Company or any
Subsidiary been advised since December 31, 2008 by any governmental entity that it intends to
issue, initiate, order, or request any such Regulatory Agreement.

          The Company has no knowledge of any facts and circumstances, and has no knowledge of any facts
or circumstances exist, that would cause its Subsidiary banking institutions: (i) to be operating
in violation, in any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued
with respect to anti-money laundering by OFAC, or any other anti-money laundering statute, rule or
regulation; or (ii) not to be in satisfactory compliance, in any material respect, with all
applicable privacy of customer information requirements contained in any applicable federal and
state privacy laws and regulations as well as the provisions of all information security programs
adopted by the Subsidiary.

          (mm) No General Solicitation or General Advertising. Neither the Company nor, to the
Company’s Knowledge, any Person acting on its behalf has engaged or will engage in any form of
general solicitation or general advertising (within the meaning of Regulation D under the
Securities Act) in connection with any offer or sale of the Preferred Shares.

          (nn) Risk Management Instruments. Except as has not had or would not reasonably be
expected to have a Material Adverse Effect, since January 1, 2009, all material derivative
instruments, including, swaps, caps, floors and option agreements, whether entered into for the
Company’s own account, or for the account of one or more of the Company Subsidiaries, were entered
into (1) only in the ordinary course of business, (2) in accordance with prudent practices and in
all material respects with all applicable laws, rules, regulations and regulatory policies, and (3)
with counterparties believed to be financially responsible at the time; and each of them
constitutes the valid and legally binding obligation of the Company or one of the Subsidiaries,
enforceable in accordance with its terms. Neither the Company or the Subsidiaries, nor, to the
knowledge of the Company, any other party thereto, is in breach of any of its material obligations
under any such agreement or arrangement.

          (oo) ERISA. The Company and each ERISA Affiliate is in compliance in all material
respects with all presently applicable provisions of ERISA; no “reportable event” described in
Section 4043 of ERISA (other than an event for which the 30-day notice requirement has been waived
by applicable regulation) has occurred with respect to any Pension Plan for which the Company would
have any liability that would reasonably be expected to have a Material Adverse

19

 

Effect; the Company has not incurred and does not expect to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any Pension Plan; or (ii) Sections 412
or 4971 of the Code that would reasonably be expected to have a Material Adverse Effect; and each
Pension Plan for which the Company would have liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such qualification.

          (pp) Reservation of Underlying Shares. Assuming the Stockholder Approvals have been
obtained, the Company will reserve, free of any preemptive or similar rights of stockholders of the
Company, a number of unissued shares of Common Stock, sufficient to issue and deliver the
Underlying Shares into which the Preferred Shares are convertible.

          (qq) Shell Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).

          (rr) Registration Eligibility. The Company is eligible to register the resale of the
Securities by the Purchasers using Form S-3 promulgated under the Securities Act.

          (ss) FDIC Policy Statement. The Company and the Bank are not subject to, and do not
expect that, as a result of the issuance of Preferred Shares provided herein or otherwise arising
in connection with the Bank’s acquisition of the Failed Bank, they will become subject to, the FDIC
Statement of Policy on Qualifications for Failed Bank Acquisitions (as in effect and interpreted on
the date hereof) (the “FDIC Policy Statement”).

          (tt) No Additional Agreements. The Company has no other agreements or understandings
(including, without limitation, side letters) with any Purchaser to purchase Preferred Shares on
terms that are different from those set forth herein.

     3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for
itself and for no other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:

          (a) Organization; Authority. If such Purchaser is an entity, it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization with
the requisite corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. If such Purchaser is an entity, the execution, delivery and
performance by such Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership,
limited liability company or other applicable like action, on the part of such Purchaser. If such
Purchaser is an entity, each of this Agreement, the Registration Rights Agreement and the Escrow
Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

20

 

          (b) No Conflicts. The execution, delivery and performance by such Purchaser of this
Agreement, the Registration Rights Agreement and the Escrow Agreement and the consummation by such
Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of
the organizational documents of such Purchaser (if such Purchaser is an entity), (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of
such Purchaser to perform its obligations hereunder.

          (c) Investment Intent. Such Purchaser understands that the Preferred Shares are
“restricted securities” and have not been registered under the Securities Act or any applicable
state securities law and is acquiring the Preferred Shares as principal for its own account and not
with a view to, or for distributing or reselling such Preferred Shares or any part thereof in
violation of the Securities Act or any applicable state securities laws, provided, that by making
the representations herein, other than as set forth herein, such Purchaser does not agree to hold
any of the Preferred Shares for any minimum period of time and reserves the right at all times to
sell or otherwise dispose of all or any part of such Preferred Shares pursuant to an effective
registration statement under the Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Such Purchaser is acquiring the
Preferred Shares hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly, with any Person to
distribute or effect any distribution of any of the Securities (or any securities which are
derivatives thereof) to or through any Person or entity.

          (d) Purchaser Status. At the time such Purchaser was offered the Preferred Shares, it
was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the
Securities Act. Such Purchaser has provided the information in the Accredited Investor
Questionnaire attached hereto as Exhibit C-1.

          (e) Reliance. The Company and the Placement Agent (on behalf of its client) will be
entitled to rely upon this Agreement and are irrevocably authorized to produce this Agreement or a
copy hereof to (A) any regulatory authority having jurisdiction over the Company and its affiliates
and (B) any interested party in any administrative or legal proceeding or official inquiry with
respect to the matters covered hereby, in each case, to the extent required by any court or
governmental authority to which the Company is subject, provided that the Company provides the
Purchaser with prior written notice of such disclosure.

          (f) General Solicitation. Purchaser: (i) became aware of the offering of the
Preferred Shares, and the Preferred Shares were offered to Purchaser, solely by direct contact
between Purchaser and the Company or Placement Agent, and not by any other means, including any
form of “general solicitation” or “general advertising” (as such terms are used in Regulation D
promulgated under the Securities Act and interpreted by the Commission); (ii) reached its decision
to invest in the Company independently from any other Purchaser; (iii) has entered into no

21

 

agreements with stockholders of the Company or other subscribers for the purpose of
controlling the Company or any of its subsidiaries; and (iv) has entered into no agreements with
stockholders of the Company or other subscribers regarding voting or transferring Purchaser’s
interest in the Company.

          (g) Direct Purchase. Purchaser is purchasing Preferred Shares directly from the
Company and not from the Placement Agent. The Placement Agent did not make any representations,
declarations or warranties to Purchaser, express or implied, regarding the Preferred Shares, the
Company or the Company’s offering of the Preferred Shares, and the Placement Agent did not offer to
sell, or solicit an offer to buy, any of the Preferred Shares that Purchaser proposes to acquire
from the Company hereunder.

          (h) Experience of Such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Preferred Shares, and has so evaluated the merits and risks of such investment. Such Purchaser is
able to bear the economic risk of an investment in the Preferred Shares and, at the present time,
is able to afford a complete loss of such investment.

          (i) Access to Information. Such Purchaser acknowledges that it has been afforded (i)
the opportunity to ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the offering of the Preferred
Shares and the merits and risks of investing in the Preferred Shares; (ii) access to information
about the Company and the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable it to evaluate its
investment; (iii) the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment; and (iv) the opportunity to ask questions of
management. Neither such inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to
rely on the truth, accuracy and completeness of the Company’s representations and warranties
contained in the Transaction Documents. Such Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed decision with respect to its acquisition
of the Preferred Shares. Purchaser acknowledges that neither the Company nor the Placement Agent
has made any representation, express or implied, with respect to the accuracy, completeness or
adequacy of any available information except, with respect to the Company, as expressly set forth
in the SEC Reports or to the extent such information is covered by the representations and
warranties of the Company contained in Section 3.1.

          (j) Brokers and Finders. Other than the Placement Agent with respect to the Company,
no Person will have, as a result of the transactions contemplated by the Transaction Documents, any
valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee
or other compensation pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Purchaser.

          (k) Independent Investment Decision. Such Purchaser has independently evaluated the
merits of its decision to purchase Preferred Shares pursuant to the Transaction

22

 

Documents, and such Purchaser confirms that it has not relied on the advice of any other
Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that
nothing in this Agreement or any other materials presented by or on behalf of the Company to the
Purchaser in connection with the purchase of the Preferred Shares constitutes legal, regulatory,
tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of
the Preferred Shares. Such Purchaser understands that the Placement Agent has acted solely as the
agent of the Company in this placement of the Securities and such Purchaser has not relied on any
statement, representation or warranty including any business or legal advice of the Placement Agent
or any of its agents, counsel or Affiliates in making its investment decision hereunder, and
confirms that none of such Persons has made any representations or warranties to such Purchaser in
connection with the transactions contemplated by the Transaction Documents.

          (l) Acquisition. The Board of Directors of the Company will control the entry into
the P&A Agreement with respect to any acquisition of the Failed Bank or any portion thereof and
stockholders of the Company will have no opportunity to affect the investment decision regarding
the potential acquisition.

          (m) ERISA. (i) If Purchaser is, or is acting on behalf of, an ERISA Entity (as
defined below), Purchaser represents and warrants that on the date hereof;

                    (A) The decision to invest assets of the ERISA Entity in the Preferred Shares was made by
fiduciaries independent of the Company or its affiliates, which fiduciaries are duly authorized to
make such investment decisions and who have not relied on any advice or recommendations of the
Company or its affiliates;

                    (B) Neither the Company nor any of its agents, representatives or affiliates have exercised
any discretionary authority or control with respect to the ERISA Entity’s investment in the
Preferred Shares;

                    (C) The purchase and holding of the Preferred Shares will not constitute a nonexempt
prohibited transaction under ERISA or Section 4975 of the Code or a similar violation under any
applicable similar laws; and

                    (D) The terms of the Documents comply with the instruments and applicable laws governing such
ERISA Entity.

(ii) For the purpose of this paragraph, the term “ERISA Entity” will mean (A) an “employee benefit
plan” within the meaning of Section 3(3) of ERISA subject to Title I of ERISA, (B) a “plan” within
the meaning of Section 4975(e)(1) of the Code and (C) any person whose assets are deemed to be
“plan assets” within the meaning of ERISA Section 3(42) and 29 C.F.R. § 2510.3-101 or otherwise
under ERISA.

          (n) Reliance on Exemptions. Such Purchaser understands that the Securities being
offered and sold to it in reliance on specific exemptions from the registration requirements of
U.S. federal and state securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements,

23

 

acknowledgements and understandings of such Purchaser set forth herein in order to determine
the availability of such exemptions and the eligibility of such Purchaser to acquire the Preferred
Shares.

          (o) No Governmental Review. Such Purchaser understands that no U.S. federal or state
agency or any other government or governmental agency has passed on or made any recommendation or
endorsement of the Securities or the fairness or suitability of the investment in the Securities
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
Purchaser understands that the Securities are not savings accounts, deposits or other obligations
of any bank and are not insured by the FDIC, including the FDIC’s Deposit Insurance Fund, or any
other governmental agency.

          (p) Antitrust. No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any governmental entity or authority or any other person or entity in
respect of any law or regulation, including the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder, is necessary or required, and no lapse
of a waiting period under law applicable to such Purchaser is necessary or required, in each case
in connection with the execution, delivery or performance by such Purchaser of this Agreement or
the purchase of the Preferred Shares contemplated hereby.

          (q) Residency. Such Purchaser’s residence (if an individual) or office in which its
investment decision with respect to the Preferred Shares was made (if an entity) are located at the
address immediately below such Purchaser’s name on its signature page hereto.

          (r) Regulatory Matters. Purchaser understands and acknowledges that: (i) the Company
is a registered bank holding company under the BHCA, and is subject to regulation by the FRB; (ii)
acquisitions of interests in bank holding companies are subject to the BHCA and the Change in Bank
Control Act (the “CIBCA”) and may be reviewed by the FRB to determine the circumstances under which
such acquisitions of interests will result in Purchaser becoming subject to the BHCA or subject to
the prior notice requirements of the CIBCA. Assuming the accuracy of the representations and
warranties of the Company contained herein, Purchaser represents that neither it nor its Affiliates
will, as a result of the transactions contemplated herein, be deemed to (i) own or control 10% or
more of any class of voting securities of the Company or (ii) otherwise control the Company for
purposes of the BHCA or CIBCA. Purchaser is not participating and has not participated with any
other investor in the offering of the Preferred Shares in any joint activity or parallel action
towards a common goal between or among such investors of acquiring control of the Company.

          (s) Trading. Purchaser acknowledges that there is no trading market for the Preferred
Stock, and no such market is expected to develop.

          (t) OFAC and Anti-Money Laundering. The Purchaser understands, acknowledges,
represents and agrees that (i) the Purchaser is not the target of any sanction, regulation, or law
promulgated by the Office of Foreign Assets Control, the Financial Crimes Enforcement Network or
any other U.S. governmental entity (“U.S. Sanctions Laws”); (ii) the Purchaser is not owned by,
controlled by, under common control with, or acting on behalf of any person that is the target of
U.S. Sanctions Laws; (iii) the Purchaser is not a “foreign shell bank” and is not acting on behalf
of a “foreign shell bank” under applicable anti-money laundering laws and regulations; (iv) the
Purchaser’s entry into this Agreement or consummation of the transactions

24

 

contemplated hereby will not contravene U.S. Sanctions Laws or applicable anti-money
laundering laws or regulations; (v) the Purchaser will promptly provide to the Company or any
regulatory or law enforcement authority such information or documentation as may be required to
comply with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; and (vi)
the Company may provide to any regulatory or law enforcement authority information or documentation
regarding, or provided by, the Purchaser for the purposes of complying with U.S. Sanctions Laws or
applicable anti-money laundering laws or regulations.

          (u) Purchaser has not discussed the Offering with any other party or potential investors
(other than the Company, Placement Agent, any other Purchaser and Purchaser’s authorized
representatives), except as expressly permitted under the terms of this Agreement.

          (v) Knowledge as to Conditions. Purchaser does not know of any reason why any
regulatory approvals and, to the extent necessary, any other approvals, authorizations, filings,
registrations, and notices required or otherwise a condition to the consummation by it of the
transactions contemplated by this Agreement will not be obtained.

     The Company and each of the Purchasers acknowledge and agree that no party to this Agreement
has made or makes any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Article 3 and the Transaction Documents.

ARTICLE 4:

OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

     (a) Compliance with Laws. Notwithstanding any other provision of this Article 4, each
Purchaser covenants that the Securities may be disposed of only pursuant to an effective
registration statement under, and in compliance with the requirements of, the Securities Act, or
pursuant to an available exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, and in compliance with any applicable state, federal or foreign
securities laws. In connection with any transfer of the Securities other than (i) pursuant to an
effective registration statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that
the transferor provides the Company with reasonable assurances (in the form of seller and broker
representation letters) that such securities may be sold pursuant to such rule), the Company may
require the transferor thereof to provide to the Company and the Transfer Agent, at the
transferor’s expense, an opinion of counsel selected by the transferor and reasonably acceptable to
the Company and the Transfer Agent, the form and substance of which opinion shall be reasonably
satisfactory to the Company and the Transfer Agent, to the effect that such transfer does not
require registration of such transferred Securities under the Securities Act. As a condition of
transfer (other than pursuant to clauses (i), (ii) or (iii) of the preceding sentence), any such
transferee shall agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights Agreement with respect to
such transferred Securities.

     (b) Legends. Certificates evidencing the Securities shall bear any legend as required
by the “blue sky” laws of any state and a restrictive legend in substantially the following form
(and,

25

 

with respect to Securities held in book-entry form, the Transfer Agent will record such a
legend on the share register), until such time as they are not required under Section 4.1(c) or
applicable law:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES
THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF SELLER AND BROKER
REPRESENTATION LETTERS) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH
RULE). NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF
THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF
THESE SECURITIES.

     (c) Removal of Legends. The restrictive legend set forth in Section 4.1(b) above shall
be removed and the Company shall issue a certificate without such restrictive legend or any other
restrictive legend to the holder of the applicable Securities upon which it is stamped or issue to
such holder by electronic delivery at the applicable balance account at DTC, if (i) such Securities
are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the
Company), or (ii) such Securities are eligible for sale under Rule 144, without the requirement for
the Company to be in compliance with the current public information required under Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) as to such securities and without volume or manner-of-sale
restrictions. Following the earlier of (i) the Effective Date (as defined in the Registration
Rights Agreement) or (ii) Rule 144 becoming available for the resale of Securities, without the
requirement for the Company to be in compliance with the current public information required under
144(c)(1) (or Rule 144(i)(2), if applicable) as to the Securities and without volume or
manner-of-sale restrictions, the Company shall instruct the Transfer Agent to remove the legend
from the Securities and shall cause its counsel to issue any legend removal opinion required by the
Transfer Agent. Any fees (with respect to the Transfer Agent, Company counsel or otherwise)
associated with the issuance of such opinion or the removal of such legend shall be borne by the
Company. If a legend is no longer required pursuant to the foregoing, the Company will no later
than three (3) Trading Days following the delivery by a Purchaser to the Company or the Transfer
Agent (with notice to the Company) of a legended certificate or instrument representing such
Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer) and a representation letter to the extent
required by Section 4.1(a), (such third Trading

26

 

Day, the “Legend Removal Date”) deliver or cause to be delivered to such Purchaser a
certificate or instrument (as the case may be) representing such Securities that is free from all
restrictive legends. The Company may not make any notation on its records or give instructions to
the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c).
Certificates for Securities free from all restrictive legends may be transmitted by the Transfer
Agent to the Purchasers by crediting the account of the Purchaser’s prime broker with DTC as
directed by such Purchaser.

     (d) Acknowledgement. Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the
Securities or any interest therein without complying with the requirements of the Securities
Act            and the rules and regulations promulgated thereunder. Except as otherwise provided
below, while the above-referenced registration statement remains effective, each Purchaser
hereunder may sell the Securities in accordance with the plan of distribution contained in the
registration statement and if it does so it will comply therewith and with the related prospectus
delivery requirements unless an exemption therefrom is available or unless the Securities are sold
pursuant to Rule 144. Each Purchaser, severally and not jointly with the other Purchasers, agrees
that if it is notified by the Company in writing at any time that the registration statement
registering the resale of the Securities is not effective or that the prospectus included in such
registration statement no longer complies with the requirements of Section 10 of the Securities
Act, such Purchaser will refrain from selling such Securities until such time as such Purchaser is
notified by the Company that such registration statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is able to, and does, sell
such Securities pursuant to an available exemption from the registration requirements of Section 5
of the Securities Act.

     4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of the
Securities may result in dilution of the outstanding shares of Common Stock. The Company further
acknowledges that its obligations under the Transaction Documents, including without limitation its
obligation to issue the Securities pursuant to the Transaction Documents, are unconditional and
absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of
the effect of any such dilution or any claim the Company may have against any Purchaser and
regardless of the dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

     4.3 Furnishing of Information. In order to enable the Purchasers to sell the
Securities under Rule 144 of the Securities Act, for a period of one year from the Closing, the
Company shall maintain the registration of the Common Stock under Section 12(b) or 12(g) of the
Exchange Act and to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. During such one year period, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly
available the information described in Rule 144(c)(2), if the provision of such information will
allow resales of the Securities pursuant to Rule 144.

     4.4 Form D and Blue Sky. The Company agrees to timely file a Form D with respect to
the Preferred Shares as required under Regulation D. The Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Preferred Shares for sale to the Purchasers at the Closing pursuant
to

27

 

this Agreement under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification). The Company shall make all filings and
reports relating to the offer and sale of the Preferred Shares required under applicable securities
or “Blue Sky” laws of the states of the United States following the Closing Date.

     4.5 No Integration. The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities to the Purchasers.

     4.6 Securities Laws Disclosure; Publicity. On or before 7:30 p.m., New York City time,
on the Closing Date, the Company shall issue one or more press releases (collectively, the “Press
Release”) disclosing the material terms of the transactions contemplated hereby, including, without
limitation, the issuance of the Preferred Shares and the acquisition of the Failed Bank. On or
before 5:30 p.m., New York City time, on the fourth Trading Day immediately following the Closing
Date, the Company will file a Current Report on Form 8-K with the Commission describing the terms
of the Transaction Documents and the P&A Agreement (and including as exhibits to such Current
Report on Form 8-K the material Transaction Documents (including, without limitation, this
Agreement, the Registration Rights Agreement and the Certificate of Designations) and the P&A
Agreement (unless the FDIC objects)). Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser or any Affiliate or investment adviser of any Purchaser, or
include the name of any Purchaser or any Affiliate or investment adviser of any Purchaser in any
press release or filing with the Commission (other than the Registration Statement) or Trading
Market, without the prior written consent of such Purchaser, except (i) as required by federal
securities law in connection with (A) any registration statement contemplated by the Registration
Rights Agreement and (B) the filing of final Transaction Documents with the Commission, (ii) to the
extent such disclosure is required by law, at the request of the Staff of the Commission or Trading
Market regulations, in which case the Company shall provide the Purchasers with prior written
notice of such disclosure permitted under this subclause (ii). Notwithstanding the foregoing, the
Company may disclose the name of any Purchaser or any Affiliate or investment adviser of any
Purchaser to the FDIC in connection with its bid for the Failed Bank. From and after the issuance
of the Press Release, no Purchaser shall be in possession of any material, non-public information
received from the Company, any Subsidiary or any of their respective officers, directors or
employees, that is not disclosed in the Press Release. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company as described in this Section 4.6, such Purchaser
will maintain the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction).

     4.7 Non-Public Information. Except with the express written consent of such Purchaser
and unless prior thereto such Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information, the Company shall not, and shall cause each Subsidiary
and each of their respective officers, directors, employees and agents, not to, and each Purchaser
shall not directly solicit the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents to provide any Purchaser with any material, non-public
information regarding the Company or any of its Subsidiaries from and after the filing of the Press
Release.

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     4.8 Indemnification.

          (a) Indemnification of Purchasers. In addition to the indemnity provided in the
Registration Rights Agreement, the Company will indemnify and hold each Purchaser and its
directors, officers, stockholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Purchaser (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
stockholders, agents, members, partners or employees (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other
title) of such controlling person (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of (i) any breach of
any of the representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents or (ii) any action instituted against a Purchaser
Party in any capacity, or any of them or their respective affiliates, by any stockholder of the
Company who is not an affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by this Agreement. The Company will not be liable to any Purchaser Party under this
Agreement to the extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents
or attributable to the gross negligence or willful misconduct on the part of such Purchaser Party.

          (b) Conduct of Indemnification Proceedings. Promptly after receipt by any Person (the
"Indemnified Person”) of notice of any demand, claim or circumstances which would or might give
rise to a claim or the commencement of any action, proceeding or investigation in respect of which
indemnity may be sought pursuant to Section 4.8(a), such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent that the Company is
actually and materially and adversely prejudiced by such failure to notify. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the
Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company
shall have failed promptly to assume the defense of such proceeding and to employ counsel
reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable
judgment of counsel to such Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them; provided, that
the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all Indemnified Parties. The Company shall not be liable for any
settlement of any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified
Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall
not effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and

29

 

indemnity could have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Person from all liability arising out of such
proceeding.

     4.9 Listing of Common Stock. The Company will use its reasonable best efforts to list
the Underlying Shares for quotation on the NYSE and maintain the listing of the Common Stock on the
NYSE.

     4.10 Use of Proceeds. The Company intends to use the net proceeds from the sale of the
Preferred Shares hereunder for the purpose of acquiring certain assets and liabilities of the
Failed Bank from the FDIC and related transaction fees and expenses and general corporate purposes.

     4.11 Stockholders Meeting. The Company shall call a special meeting of its
stockholders, to be held as promptly as practicable following the Closing, but in no event later
than 75 days after the Closing, to vote on proposals (the “Stockholder Proposals”) to (i) approve
the conversion of the Preferred Shares into Common Stock for purposes of Rule 312.03 of the NYSE
Listed Company Manual, and (ii) if necessary, amend the Certificate of Incorporation to increase
the number of authorized shares of Common Stock to at least such number as shall be sufficient to
permit the full conversion of the Preferred Shares (such approval of the Stockholder Proposals,
"Stockholder Approvals”). The Board of Directors of the Company shall recommend to the Company’s
stockholders that such stockholders vote in favor of the Stockholder Proposals. In connection with
such meeting, the Company shall promptly prepare and file (but in no event more than 15 Business
Days after the Closing Date) with the Commission a preliminary proxy statement, shall use its
reasonable best efforts to respond to any comments of the Commission or its staff and to cause a
definitive proxy statement related to such stockholders’ meeting to be mailed to the Company’s
stockholders not more than 10 Business Days after clearance thereof by the Commission, and shall
use its reasonable best efforts to solicit proxies for such Stockholder Approvals. If at any time
prior to such stockholders’ meeting there shall occur any event that is required to be set forth in
an amendment or supplement to the proxy statement, the Company shall as promptly as practicable
prepare and mail to its stockholders such an amendment or supplement. In the event that
Stockholder Approvals are not obtained at such special stockholders meeting, the Company shall
include a proposal to approve (and the Board of Directors shall recommend approval of) such
proposal at a meeting of its stockholders to be held no less than once in each subsequent six-month
period beginning on the date of such special stockholders meeting until such approval is obtained.

     4.12 Limitation on Beneficial Ownership. No Purchaser (and its Affiliates or any
other Persons with which it is acting in concert) will be entitled to purchase a number of
Preferred Shares that would result in such Purchaser becoming, directly or indirectly, the
beneficial owner (as determined under Rule 13d-3 under the Exchange Act) of more than 9.9% of the
number of shares of Common Stock issued and outstanding.

ARTICLE 5:

CONDITIONS PRECEDENT TO CLOSING

     5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase Preferred
Shares. The obligation of each Purchaser to acquire Preferred Shares at the Closing is subject
to the fulfillment, on or prior to the Closing Date, of each of the following conditions, any of
which may be waived by such Purchaser (as to itself only):

30

 

          (a) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality, which shall be true and correct
in all respects) as of the date hereof and as of the Closing Date, as though made on and as of such
date, except for such representations and warranties that speak as of a specific date.

          (b) Performance. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the Closing.

          (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

          (d) Consents. Other than the Required Approvals contemplated in Section 3.1(e)(i),
(iii), (v) and (vi) above, the Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Preferred Shares, all of which shall be and remain so long as necessary in full
force and effect.

          (e) Company Deliverables. The Company shall have delivered the Company Deliverables in
accordance with Section 2.2(a).

          (f) Compliance Certificate. The Company shall have delivered to each Purchaser a
certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief
Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in Sections 5.1(a) and (b) in the form attached hereto as Exhibit F.

          (g) Certificate of Designations. The Company shall have filed the Certificate of
Designations with the Secretary of State.

          (h) Termination. This Agreement shall not have been terminated as to such Purchaser in
accordance with Sections 6.16 or 6.17 herein.

          (i) Acquisition. (i) The FDIC shall have accepted the bid from the Bank for the Failed
Bank, (ii) the Bank shall have executed the P&A Agreement with the FDIC with respect to the Failed
Bank and (iii) the closing under the P&A Agreement shall be imminent.

          (j) Minimum Gross Proceeds. The Company shall simultaneously issue and deliver at the
Closing to the Purchasers hereunder in the aggregate at least sufficient Preferred Shares against
payment of aggregate Subscription Amounts of at least $175.0 million.

     5.2 Conditions Precedent to the Obligations of the Company to sell Preferred Shares.
The Company’s obligation to sell and issue the Preferred Shares at the Closing is subject to the
fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be
waived by the Company:

31

 

          (a) Representations and Warranties. The representations and warranties made by each
Purchaser in Section 3.2 hereof shall be true and correct in all material respects (except for
those representations and warranties that are qualified by materiality, which shall be true and
correct in all respects) as of the date hereof and as of the Closing Date as though made on and as
of such date, except for representations and warranties that speak as of a specific date.

          (b) Performance. Such Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.

          (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

          (d) Consents. Other than the Required Approvals contemplated in Section 3.1(e)(i),
(iii), (v) and (vi) above, the Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Preferred Shares, all of which shall be and remain so long as necessary in full
force and effect.

          (e) Purchasers Deliverables. Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).

          (f) Termination. This Agreement shall not have been terminated as to such Purchaser in
accordance with Sections 6.16 or 6.17 herein.

ARTICLE 6:

MISCELLANEOUS

     6.1 Fees and Expenses. The parties hereto shall be responsible for the payment of all
expenses incurred by them in connection with the preparation and negotiation of the Transaction
Documents and the consummation of the transactions contemplated hereby. The Company shall pay all
amounts owed to the Placement Agent relating to or arising out of the transactions contemplated
hereby. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties
levied in connection with the sale and issuance of the Securities to the Purchasers.

     6.2 Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules. At or after the Closing, and without further consideration,
the Company and the Purchasers will execute and deliver to the other such further documents as may
be reasonably requested in order to give practical effect to the intention of the parties under the
Transaction Documents.

32

 

     6.3 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section prior to 5:00 p.m., New York City
time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in this Section on a day
that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service with next day delivery specified, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications shall be as
follows:

			
	     If to the Company:	 	Oriental Financial Group Inc.

997 San Roberto Street

San Juan, Puerto Rico 00926

Attention: General Counsel

Telephone: (787) 993-4206

Fax: (787) 771-6896

			
	     With a copy to:	 	Skadden, Arps, Slate, Meagher & Flom LLP

300 S. Grand Ave, 34th Floor

Los Angeles, CA 90017

Attention: Gregg Noel

Telephone: (213) 687-5000

Fax: (213) 687-5600

	 	 	If to a Purchaser: To the address set forth under such Purchaser’s name on the
signature page hereof;

     or such other address as may be designated in writing hereafter, in the same manner, by such
Person.

     6.4 Amendments; Waivers; No Additional Consideration. No amendment or waiver of any
provision of this Agreement will be effective with respect to any party unless made in writing and
signed by an officer or a duly authorized representative of such party. No consideration shall be
offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision
of any Transaction Document unless the same consideration is also offered to all Purchasers who
then hold Preferred Shares.

     6.5 Construction. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The
language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement or any of the Transaction Documents.

33

 

     6.6 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted assigns. This
Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the
prior written consent of the Purchasers. Any Purchaser may assign its rights hereunder in whole or
in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with
the Transaction Documents and applicable law, provided such transferee shall agree in writing to be
bound, with respect to the transferred Securities, by the terms and conditions of this Agreement
that apply to the “Purchasers”.

     6.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, other than, solely with respect to
the provisions of Section 4.8, the Indemnified Persons.

     6.8 Governing Law. This Agreement will be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be performed entirely within
such State. Each party agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees or agents) may be
commenced on a non-exclusive basis in the New York Courts. Each party hereto hereby irrevocably
submits to the non-exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     6.9 Survival. Subject to applicable statute of limitations, the representations,
warranties, agreements and covenants contained herein shall survive the Closing and the delivery of
the Preferred Shares; provided, that the representations and warranties of the Company shall
survive the Closing and the delivery of Preferred Shares for a period of one year.

     6.10 Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become

34

 

effective when counterparts have been signed by each party and delivered to the other party,
it being understood that the parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

     6.11 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.

     6.12 Replacement of Preferred Shares. If any certificate or instrument evidencing any
Preferred Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction
and the execution by the holder thereof of a customary lost certificate affidavit of that fact and
an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in
connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is
required by the Transfer Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Preferred Shares. If a replacement certificate or instrument evidencing any Preferred
Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a replacement.

     6.13 Remedies. In addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, each of the Purchasers and the Company may be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any action for a
temporary restraining order) the defense that a remedy at law would be adequate.

     6.14 Payment Set Aside. To the extent that the Company makes a payment or payments to
any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent
of any such restoration the obligation or part thereof originally intended to be satisfied shall be
revived

35

 

and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

     6.15 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser
to purchase Preferred Shares pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which
may have been made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any
other Purchaser (or any other Person) relating to or arising from any such information, materials,
statement or opinions. Nothing contained herein or in any Transaction Document, and no action
taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no
other Purchaser has acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Securities or enforcing its rights under the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.

     6.16 Effectiveness. Sections 6.1 through 6.8, Section 6.10, Section 6.11 and this
Section 6.16 shall be effective upon the execution of this Agreement by the parties hereto. All
other provisions of this Agreement shall become automatically effective, without further action of
the parties, upon the later of the date (such date, the “Effectiveness Date”) (i) that is two
business days prior to the date (the “Scheduled Date”) on which the FDIC is scheduled to be
appointed receiver for the Failed Bank and will enter into the P&A Agreement with the Bank relating
to the Bank’s purchase of certain assets and assumption of deposits (and certain other specified
liabilities) of the Failed Bank and (ii) that the Company notifies the Purchasers of the Scheduled
Date. The Company will provide notification to each Purchaser of (i) the Scheduled Date upon the
notification to the Company by the FDIC that the Bank is the winning bidder for the Failed Bank and
(ii) any changes to the Scheduled Date by the FDIC following the initial determination of the
Scheduled Date by the FDIC. If (i) the FDIC notifies the Company that the Bank will not be
permitted to enter a bid for the Failed Bank, (ii) the FDIC has notified the Company that the
scheduled due date for bids with respect to the Failed Bank has been modified, changed or set to a
date later than June 1, 2010, or such other date as the parties mutually agree, or that the FDIC
intends not to schedule or re-schedule a bid date for the Failed Bank on or before June 1, 2010, or
such other date as the parties mutually agree, (iii) the Bank fails to submit a bid for the Failed
Bank by the deadline for such submission established by the FDIC, (iv) the FDIC has notified the
Company that the Bank is not the winning bidder for the Failed Bank, (v) no bid by the Bank for the
Failed Bank has been

36

 

accepted by the FDIC by June 1, 2010 or (vi) if the Bank has been selected as the winning
bidder for the Failed Bank, the P&A Closing has not occurred by June 30, 2010, then, in each case,
this Agreement shall terminate, other than Sections 6.1 through 6.8, Section 6.10, Section 6.11 and
this Section 6.16, which shall survive such termination. The Company shall promptly notify
Purchaser upon receipt of any notification described in the two preceding sentences from the FDIC.
Prior to such termination, neither party may revoke its acceptance of this Agreement.

     6.17 Termination, Rescission.

          (a) In the event that, following the Effectiveness Date, the Purchase and Assumption Agreement
with the FDIC relating to the purchase by Oriental Bank and Trust, a wholly owned Subsidiary of the
Company (the “Bank”), of certain assets, and the assumption by the Bank of deposits (and certain
other specified liabilities), of Eurobank, San Juan, Puerto Rico (“Failed Bank”) (the “P&A
Agreement”), is not entered into on or before June 1, 2010, or is entered into prior to such date
but the consummation of the transfer of the assets and liabilities of the Failed Bank to the Bank
pursuant to the P&A Agreement (such transfer, the “P&A Closing”) does not occur by June 30, 2010,
then either the Company, upon written notice to the Purchasers, or any Purchaser, solely with
respect to itself and not with respect to any other Purchaser, upon written notice to the Company,
may terminate this Agreement.

          (b) Promptly following the termination of this Agreement pursuant to Section 6.16 or Section
6.17(a), the Company shall provide written notice to the Escrow Agent notifying the Escrow Agent
that this Agreement has been terminated. Pursuant to the terms of the Escrow Agreement, the Escrow
Agent shall (A) distribute to each Purchaser that is not a Section 2.1(c)(iii) Purchaser such
Purchaser’s Subscription Amount and (B) advise the Transfer Agent that the share issuance
instructions with respect to such Purchaser shall be null and void.

          (c) In the event that following the Closing, the P&A Agreement is not entered into on or
before June 1, 2010 or the P&A Agreement is terminated prior to the P&A Closing, or the P&A Closing
does not occur by June 30, 2010, then the Company shall promptly notify Purchaser of such event and
either (i) the Company, upon written notice to the Purchasers, may redeem the Securities purchased
hereunder or (ii) any Purchaser, solely with respect to itself and not with respect to any other
Purchaser, upon written notice to the Company, require the Company to repurchase the Securities
purchased hereunder as specified on such Purchaser’s signature page hereto. Promptly following
either such notice, (i) the Company and Purchaser shall provide written notice to the Transfer
Agent notifying the Transfer Agent that such Securities have been redeemed or repurchased, as the
case may be (unless Purchaser is a Certificate Purchaser, in which case Purchaser shall return to
the Company for cancellation the certificates for its Preferred Shares concurrently with the
Company returning Purchaser’s Subscription Amount pursuant to the following clause (ii)) and (ii)
the Company shall promptly return to Purchaser by wire transfer of immediately available funds to a
bank account designated by Purchaser, its Subscription Amount.

          (d) Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in
its sole discretion from time to time upon written notice to the Company, any

37

 

relevant notice, demand or election in whole or in part without prejudice to its future
actions and rights.

38

 

     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above.

	 	 	 	 	 
	 	ORIENTAL FINANCIAL GROUP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGES FOR PURCHASERS FOLLOW]

 

	 	 	 	 	 	 	 

	 	 	PURCHASER:	 	 
	 	 	 
	 	 
	 
	 

	 	By:
	 	 

	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Aggregate Purchase Price (Subscription Amount):

 $                    	 	 
	 
	 	 	 	 	 	 
	 	 	Number of Preferred Shares to be Acquired:	 	 
	 
	 	 	 	 	 	 
	 	 	                    	 	 
	 
	 	 	 	 	 	 
	 	 	Tax ID No.:                                         	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Telephone No.:                                         	 	 
	 
	 	 	 	 	 	 
	 	 	Facsimile No.:                                         	 	 
	 
	 	 	 	 	 	 
	 	 	E-mail Address:                                         	 	 
	 
	 	 	 	 	 	 
	 	 	Attention:                                         	 	 
	 
	 	 	 	 	 	 
	 	 	Wire instructions for return of escrowed funds:	 	 
	 
	 	 	 	 	 	 
	 	 	                                                            	 	 
	 
	 	 	 	 	 	 
	 	 	                                                            	 	 
	 
	 	 	 	 	 	 
	 	 	                                                            	 	 
	 
	 	 	 	 	 	 
	 	 	o Purchaser is prohibited by the terms of its
organizational or constituent documents to enter into an
escrow agreement and has provided the Company with documented
evidence of such prohibition. Purchaser meets the
requirements of a Section 2.1(c)(iii) Purchaser.	 	 
	 
	 	 	 	 	 	 
	 	 	o Purchaser has entered into a Custodian Agreement.	 	 

Delivery Instructions:

(if different than above)

c/o                                                             

Street:                                                             

City/State/Zip:                                                   

Attention:                                                             

Telephone No.:                                                             

[Signature Page to Securities Purchase Agreement]

 

EXHIBITS

	 	 	 

	A:

	 	Form of Certificate of Designations
	B:

	 	Form of Registration Rights Agreement
	C-1:

	 	Accredited Investor Questionnaire
	C-2:

	 	Stock Certificate Questionnaire
	D:

	 	Form of Opinion of Company Puerto Rican Counsel
	E:

	 	Form of Opinion of Company U.S. Counsel
	F:

	 	Form of Secretary’s Certificate
	G:

	 	Form of Officer’s Certificate
	H:

	 	Subsidiaries of the Company
	I:

	 	Form of Escrow Agreement

 

 

EXHIBIT A

Form of Certificate of Designations

 

 

EXHIBIT B

Form of Registration Rights Agreement

 

 

EXHIBIT C-1

ACCREDITED INVESTOR QUESTIONNAIRE

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

To:      Oriental Financial Group Inc.

This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor
in connection with the offer and sale of shares of mandatorily convertible non-cumulative
non-voting perpetual preferred stock, $1,000 liquidation preference per share (the “Preferred
Shares”), of Oriental Financial Group Inc., a financial holding company and corporation
organized in the Commonwealth of Puerto Rico (the “Corporation”). The Preferred Shares are
being offered and sold by the Corporation without registration under the Securities Act of 1933, as
amended (the “Securities Act”), and the securities laws of certain states, in reliance on
the exemptions contained in Section 4(2) of the Securities Act and on Regulation D promulgated
thereunder and in reliance on similar exemptions under applicable state laws. The Corporation must
determine that a potential investor meets certain suitability requirements before offering or
selling Preferred Shares to such investor. The purpose of this Questionnaire is to assure the
Corporation that each investor will meet the applicable suitability requirements. The information
supplied by you will be used in determining whether you meet such criteria, and reliance upon the
private offering exemptions from registration is based in part on the information herein supplied.

This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any
security. Your answers will be kept strictly confidential. However, by signing this
Questionnaire, you will be authorizing the Corporation to provide a completed copy of this
Questionnaire to such parties as the Corporation deems appropriate in order to ensure that the
offer and sale of the Preferred Shares will not result in a violation of the Securities Act or the
securities laws of any state and that you otherwise satisfy the suitability standards applicable to
purchasers of the Preferred Shares. All potential investors must answer all applicable questions
and complete, date and sign this Questionnaire. Please print or type your responses and attach
additional sheets of paper if necessary to complete your answers to any item.

PART A. BACKGROUND INFORMATION

			
	Name of Beneficial Owner of the Preferred Shares:	 	 

			
	Business Address:	 	 
(Number and Street)

 

	 	 	 	 	 

	(City)
	 	(State)
	 	(Zip Code)

			
	Telephone Number: (     )	 	 

 

 

If a corporation, partnership, limited liability company, trust or other entity:

			
	Type of entity:	 	 

Were you formed for the purpose of investing in the securities being offered?

     Yes       No      

If an individual:

			
	Residence Address:	 	 
(Number and Street)

 

	 	 	 	 	 

	(City)
	 	(State)
	 	(Zip Code)

			
	Telephone Number: (     )	 	 

	 	 	 	 	 

	 	 	 	 	 
	Age:                     
	 	Citizenship:                     
	 	Where registered to vote:                     

Set forth in the space provided below the state(s), if any, in the United States in which you
maintained your residence during the past two years and the dates during which you resided in each
state:

Are you a director or executive officer of the Corporation?

     Yes       No      

			
	Social Security or Taxpayer Identification No.	 	 

PART B. ACCREDITED INVESTOR QUESTIONNAIRE

     In order for the Company to offer and sell the Preferred Shares in conformance with state and
federal securities laws, the following information must be obtained regarding your investor status.
Please initial each category applicable to you as a Purchaser of Preferred Shares.

	 	     	 	(1) A bank as defined in Section 3(a)(2) of the Securities Act,
or any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;
	 
	 	     	 	(2) A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
	 
	 	     	 	(3) An insurance company as defined in Section 2(13) of the
Securities Act;

 

 

	 	     	 	(4) An investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of that act;
	 
	 	     	 	(5) A Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
	 
	 	     	 	(6) A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets
in excess of $5,000,000;
	 
	 	     	 	(7) An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is either a
bank, savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;
	 
	 	     	 	(8) A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
	 
	 	     	 	(9) An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Preferred
Shares, with total assets in excess of $5,000,000;
	 
	 	     	 	(10) A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Preferred Shares, whose
purchase is directed by a sophisticated person who has such knowledge and
experience in financial and business matters that such person is capable of
evaluating the merits and risks of investing in the Company;
	 
	 	     	 	(11) A natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000;
	 
	 	     	 	(12) A natural person who had an individual income in excess of $200,000 in each
of the two most recent years, or joint income with that person’s spouse in
excess of $300,000, in each of those years, and has a reasonable expectation of
reaching the same income level in the current year;
	 
	 	     	 	(13) An executive officer or director of the Corporation;

 

 

	 	     	 	(14) An entity in which all of the equity owners qualify under any of the above
subparagraphs. If the undersigned belongs to this investor category only, list
the equity owners of the undersigned, and the investor category which each such
equity owner satisfies.

A. FOR EXECUTION BY AN INDIVIDUAL:

	 	 	 	 	 	 	 

	 

	 	By
	 	 	 	 
	 
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 

B. FOR EXECUTION BY AN ENTITY:

	 	 	 	 	 	 	 

	 

	Entity Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 
	 	 	 	 
	 	 
	Date
	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

C. ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

	 	 	 	 	 	 	 

	 

	Entity Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 

	 

	Entity Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT C-2

Stock Certificate Questionnaire

Pursuant to Section 2.2(b) of the Agreement, please provide us with the following information:

	 	 	 	 	 	 	 

	1.

	 	The exact name that the Preferred Shares are to be registered in (this
is the name that will appear on the stock certificate(s) and
warrant(s)). You may use a nominee name if appropriate:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	The relationship between the Purchaser of the Preferred Shares and the
Registered Holder listed in response to Item 1 above:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	3.

	 	The mailing address, telephone and telecopy number of the Registered
Holder listed in response to Item 1 above:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	4.

	 	The Tax Identification Number (or, if an individual, the Social
Security Number) of the Registered Holder listed in response to Item 1
above:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT D

Form of Opinion of Company Puerto Rican Counsel*

	1.	 	The Company is duly registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended, and a financial holding company under the Gramm-Leach-Bliley Act of 1999,
as amended, and has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Puerto Rico.
	 
	2.	 	The Company has the corporate power and authority to execute and deliver and to perform its
obligations under the Transaction Documents, including, without limitation, to issue the
Preferred Shares and, upon obtaining the Stockholder Approvals, the Underlying Shares.
	 
	3.	 	Each of the Transaction Documents has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery by the Purchasers (to the
extent they are a party), each of the Transaction Documents constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its terms.
	 
	4.	 	The execution and delivery by the Company of each of the Transaction Documents and the
performance by the Company of its obligations under such agreements, including its issuance
and sale of the Preferred Shares and, upon obtaining the Stockholder Approvals, the Underlying
Shares, do not and will not: (a) result in any violation of the Certificate of Incorporation
or Bylaws of the Company, (b) require any consent, approval, license or exemption by, order or
authorization of, or filing, recording or registration by the Company with any Puerto Rican
governmental authority, except for the filing of the Certificate of Designations with the
Puerto Rico Department of State, (c) violate any court order, judgment or decree, if any, or
(d) result in a breach of, or constitute a default under, any Material Contract.
	 
	5.	 	The Preferred Shares being delivered to the Purchasers pursuant to the Securities Purchase
Agreement have been duly and validly authorized and, when issued, delivered and paid for as
contemplated in the Securities Purchase Agreement, will be duly and validly issued, fully paid
and non-assessable, and free of any preemptive right or similar rights contained in the
Company’s Certificate of Incorporation or Bylaws. The Underlying Shares, when issued in
accordance with the Certificate of Designations, will be duly and validly issued, fully paid
and non-assessable, and free of any preemptive right or similar rights contained in the
Company’s Certificate of Incorporation or Bylaws.

 

			
	*	 	The opinion letter of Company Counsel will be subject to customary limitations and carveouts.

 

 

EXHIBIT E

Form of Opinion of Company U.S. Counsel*

	1.	 	Each of the Transaction Documents has been duly executed and delivered to the extent
such execution and delivery are governed by the laws of the State of New York by the
Company, and assuming due authorization, execution and delivery by the Purchasers, each of
the Transaction Documents constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
	 
	2.	 	The execution and delivery by the Company of each of the Transaction Documents and the
consummation by the Company of the transaction contemplated thereby, including the issuance
and sale of the Preferred Shares and the Underlying Shares, will not (i) constitute a
violation of, or breach or default under, the terms of any Applicable Contract or (ii)
violate or conflict with, or result in any contravention of, any Applicable Law or
Applicable Orders. We do not express any opinion, however, as to whether the execution,
delivery or performance by the Company of the Transaction Documents will constitute a
violation of, or default under, any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or results of operations
of the Company or any of its subsidiaries.
	 
	3.	 	No Governmental Approval, which has not been obtained or taken and is not in full force
and effect, is required to authorize, or is required for, the execution or delivery of the
Transaction Documents by the Company or the consummation by the Company of the transactions
contemplated thereby.
	 
	4.	 	Assuming (i) the accuracy of the representations and warranties of the Company set
forth in Section 3.1 of the Securities Purchase Agreement and of you in Section 3.2 of the
Securities Purchase Agreement, and (ii) the accuracy of the representations and warranties
made in the Accredited Investor Questionnaire, the offer, sale and delivery of the
Preferred Shares to you in the manner contemplated by the Securities Purchase Agreement, do
not require registration under the Securities Act, and the Underlying Shares issuable to
the holders of the Preferred Shares in accordance with the Certificate of Designations may
be delivered to such holders without registration under the Securities Act provided that no
commission or other remuneration is paid or given directly or indirectly for soliciting
such conversion.

 

			
	*	 	The opinion letter of Company Counsel will be subject to customary limitations and carveouts.

 

 

EXHIBIT F

Form of Secretary’s Certificate

The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of
Oriental Financial Group Inc., a financial holding company and corporation organized in the
Commonwealth of Puerto Rico (the “Company”), and that as such he is authorized to execute and
deliver this certificate in the name and on behalf of the Company and in connection with the
Securities Purchase Agreement, dated as of April 23, 2010, by and among the Company and the
investors party thereto (the “Securities Purchase Agreement”), and further certifies in his
official capacity, in the name and on behalf of the Company, the items set forth below.
Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the
Securities Purchase Agreement.

	1.	 	Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions
duly adopted by the Board of Directors of the Company at a meeting held on [                    ], 2010.
Such resolutions have not in any way been amended, modified, revoked or rescinded, have been
in full force and effect since their adoption to and including the date hereof and are now in
full force and effect.
	 
	2.	 	The Company’s Certificate of Incorporation, as amended, were filed as an Exhibit to the Form
S-3 on April 2, 1999; its Bylaws were filed as an exhibit to the 8-K filed with the SEC on
June 23, 2008. Such Certificate of Incorporation, as amended, and Bylaws, constitute true,
correct and complete copies of the Certificate of Incorporation, as amended, and Bylaws as in
effect on the date hereof.
	 
	3.	 	Each person listed below has been duly elected or appointed to the position(s) indicated
opposite his name and is duly authorized to sign the Securities Purchase Agreement and each of
the Transaction Documents on behalf of the Company, and the signature appearing opposite such
person’s name below is such person’s genuine signature.

	 	 	 	 	 

	Name
	 	Position
	 	Signature
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 

 

 

IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this       day of [     ], 2010.

	 	 	 	 	 

	 

	 	 

	 	 
	 

	 	[                    ]	 	 
	 

	 	Secretary	 	 

I, [                    ], [Chief Financial Officer], hereby certify that [                    ] is the duly
elected, qualified and acting Secretary of the Company and that the signature set forth above is
his true signature.

	 	 	 	 	 

	 

	 	 

[                    ]
	 	 
	 

	 	[Chief Financial Officer]	 	 

 

 

EXHIBIT A

Resolutions

 

 

EXHIBIT B

Certificate of Incorporation

 

 

EXHIBIT C

Bylaws

 

 

EXHIBIT G

Form of Officer’s Certificate

The undersigned, the [Chief Financial Officer] [Chief Executive Officer] of Oriental Financial
Group Inc., a financial holding company and corporation organized in the Commonwealth of Puerto
Rico (the “Company”), pursuant to Section 5.1(g) of the Securities Purchase Agreement, dated as of
April 23, 2010 by and among the Company and the investors signatory thereto (the “Securities
Purchase Agreement”), hereby represents, warrants and certifies as follows (capitalized terms used
but not otherwise defined herein shall have the meaning set forth in the Securities Purchase
Agreement):

	 	1.	 	The representations and warranties of the Company contained in
the Securities Purchase Agreement are true and correct as of the date when made
and as of the Closing Date, as though made on and as of such date, except for
such representations and warranties that speak as of a specific date.
	 
	 	2.	 	The Company has performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing.

IN WITNESS WHEREOF, the undersigned has executed this certificate this       day of [                    ],
2010.

	 	 	 	 	 

	 

	 	 

	 	 
	 

	 	[                    ]	 	 
	 

	 	[Chief Financial Officer] [Chief Executive Officer]	 	 

 

 

EXHIBIT H

Subsidiaries

Oriental Bank and Trust

Oriental International Bank Inc.

Oriental Mortgage Corporation

Oriental Financial Services Corp.

Oriental Insurance, Inc.

Caribbean Pension Consultants, Inc.

Oriental Financial (PR) Statutory Trust II

 

 

EXHIBIT I

Form of Escrow Agreementexv10w25

Exhibit 10.25

TAX PROTECTION AGREEMENT

          This TAX PROTECTION AGREEMENT (this “Agreement”) is entered into as of
                    , 2010, by and among Younan
Properties, Inc., a Maryland corporation (the “REIT”), Younan Properties, L.P., a Maryland
limited partnership (the “Operating Partnership”), each Protected Partner identified as a
signatory on Schedule I, as amended from time to time, and each Guarantee Partner identified as a
signatory on Schedule II, as amended from time to time.

RECITALS

          WHEREAS, the REIT desires to consolidate the ownership of a portfolio of office and certain
other properties currently owned, directly or indirectly, by certain entities (collectively, the
“Single Asset Entities”) and managed by Younan Properties, Inc., a California corporation
(“YPI”), Younan Investment Properties LP, a Delaware limited partnership and subsidiary of
YPI (“YIP”), or another affiliate of YPI;

          WHEREAS, concurrently with the execution of this Agreement, the REIT will enter into an
agreement and plan of merger with YPI, pursuant to which YPI will merge with and into the REIT;

          WHEREAS, concurrently with the execution of this Agreement, the Operating Partnership will
enter into an agreement and plan of merger with YIP and certain other entities (the “SAE Entity
Members”) that are direct or indirect partners or members of certain of the Single Asset
Entities, pursuant to which, immediately following the merger identified in the preceding
paragraph, (i) YIP will merge with and into the Operating Partnership and (ii) thereafter, the
Operating Partnership will acquire all or a portion of the interests in each of the SAE Entity
Members pursuant to mergers of the SAE Entity Members with and into the Operating Partnership in
the order set forth in the merger agreement for each such SAE Entity Member;

          WHEREAS, YPI S/WL LLC, an affiliate of the Protected Partners’ Representative (as defined
below) will assign to the Operating Partnership its rights and obligations under that certain
purchase agreement (the “Fund Purchase Agreement”) between YPI S/WL LLC and Passco Younan
Fund I LLC, a Delaware limited liability company (the “Fund”), pursuant to which YPI S/WL
LLC has agreed to purchase certain interests held by the Fund, which rights and obligations will be
assigned to the Operating Partnership as a result of the merger of YPI S/WL LLC with and into the
Operating Partnership, and the Operating Partnership will purchase the interests from the Fund
pursuant to the terms of the Fund Purchase Agreement;

          WHEREAS, YGH Investments LLC, a California limited liability company and an SAE Entity Member
will assign to YPI its rights and obligations under that certain purchase agreement (the “CHI
Purchase Agreement”) to acquire all of Chung Hsein International LP’s interests in 4041 Central
Plaza LLC, a Delaware limited liability company, which rights and obligations will be assigned to
the Operating Partnership as a result of the merger of YPI into the REIT and the REIT’s
contribution of the assets of YPI to the Operating Partnership, and

 

 

immediately after such merger and contribution, the Operating Partnership will consummate the
transactions contemplated by the CHI Purchase Agreement;

          WHEREAS, concurrently with the execution of this Agreement, the REIT and the Operating
Partnership will enter into an agreement and plan of merger with certain of the Single Asset
Entities, pursuant to which, immediately following the transactions identified in the preceding
paragraphs, the Operating Partnership will acquire, directly or indirectly, certain of the
interests in the Single Asset Entities;

          WHEREAS, the Formation Transactions relate to the proposed initial public offering of the
common stock of the REIT, par value $.01 per share, following which the REIT will operate as a
self-administered and self-managed real estate investment trust within the meaning of Section 856
of the Code (as defined below); and

          WHEREAS, as a condition to engaging in the Formation Transactions with respect to each
Protected Property (as defined below), and as an inducement to do so, the parties hereto are
entering into this Agreement;

          NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

          For purposes of this Agreement the following terms shall apply:

          Section 1.1 “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling or controlled
by or under common control with such Person. For the purposes of this definition, “control” when
used with respect to any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

          Section 1.2 “Agreement” has the meaning set forth in the preamble.

          Section 1.3 “CHI Purchase Agreement” has the meaning set forth in the preamble.

          Section 1.4 “Closing Date” has the meaning assigned to it in the applicable Pre-Formation Transaction Documentation.

          Section 1.5 “Code” means the Internal Revenue Code of 1986, as amended.

          Section 1.6 “Collateral” has the meaning set forth in the definition of “Qualified Liability.”

2

 

          Section 1.7 “Debt Gross Up Amount” has the meaning set forth in definition of “Make Whole Amount.”

          Section 1.8 “Debt Notification Event” means, with respect to a Qualified Liability,
any transaction in which such liability shall be refinanced, otherwise repaid (excluding for this
purpose, scheduled payments of principal occurring prior to the maturity date of such liability),
or guaranteed by any of the REIT, the Operating Partnership, or one or more of their Affiliates, or
guaranteed by one or more partners of the Partnership.

          Section 1.9 “Exchange” has the meaning set forth in Section 2.1(b) of this Agreement.

          Section 1.10 “Formation Transaction Documentation” means all of the agreements and plans of merger, substantially in the forms accompanying the
Request for Consent dated March 12, 2010, pursuant to which all of the equity interests in the
Younan Entities held by the Pre-Formation Participants are to be acquired by the REIT or the
Operating Partnership, directly or indirectly, as part of the Formation Transactions.

          Section 1.11 “Formation Transactions” means the transactions contemplated by this Agreement and the other Formation Transaction
Documentation.

          Section 1.12 “Fund” has the meaning set forth in the preamble.

          Section 1.13 “Fund Purchase Agreement” has the meaning set forth in the preamble.

          Section 1.14 “Fundamental Transaction” means a merger, consolidation or other
combination of the Operating Partnership with or into any other entity, a transfer of all or
substantially all of the assets of the Operating Partnership, any reclassification,
recapitalization
or change of the outstanding equity interests of the Operating Partnership, or a conversion of
the Operating Partnership into another form of entity.

          Section 1.15 “Guarantee Partner” means: (i) each signatory on Schedule II attached
hereto, as amended from time to time; (ii) any person who holds OP Units and who acquired such OP
Units from another Guarantee Partner in a transaction in which such person’s adjusted basis in such
OP Units, as determined for Federal income tax purposes, is determined, in whole or in part, by
reference to the adjusted basis of the transferor Guarantee Partner in such OP Units; and (iii)
with respect to a Guarantee Partner that is Pass Through Entity, and solely for purposes of
computing the amount to be paid under Section 2.4 with respect to
such Guarantee Partner, any person who (y) holds an interest in such Guarantee Partner, either
directly or through one or more Pass Through Entities, and (z) is required to include all or a
portion of the income of such Guarantee Partner in its own gross income.

          Section 1.16 “Guarantee Opportunity” has the meaning set forth in Section
2.4(b).

3

 

          Section 1.17 “Guaranteed Liability” means any Qualified Liability that is guaranteed,
in whole or in part, by one or more Guarantee Partners in accordance with Section 2.4(b) of
this Agreement.

          Section 1.18 “Guarantee Permissible Liability” means a liability with respect to which
the lender permits a guarantee.

          Section 1.19 “Gross Up Amount” has the meaning set forth in definition of “Make Whole Amount.”

          Section 1.20 “Make Whole Amount” means: (a) with respect to any Protected Partner that recognizes gain under Section 704(c) of
the Code as a result of a Tax Protection Period Transfer, the sum of (i) the product of (x) the
income and gain recognized by such Protected Partner under Section 704(c) of the Code in respect of
such Tax Protection Period Transfer (taking into account any adjustments under Section 743 of the
Code to which such Protected Partner is entitled) multiplied by (y) the Make Whole Tax Rate, plus
(ii) an amount equal to the combined Federal, applicable state and local income taxes (calculated
using the Make Whole Tax Rate) imposed on a Protected Partner as a result of the receipt by a
Protected Partner of a payment under Section 2.2 (the “Gross Up Amount”); provided,
however, that the Gross Up Amount shall be computed without regard to any losses, credit, or other
tax attributes that a Protected Partner might have that would reduce its actual tax liability; and
(b) with respect to any Guarantee Partner that recognizes gain as a result of a breach by the
Operating Partnership of the provisions of Section 2.4 hereof, the
sum of (i) the product of (x) the income and gain recognized by such Guarantee Partner by reason of
such breach, multiplied by (y) the Make Whole Tax Rate, plus (ii) an amount equal to the combined
Federal, applicable state and local income taxes (calculated using the Make Whole Tax Rate) imposed
on a Guarantee Partner as a result of the receipt by a Guarantee Partner of a payment under
Section 2.4(e) (the “Debt Gross Up Amount”); provided, however, that the Debt Gross
Up Amount shall be computed without regard to any losses, credit,
or other tax attributes that a Guarantee Partner might have that would reduce its actual tax
liability. For purposes of calculating the amount of Section 704(c) gain that is allocated to a
Protected Partner, (i) subject to clause (ii) below, any “reverse Section 704(c) gain” allocated to
such partner pursuant to Treasury Regulations § 1.704-3(a)(6) shall not be taken into account, and
(ii) if, as a result of adjustments to the Gross Asset Value (as defined in the OP Agreement) of
the Protected Properties pursuant to clause (b) of the definition of Gross Asset Value as set forth
in the OP Agreement, all or a portion of the gain recognized by the Operating Partnership that
would have been Section 704(c) gain without regard to such adjustments becomes or is treated as
“reverse Section 704(c) gain” or Section 704(b) gain under Section 704 of the Code, then such gain
shall continue to be treated as Section 704(c) gain; provided that the total amount of 704(c) gain
and income taken into account for purpose of calculating the Make Whole Amount shall not exceed the
initial Section 704(c) gain amount as of the Closing Date (whether or not equal to the estimated
amount set forth on Exhibit B).

          Section 1.21 “Make Whole Tax Rate” means, with respect to a Protected Partner who is entitled to receive a payment under
Section 2.2 and with respect to a Guarantee Partner who is entitled to receive payment
under Section 2.4(e), the highest combined statutory Federal, state
and local tax rate in respect of the income or gain that

4

 

gave rise to such payment, taking into
account the character of the income and gain in the hands of such Protected Partner or Guarantee
Partner, as applicable (reduced, in the case of Federal taxes, by the deduction allowed for income
taxes paid to a state or locality), for the taxable year in which the event that gave rise to such
payment under Section 2.2 or Section 2.4 occurred.
Notwithstanding the foregoing, if a Protected Partner or Guarantee Partner demonstrates to the
reasonable satisfaction of the Operating Partnership that such Protected Partner or Guarantee
Partner, as applicable, is not entitled to a Federal income tax deduction for all or a portion of
the income taxes paid to a state or locality, the Make Whole Tax Rate applicable to such Protected
Partner or Guarantee Partner shall be reduced only by the deduction, if any, the Protected Partner
or Guarantee Partner is entitled to take for such taxes.

          Section 1.22 “OP Agreement” means the Agreement of Limited Partnership of Younan Properties, LP, as amended from time to
time.

          Section 1.23 “OP Units” means common units of partnership interest in the Operating Partnership.

          Section 1.24 “Operating Partnership” has the meaning set forth in the preamble.

          Section 1.25 “Pass Through Entity” means a partnership, grantor trust, or S corporation for Federal income tax purposes.

          Section 1.26 “Permitted Disposition” means a sale, exchange or other disposition of OP Units (i) by a Protected Partner or
Guarantee Partner: (a) to such Protected Partner’s or Guarantee Partner’s children, spouse or
issue; (b) to a trust for such Protected Partner or Guarantee Partner or such Protected Partner’s
or Guarantee Partner’s children, spouse or issue; (c) in the case of a trust which is a Protected
Partner or Guarantee Partner, to its beneficiaries, or any of them, whether current or remainder
beneficiaries; (d) to a revocable inter vivos trust of which such Protected Partner or Guarantee
Partner is a trustee; (e) in the case of any partnership or limited liability company which is a
Protected Partner or Guarantee Partner, to its partners or members; and/or (f) in the case of any
corporation which is a Protected Partner or Guarantee Partner, to its shareholders, and (ii) by a
party described in clauses (a), (b), (c) or (d) to a partnership, limited liability company or
corporation of which the only partners, members or shareholders, as applicable, are parties
described in clauses (a), (b), (c) or (d); provided, that for purposes of the definition of Tax
Protection Period, such Protected Partner or Guarantee Partner shall be treated as continuing to
own any OP Units which were subject to a Permitted Disposition unless and until there has been a
sale, exchange or other disposition of such OP Units by a permitted transferee which is not another
Permitted Disposition.

          Section 1.27 “Person” means an individual or a corporation, partnership, trust, unincorporated organization,
association, limited liability company or other entity.

          Section 1.28 “Pre-Formation Interests” means the interests held by the Pre-Formation Participants.

          Section 1.29 “Pre-Formation Participants” means the holders of the equity interests in the relevant Younan Entities immediately prior to
the Formation Transactions.

5

 

          Section 1.30 “Protected Partner” means: (i) each signatory on Schedule I attached hereto, as amended from time to time; (ii)
any person who holds OP Units and who acquired such OP Units from another Protected Partner in a
transaction in which such person’s adjusted basis in such OP Units, as determined for Federal
income tax purposes, is determined, in whole or in part, by reference to the adjusted basis of the
transferor Protected Partner in such OP Units; and (iii) with respect to a Protected Partner that
is Pass Through Entity, and solely for purposes of computing the amount to be paid under
Section 2.2 with respect to such Protected Partner, any person who (y) holds an interest in
such Protected Partner, either directly or through one or more Pass Through Entities, and (z) is
required to include all or a portion of the income of such Protected Partner in its own gross
income.

          Section 1.31 “Protected Partners’ Representative” means Zaya Younan.

          Section 1.32 “Protected Property” mean each property identified on Exhibit A hereto and each property acquired in Exchange for a
Protected Property as set forth in Section 2.1(b).

          Section 1.33 “Qualified Liability” means either:

               (a) A direct or indirect liability of the Operating Partnership (or of an entity whose
separate existence from the Operating Partnership is disregarded for Federal income tax purposes)
with respect to which all of the following requirements are satisfied:

                    (i) the liability is secured by real property or other assets (the “Collateral”) owned
directly or indirectly by the Operating Partnership (or by an entity whose separate existence from
the Operating Partnership is disregarded for Federal income tax purposes);

                    (ii) on the date on which the Operating Partnership designated such liability as a Qualified
Liability, the fair market value (as reasonably determined in good faith by the Operating
Partnership) of the Collateral was at least 1.5 times the aggregate amount of any Qualified
Liabilities that is guaranteed by one or more Guarantee Partners under Section 2.4(b) secured by
such Collateral at such time;

                    (iii) the liability constitutes “qualified nonrecourse financing” as defined in Section
465(b)(6) of the Code with respect to the Protected Partners;

                    (iv) other than guarantees by the Guarantee Partners, no other person has executed any
guarantees with respect to such liability; and

                    (v) the Collateral does not provide security for another liability (other than another
Qualified Liability) that ranks senior to, or pari passu with, the liability described in clause
(i) above.

For purposes of determining whether clause (ii) has been satisfied in situations where one or more
potential Qualified Liabilities are secured by more than one item of Collateral, the Operating
Partnership shall allocate such liabilities among such items of Collateral in proportion

6

 

to their
relative fair market values (as reasonably determined in good faith by the Operating Partnership);
or

               (b) A direct liability of the Operating Partnership that

                    (i) is not secured by any of the assets of the Operating Partnership and is a general,
recourse obligation of the Operating Partnership, and

                    (ii) is not provided by a lender that has an interest in the Operating Partnership or is
related to the Operating Partnership within the meaning of Section 465(b)(3)(C) or the Code.

          Section 1.34 “Required Liability Amount” means, with respect to each Guarantee
Partner, 110% of such Guarantee Partner’s estimated “negative tax capital account” as of the
Closing Date, an estimate of which is set forth on Exhibit C hereto for each such Guarantee
Partner.

          Section 1.35 “REIT” has the meaning set forth in the preamble.

          Section 1.36 “SAE Entity Members” has the meaning set forth in the recitals.

          Section 1.37 “Section 2.4 Notice” has the meaning set forth in Section 2.4(c).

          Section 1.38 “Single Asset Entities” has the meaning set forth in the recitals.

          Section 1.39 “Tax Protection Period” means, with respect to each Protected Partner and each Guarantee Partner, the period of time
beginning on Closing Date and ending on the earlier to occur of: (a) the tenth (10th) anniversary
of the Closing and (b) the date on which fifty percent (50%) or more of the OP Units originally
received by the Protected Partner or Guarantee Partner, as applicable, in the Formation
Transactions have been sold, exchanged or otherwise disposed of by any Protected Partner or
Guarantee Partner, other than in a Permitted Disposition.

          Section 1.40 “Tax Protection Period Transfer” has the meaning set forth in Section 2.1(a) of this Agreement.

          Section 1.41 “Transfer” means any direct or indirect sale, exchange, transfer or other disposition, whether voluntary
or involuntary.

          Section 1.42 “Treasury Regulations” means the income tax regulations under the Code, whether such regulations are in proposed,
temporary or final form, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

          Section 1.43 “YIP” has the meaning set forth in the recitals.

          Section 1.44 “YIP Merger Agreement” means the agreement and plan of merger pursuant to which YIP will merge with and into the
Operating Partnership.

7

 

          Section 1.45 “Younan Entities” means YPI, YIP, the SAE Entity Members and the Single Asset Entities collectively.

          Section 1.46 “YPI” has the meaning set forth in the recitals.

ARTICLE II

TAX PROTECTIONS

          Section 2.1 Indemnification Upon Taxable Transfers.

               (a) Unless the Protected Partners’ Representative consents to a Tax Protection Period Transfer
(as defined below), during the Tax Protection Period, the Operating Partnership shall indemnify the
Protected Partners as set forth in Section 2.2 if the Operating Partnership or any entity
in which the Operating Partnership holds a direct or indirect interest shall cause or permit (i)
any Transfer of all or any portion of a Protected Property (including any interest therein or in
the entity owning, directly or indirectly, the Protected Property) in a transaction that would
result in the recognition of taxable income or gain by any Protected Partner under Section 704(c)
of the Code, or (ii) any Fundamental Transaction that would result in the recognition of taxable
income or gain to any Protected Partner (a Fundamental Transaction and a Transfer, collectively a
“Tax Protection Period Transfer”).

               (b) Section 2.1(a) shall not apply to any Tax Protection Period Transfer of a Protected Property
(including any interest therein or in the entity owning, directly or indirectly, the Protected
Property) (i) in a transaction in which no gain is required to be recognized by a Protected Partner
(an “Exchange”), including a transaction qualifying under Section 1031 or Section 721 (or
any successor statutes) of the Code; provided, however, that any property acquired by the Operating
Partnership in the Exchange shall remain subject to the provisions of this Article II in
place of the exchanged Protected Property for the remainder of the Tax Protection Period or (ii) as
a result of the condemnation or other taking of any Protected Property by a governmental entity in
an eminent domain proceeding or otherwise, provided that the Operating Partnership shall use
commercially reasonable efforts to structure such disposition as either a tax-free like-kind
exchange under Section 1031 or a tax-free reinvestment of proceeds under Section 1033, provided
that in no event shall the Operating Partnership be obligated to acquire or invest in any property
that it otherwise would not have acquired or invested in.

          Section 2.2 Indemnification for Taxable Transfers.

               (a) In the event of a Tax Protection Period Transfer described in Section 2.1(a), each
Protected Partner shall, within 30 days after the closing of such Tax Protection Period Transfer,
receive from the Operating Partnership an amount of cash equal to the estimated Make Whole Amount
applicable to such Tax Protection Period Transfer. If it is later determined that the true Make
Whole Amount applicable to a Protected Partner exceeds the estimated Make Whole Amount applicable
to such Protected Partner, then the Operating Partnership shall pay such excess to such Protected
Partner within 90 days after the closing of the Tax Protection Period Transfer, and if such
estimated Make Whole Amount exceeds the true

8

 

Make Whole Amount, then such Protected Partner shall
promptly refund such excess to the Operating Partnership, but only to the extent such excess was
actually received by such Protected Partner.

               (b) Notwithstanding any provision of this Agreement to the contrary, the sole and exclusive
rights and remedies of any Protected Partner under Section 2.1(a) shall be a claim against
the Operating Partnership for the Make Whole Amount as set forth in this Section 2.2, and
no Protected Partner shall be entitled to pursue a claim for specific performance of the covenants
set forth in Section 2.1(a) or bring a claim against any person that acquires a Protected
Property from the Operating Partnership in violation of Section 2.1(a).

          Section 2.3 Section 704(c) Gains. A good faith estimate of the initial amount of Section 704(c) gain allocable to each
Protected Partner as of the Closing Date of each OP Merger is set forth on Exhibit B
hereto. The parties acknowledge that the initial amount of such Section 704(c) gain may be
adjusted over time as required by Section 704(c) of the Code and the Regulations promulgated
thereunder.

          Section 2.4 Debt Maintenance and Allocation.

               (a) During the Tax Protection Period, the Operating Partnership shall: maintain on a
continuous basis an amount of Qualified Liabilities at least equal to the aggregate Required
Liability Amount of the Guarantee Partners. For the avoidance of doubt, and notwithstanding any
other provision of this Agreement, the Operating Partnership shall not be required to maintain any
amount of Qualified Liabilities in excess of the aggregate Required Liability Amount of all
Guarantee Partners.

               (b) (i) During the Tax Protection Period, the Operating Partnership shall provide each
Guarantee Partner with the opportunity to execute a guarantee of one or more Qualified
Liabilities that are Guarantee Permissible Liabilities in an amount up to such Guarantee Partner’s
Required Liability Amount (each such opportunity and each opportunity required by Section
2.4(c), a “Guaranty Opportunity”), and (ii) after the Tax Protection Period, and for so
long as a Guarantee Partner is a partner in the Operating Partnership, the Operating Partnership
shall use commercially reasonable efforts to make Guaranty Opportunities available to the Guarantee
Partner, provided that in the case of this clause (ii), the Operating Partnership shall not be
required to incur any indebtedness that it would not otherwise have incurred and shall not be
required to continue to maintain any indebtedness
that it would not otherwise maintain, as determined by the Operating Partnership in its
reasonable discretion; provided, however, that in the case of clauses (i) and (ii) the aggregate
amount of all guarantees executed by all Guarantee Partners shall not exceed the aggregate Required
Liability Amount of all Guarantee Partners. The Operating Partnership shall have the discretion to
identify the Qualified Liability or Qualified Liabilities that shall be made available for
guarantee by each Guarantee Partner. The Operating Partnership and
each Guarantee Partner shall cooperate in good faith to determine
mutually acceptable form and manner of the guarantee, provided such
parties agree that the guarantee may be on a “bottom
dollar” basis if so requested by a Guarantee Partner. Each Guarantee Partner and its direct and indirect owners may
allocate the

9

 

Guarantee Opportunity afforded to such Guarantee Partner in any manner they choose.
The Operating Partnership agrees to file its tax returns allocating any debt subject to a Guarantee
to the applicable Guarantee Partners, unless otherwise required by applicable law. Each
Guarantee Partner shall bear the costs incurred by it in connection with the execution of any
guarantee to which it is a party. To the extent a Guarantee Partner executes a guarantee, the
Operating Partnership shall deliver a copy of such guarantee to the lender under the Guaranteed
Liability promptly after receiving such copy from the relevant Guarantee Partner.

               (c) During the Tax Protection Period, the Operating Partnership shall not allow a Debt
Notification Event to occur unless the Operating Partnership provides at least thirty (30) days’
written notice (a “Section 2.4 Notice”) to each Guarantee Partner that may be affected
thereby. The Section 2.4 Notice shall describe the Debt Notification Event and designate and
provide a description of one or more Qualified Liabilities that may be guaranteed by the Guarantee
Partners pursuant to Section 2.4(b) of this Agreement in an amount equal to the amount of
the refinanced or repaid Qualifying Debt that was guaranteed by such Guarantee Partner immediately
prior to the date of the refinancing or repayment. Any Guarantee Partner that desires to execute a
guarantee following the receipt of a Section 2.4 Notice shall provide the Operating Partnership
with notice thereof within fifteen (15) days after the date of the Section 2.4 Notice.

               (d) Provided
that the Operating Partnership satisfies its obligations under
Section 2.4(a), (b) and (c) of this Agreement, it shall have no liability under Section 2.4(e) for breach
of Section 2.4, whether or not such Guarantee Partner
accepts such Guaranty
Opportunity. Furthermore, the Operating Partnership makes no
representation or warranty to any Guarantee Partner concerning the
treatment or effect of any guarantee under Federal, state, local, or
foreign Tax law, and bears no responsibility for any Tax liability of
any Guarantee Partner or Affiliate thereof that is attributable to a
reallocation, by a taxing authority, of debt subject to a guarantee
(other than an act or omission that is indemnifiable under Section
2.4(e) of this Agreement).

               (e) If the Operating Partnership shall fail to comply with any provision of this Section
2.4, the Operating Partnership shall pay, within 30 days of such failure, a Make Whole Payment
to each Guarantee Partner who recognizes income or gain as a result of such failure equal to the
estimated Make Whole Amount applicable to such failure. If it is determined that the true Make
Whole Amount applicable to a Guarantee Partner exceeds the estimated Make Whole Amount paid to such
Guarantee Partner, then the Operating Partnership shall pay such excess to such Guarantee Partner
within thirty (30) days after the true Make Whole Amount has
been determined, and if such estimated Make Whole Amount exceeds the true Make Whole Amount,
then such Guarantee Partner shall refund such excess to the Operating Partnership within thirty
(30) days after the true Make Whole Amount has been determined, but only to the extent such excess
was actually received by such Guarantee Partner.

               (f) Notwithstanding any provision of this Agreement to the contrary, the sole and exclusive
rights and remedies of any Guarantee Partner for a breach or violation of the covenants set forth
in Section 2.4 shall be a claim against the Operating Partnership for the Make Whole Amount
as set forth in Section 2.4(e), and no Guarantee Partner shall be entitled to pursue a
claim for specific performance of the covenants set forth in Section 2.4.

10

 

          Section 2.5 Dispute Resolution. Any controversy, dispute, or claim of any nature arising out of, in connection with, or in
relation to the interpretation, performance, enforcement or breach of this Agreement (and any
closing document executed in connection herewith) shall be governed by Section 8.08 of the
YIP Merger Agreement.

ARTICLE III

GENERAL PROVISIONS 

          Section 3.1 Notices. All notices, demands, declarations, consents, directions, approvals, instructions, requests
and other communications required or permitted by the terms of this Agreement shall be given in the
same manner as in the OP Agreement.

          Section 3.2 Titles and Captions. All Article or Section titles or captions in this Agreement are for convenience only. They
shall not be deemed part of this Agreement and in no way define, limit, extend or describe the
scope or intent of any provisions hereof. Except as specifically provided otherwise, references to
“Articles” and “Sections” are to Articles and Sections of this Agreement.

          Section 3.3 Pronouns and Plurals. Whenever the context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa.

          Section 3.4 Further Action. The parties shall execute and deliver all documents, provide all information and take or
refrain form taking action as may be necessary or appropriate to achieve the purposes of this
Agreement.

          Section 3.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their heirs, executors, administrators, successors, legal representatives and permitted assigns.

          Section 3.6 Creditors. Other than as expressly set forth herein, none of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Operating Partnership.

          Section 3.7 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute waiver of any such breach or any covenant, duty, agreement or
condition.

          Section 3.8 Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute one
agreement binding on all of the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.

11

 

          Section 3.9 Applicable Law. This Agreement shall be construed and enforced in accordance with and governed by the laws
of the State of California, without regard to the principles of conflicts of law.

          Section 3.10 Invalidity of Provisions. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of other remaining provisions contained herein
shall not be affected thereby.

          Section 3.11 Entire Agreement. This Agreement contains the entire understanding and agreement among the Partners with
respect to the subject matter hereof and amends, restates and supersedes the OP Agreement and any
other prior written or oral understandings or agreements among them with respect thereto.

          Section 3.12 No Rights as Stockholders. Nothing contained in this Agreement shall be construed as conferring upon the holders of
the OP Units any rights whatsoever as stockholders of the REIT, including, without limitation, any
right to receive dividends or other distributions made to stockholders of the REIT
or to vote or to consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the REIT or any other matter.

[Remainder of Page Left Blank Intentionally]

12

 

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

	 	 	 	 	 	 	 	 	 	 	 

	 	 	REIT:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	YOUNAN PROPERTIES, INC.,	 	 
	 	 	a Maryland corporation	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	OPERATING PARTNERSHIP:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	YOUNAN PROPERTIES, L.P.,	 	 
	 	 	a Maryland limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	YOUNAN PROPERTIES, INC.	 	 
	 	 	 	 	a Maryland corporation,	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title :	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

Signature Page to Tax Protection Agreement

 

 

SCHEDULE I

PROTECTED PARTNERS

See Attached.

Schedule I-1

 

 

SCHEDULE II

GUARANTEE PARTNERS

See Attached.

Schedule II-1

 

 

EXHIBIT A

PROTECTED PROPERTIES

	 	 	 	 	 
	Property #	 	Property Name	 	Property Address
	 
	1605

	 	Younan North LaSalle
	 	200 North LaSalle, Chicago, Illinois
	 
	1912

	 	KPMG Center
	 	717 N. Harwood, Dallas, Texas
	 
	1917

	 	Thanksgiving Tower
	 	1601 Elm Street, Dallas, Texas
	 
	1957

	 	Two Westlake
	 	580 Westlake Park Blvd., Houston, Texas
	 

Exhibit A-1

 

 

EXHIBIT B

ESTIMATED ALLOCATIONS OF SECTION 704(c) GAIN

See Attached.

Exhibit B-1

 

 

EXHIBIT C

REQUIRED LIABILITY AMOUNT

See Attached.

Exhibit C-1

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