Document:

Exhibit 10

Exhibit 10.1

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of May 12, 2004, by and between Interstate General Properties Limited Partnership S.E., a Maryland limited partnership (the "Company") and Jorge Garcia Massuet (the "Executive"), a resident of Puerto Rico.

WHEREAS, the Company is an indirect, wholly-owned subsidiary of American Community Properties Trust ("ACPT");

WHEREAS, the Executive is an engineer by profession and possesses unique and valuable experience and expertise in the field of real estate development.

WHEREAS, in order to provide continuity of management and to take advantage of the Executive's expertise, the Company wishes to secure the services of the Executive as Vice President of Construction, and the Executive wishes to provide such services, in accordance with the terms and subject to the considerations provided herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to be bound by the following terms and conditions:

1.Employment.  The Company shall employ the Executive, and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein. The Executive represents and warrants that neither the execution by him of this Agreement nor the performance by him of his duties and obligations hereunder will violate any agreement to which he is a party or by which he is bound.

2.Term.  The Executive's employment under this Agreement shall continue until his death, resignation or termination by the Board of Trustees of ACPT (the "Board").

3.Position and Duties.  The Executive shall serve as Vice President of Construction of the Company and shall have primary responsibility for managing the construction and development of real estate assets of the Company in Puerto Rico. In addition, the Executive shall have such other powers and duties as may from time to time be prescribed by the Board.  The Executive shall report to the President of the Company.  The Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company.

4.Place of Performance.  In connection with his employment by the Company, the Executive shall be based at the Company's principal executive offices which, as of the date of this Agreement, are located in Hato Rey, Puerto Rico.

5.Compensation.

(a)Base Salary.  The Executive shall receive an annual base salary of $185,000, payable in substantially equal semi-monthly installments (the "Base Salary").  The Executive may receive salary increases at the discretion of the Compensation Committee.

(b)Benefit Plans.  The Executive shall participate in such bonus and benefit plans as may be established from time to time by the Company on the same basis as comparable senior executive employees of the Company.  The granting to Executive of any discretionary benefits under such plans shall be determined solely by the Compensation Committee.

(c)Expenses.  During the term of his employment hereunder, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him (in accordance with the policies and procedures established for the Company's senior executive officers) in connection with his services hereunder.  The Executive shall account to the Company for such expenses in accordance with established Company policy.

(d)Vacations.  The Executive shall be entitled to the number of paid vacation days determined by the Company generally for its senior executive officers, but not less than twenty (20) days per year.  The Executive shall also be entitled to all paid holidays given to the Company's senior executive officers.

(e)Certain Specified Benefits.  In addition to the benefits for which the Executive is eligible under subsection (b) of this section, during the term of his employment hereunder, the Company shall provide for the Executive's business use (i) a suitable automobile for which the Company shall only be obligated to pay a monthly amount no higher than $700.00 plus insurance, repairs and gas, (ii) a cellular phone whose use must be primarily used for the company's business purposes, and (iii) shall pay the Executive's membership dues in a Country Club reasonably acceptable to the President.

6.Withholding.  Anything in this Agreement to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or his estate or beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation.  In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes and withholdings as required by law, provided it is satisfied that all requirements of law affecting its responsibilities to withhold compensation have been satisfied.

7.Unauthorized Disclosure.  During the period of his employment hereunder, and for a period of three (3) years thereafter, the Executive shall not, without the written consent of the Board or a person authorized by the Board, disclose to any person other than as required by law or court order, or other than to an authorized employee of the Company or its Affiliates, or to a person to whom disclosure is necessary or appropriate in connection with the performance by the Executive of his duties as an executive of the Company (e.g., disclosure to the Company's or its Affiliates' outside accountants or bankers of financial data properly requested by such persons and approved by an authorized officer of the Company), any confidential information obtained by him while in the employ of the Company with respect to any of the Company's or the Company's Affiliates' products, services, customers, suppliers, marketing techniques, methods or future plans; provided, however, that confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Executive) or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that conducted by the Company.  The Executive shall be allowed to disclose confidential information to his attorney solely for the purpose of ascertaining whether such information is confidential within the intent of this Agreement; provided, however, that the Executive (a) discloses to his attorney the provisions of this Section 7 and (b) agrees not to waive the attorney-client privilege with respect thereto.  The provisions of this Section 7 shall survive termination of this Agreement.

8.Corporate Opportunities.  While the Executive is employed by the Company hereunder, the Executive shall use his best efforts to make available to the Company business opportunities that come to his attention.

9.Termination.  (a)  Either party may terminate the Executive's employment under this Agreement for any reason upon 60 days prior written notice to the other.  Except as otherwise provided in this Section 9, upon such termination the salary payment and benefit obligations of the Company hereunder shall cease.

(b)This Agreement automatically shall terminate upon the death or disability of the Executive.  For purposes of this Agreement, the Executive shall become "disabled" at such time as the Executive has a physical or mental condition, verified by a physician designated by the Company, which in the good faith judgment of the Board prevents the Executive from carrying out one or more of the material aspects of his assigned duties for at least 270 consecutive days.  The Executive agrees, upon request of the Board, at a time convenient to the Executive during a 30-day period designated by the Board, to submit to any medically reasonable examination by a physician designated by the Company.  In the event of termination under this Section 9(b), (i) the Company shall pay to the Executive, or the Executive's estate, as the case may be, a pro-rated portion of the Base Salary for a period of six months following such termination and (ii) the Executive shall remain eligible to receive all benefits pursuant to Section 5(b) hereof during such six month period.

(c)The Company may terminate this Agreement immediately for cause.  For purposes of this Agreement, "cause" shall mean any termination of the Executive by the Company approved by the Board arising from (i) the Executive's willful, reckless or negligent inattention to the welfare of ACPT and its subsidiaries, (ii) the Executive's unethical conduct, (iii) the Executive's repeated disregard of the Company's written rules, policies and regulations, (iv) conviction of a felony or other criminal offense relating to fraud or theft or (v) repeated failure or refusal by the Executive to perform his material obligations under this Agreement, including any lawful directive of the Board.  In the event of termination under this Section 9(c), all salary payment and benefit obligations of the Company hereunder shall cease immediately.

(d)The Executive may terminate this Agreement immediately upon any breach by the Company of any of its obligations under this Agreement.  In the event of (i) a termination by Executive under this Section 9(d) or (ii) termination of this Agreement by the Company for any reason other than for cause, (x) the Company shall pay to the Executive the Base Salary for a period of 24 months following such termination, and (y) the Executive shall remain eligible to receive all benefits pursuant to Section 5(b) hereof during such 24 month period.   

10.Notices.  For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or facsimile transmission or five days after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Company:

Interstate General Properties Limited Partnership S.E.

Attn:  President

P. O. Box 363908

San Juan, PR  00936-3908

 

If to the Executive:

Mr. Jorge Garcia Massuet

P. O. Box 210

Trujillo Alto, PR

 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

11.Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with respect to the transactions contemplated herein, and supersedes all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein.  This Agreement shall be binding upon, and shall inure to the benefit of, the respective successors, heirs, and permitted assigns of the parties; provided that the Executive may not assign this Agreement without the prior written consent of the Company.

12.Headings.  Article and section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

13.Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

14.Governing Law.  This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the Commonwealth of Puerto Rico (excluding the choice-of-law rules thereof).

15.Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.

	Arbitration.

(a)Except as otherwise specifically provided herein, any dispute or controversy arising between the Executive and the Company relating to this Agreement shall be submitted to private, binding arbitration, upon the written request of either the Executive or the Company, before a panel of three arbitrators, under the auspices of and in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), such arbitration to take place in San Juan, Puerto Rico, or as otherwise determined by the arbitrators.  In the event of such dispute or controversy, the Company and the Executive shall independently and simultaneously select one arbitrator each, both of whom must have no past or present familial or business relationships with the parties and must possess expertise in the area of compensation of senior management employees.  These two arbitrators shall jointly agree upon and select a third arbitrator who also possesses such credentials.  These three arbitrators shall hear and decide the dispute or controversy by majority vote, and their decision and award shall be final and conclusive upon the parties, and their heirs, administrators, executors, successors, and assigns.  The arbitrators shall have no power or authority to add to, subtract from, or otherwise modify the terms of this Agreement.  In the event that the Commercial Arbitration Rules of the AAA conflict with the procedures set forth in this section, the terms of this section shall govern.  The Executive and the Company agree that the arbitration must be initiated by personally delivering a statement of claim to the AAA and to the party against whom the claim is asserted no later than ninety (90) days after the basis of the claim becomes known, or reasonably should have been known or discovered, by the party asserting the claim.  In the event arbitration is not initiated within such ninety (90) day period, such claim, dispute, or controversy shall be irrevocably time-barred.  A judgment based upon such arbitration award may be entered in any court having jurisdiction thereof.

(b)Notwithstanding the foregoing, any action brought by the Company seeking a temporary restraining order, temporary and/or permanent injunction, and/or a decree of specific performance of the terms of this Agreement may be brought in a court of competent jurisdiction without the obligation to proceed first to arbitration.

17.  Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

	
INTERSTATE GENERAL PROPERTIES LIMITED PARTNERSHIP S.E.

	 	 
	
By:
	
IGP Group Corp.

	 	
Its Managing General Partner

	 	 
	
By:
	
/s/ Carlos R. Rodriguez

	 	
Carlos R. Rodriguez

	 	
President

	 	 
	 	
/s/ Jorge Garcia Massuet

	 	
Jorge Garcia MassuetSECOND AMENDMENT TO MANAGEMENT AGREEMENT

Exhibit 10.2

MANAGEMENT AGREEMENT

INTERSTATE ST. CHARLES, INC.

SANTA MARIA SHOPPING CENTER

 

THIS AGREEMENT made this 5th day of January 1987, by and between INTERSTATE GENERAL PROPERTIES (IGP) - (Management Agent) and INTERSTATE ST. CHARLES, INC. (SANTA MARIA SHOPPING CENTER) - "St. Charles."

BACKGROUND

St. Charles is the owner of Santa Maria Shopping Center which is located at State Road #833, Barrio Los Frailes, Guaynabo, Puerto Rico, "The Property."

St. Charles wishes to appoint Interstate General Properties its exclusive managing agent of the property described in the preceding paragraph and the Management Agent is willing to accept such appointment on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises, the mutual undertakings of the parties as hereinafter set forth, and good and valuable other consideration, the legal sufficiency of which each of the parties acknowledges to the other, the parties intending to be legally bound by these presents, agree as follows:

1.The Management Agent hereby accepts the appointment, on the terms and conditions hereinafter set forth, as exclusive managing agent of the property.

2.The Management Agent shall render and perform the following duties:

	Investigate, hire, pay, supervise and discharge the personnel necessary to be employed to maintain and operate properly the property.  In each instance such personnel shall be in Management Agent's employ, but all expenses regarding such employees shall be charged to St. Charles on a regular basis and compensation for the services of such employees shall be considered an operating expense of the Property.
	Let and re-let space in the Property in accordance with a rent schedule and other terms approved from time to time by St. Charles.
	Collect all rents due from tenants and other users or Lessee's space or other facilities in the Property.  St. Charles hereby authorizes and directs Management Agent to request, demand, collect, receive and receipt for any and all charges or rents which may at any time be or become due to St. Charles.  Management Agent is authorized and directed to file and prosecute in its own name or in the name of St. Charles any and all legal actions required for the collection of rents, the eviction of tenants or other action required, or as may be appropriate in the operation and maintenance of the Property.
	Cause the buildings, appurtenances and grounds to be maintained in a clean and proper manner consistent with the customary use of the facilities.
	Pay all ordinary and necessary expenses, incurred in connection with the ownership, maintenance and operation.
	Make debt service payments as required.
	Make contracts for water, electricity, gas, fuel oil, telephone, security protection and all other personal property, equipment, supplies and services required or desirable in the operation and maintenance of the Property.
	Cause to be placed and kept in force all forms of insurance required to protect adequately St. Charles, (or as required by law), including as appropriate, public liability insurance, fire and extended coverage insurance, burglary and theft insurance, plate glass and vandalism insurance.
	Prepare for execution and filing all governmental reports and returns as required by law pertaining to the Property.
	Maintain a comprehensive system of office records, financial books and accounts and other records which shall completely and accurately reflect the financial operations of the Property.  Such books, records and accounts shall be available for inspection during regular business hours by St. Charles at the offices of the Management Agent in Hato Rey, Puerto Rico.  Within ninety (90) days following the end of each calendar or fiscal year of St. Charles, the Management Agent shall furnish to St. Charles a complete annual financial report of the operations of the property, which report, if required by St. Charles, shall be certified to by a Certified Public Accountant.  Fees paid to outside auditors shall be considered a Property operating expense.
	Operate the Property at all time in accordance with all applicable governmental laws, regulations and ordinances.
	Take such further actions as may be required or appropriate for the efficient operation and maintenance of the Property.

3.Any payments to be made by Management Agent under this Agreement shall be made out of such sums as are available from the operations of the Property, or as may be provided by St. Charles.  The Management Agent shall not be obligated to make any advance to or for the account of St. Charles or to pay any sum except out of funds held or provided for as provided in this paragraph, nor shall the Management Agent be obligated to incur any liability or obligation for the account of St. Charles without assurance that the necessary funds for the discharge of such undertaking will be provided.

4.The Management Agent shall establish and maintain in a bank acceptable to St. Charles, a separate bank account for St. Charles for the deposit of monies of St. Charles and a separate account for tenant security deposits, with authority to draw on the former account for any payments to be made by the Management Agent to discharge any liabilities or obligations incurred by it under this Agreement as well as for the payment of Management Agent's fees.

5.For its services under this Agreement, the Management Agent shall be entitled to receive a fee computed and payable monthly in an amount equal to 3 1/2% of gross rent plus common area charges and percentage rents.

6.This agreement shall be in effect from the 1st day of January, 1987 thru December 31, 1987, subject to the following conditions:  In the event a bankruptcy is filed by or against St. Charles or the Management Agent or in the event that either of them makes an assignment for the benefit of creditors or takes advantage of any bankruptcy or insolvency act, the other party may terminate this Agreement with prompt advice in writing to the other.

Unless canceled pursuant to this paragraph, this Agreement shall be automatically renewed for annual periods.

7.This Agreement constitutes the entire agreement between the parties and no variation or modification of this Agreement shall be valid or enforceable unless stated in writing and signed by the parties hereto.

8.This Agreement shall be binding upon and inure to the benefit of the parties hereto, together with their successors and assigns.

9.This Agreement shall be governed by and construed under the laws of the Commonwealth of Puerto Rico.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement the day, month and year first hereinabove written.

 

	
OWNER:
	
MANAGEMENT AGENT:

	 
	 	
INTERSTATE GENERAL PROPERTIES

LIMITED PARTNERSHIP

	
INTERSTATE ST. CHARLES, INC.

	 	 	 	 
	
By:
	
/s/ Donald G. Blakeman
	
By:
	
/s/ Rogelio Perez-Guzman

	 	 	 	
Rogelio Perez-Guzman

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