Document:

EX-10.1

Loan Agreement

 

Dated   September 24, 2008

 

Santander BanCorp (“Santander BanCorp”)

Santander Financial Services, Inc. (“Santander FS”)

(each a “Borrower” and together the “Borrowers”)

Banco Santander Puerto Rico (“Bank”)

 

 

Loan Agreement

Contents

 

	 	 	 	 	 	 	 
	Details	 	 	1	 
	 	 	 
	 	 	 	 
	General terms	 	 	3	 
	 	 	 
	 	 	 	 
	 	 	1   Interpretation
	 	 	3	 
	1.1	 	Definitions
	 	 	3	 
	1.2	 	References to certain general terms
	 	 	6	 
	1.3	 	Number
	 	 	7	 
	1.4	 	Headings
	 	 	7	 
	 	 	 
	 	 	 	 
	 	 	2   The Facility and Facility Limits
	 	 	7	 
	2.1	 	Bank to fund
	 	 	7	 
	2.2	 	Maximum accommodation — Limits
	 	 	7	 
	2.3	 	Liability of the Borrowers
	 	 	8	 
	2.4	 	Purpose
	 	 	8	 
	 	 	 
	 	 	 	 
	 	 	3   Using the Facility
	 	 	8	 
	3.1	 	Drawing down
	 	 	8	 
	3.2	 	Requesting a drawdown
	 	 	9	 
	3.3	 	Effect of a Drawdown Notice
	 	 	9	 
	3.4	 	Conditions to drawdown
	 	 	9	 
	3.5	 	Conditions to all drawdowns
	 	 	9	 
	3.6	 	Benefit of conditions
	 	 	9	 
	 	 	 
	 	 	 	 
	 	 	4   Interest
	 	 	10	 
	4.1	 	Interest charges
	 	 	10	 
	 	 	 
	 	 	 	 
	 	 	5   Repaying and prepaying
	 	 	10	 
	5.1	 	Repayment
	 	 	10	 
	5.2	 	Prepayment
	 	 	10	 
	5.3	 	Prepayments not available for redrawing
	 	 	10	 
	 	 	 
	 	 	 	 
	 	 	6   Payments
	 	 	10	 
	6.1	 	Manner of payment
	 	 	10	 
	6.2	 	No Withholding
	 	 	11	 
	 	 	 
	 	 	 	 
	 	 	7   Cancellation
	 	 	11	 
	 	 	 
	 	 	 	 
	 	 	8   Increased costs
	 	 	11	 
	8.1	 	Compensation
	 	 	11	 
	8.2	 	Possible minimization
	 	 	12	 
	 	 	 
	 	 	 	 
	 	 	9   Illegality or impossibility
	 	 	12	 
	9.1	 	Bank’s right to suspend or cancel
	 	 	12	 
	9.2	 	Extent and duration
	 	 	13	 
	9.3	 	Notice requiring prepayment
	 	 	13	 
	 	 	 
	 	 	 	 
	 	 	10   Representations and warranties
	 	 	13	 
	10.1	 	Representations and warranties
	 	 	13	 
	10.2	 	Repetition of representations and warranties
	 	 	14	 
	10.3	 	Reliance
	 	 	14	 
	 	 	 
	 	 	 	 
	 	 	11   Undertakings
	 	 	14	 
	11.1	 	General undertakings
	 	 	14	 
	 	 	 
	 	 	 	 
	 	 	12   Default
	 	 	15	 
	12.1	 	Events of Default
	 	 	15	 

 

 

	 	 	 	 	 	 	 
	12.2	 	Consequences of default
	 	 	16	 
	12.3	 	Investigation of default
	 	 	17	 
	 	 	 
	 	 	 	 
	 	 	13   Costs and indemnities
	 	 	17	 
	13.1	 	What the Borrowers agree to pay
	 	 	17	 
	13.2	 	Indemnity
	 	 	17	 
	 	 	 
	 	 	 	 
	 	 	14   Interest on overdue amounts
	 	 	18	 
	14.1	 	Obligation to pay
	 	 	18	 
	14.2	 	Compounding
	 	 	18	 
	14.3	 	Interest following judgment
	 	 	18	 
	 	 	 
	 	 	 	 
	 	 	15   Application of payments
	 	 	18	 
	 	 	 
	 	 	 	 
	 	 	16   Dealing with interests
	 	 	19	 
	16.1	 	No dealing by Borrowers
	 	 	19	 
	16.2	 	Dealings by Bank
	 	 	19	 
	 	 	 
	 	 	 	 
	 	 	17   Notices and other communications
	 	 	19	 
	17.1	 	Form — all communications
	 	 	19	 
	17.2	 	Form — communications sent by email
	 	 	19	 
	17.3	 	Delivery
	 	 	19	 
	17.4	 	When effective
	 	 	20	 
	17.5	 	When taken to be received
	 	 	20	 
	17.6	 	Receipt outside business hours
	 	 	20	 
	17.7	 	Waiver of notice period
	 	 	20	 
	 	 	 
	 	 	 	 
	 	 	18   General
	 	 	20	 
	18.1	 	Application to Transaction Documents
	 	 	20	 
	18.2	 	Prompt performance
	 	 	20	 
	18.3	 	Consents
	 	 	21	 
	18.4	 	Certificates
	 	 	21	 
	18.5	 	Set-off
	 	 	21	 
	18.6	 	Discretion in exercising rights
	 	 	21	 
	18.7	 	Partial exercising of rights; no waiver
	 	 	21	 
	18.8	 	No liability for loss
	 	 	21	 
	18.9	 	Conflict of interest
	 	 	21	 
	18.10	 	Remedies cumulative
	 	 	22	 
	18.11	 	Indemnities
	 	 	22	 
	18.12	 	Rights and obligations are unaffected
	 	 	22	 
	18.13	 	Inconsistent law
	 	 	22	 
	18.14	 	Supervening legislation
	 	 	22	 
	18.15	 	Time of the essence
	 	 	22	 
	18.16	 	Variation and waiver
	 	 	22	 
	18.17	 	Further steps
	 	 	22	 
	18.18	 	Counterparts
	 	 	23	 
	18.19	 	Governing law
	 	 	23	 
	 	 	 
	 	 	 	 
	Schedule 1 - Conditions precedent (clause 3.4)	 	 	Sch. 1-1	 
	 	 	 
	 	 	 	 
	Schedule 2 - Drawdown Notice (clause 3)	 	 	Sch. 2-1	 
	 	 	 
	 	 	 	 
	Signature page	 	 	S-1	 

 

 

Details

Parties

	 	 	 	 	 
	 
	 
	 	 	 	 
	Parties	 	Santander BanCorp, Santander FS and Bank
	 
	 	 	 	 
	 
	 
	 	 	 	 
	Santander
	 	Name	 	Santander BanCorp
	BanCorp
	 	 	 	 
	 
	 	 	 	 
	 
	 	IRS TAX ID	 	66-0573723
	 
	 	 	 	 
	 
	 	Incorporated	 	Commonwealth of Puerto Rico
	 
	 	 	 	 
	 
	 	Address	 	207 Ponce de Leon Avenue
	 
	 	 	 	4th Floor
	 
	 	 	 	San Juan, PR 00918
	 
	 	 	 	 
	 
	 	Fax	 	+1-787-777-4191
	 
	 	 	 	 
	 
	 	Telephone	 	+1- 787-777-4486
	 
	 	 	 	 
	 
	 	Email	 	fbruno@bspr.com
	 
	 	 	 	 
	 
	 	Attention	 	Fernando L. Bruno
	 
	 	 	 	 
	 
	 
	 	 	 	 
	Santander FS
	 	Name	 	Santander Financial Services, Inc.
	 
	 	 	 	 
	 
	 	IRS TAX ID	 	66-0422347
	 
	 	 	 	 
	 
	 	Incorporated	 	Commonwealth of Puerto Rico
	 
	 	 	 	 
	 
	 	Address	 	207 Ponce de Leon Avenue
	 
	 	 	 	4th Floor
	 
	 	 	 	San Juan, PR 00918
	 
	 	 	 	 
	 
	 	Fax	 	+1-787-777-4191
	 
	 	 	 	 
	 
	 	Telephone	 	+1-787-777-4486
	 
	 	 	 	 
	 
	 	Email	 	fbruno@bspr.com
	 
	 	 	 	 
	 
	 	Attention	 	Fernando L. Bruno

1

 

	 	 	 	 	 
	 
	 
	 	 	 	 
	Bank
	 	Name	 	Banco Santander Puerto Rico
	 
	 	 	 	 
	 
	 	IRS TAX ID	 	66-312389
	 
	 	 	 	 
	 
	 	Incorporated in	 	Commonwealth of Puerto Rico
	 
	 	 	 	 
	 
	 	Address	 	207 Ponce de Leon Avenue
	 
	 	 	 	5th Floor
	 
	 	 	 	San Juan, PR 00918
	 
	 	 	 	 
	 
	 	Fax	 	787-767-7913
	 
	 	 	 	 
	 
	 	Telephone	 	787-777-4534
	 
	 	 	 	 
	 
	 	Email	 	cmgarcia@bspr.com
	 
	 	 	 	 
	 
	 	Attention	 	Carlos M. García
	 
	 	 	 	 
	Summary of facility
	 
	 	 	 	 
	 
	 
	 	 	 	 
	Facility
	 	Facility Limit	 	$630,000,000
	 
	 	 	 	 
	 
	 	Santander	 	$200,000,000
	 
	 	BanCorp Facility	 	 
	 
	 	Limit	 	 
	 
	 	 	 	 
	 
	 	Santander FS	 	$430,000,000
	 
	 	Facility Limit	 	 
	 
	 	 	 	 
	 
	 	Availability	 	The period from the date of this agreement to
	 
	 	Period	 	September 26, 2008
	 
	 	 	 	 
	 
	 	Maturity Date	 	September 24, 2009
	 
	 	 	 	 
	 
	 	Interest Rate	 	4.4343% per annum
	 
	 	 	 	 
	 
	 	Purpose	 	To refinance short-term borrowings from the
	 
	 	 	 	Bank and for general corporate purposes.

2

 

Loan Agreement

General terms

 

	1	 	Interpretation

	1.1	  	 Definitions

These meanings apply unless the contrary intention appears:

Amount Owing means the total of all amounts which are then due for payment, or which will or
may become due for payment, in connection with any Transaction Document (including
transactions in connection with them) to the Bank.

Authorized Officer means any appointed by the party to act as an Authorized Officer for the
purposes of the Transaction Documents

Availability Period means the period from the date of this agreement to September 26, 2008.

Bank means the person so described above in the Details.

Borrower means Santander BanCorp or Santander FS, as the context requires.

Borrowers means Santander BanCorp and Santander FS.

Business Day means a day on which banks are open for general banking business in Madrid,
Spain, New York, New York and San Juan, Puerto Rico (not being a Saturday, Sunday or public
holiday in any such place).

BSCH means Banco Santander, SA.

Control of a corporation includes the direct or indirect power to directly or indirectly:

	 	(a)	 	direct the management or policies of the corporation; or
	 
	 	(b)	 	control the membership of the board of directors;

whether or not the power has statutory, legal or equitable force or is based on statutory,
legal or equitable rights and whether or not it arises by means of trusts, agreements,
arrangements, understandings, practices, the ownership of any interest in shares or stock of
the corporation or otherwise.

Costs include costs, charges and expenses, including those incurred in connection with
advisors.

Default Rate means the Interest Rate plus 2% per annum.

Details means the section of this agreement headed “Details.”

3

 

Directive means:

	 	(a)	 	a law; or
	 
	 	(b)	 	a treaty, an official directive, request, regulation, guideline or policy
(whether or not having the force of law) with which banks in Puerto Rico and the United
States generally comply in carrying on their business.

Drawdown Date means the date on which a drawdown is or is to be made.

Drawdown Notice means a completed notice containing the information and representations and
warranties set out in Schedule 2.

Drawing means the outstanding principal amount of a drawdown made under the Facility.

Event of Default means an event so described in clause 12.

Facility means the Santander BanCorp Facility or the Santander FS Facility or both, as the
context requires.

Facility Limit means the sum of the Santander BanCorp Facility Limit and the Santander FS
Facility Limit, as each may be reduced or cancelled under this agreement.

Financial Report means a financial report consisting of:

	 	(a)	 	financial statements; and
	 
	 	(b)	 	any notes to those financial statements; and
	 
	 	(c)	 	any directors’ or officers’ declaration about the financial statements and
notes,

together with any reports (including any directors’ or officers’ reports) attached to any of
those documents or intended to be read with any of them.

A person is Insolvent if:

	 	(a)	 	it is generally unable to pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or
	 
	 	(b)	 	any proceeding shall be instituted by or against it seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of any order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall remain undismissed or
unstayed for a period of sixty (60) calendar days or any of the actions sought in
such

4

 

	 	 	 	proceeding (including, without limitation, the entry of any order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall occur; or
	 
	 	(c)	 	it shall take any action to authorize any of the actions set forth above.

Interest Payment Date means the Maturity Date.

Interest Rate means 4.4343% per annum.

Limit means:

	 	(a)	 	the Facility Limit;
	 
	 	(b)	 	the Santander BanCorp Facility Limit; and
	 
	 	(c)	 	Santander FS Facility Limit,

or any of them, as the context requires.

Material Adverse Effect means a material adverse effect on:

	 	(a)	 	the applicable Borrower’s ability to comply with its obligations under any
Transaction Document; or
	 
	 	(b)	 	the Bank’s rights under a Transaction Document; or
	 
	 	(c)	 	the business or financial condition of the applicable Borrower.

Maturity Date means September 24, 2009.

Potential Event of Default means an event which, with the giving of notice, lapse of time or
fulfillment of any condition, would be likely to become an Event of Default.

Santander BanCorp Facility means the facility made available to Santander BanCorp under this
agreement.

Santander BanCorp Facility Limit means $200,000,000.

Santander FS Facility means the facility made available to Santander FS under this
agreement.

Santander FS Facility Limit means $430,000,000.

Santander Group means the corporate group comprising BSCH and its consolidated Subsidiaries.

Security Agreement, Pledge and Assignment means the Security Agreement, Pledge and
Assignment dated on or about the date of this Loan Agreement, between BSCH and the Bank.

5

 

	 	 	Subsidiary of an entity means another entity which:

	 	(a)	 	is a subsidiary of the first entity within the meaning of any applicable law,
if the context requires it; or
	 
	 	(b)	 	is part of the consolidated entity constituted by the first entity and the
entities it is required to include in the consolidated financial statements it
prepares, or would be if the first entity was required to prepare consolidated
financial statements.

	 	 	Taxes means any and all taxes, imposts, duties, charges, fees, levies or other charges or
assessments of whatever nature, including income, gross receipts, “patente”, excise, real or
personal property, sales, withholding, social security, retirement, unemployment,
occupation, use, service, license, net worth, payroll, franchise, and transfer and
recording, imposed by the United States Internal Revenue Service, the Commonwealth of Puerto
Rico Department of the Treasury, the Municipal Revenue Collections Center of Puerto Rico, or
any other taxing authority (whether domestic or foreign, including any federal, state,
Puerto Rico, United States possession, county, municipal, local or foreign government or any
subdivision or taxing agency thereof), whether computed on a separate, consolidated,
unitary, combined or any other basis, including interest, fines, penalties or additions to
tax attributable to or imposed on or with respect to any such taxes, charges, fees, levies
or other assessments.

	 	 	Transaction Documents means:

	 	(a)	 	this agreement;
	 
	 	(b)	 	any Drawdown Notice;
	 
	 	(c)	 	the Security Agreement, Pledge and Assignment;
	 
	 	(d)	 	any document which a Borrower or BSCH acknowledges in writing to be a
Transaction Document; and
	 
	 	(e)	 	any other document connected with any of them.

	1.2	 	References to certain general terms
	 
	 	 	Unless the contrary intention appears, in this agreement:

	 	(a)	 	a reference to a group of persons is a reference to any two or more of them
jointly and to each of them individually;
	 
	 	(b)	 	an agreement, representation or warranty in favor of two or more persons is for
the benefit of them jointly and each of them individually;
	 
	 	(c)	 	an agreement, representation or warranty by two or more persons binds them
jointly and each of them individually but an agreement, representation or warranty by
the Bank binds the Bank individually only;

6

 

	 	(d)	 	a reference to any thing (including an amount) is a reference to the whole and
each part of it;
	 
	 	(e)	 	a reference to a document (including this agreement) includes any variation or
replacement of it;
	 
	 	(f)	 	a reference to United States dollars, dollars, $ or US$ is a reference to the
lawful currency of the United States of America;
	 
	 	(g)	 	a reference to a time of day is a reference to Puerto Rico time;
	 
	 	(h)	 	the word “person” includes any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, entity, party or government (whether national,
federal, state, county, city, municipal, or otherwise, including, without limitation,
any instrumentality, division, agency, body or department thereof);
	 
	 	(i)	 	a reference to a particular person includes the person’s executors,
administrators, successors, substitutes (including persons taking by novation) and
assigns;
	 
	 	(j)	 	the words “including,” “for example” or “such as” when introducing an example,
do not limit the meaning of the words to which the example relates to that example or
examples of a similar kind;
	 
	 	(k)	 	an Event of Default or Potential Event of Default is “continuing” if it has not
been waived by, or remedied to the satisfaction of, the Bank.

	1.3	 	Number
	 
	 	 	The singular includes the plural and vice versa.

	1.4	 	Headings
	 
	 	 	Headings and the Summary in the Details are for convenience only and do not affect the
interpretation of this agreement.

 

	2	  	The Facility and Facility Limits

	2.1	 	Bank to fund
	 
	 	 	The Bank agrees to provide the loans requested by the Borrowers under this agreement.

	2.2	 	Maximum loans — Limits

	 	(a)	 	Subject to paragraphs (b) and (c), the maximum total amount of loans available
to the Borrowers under this agreement is the Facility Limit.

7

 

	 	(b)	 	Within the Facility Limit:

	 	(i)	 	the maximum total amount of loans available to Santander
BanCorp is the Santander BanCorp Facility Limit; and
	 
	 	(ii)	 	the maximum total amount of loans available to Santander FS is
the Santander FS Facility Limit.

	 	(c)	 	To avoid doubt:

	 	(i)	 	no part of the Santander BanCorp Facility Limit is available to
be borrowed by Santander FS; and
	 
	 	(ii)	 	no part of the Santander FS Facility Limit is available to be
borrowed by Santander BanCorp.

	2.3	 	Liability of the Borrowers
	 
	 	 	The Borrowers’ obligations to pay principal and interest in connection with the Facilities
is several and not joint (“mancomunado”). Therefore:

	 	(a)	 	a Drawing by Santander BanCorp under the Santander BanCorp Facility, all
amounts of interest (including default interest) in connection with that Drawing, and
amounts payable under clause 6.2 in connection with any payment by Santander BanCorp,
are repayable or payable (as the case may be) by Santander BanCorp and not by Santander
FS; and
	 
	 	(b)	 	a Drawing by Santander FS under the Santander FS Facility, all amounts of
interest (including default interest) in connection with that Drawing, and amounts
payable under clause 6.2 in connection with any payment by Santander FS, are repayable
or payable (as the case may be) by Santander FS and not by Santander BanCorp.

	 	 	Subject only to clause 2.3 above, the Borrowers are jointly and severally liable to pay all
other amounts payable under the Transaction Documents (including amounts payable under
indemnities to the extent they do not comprise amounts in the nature of those described in
paragraphs (a) or (b)).

	2.4	 	Purpose
	 
	 	 	Drawings under the Facilities may only be used to refinance short-term borrowings incurred
under a loan agreement dated March 25, 2008, with the Bank and for general corporate
purposes, and for no other purpose.

 

	3	  	Using the Facility

	3.1	 	Drawing down
	 
	 	 	The Borrowers need not use the Facility. However, if a Borrower wants to use a Facility, a
Borrower may do so by a single drawdown. The undrawn part of a Facility is automatically
cancelled after the Drawing is made.

8

 

	3.2	 	Requesting a drawdown
	 
	 	 	If a Borrower wants a drawdown, it agrees to give a Drawdown Notice to the Bank by 11:00
a.m. on the Business Day next preceding the day it wants the drawdown. Each Borrower must
provide its own Drawdown Notice.

	3.3	 	Effect of a Drawdown Notice
	 
	 	 	A Drawdown Notice is effective when the Bank actually receives it in legible form. An
effective Drawdown Notice is irrevocable.

	3.4	 	Conditions to drawdown
	 
	 	 	Neither Borrower may request a drawdown until the Bank has received every item listed in
Schedule 1 (“Conditions precedent”) in form and substance satisfactory to the Bank.
Any item required to be certified must be certified by authorized
officers of the applicable
Borrower as being true and complete as at a date no earlier than the date of this agreement.
The Bank agrees to notify the applicable Borrower as soon as practicable after the Bank
receives the final item.

	3.5	 	Conditions to all drawdowns
	 
	 	 	The Bank need not provide any loans unless:

	 	(a)	 	it is to be provided during the Availability Period; and
	 
	 	(b)	 	it is satisfied that the loan is to be used solely for the purposes described
in clause 2.4; and
	 
	 	(c)	 	the Bank has received a Drawdown Notice in respect of it; and
	 
	 	(d)	 	the Bank is satisfied that the representations and warranties in clause 10
(“Representations and warranties”) and in the Drawdown Notice, and the statements in
the Drawdown Notice, are correct and not misleading at the date of the Drawdown Notice
and at the date the loan is provided; and
	 
	 	(e)	 	the Bank is satisfied that no Event of Default or Potential Event of Default is
continuing, or would result from the loan being provided; and
	 
	 	(f)	 	the Bank has received all other documents and other information it reasonably
requests.

	3.6	 	Benefit of conditions
	 
	 	 	Each condition to drawdown is for the sole benefit of the Bank and may be waived by it.

9

 

 

	4	  	Interest

	4.1	 	Interest charges
	 
	 	 	Each Borrower agrees to pay interest on the Drawing until the Maturity Date at the Interest
Rate. Interest:

	 	(a)	 	accrues daily from and including the Drawdown Date but excluding the Maturity
Date; and
	 
	 	(b)	 	is payable on the Interest Payment Date; and
	 
	 	(c)	 	is calculated on actual days elapsed and a year of 360 days.

 

	5	  	Repaying and prepaying

	5.1	 	Repayment
	 
	 	 	Each Borrower agrees to repay the Drawing in full on the Maturity Date.

	5.2	 	Prepayment
	 
	 	 	A Borrower may prepay the Drawing in full (but not in part) by notifying the proposed
prepayment to the Bank by 11:00 a.m. on the second Business Day before the prepayment (once
given, a notice of prepayment is irrevocable and the Borrower is obliged to prepay in
accordance with the notice). If a Borrower prepays, it may be liable for break costs — see
clause 13.2 (“Indemnity”).

	5.3	 	Prepayments not available for redrawing
	 
	 	 	Amounts prepaid or repaid, as the case may be, may not be redrawn.

 

	6	  	Payments

	6.1	 	Manner of payment
	 
	 	 	Unless a provision of a Transaction Document expressly states otherwise, each Borrower
agrees to make payments (including payments by way of reimbursement) under each Transaction
Document:

	 	(a)	 	on the due date (or, if that is not a Business Day, on the previous Business
Day); and
	 
	 	(b)	 	not later than 11:00 a.m.; and
	 
	 	(c)	 	in United States dollars in immediately available funds; and

10

 

	 	(d)	 	to the Bank by payment into the following account, or as the Bank otherwise
directs:

	 	 	 	Bank: Deutsche Bank
	 
	 	 	 	ABA:021001033
	 
	 	 	 	For account of: Banco Santander Puerto Rico
	 
	 	 	 	Account No.:0401408

	 	 	If the Bank directs a Borrower to pay a particular party or in a particular manner, a
Borrower is taken to have satisfied its obligation to the Bank by paying in accordance with
the direction.
	 
	 	 	A Borrower satisfies a payment obligation only when the Bank or the person to whom it has
directed payment receives the amount.

	6.2	 	No Withholding
	 
	 	 	All payments to be made by a Borrower must be made without set-off or counter-claim, and be
free and clear of any withholding or deduction for Taxes unless prohibited by law. If any
deduction is required by law, the relevant Borrower will make the deduction, pay any Taxes,
and pay to the Bank further amount(s) sufficient to ensure that the Bank receives the same
net amount as it would have received if no deduction had been made.

 

	7	   	 Cancellation

	 	 	Before a Drawing is made, a Borrower may cancel an undrawn Facility in whole or in part by
notifying the Bank on or before the second Business Day before the cancellation is to take
effect. A partial cancellation must be at least $1,000,000 and a whole multiple of
$1,000,000. Once given, the notice is irrevocable. The relevant Limits will be reduced by
the amount of any cancellation.

 

	8	    	 Increased costs

	8.1	 	Compensation
	 
	 	 	Each Borrower agrees to compensate the Bank on demand if the Bank determines that:

	 	(a)	 	a Directive or change in Directive, in either case applying for the first time
after the date of this agreement; or
	 
	 	(b)	 	a change in a Directive’s interpretation or administration by an authority
after the date of this agreement; or
	 
	 	(c)	 	compliance by the Bank or any of its Related Entities with any such Directive,
changed Directive or changed interpretation or administration

11

 

	 	 	directly or indirectly:

	 	(i)	 	increases the cost of the Facility to the Bank or any of its
Related Entities; or
	 
	 	(ii)	 	reduces any amount received or receivable by the Bank, or the
effective return to, the Bank or any of its Related Entities, in connection
with the Facility; or
	 
	 	(iii)	 	reduces the return on capital allocated to the Facility.

	 	 	In this clause 8.1, a reference to a Directive does not include a Directive imposing or
changing the basis of a tax on the overall net income of the Bank.

	 	 	The Bank shall notify the Borrowers of any event occurring after the date of this agreement
entitling the Bank to compensation under this clause 8.1 as promptly as practicable, but in
any event within two days after the Bank obtains actual knowledge thereof, provided that if
the Bank fails to give such notice to the Borrowers within two days after it obtains actual
knowledge of such event, the Bank shall only be entitled to payment under clause 8.1 for
costs or other amounts incurred or payable from and after the date that is two days prior to
the date of actual notice to the Borrowers.

	 	 	Compensation need not be in the form of a lump sum and may be demanded as a series of
payments.

	8.2	 	Possible minimization
	 
	 	 	Each Borrower agrees to compensate the Bank whether or not the increase or reduction could
have been avoided. However, if a Borrower asks, the Bank agrees to consider ways of
minimizing any increase or reduction.

 

	9	    	 Illegality or impossibility

	9.1	 	Bank’s right to suspend or cancel
	 
	 	 	This clause 9 applies if the Bank determines that:

	 	(a)	 	a change in a Directive; or
	 
	 	(b)	 	a change in the interpretation or administration of a Directive by an
authority; or
	 
	 	(c)	 	a Directive,

	 	 	applying for the first time after the date of this agreement, makes it (or will make it)
illegal or impossible in practice for the Bank to fund, provide, or continue to fund or
provide, a loan under the Transaction Documents. In these circumstances, the Bank, by
giving a notice to the Borrowers, may suspend or cancel some or all of the Bank’s
obligations under this agreement as indicated in the notice.

12

 

	9.2	 	Extent and duration

	 	 	The suspension or cancellation:

	 	(a)	 	must apply only to the extent necessary to avoid the illegality or
impossibility; and
	 
	 	(b)	 	in the case of suspension, may continue only for so long as the illegality or
impossibility continues.

	9.3	 	Notice requiring prepayment

	 	 	If the illegality or impossibility relates to the Drawing, the Bank, by giving a notice to
the Borrowers, may require prepayment of all or part of the Drawing and interest accrued on
that part. Each Borrower agrees to repay the amount specified within two Business Days
after receiving the notice (or, if earlier, on the date the illegality or impossibility
arises).

 

	10	   	Representations and warranties

	10.1	 	Representations and warranties
	 
	 	 	Each Borrower represents and warrants in respect of itself that:

	 	(a)	 	(incorporation and existence) it has been incorporated in accordance with the
laws of the Commonwealth of Puerto Rico, is validly existing under those laws and has
power and authority to carry on its business as it is now being conducted; and
	 
	 	(b)	 	(power) it has power to enter into the Transaction Documents to which it is a
party and comply with its obligations under them; and
	 
	 	(c)	 	(no contravention or exceeding power) the Transaction Documents and the
transactions under them which involve it do not contravene its organizational documents
or any law or obligation by which it is bound or to which any of its assets are
subject, where such contravention has or is likely to have a Material Adverse Effect,
or cause a limitation on its powers or the powers of its directors to be exceeded; and
	 
	 	(d)	 	(authorizations) it has in full force and effect the authorizations necessary
for it to enter into the Transaction Documents to which it is a party, to comply with
its obligations and exercise its rights under them and to allow them to be enforced;
and
	 
	 	(e)	 	(validity of obligations) its obligations under the Transaction Documents are
valid and binding and are enforceable against it in accordance with their terms; and
	 
	 	(f)	 	(benefit) it benefits by entering into the Transaction Documents to which it is
a party; and
	 
	 	(g)	 	(accounts) its most recent Financial Report given to the Bank complies with the
requirements of any applicable laws and:

	 	(i)	 	complies with any applicable accounting standards; and
	 
	 	(ii)	 	gives a true and fair view of its financial position and
performance or, if it is required to prepare consolidated financial statements,
a true and fair view of the financial position and performance of the
consolidated entity constituted by it and the entities it is required to
include in the consolidated financial statements; and

13

 

	 	(h)	 	(solvency) there are no reasonable grounds to suspect that it is unable to pay
its debts as and when they become due and payable; and
	 
	 	(i)	 	(not a trustee) unless stated in the Details, it does not enter into any
Transaction Document as trustee; and
	 
	 	(j)	 	(litigation) there is no pending or threatened proceeding affecting it or any
of its assets before a court, authority, commission or arbitrator in which a decision
against it (either alone or together with other decisions) is likely to have a Material
Adverse Effect; and
	 
	 	(k)	 	(Event of Default) no Event of Default or Potential Event of Default is
continuing; and
	 
	 	(l)	 	(default under law — Material Adverse Effect) it is not in breach of a law or
obligation affecting it or its assets in a way which has had, or is likely to have, a
Material Adverse Effect; and
	 
	 	(m)	 	(full disclosure) all information provided by it to the Bank (whether following
a request from the Bank or otherwise) and which is used by the Bank in its assessment
of the nature and amount of the risk undertaken by the Bank in entering into the
Transaction Documents, and doing anything in connection with them, is complete and
accurate as of the time such information is provided to the Bank; and
	 
	 	(n)	 	(no immunity) it has no immunity from the jurisdiction of a court or from legal
process; and
	 
	 	(o)	 	(residency) the Borrower is a company resident in Puerto Rico for taxation
purposes and is not resident for taxation purposes in any other jurisdiction.

	10.2	 	Repetition of representations and warranties
	 
	 	 	The representations and warranties in this clause 10 are taken to be also repeated (by
reference to the then current circumstances) on the Drawdown Date.

	10.3	 	Reliance
	 
	 	 	Each Borrower acknowledges that the Bank has entered into the Transaction Documents in
reliance on the representations and warranties in this clause 10.

 

	11	  	 Undertakings

	11.1	 	General undertakings
	 
	 	 	Each Borrower undertakes:

	 	(a)	 	(accounting records) to keep proper accounting records; and

14

 

	 	(b)	 	(conduct of business) to conduct its business (including collecting debts owed
to it) in the ordinary course consistent with its customary practices as at the date of
this agreement; and
	 
	 	(c)	 	(no cessation of business) not, without the Bank’s consent, (which shall not be
unreasonably withheld) significantly change the general character of any business it
conducts; and
	 
	 	(d)	 	(information) to give the Bank any document or other information that the Bank
reasonably requests from time to time; and
	 
	 	(e)	 	(status certificates) on request from the Bank, to give the Bank a certificate
signed by two of its Authorized Officers which states whether an Event of Default or
Potential Event of Default is continuing; and
	 
	 	(f)	 	(maintain authorizations) to obtain, renew on time and comply with the terms of
each authorization necessary for it to enter into the Transaction Documents to which it
is a party, to comply with its obligations and exercise its rights under them and to
allow them to be enforced.

 

	12	  	 Default

	12.1	 	Events of Default
	 
	 	 	Each of the following is an Event of Default:

	 	(a)	 	(non-payment — Transaction Document) a Borrower does not pay on time any amount
payable by it under any Transaction Document in the manner required under it; or
	 
	 	(b)	 	(cross default) any present or future monetary obligations of a Borrower for
amounts totaling more than $3,000,000 (or equivalent) are not satisfied on time (or at
the end of their period of grace) or become prematurely payable as a result of a
default of a Borrower.

	 	 	 	(In this clause 12.1(b), a “monetary obligation” means a monetary obligation in
connection with:

	 	(i)	 	money borrowed or raised; or
	 
	 	(ii)	 	any hiring arrangement, redeemable preferred share, letter of
credit or financial markets transaction (including a swap, option or futures
contract), performance bond or guarantee facility; or
	 
	 	(iii)	 	a guarantee or indemnity in connection with anything referred
to in clauses 12.1(b)(i) or 12.1(b)(ii)); or

15

 

	 	(c)	 	(enforcement against assets) distress is levied or a judgment, order or
encumbrance is enforced, or becomes enforceable, against any property of a Borrower
having a value of more than $3,000,000 (or equivalent); or
	 
	 	(d)	 	(incorrect representation or warranty) a representation or warranty made, or
taken by clause 10.2 to be repeated, by or for a Borrower in this agreement or by BSCH
in the Security Agreement, Pledge and Assignment is found to have been incorrect or
misleading when made or so taken to be repeated; or
	 
	 	(e)	 	(Insolvency) a Borrower becomes Insolvent; or
	 
	 	(f)	 	(ceasing business) a Borrower or BSCH stops payment on any of its material
obligations, ceases to carry on its business or a material part of it, or threatens to
do either of those things except to merge or consolidate while solvent on terms
approved in writing by the Bank; or
	 
	 	(g)	 	(voidable Transaction Document) a Transaction Document or a transaction in
connection with it is or becomes (or is claimed to be) wholly or partly void, voidable
or unenforceable or does not have (or is claimed not to have) the priority the Bank
intended it to have, in each case, as a result of events not due to the acts or
omissions of the Bank (“claimed” in this paragraph means claimed by a Borrower or any
of its Related Entities or anyone on behalf of any of them); or
	 
	 	(h)	 	(appointment of manager) a person is appointed under legislation to manage any
part of the affairs of a Borrower or BSCH; or
	 
	 	(i)	 	(Material Adverse Effect) an event occurs which has, or is likely to have (or a
series of events occur which, together, have, or are likely to have), a Material
Adverse Effect;
	 
	 	(j)	 	(collateral) the value of any cash collateral deposited with the Bank and
provided as security for the Facility under the Security Agreement, Pledge and
Assignment ceases to be at least equal in amount to any amount that may be required
under Section 23A of the Federal Reserve Act and Regulation W promulgated thereunder;
or
	 
	 	(k)	 	(non-compliance with other obligations) a Borrower or BSCH does not comply with
any other obligation under any Transaction Document and, if the non-compliance can be
remedied, does not remedy the non-compliance within ten days.

	12.2	 	Consequences of default
	 
	 	 	If an Event of Default is continuing, then the Bank may declare at any time by notice to the
Borrowers that:

	 	(a)	 	subject to clause 2.3, an amount equal to the Amount Owing is either:

	 	(i)	 	payable on demand; or

16

 

	 	(ii)	 	immediately due for payment;

	 	(b)	 	the Bank’s obligations specified in the notice are terminated.

	 	 	The Bank may make either or both of these declarations. The making of either of them gives
immediate effect to its provisions.

	12.3	 	Investigation of default
	 
	 	 	If the Bank reasonably believes that an Event of Default is, or may be, continuing, the Bank
may appoint a person to investigate this. Each Borrower agrees to cooperate with the person
and comply with every reasonable request they make. If there is or was an Event of Default,
the Borrowers agree to pay all Costs in connection with the investigation.

 

	13	 	Costs and indemnities

	13.1	 	What the Borrowers agree to pay
	 
	 	 	The Borrowers agree to pay or reimburse the Bank for:

	 	(a)	 	all its reasonable Costs in drafting and negotiating a Transaction Document;
and
	 
	 	(b)	 	enforcing a Transaction Document,

	 	 	including, but not limited to, legal Costs.
	 
	 	 	The Borrowers must pay all internal revenue stamps in connection with a Transaction
Document.

	13.2	 	Indemnity
	 
	 	 	The Borrowers shall indemnify the Bank against any liability or loss arising from, and any
Costs incurred in connection with:

	 	(a)	 	loans requested under a Transaction Document not being provided in accordance
with the request for any reason except default of the Bank; or
	 
	 	(b)	 	a loan under a Transaction Document being repaid, discharged or made payable
other than at its maturity or as otherwise allowed under the terms of a Transaction
Document; or
	 
	 	(c)	 	the Bank acting in connection with a Transaction Document in good faith on fax,
telephone, email or written instructions purporting to originate from the offices of a
Borrower or to be given by an Authorized Officer of a Borrower; or
	 
	 	(d)	 	an Event of Default; or
	 
	 	(e)	 	the Bank exercising or attempting to exercise a right or remedy in connection
with a Transaction Document after an Event of Default; or

17

 

	 	(f)	 	any indemnity the Bank gives a trustee in bankruptcy or administrator of the
Borrowers.

	 	 	The Borrowers agree to pay amounts due under this indemnity on demand from the Bank.

 

	14	 	Interest on overdue amounts
	 
	14.1	 	Obligation to pay
	 
	 	 	If a Borrower does not pay any amount under this agreement on the due date for payment, the
relevant Borrower agrees to pay interest on any such amount at the Default Rate. The
interest accrues daily from (and including) the due date to (but excluding) the date of
actual payment and is calculated on actual days elapsed and a year of 360 days.
	 
	 	 	The relevant Borrower agrees to pay interest under this clause on demand from the Bank.
	 
	14.2	 	Compounding
	 
	 	 	To the extent permitted by applicable law, any interest payable under clause 14.1 which is
not paid when due for payment may be added to the overdue amount by the Bank. Interest is
payable on the increased overdue amount at the Default Rate in the manner set out in clause
14.1.
	 
	14.3	 	Interest following judgment
	 
	 	 	If a liability becomes merged in a judgment, the relevant Borrower agrees to pay interest on
the amount of that liability as an independent obligation. This interest:

	 	(a)	 	accrues daily from (and including) the date the liability becomes due for
payment both before and after the judgment up to (but excluding) the date the liability
is paid; and
	 
	 	(b)	 	is calculated at the judgment rate or the Default Rate (whichever is higher).

	 	 	The relevant Borrower agrees to pay interest under this clause on demand from the Bank.

 

	15	 	Application of payments
	 
	 	 	Subject to clause 2.3, the Bank may apply amounts paid by the Borrowers towards satisfaction
of the Borrowers’ obligations under the Transaction Documents in the manner it sees fit,
unless the Transaction Documents expressly provide otherwise. This appropriation overrides
any purported appropriation by a Borrower or any other person.

18

 

 

	16	 	Dealing with interests
	 
	16.1	 	No dealing by Borrowers
	 
	 	 	The Borrowers may not assign or otherwise deal with their rights under any Transaction
Document or allow any interest in them to arise or be varied, in each case, without the
Bank’s consent.
	 
	16.2	 	Dealings by Bank
	 
	 	 	The Bank may assign or otherwise deal with its rights under the Transaction Documents
(including by assignment or participation) without the consent of any person.

 

	17	 	Notices and other communications
	 
	17.1	 	Form — all communications
	 
	 	 	Unless expressly stated otherwise in the Transaction Documents, all notices, certificates,
consents, approvals, waivers and other communications in connection with a Transaction
Document must be in writing, signed by the sender (if an individual) or an Authorized
Officer of the sender and marked for the attention of the person identified in the Details
or, if the recipient has notified otherwise, then marked for attention in the way last
notified.
	 
	17.2	 	Form — communications sent by email
	 
	 	 	Communications sent by email need not be marked for attention in the way stated in clause
17.1 (“Form — all communications”). However, the email must state the first and last name
of the sender.
	 
	 	 	Communications sent by email are taken to be signed by the named sender.
	 
	17.3	 	Delivery
	 
	 	 	Communications must be:

	 	(a)	 	Hand delivered at the address set out or referred to in the Details; or
	 
	 	(b)	 	sent by prepaid ordinary mail to the address set out or referred to in the
Details; or
	 
	 	(c)	 	sent by fax to the fax number set out or referred to in the Details; or
	 
	 	(d)	 	sent by email to the address set out or referred to in the Details.

	 	 	However, if the intended recipient has notified a changed address or fax number, then
communications must be to that address or number.

19

 

	17.4	 	When effective
	 
	 	 	Communications take effect from the time they are received or taken to be received under
clause 17.5 (“When taken to be received”) (whichever happens first) unless a later time is
specified.
	 
	17.5	 	When taken to be received
	 
	 	 	Communications are taken to be received:

	 	(a)	 	if sent by mail, three days after posting; or
	 
	 	(b)	 	if sent by fax, at the time shown in the transmission report as the time that
the whole fax was sent; or
	 
	 	(c)	 	if sent by email:

	 	(i)	 	when the sender receives an automated message confirming
delivery; or
	 
	 	(ii)	 	four hours after the time sent (as recorded on the device from
which the sender sent the email) unless the sender receives an automated
message that the email has not been delivered,

	 	 	 	whichever happens first.

	17.6	 	Receipt outside business hours
	 
	 	 	Despite clauses 17.4 (“When effective”) and 17.5 (“When taken to be received”), if
communications are received or taken to be received under clause 17.5 after 5:00 p.m. in the
place of receipt or on a non-Business Day, they are taken to be received at 9:00 a.m. on the
next Business Day and take effect from that time unless a later time is specified.
	 
	17.7	 	Waiver of notice period
	 
	 	 	The Bank may waive a period of notice required to be given by a Borrower under this
agreement.

 

	18	 	General
	 
	18.1	 	Application to Transaction Documents
	 
	 	 	If anything in this clause 18 (“General”) is inconsistent with a provision in another
Transaction Document, then the provision in the other Transaction Document prevails for the
purposes of that Transaction Document.
	 
	18.2	 	Prompt performance
	 
	 	 	Subject to clause 18.15 (“Time of the essence”):

20

 

	 	(a)	 	if a Transaction Document specifies when a Borrower agrees to perform an
obligation, the Borrower agrees to perform it by the time specified; and
	 
	 	(b)	 	the Borrowers agree to perform all other obligations promptly.

	18.3	 	Consents
	 
	 	 	The Borrowers agree to comply with all conditions in any consent the Bank gives in
connection with a Transaction Document.
	 
	18.4	 	Certificates
	 
	 	 	The Bank may give the Borrowers a certificate about an amount payable or other matter in
connection with a Transaction Document. The certificate is sufficient evidence of the amount
or matter, unless it is proved to be incorrect.
	 
	18.5	 	Set-off
	 
	 	 	If an Event of Default is continuing, the Bank may, in its absolute discretion, set off any
amount owing by the Bank to a Borrower (whether or not due for payment) against any amount
due for payment by a Borrower to the Bank under a Transaction Document.
	 
	 	 	The Bank may do anything necessary to effect any set-off under this clause in accordance
with applicable law. This clause applies despite any other agreement between a Borrower and
the Bank.
	 
	18.6	 	Discretion in exercising rights
	 
	 	 	The Bank may exercise a right or remedy or give or refuse its consent under a Transaction
Document in any way it considers appropriate (including by imposing conditions).
	 
	18.7	 	Partial exercising of rights; no waiver
	 
	 	 	If the Bank does not exercise a right or remedy under a Transaction Document fully or at a
given time, the Bank may still exercise it later.
	 
	18.8	 	No liability for loss
	 
	 	 	The Bank is not liable for loss caused by the exercise or attempted exercise of, failure to
exercise, or delay in exercising, a right or remedy under a Transaction Document.
	 
	18.9	 	Conflict of interest
	 
	 	 	The Bank’s rights and remedies under any Transaction Document may be exercised even if this
involves a conflict of duty or the Bank has a personal interest in their exercise, subject
to applicable laws.

21

 

	18.10	 	Remedies cumulative
	 
	 	 	The rights and remedies of the Bank under any Transaction Document are in addition to other
rights and remedies given by law independently of the Transaction Document.
	 
	18.11	 	Indemnities
	 
	 	 	Any indemnity in a Transaction Document is a continuing obligation, independent of the
Borrowers’ other obligations under that Transaction Document and survives the termination of
the Transaction Document. It is not necessary for the Bank to incur expense or make payment
before enforcing a right of indemnity under a Transaction Document.
	 
	18.12	 	Rights and obligations are unaffected
	 
	 	 	Rights given to the Bank under a Transaction Document and the Borrowers’ liabilities under
it are not affected by anything which might otherwise affect them at law.
	 
	18.13	 	Inconsistent law
	 
	 	 	To the extent permitted by law, each Transaction Document prevails to the extent it is
inconsistent with any law.
	 
	18.14	 	Supervening legislation
	 
	 	 	Any present or future legislation which operates to vary the obligations of the Borrowers in
connection with a Transaction Document with the result that the Bank’s rights, powers or
remedies are adversely affected (including by way of delay or postponement) is excluded
except to the extent that its exclusion is prohibited or rendered ineffective by law.
	 
	18.15	 	Time of the essence
	 
	 	 	Time is of the essence in any Transaction Document in respect of an obligation of a Borrower
to pay money.
	 
	18.16	 	Variation and waiver
	 
	 	 	A provision of a Transaction Document, or right created under it, may not be waived or
varied except in writing signed by the party or parties to be bound.
	 
	18.17	 	Further steps
	 
	 	 	The Borrowers agree to do anything the Bank may request (such as obtaining consents, signing
and producing documents and getting documents completed and signed):

	 	 (a)	 	to bind the Borrowers and any other person intended to be bound under the
Transaction Documents;
	 
	 	 (b)	 	to show whether the Borrowers are complying with this agreement.

22

 

	18.18	 	Counterparts
	 
	 	 	This agreement may consist of a number of copies, each signed by one or more parties to the
agreement. If so, the signed copies are treated as making up the one document.
	 
	18.19	 	Governing law
	 
	 	 	Each Transaction Document is governed by the laws of the Commonwealth of Puerto Rico.

[SIGNATURE PAGE FOLLOWS]

23

 

Loan Agreement

Schedule 1 — Conditions precedent (clause 3.4)

Conditions to first drawdown

	•	 	Each item must be in form and substance satisfactory to the Bank.

	•	 	The Bank may also require other documents and information (see clause 3.5(f))

	•	 	Certification is to be by the secretary or other authorized officer of the applicable
Borrower, that the item is true and complete as at a date no earlier than the date of this
agreement.

 

	 	 	 	 	 	 	 
	 	 	Item	 	Form	 	Required for
	 
	 	 	 	 	 	 
	1

	 	Extract of minutes of a
meeting of the Borrowers’
board of directors which
evidences the resolutions:
	 	Certified copy
	 	Each Borrower
	 
	 	 	 	 	 	 
	 

	 	(a) authorizing the signing
and delivery of the
Transaction Documents to
which the entity is a party
and the observance of
obligations under those
documents; and	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(b) appointing Authorized
Officers of the entity.	 	 	 	 
	 
	 	 	 	 	 	 
	2

	 	Specimen signature of
	 	Certified copy
	 	Each Borrower
	 
	 	 	 	 	 	 
	 

	 	(a) each Authorized Officer
of the entity; and	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(b) each other person who
is authorized to sign a
Transaction Document for
the Borrowers.	 	 	 	 
	 
	 	 	 	 	 	 
	3

	 	This agreement fully signed.
	 	Original
	 	Each Borrower
	 
	 	 	 	 	 	 
	4

	 	A certificate of deposit
opened by BSCH with the
Bank in the aggregate
amount of the Facility to
be provided as security for
the Facility under the
Security Agreement, Pledge
and Assignment.
	 	N/A
	 	BSCH and Each
Borrower
	 
	 	 	 	 	 	 
	5

	 	The Security Agreement,
Pledge and Assignment fully
signed.
	 	Original
	 	BSCH

Sch. 1-1

 

Schedule 2 — Drawdown Notice (clause 3)

	 	 	 
	To:

	 	Banco Santander Puerto Rico

207 Ponce de León Avenue

San Juan, Puerto Rico 00917
	 
	 	 
	Attention:

	 	[•]
	 
	 	 
	[Date]
	 	 

Drawdown Notice — Loan Agreement between Santander BanCorp, Santander Financial Services, Inc. and
Banco Santander Puerto Rico, dated September 24, 2008 (“Loan Agreement”)

Under clause 3.2 (“Requesting a drawdown”) of the Loan Agreement, the Borrower gives notice as
follows.1 

The Borrower wants to borrow under the Facility.

	•	 	The requested Drawdown Date is [      ]2.
	 
	•	 	The amount of the proposed drawdown is US$[      ].
	 
	•	 	The proposed drawdown is to be paid to:

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Account number:	 	 	[                                       ]	 	 	 	 	 
	 
	 	Account name:	 	 	[                                       ]	 	 	 	 	 
	 
	 	Correspondent Bank:	 	 	[                                       ]	 	 	 	 	 
	 
	 	Swift:	 	 	[                                       ]	 	 	 	 	 
	 
	 	Beneficiary Bank:	 	 	[                                       ]	 	 	 	 	 
	 
	 	Swift:	 	 	[                                       ]	 	 	 	 	 
	 
	 	Beneficiary:	 	 	[                                       ]	 	 	 	 	 

The Borrower represents and warrants that the representations and warranties in the Loan Agreement
are correct and not misleading on the date of this notice and that each will be correct and not
misleading on the Drawdown Date.

Clause 1 of the Loan Agreement applies to this notice as if it was fully set out in this notice.

	 
	 
	 

	[Name of person] being

	an Authorized Officer of

	[Name of Borrower]

Instructions for completion

1      All items must be completed.

2      Must be a Business Day within the Availability Period.

Sch. 2-1

 

Signature page

DATED: September 24, 2008

	 	 	 	 	 
	SIGNED for and on behalf of
	 	)	 	 
	SANTANDER BANCORP
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 
	/s/ Maria Calero
	 	)	 	/s/ Rafael S. Bonilla

	Signature
	 	)	 	Signature
	 
	 	)	 	 
	Name: Maria
Calero
	 	)	 	Name: Rafael S. Bonilla
	 
	 	)	 	 
	Title:
Executive Vice President
	 	)	 	Title: Senior Vice President
	 
	 	 	 	 
	SIGNED for and on behalf of
	 	)	 	 
	SANTANDER FINANCIAL
	 	)	 	 
	SERVICES, INC.
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 
	/s/ Elizabeth Ortiz Irrizary
	 	)	 	/s/
Mario E. Delgado

	Signature
	 	)	 	Signature
	 
	 	)	 	 
	Name: Elizabeth Ortiz Irrizary
	 	)	 	Name: Mario E. Delgado
	 
	 	)	 	 
	Title: Vice
President
	 	)	 	Title: President
	 
	 	 	 	 
	SIGNED for and on behalf of
	 	)	 	 
	BANCO SANTANDER PUERTO RICO
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 
	/s/ Tomas Torres
	 	)	 	/s/
Jose Santoni

	Signature
	 	)	 	Signature
	 
	 	)	 	 
	Name: Tomas Torres
	 	)	 	Name: Jose Santoni
	 
	 	)	 	 
	Title:
Executive Vice President
	 	)	 	Title: First Senior Vice President

S-1EX-10.01 MICHAEL PROMOTICO EMPLOYMENT AGREEMENT

Exhibit 10.01

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of this 23rd day of
September, 2008, by and between Standard Tel Networks, LLC, a
California Limited Liability Company (the
“Company”), and Michael Promotico (“Employee”).

BACKGROUND

     Concurrently with the execution and delivery of this Agreement, pursuant to an Stock and
Membership Interest Purchase Agreement dated as of the date hereof (the “Purchase Agreement”), the
Company is purchasing is acquiring all of the stock of Trans-West
Networks Solutions, Inc. and all of
the membership interest of ProLogic Communications, Inc. The execution and delivery of this
Agreement is a condition to the consummation of the transactions contemplated by the Purchase
Agreement. The Company desires to employ Employee, and Employee wishes to accept such employment,
upon the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the facts, mutual promises, and covenants contained herein
and intending to be legally bound hereby, the parties hereto agree as follows:

     1. Employment and Duties.

          1.1. During the Term (as defined in Section 3 of this Agreement), the Company shall employ
Employee, and Employee hereby accepts such employment, as the Chief Executive Officer of the
Company, and shall report to the Board of Directors of the Company and be subject to its
supervision. Employee shall have such responsibilities and duties, consistent with his position and
expertise, as may from time to time be prescribed by the Board of Directors of the Company,
including without limitation those set forth in Exhibit A to this Agreement.

          1.2. Employee shall devote substantially all of his business time, energy, skill and
commercially reasonable efforts to the business and affairs of the Company. Employee acknowledges
and agrees that he shall observe and comply with all of the Company’s reasonable policies as
prescribed by the Board, as the case may be. Nothing in this Section 1, however, shall prohibit
Employee from (i) serving as a director, trustee, officer of, or partner in, any other firm, trust,
corporation or partnership; provided that such activities are not inconsistent with Employee’s
duties under this Agreement; or (ii) engaging in additional activities in connection with personal
investments and community affairs that are not inconsistent with Employee’s duties under this
Agreement.

     2. Compensation.

          2.1. Base Salary. In consideration of the services rendered to the Company (and/or its
Affiliates) by Employee, during the Term (as defined in Section 3) Employee shall receive an annual
salary of Two Hundred Thirty Thousand and No/100 Dollars ($230,000) (“Base Salary”).

          2.2. Bonus. During the Term the Company shall pay Employee, in addition to his Base Salary, an
annual performance incentive bonus based upon annual EBITDA targets for the Company as set forth in
Exhibit B attached hereto (the “Bonus”).

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          2.3. Stock Options. Upon the execution of this Agreement, Employee shall enter into a stock
option agreement with Brookside Technology Holdings, Corp., the parent company of the Company
(“Brookside”), pursuant to which Brookside shall grant to Employee an option to purchase Four
Million (4,000,000) shares of common stock of Brookside, on the terms (including the vesting
schedule) set forth in the stock option agreement.

          2.4. Benefits. During the Term, the Company shall pay to Employee a monthly car allowance in
an amount of One Thousand Five Hundred and No/100 Dollars ($1,500). Additionally, during the Term,
Employee shall be entitled to receive fringe benefits that are generally available to the Company’s
employees in accordance with the then existing terms and conditions of the Company’s policies.

          2.5. Vacation. During the Term, Employee shall be entitled to vacation in accordance with the
vacation policies of the Company in effect for its employees from time to time, which vacation
shall be taken by Employee at such time or times as approved by the Board, as the case may be.
Vacation days which are not used during any calendar year may not be accrued, nor shall the
Employee be entitled to compensation for unused vacation days, during the term hereof or upon
termination of employment.

          2.6. Expenses. During the Term, Employee will be entitled to reimbursement of all reasonable
expenses incurred in the ordinary course of business on behalf of the Company (other than mileage
reimbursement, which is included in the car allowance contemplated above), subject to the
presentation of appropriate documentation and approved in accordance with the then existing terms
and conditions of the Company’s policies.

          2.7. Withholding. The Company may withhold from compensation payable to Employee all
applicable federal, state and local withholding taxes.

     3. Term. The term of employment under this Agreement shall be a period commencing on
the date hereof and ending on the third anniversary of the date hereof (the “Expiration Date”),
unless terminated earlier in accordance with the other provisions hereof (the “Initial Term”).
Unless otherwise extended by the mutual written agreement of the Company and Employee (each such
extension period shall be referred to herein as a “Renewal Term”), this Agreement shall terminate
automatically on the Expiration Date, without any notice, severance pay, termination pay or any
severance obligation whatsoever. The Initial Term and Renewal Term(s) are collectively referred to
herein as the “Term.”

     4. Termination.

          4.1. Definitions. As used herein, the following terms shall have the following meanings:

               4.1.1. “Notice of Termination” means a written notice specifying the termination provision in
this Agreement relied upon.

               4.1.2. “Date of Termination” means (i) where termination is due to the death of the Employee,
the date of death, or (ii) the earlier of the date specified in the Notice of Termination or the
last day Employee is employed by the Company, as the case may be.

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               4.1.3. “Cause” means that Employee has (i) breached any fiduciary duty or legal or material
contractual obligation to the Company or to the Company’s direct or indirect equity holders, which
breach is not cured within ten (10) days after notice to the Employee thereof or, if cured, recurs
(it being agreed that such cure right shall only be available once during the Initial Term and each
Renewal Term), (ii) failed to perform satisfactorily Employee’s material job duties or to follow
any material reasonable directive of the Board or any superior officer, which failure is not cured
within ten (10) days after notice to Employee thereof or, if cured, recurs (it being agreed that
such cure right shall only be available once during the Initial Term and each Renewal Term), (iii)
engaged in gross negligence, insubordination, willful misconduct, willful violation of any law,
fraud, embezzlement, acts of dishonesty or a conflict of interest relating to the affairs of the
Company or any of its affiliates, or (iv) been convicted of or pleaded nolo contendere to (A) any
misdemeanor relating to the affairs of the Company or any of its affiliates or (B) any felony.

               4.1.4. “Good Reason” means Employee’s voluntary termination within 30 days following the
occurrence of one or more of the following: (i) a material diminution or increase in Employee’s
authority, duties, or responsibilities that is not remedied by the Company promptly after receipt
of notice thereof given by Employee, or (ii) a material change by Company in the geographical
location at which Employee must provide the services described in this Agreement, excluding
reasonable travel (it being agreed that, without diminishing the generality of the foregoing, the
term “material” shall not be deemed to have been satisfied in connection with any change of
location less than twenty-five (25) miles).

               4.1.5. “Disability” means illness (mental or physical) or accident, which results in Employee
being unable to perform Employee’s duties as an employee of the Company on a full time basis, with
or without reasonable accommodation, for a period of sixty (60) days, whether or not consecutive,
in any twelve month period. In the event of a dispute as to whether Employee is Disabled, the
Company may refer the same to a mutually acceptable licensed practicing physician, whose written
report shall be final and binding upon the parties, and Employee agrees to submit to such tests and
examination as such physician shall deem appropriate. If Employee fails or refuses for any reason
to promptly submit to any examination requested by such physician, then Employee shall be
considered to be Disabled.

          4.2. General. Employee’s employment with the Company may be terminated at any time by the
Company with Cause or without Cause or in the event of the death or Disability of Employee,
effective (except in the event of Employee’s death) immediately upon receipt of written Notice of
Termination by Employee or upon such other date specified in such Notice of Termination. Employee’s
employment shall automatically terminate upon his death. Employee may resign after at least thirty
(30) days prior written Notice of Termination thereof from Employee to the Company.

          4.3. Effects of Termination. If the Company terminates the Employee’s employment during the
Initial Term of the Agreement other than for Cause or as a result of the death or Disability of
Employee, the Company shall pay to Employee (a) any and all Base Salary and expense reimbursement
that had accrued but had not been paid prior to the Date of Termination, which amount shall be paid
promptly after the Date of Termination, and (b) an amount equal to Employee’s monthly Base Salary
multiplied by the lesser of (i) six months or (ii) the remaining number of whole months left in the
Initial Term, which amount shall be paid in monthly installments consistent with how the Company
historically paid Employee’s Base Salary, in all cases such payments being subject to deductions
and offsets for amounts owed by Employee to the Company, and otherwise the Company shall have no
further obligation to make any payments or provide any benefits to

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Employee hereunder after the Date of Termination. If Employee’s employment is terminated for
any other reason, the Company shall have no further obligation to make any payments or provide any
benefits to Employee hereunder after the Date of Termination except for payments of Base Salary and
expense reimbursement that had accrued but had not been paid prior to the Date of Termination, less
all deductions or offsets for amounts owed by Employee to the Company.

          4.4. Procedure upon Termination. On termination of employment regardless of the reason,
Employee (or his heirs, representatives or estate as the case may be) shall promptly return to the
Company all documents (including copies) and other property containing or disclosing Confidential
Information (as defined herein), including customer lists, manuals, letters, materials, reports and
records in Employee’s possession or control no matter from whom or in what manner acquired.

     5. Covenants.

          5.1. Employee will not at any time, directly or indirectly, use, disclose or divulge any
Confidential Information (as hereinafter defined), except as required in connection with the
performance of the Employee’s duties for the Company, and except to the extent required by law (but
only after the Employee has provided the Company with reasonable notice and opportunity to take
action against any legally required disclosure). As used herein, “Confidential Information” means
all (a) trade secrets, inventions, ideas, processes, apparatus, equipment, data, programs,
listings, patents, copyrights, trademarks, service marks, works of authorship, know-how,
improvements, discoveries, developments, designs, sketches, drawings, models and techniques
relating to the current, future and proposed products and services of the Company (collectively,
“Inventions”); (b) information regarding plans for research, development, new products, product
design, details and specifications, engineering, marketing and sales, business records and plans,
budgets, plans for future developments, business forecasts, financial statements and other
financial information, licenses, prices and costs, procurement requirements, policies or
operational methods, suppliers, customers, potential customers and key personnel; (c) information
regarding the skills and compensation of other executives of the Company; (d) information of others
that the Company has agreed to keep confidential; and (e) the terms of this Agreement;
provided, that Confidential Information shall not include any information that has entered
or enters the public domain through no fault of Employee.

          5.2. During his employment pursuant to this Agreement, Employee will not improperly use or
disclose any confidential information or trade secrets, if any, of any former employer or any other
Person (as defined herein) to whom Employee has an obligation of confidentiality, and Employee will
not bring onto the premises of the Company any unpublished documents or any property belonging to
any former employer or any other person to whom Employee has an obligation of confidentiality
unless consented to in writing by that former employer or person.

          5.3. Within the United States (the “Restricted Territory”), Employee shall, during the Term
and for a period of five (5) years after (the “Restricted Period”), in any capacity (including
owner, member, partner, shareholder, consultant, advisor, financier, agent, employee, officer,
director, manager or otherwise), whether directly, indirectly for his own account or for the
benefit of any person or entity, establish, engage in or be connected with (i) the Business (as
defined below) or (ii) any business that competes with the Business. “Business” means providing,
selling, designing, analyzing or implementing converged Voice over IP (VoIP), data or wireless
business communications systems or solutions.

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          5.4. Employee will not, during the Term and the Restricted Period for a period of five years
thereafter, in any capacity (including, but not limited to, owner, partner, member, shareholder,
consultant, advisor, financier, agent, employee, officer, director, manager or otherwise), directly
or indirectly, for his own account or for the benefit of any person or entity in (i) the Business
(as defined in the Restrictive covenant Agreement) or (ii) any business in competition with Company
or its affiliates or subsidiaries during the Term:

               5.4.1. Solicit, hire, contract, engage, retain, divert, induce or accept business from or
otherwise take away or interfere with (i) any customer of Company or its affiliates or subsidiaries
or (ii) any prospective customer of Company or its affiliates or subsidiaries with which Company or
its affiliates or subsidiaries have had a substantial business contact during the Term, for the
purpose of providing the same or similar services or goods as that of the Company (or an affiliate
or subsidiary thereof); and/or

               5.4.2. Solicit, divert or induce any of the employees or consultants of Company or its
affiliates or subsidiaries to leave or to work for Employee or any person or entity with which
Employee is connected or otherwise hire, engage, employ or retain any such employee or consultant.

          5.5. Employee will not, at any time after the date hereof, publish or communicate disparaging
or derogatory statements or opinions about Company (or an affiliate or subsidiary thereof),
including but not limited to, disparaging or derogatory statements or opinions about Company’s
management, products or services, to any third party. It shall not be a breach of this Section 5.5
for Employee to testify truthfully in any judicial or administrative proceeding or to make
statements or allegations in legal filings that are based on Employee’s reasonable belief and are
not made in bad faith.

     6. Prior Agreements. Employee represents to the Company (a) that there are no
restrictions, agreements or understandings whatsoever to which Employee is a party which would
prevent or make unlawful Employee’s execution of this Agreement or Employee’s employment hereunder,
(b) that Employee’s execution of this Agreement and Employee’s employment hereunder shall not
constitute a breach of any contract, agreement or understanding, oral or written to which Employee
is a party or by which Employee is bound, (c) that Employee is free and able to execute this
Agreement and to enter into employment with the Company and (d) that this Agreement is a valid and
binding obligation of Employee, enforceable in accordance with its terms.

     7. Remedies. Employee acknowledges that it would be extremely difficult to measure the
damages that might result from any breach by Employee of this Agreement (including, without
limitation, Sections 5 and 6 of this Agreement (the “Covenants”)), and that such a breach would
cause irreparable injury to the Company. Accordingly, the Company will be entitled to (i) enforce
the Covenants and Agreement by obtaining a court order prohibiting Employee (and any others
involved) from breaching this Agreement and (ii) require Employee to account for and pay over to
the Company all compensation, profits, monies, accruals, increments or other benefits derived or
received by Employee as a result of any transactions constituting a breach of any of the Covenants.
Any breach by the Company of any obligation it owes Employee will not affect the enforceability or
validity of this provision and/or this Agreement. If a court decides that any part of this
Agreement is not enforceable, the remainder of this Agreement will not be affected. If a court
decides that any part of this Agreement is too broad, the court may limit that part and enforce it
as limited.

     8. Miscellaneous.

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          8.1. For purposes of this Agreement an “Affiliate” of, or person “affiliated” with a person
shall mean any company or other trade or business that controls, is controlled by or is under
common control with such person within the meaning of Rule 405 of Regulation C under the Securities
Act of 1933 as now in effect or as hereafter amended. Any reference herein to an Affiliate shall be
deemed to include (i) any Affiliate existing on the date hereof together with any Affiliates which
may exist hereafter from time to time and (ii) any successor of any such Affiliate.

          8.2. The rights and protections of the Company hereunder shall extend to any successors or
assigns of the Company. For purposes of this Agreement, a transfer of Employee to a new position
with the Company or to a position with the parent, subsidiary or Affiliate of the Company will not
constitute termination of employment with the Company so long as the new position is one of
comparable level and prestige. This Agreement may be assigned by the Company without Employee’s
consent; provided that the Company notify Employee in writing of such assignment. This Agreement is
not assignable by Employee.

          8.3. All notices, requests, demands, consents or other communications required or permitted to
be given under this Agreement shall be in writing and shall be deemed to have been duly given if
and when (i) delivered personally, (ii) three days following mail by first class certified mail,
return receipt requested, postage prepaid or (iii) sent by a nationally recognized overnight
courier service, postage or delivery charges prepaid, to the parties at the addresses set forth
below:

	 	(a)	 	If to Employee:
	 
	 	 	 	Michael Promotico

1385 Nightshade Road,

Carlsbad, CA 92011
	 
	 	(b)	 	If to Company:
	 
	 	 	 	Standard Tel Networks, LLC

15500 Roosevelt Boulevard,

Suite 101,

Clearwater, FL 33760

Attention: Michael Nole
	 
	 	with a copy, given in the manner prescribed above, to:
	 
	 	 	 	Shumaker, Loop & Kendrick, LLP

101 East Kennedy Boulevard, Suite 2800

Tampa, FL 33602

Attention: Julio C. Esquivel

Facsimile: (813) 229-1660

          8.4. This Agreement, the Purchase Agreement and the Restrictive Covenant Agreement set forth
the entire understanding between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous written, oral, expressed or implied, communications,
agreements and understandings with respect to the subject matter hereof. This Agreement shall not
be amended, modified, supplemented or terminated except in writing signed by both parties. No
action

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taken by the Company hereunder, including any waiver, consent or approval, shall be effective
unless authorized by the Board.

          8.5. If any provision of this Agreement is construed to be invalid, illegal or unenforceable,
then the remaining provisions hereof shall not be affected thereby and shall be enforceable without
regard thereto.

          8.6. This Agreement may be fully executed in any number of counterparts, including by
facsimile, each of which when so executed and delivered shall be an original hereof, and it shall
not be necessary in making proof of this Agreement to produce or account for more than one (1)
counterpart hereof.

          8.7. Section and subsection headings in this Agreement are inserted for convenience of
reference only, and shall neither constitute a part of this Agreement nor affect its construction,
interpretation, meaning or effect. All words used in this Agreement shall be construed to be of
such number and gender as the context requires or permits. When used in this agreement, the words
“including” and “include” shall be deemed to be followed by the words “without limitation.”

          8.8. Neither the failure nor delay on the part of either party to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof, nor shall the single or
partial exercise of any right, remedy, power or privilege preclude any other or further exercise of
the same or any other right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

          8.9. This Agreement shall be governed by the laws of the State of Florida, without giving
effect to principles of conflicts of laws. The parties hereto consent to the exclusive jurisdiction
of the state and federal courts located in the State of Florida with respect to all claims and
disputes between or among the parties hereto with respect to the subject matter hereof.

          8.10. The parties hereto acknowledge and agree that this Agreement has been negotiated at
arm’s length and among parties equally sophisticated and knowledgeable in the matters dealt with in
this Agreement. Accordingly, any rule of law or legal decision that would require interpretation of
any ambiguities in this Agreement against the party that has drafted it is not applicable and is
waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the
intent of the parties as set forth in this Agreement.

          8.11. Except as otherwise expressly provided herein, the rights and obligations of the parties
to this Agreement shall survive the termination of Employee’s employment with the Company. Except
as otherwise expressly provided herein, the rights and obligations of the parties to this Agreement
shall survive the termination of Employee’s employment with the Company.

[Signature page follows.]

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

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	
 	 
	 	Michael Promotico 	 
	 	 	 
	 
	 	COMPANY

Standard Tel Networks, LLC

 	 
	 	By:  	 	 
	 	Name: Michael Nole	 
	 	Title: Managing Member	 
	 

[Signature page to Employment Agreement]

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Exhibit A

The CEO is responsible for managing the overall business of the Company, whose business is
primarily concentrated in the Western Region of the U.S., including California, Washington, Arizona
and Nevada. The CEO’s responsibilities include, but are not limited to, the attainment of all
bookings, revenue, profitability, margins, inventory, and customer satisfaction targets in
accordance with the Company’s financial budgets, forecasts and goals.

AREAS OF RESPONSIBLILITY INCLUDE:

Management of Sales Managers

Management of Operational Managers

Management of Administrative Staff

Management of Profit and Loss

Budgeting, Forecasting, and Reporting

ESSENTIAL FUNCTIONS INCLUDE:

     Management of Sales Managers to:

	 	1.	 	Maintain optimum staffing level to meet the company’s Organizational and
Financial Plans
	 
	 	2.	 	Maximize performance of sales personnel to include the following areas:

	 	–	 	New Business Development: securing new business in the territory to meet or
exceed Company goals at prescribed pricing/margin levels.
	 
	 	–	 	Customer Base: Maintaining highest level of customer satisfaction while
maximizing the sales opportunities to the base
	 
	 	–	 	Driving the sale of Company’s entire product and services portfolio

	 	o	 	Products (Voice, Data, Video related hardware and software)
	 
	 	o	 	Support Services (Warranty, Maintenance, Managed Services)
	 
	 	o	 	Financing

	 	–	 	Professional Communications with customers, management, and colleagues which
includes group and one-on –one meetings, activity reports, account and territory
analysis, marketing and competitive information.
	 
	 	–	 	Sales Skills and Sales Process: Continued assessment of, and skill development
in the orchestration and implementation of the Company’s 5 Step solutions oriented
Sales Process

	 	o	 	Presentation of Company value proposition
	 
	 	o	 	Qualifying, problem solving, negotiating , time and territory management
	 
	 	o	 	Product and Applications
	 
	 	o	 	Forecasting

	 	3.	 	Plan and conduct weekly/quarterly/annual sales meetings
	 
	 	4.	 	Provide a climate suitable for self-motivation of entire Sales Force through
variable compensation, performance based compensation increases, spot rewards and sales
incentive programs.

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	 	5.	 	Regular coaching, instruction, and demonstration to improve the skill sets and
performance results, including the use of all sales tools related to Sales Process and
Performance evaluation and management.
	 
	 	6.	 	Train and ensures accurate and timely use and future development of Company
Customer Relationship Management Systems (CRM)
	 
	 	7.	 	Identify and correct systemic and/or isolated issues that may have an effect on
Sales.
	 
	 	8.	 	Determine and manage to sales and income goals for all sales personnel.
	 
	 	9.	 	Monitor, inspect, and manage all sales related activity relative to sales goals
	 
	 	10.	 	Provide an environment for personal advancement and growth for personnel and
Company
	 
	 	11.	 	Manage sale and marketing travel and entertainment expenditures to insure
maximum return for the Company.

     Strategic Planning

	 	1.	 	Responsible for the development and implementation of the Long-Range Sales and
Marketing Plans consistent with the Brookside’s short and long term goals.
	 
	 	2.	 	Formally communicates the plan and attainment to Board of Directors and other
key management personnel.
	 
	 	3.	 	Disseminate the appropriate information relative to the Plan and attainment to
subordinates.

     Management of Operational and Management Administrative Staff

	 	1.	 	Maintain optimum-staffing level to meet the Company’s Organizational and
Financial Plans
	 
	 	2.	 	Manage to maximize performance of Operational and Administrative Staff to
include the following areas:

	 	o	 	Ensures highest level of Customer Satisfaction through
efficient and productive use of company personnel and resources in the
following areas:

	 	§ 	 	Installation of products
	 
	 	§ 	 	Performance of Support Services
	 
	 	§ 	 	Proper and accurate billing
	 
	 	§ 	 	Timely collection
	 
	 	§ 	 	Inventory turns
	 
	 	§ 	 	Reporting

	 	o	 	Ensures that manufacturer requirements are attained in
accordance with distribution qualifications/requirements.

	 	§ 	 	Discount levels
	 
	 	§ 	 	Technical Training and Certifications

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	 	§	 	Customer Surveys

	 	3.	 	Provide an environment for personal advancement and growth for personnel and Company
	 
	 	4.	 	Work with Operations manager on the regular coaching, instruction, and demonstration to
improve the skill sets and performance results, related to Installation, Service, and
Engineering and Performance evaluation and management.
	 
	 	5.	 	Maintain and provide all required methods of reporting, recording, and documentation
related to the business.
	 
	 	6.	 	Plan and conduct weekly Work in Process meetings.

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Exhibit B

Bonus Structure

               In accordance with the Western Regional Budget/Target (TBD), the incentive opportunity will
consist of 4 target objectives representing at least $100,000 in total annual opportunity. The
objectives will be paid as a percentage of target objectives when a minimum of 75% of target is
achieved.

	 	1.	 	Bookings Objective- 50% of total opportunity;
	 
	 	2.	 	Revenue Objective- 15% of total opportunity;
	 
	 	3.	 	Profit Objective- 25% of total opportunity; and
	 
	 	4.	 	Overall Objective (Bookings, Revenue and Profit) — 10% of total opportunity

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