Document:

EX-10.20 Services Agreement

 

Exhibit 10.20

SERVICES AGREEMENT

EFFECTIVE JANUARY 1, 2008

BETWEEN

SPHERIS OPERATIONS LLC

AND

SPHERIS, INDIA PRIVATE LIMITED

 

 

SERVICES AGREEMENT

This Services Agreement (the “Agreement”) is effective as of the 1st day of January,
2008 and is by and between:

Spheris Operations LLC, a Tennessee limited liability company with its principal office at 9009
Carothers Parkway, Suite C-3, Franklin, Tennessee 37067, USA acting by and through its affiliates
and subsidiaries (hereinafter collectively referred to as “Spheris”)

And

Spheris, India Private Limited, a company registered under the Indian Companies Act, 1956, having
its office at One HealthScribe Plaza, Koramangala Block 8, Bangalore — 560 008, India (hereinafter
referred to as “SIPL”).

WHEREAS, Spheris wishes to engage SIPL to provide transcription services and priming activity (the
“Services”) on an as-requested contract, work-for-hire basis, according to the terms herein;

WHEREAS, SIPL has agreed to provide the Services on the terms herein and its board of directors has
determined that the provision of such Services will be in the best interests of SIPL; and

WHEREAS, Spheris and SIPL wish to enter into this Agreement to establish the terms and conditions
upon which SIPL will provide the Services to Spheris at its facility located on Plot 17 of the Vega
Building, the V, Software Units Layout, Madhapur, Serilingampally Municipality, Ranga Reddy
District, Hyderabad, India.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants, and
undertakings set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge, and intending to be legally bound, the parties agree
as follows:

1. Definitions.

For purposes of this agreement, the following definitions shall apply:

“Capacity” shall mean the number of Lines that SIPL can complete in a given month, which SIPL shall
advise Spheris in accordance with the provisions of Clause 8.3.

“Client” shall mean any entity that has entered into a contract with Spheris for the transcription
of Voice Files into Transcribed Lines.

“Committed Capacity” shall mean the minimum transcription capacity of SIPL necessary to transcribe
the Committed Lines.

“Committed Lines” shall mean the minimum volume of Lines committed by Spheris as specified under
Part A of Exhibit A.

“Employees” shall mean employees of SIPL.

“Force Majeure” shall mean any interruptions to the business of either party caused as a result of
any acts beyond their control including: war, acts of internal aggression, violence, arson,
vandalism, acts of wanton destruction, fires, storms, hurricanes, floods, earthquakes, or other
natural disasters or acts of God, strikes, lockouts, or other labor disputes, disruption of
constant power supply for more than 48 hours, disruptions to the satellite linkage with Spheris,
software and hardware crashes, and changes in law that limit or prohibit the Services to be
provided hereunder.

“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996 and the
regulations promulgated thereunder, all as amended and in effect.

“Job” whether in the singular or plural, shall mean Transcription or Priming Activity, as the case
may be, and any other activity as agreed between the Parties.

“LIBOR” means London Inter Bank Offered Rate.

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“Line” whether in the singular or plural, shall mean a line of 65 characters including spaces
between words but excluding system generated template characters not required to be typed by the
transcriptionist or any other standard line, the definition of which may be agreed by the parties
during the term of this Agreement. In case of failure to agree to any other definition, the
foregoing definition of “Line” shall prevail. The parties may agree to a different definition of
“Line” for different Jobs.

“Non Stat Jobs” shall mean those jobs other than Stat Jobs

“Parties” shall mean Spheris and SIPL.

“Priming Activity” shall mean the process of entry of the patients’ as well as the doctors’ and
clinics’ demographic data in text files for each Job prior to transcription of the Voice File.

“QA Proofreading” shall have the meaning ascribed to it in Clause 6.2 hereunder.

“Services Fee” shall have the meaning ascribed to it in Clause 3.1.

“Software” shall have the meaning as ascribed to it in the Software License Agreement.

“Software License Agreement” shall mean the software license agreement executed between Spheris and
SIPL dated July 10, 2000.

“Stat Jobs” shall mean those specific jobs which, regardless of the TAT stipulated by Spheris in
respect of that Client or Work Type, are identified by Client as one that must be completed as soon
as possible and these jobs will be routed to the next available transcriptionist and/or editor for
immediate processing.

“Transcription” shall mean the electronic document created from Voice Files dictated by a doctor.

“Transcribed Lines” shall have the meaning ascribed to it in Clause 2.1 hereunder.

“Turnaround Time” or “TAT” shall mean the time specified in respect of each Job and Work Type of a
given Client, within which SIPL must convert a job into Transcribed Lines, which time shall be
stipulated by Spheris prior to assigning the Jobs of a Client or Work Type to SIPL.

“Voice Files” shall mean digital recordings of dictated voice that can be understood by playing
these files on a computer matching the hardware and software specifications prescribed by Spheris.

“Work Type” shall mean and refer to distinct categories of Jobs that shall be classified depending
on the respective departments of a Client from which such Jobs emanate.

2. Services

	2.1	 	During the term of this Agreement and for the service fee referenced in Clause 3, SIPL agrees
to provide Transcription and services relating to Priming Activity to Spheris, through SIPL’s
employees, agents, subcontractors, and representatives. The Services to be provided by SIPL
to Spheris shall include the following:

	 	(i)	 	the Transcription of the Voice Files forwarded to SIPL by Spheris into Lines of
typewritten text (the “Transcribed Lines’’). Spheris may require that the Transcribed
Lines be subsequently proofread by Spheris in order to bring them to a level of quality
required by Clause 6 of this Agreement. Transcribed Lines that meet the quality as
provided in Clause 6 shall be forwarded by Spheris to its Clients.
	 
	 	(ii)	 	to carry out the Priming Activity of the Transcription for the Voice Files
forwarded to SIPL by Spheris prior to the entry of the Transcribed Lines.

	2.2	 	SIPL acknowledges that Spheris is under a contractual obligation to provide Transcribed Lines
to its Clients at the level of accuracy and within the Turnaround Time already agreed to
between Spheris and its Client and as set forth in Clauses 5 and 6 of this agreement.
Consequently, SIPL acknowledges that the provision of the Services to the level of accuracy
and within the time specified by Spheris with regard to each Job is the essence of this
Agreement.

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	2.3	 	SIPL agrees that it will not perform any services for any third party (without the written
consent of Spheris) unless (a) SIPL is in compliance with the terms of this Agreement
(including without limitation the quality and TAT requirements of Clauses 5 and 6) for each of
four consecutive quarters and (b) Spheris thereafter refuses to provide additional Lines to
SIPL even though SIPL provides reasonable evidence showing that it has additional capacity.
If SIPL meets the conditions set forth in the previous sentence, it may perform transcription
services for third parties provided that (i) any such third party agreements, in Spheris’s
sole opinion, do not interfere with SIPL’s ability to provide Services to Spheris and (ii)
such third party contracts are terminable by SIPL upon 30 days’ notice to such third party or
parties. So long as Spheris accounts for 60% or more of SIPL’s revenue, if SIPL is unable to
provide Services in compliance with the TAT and quality requirements hereof during a period
that SIPL is performing transcription services for third parties (as permitted by this
Agreement), SIPL will terminate such third party contracts until it can provide reasonable
assurances to Spheris that it can and will comply with the TAT and quality requirements of
this Agreement.

3. Services Fees

	3.1	 	For the Services, Spheris shall pay to SIPL a fee to be calculated as set out in Part
A of Exhibit A (the “Services Fee”).
	 
	3.2	 	The Services Fee shall be invoiced to Spheris on a monthly basis and shall be due sixty (60)
days from the receipt by Spheris of the invoice therefore.
	 
	3.3	 	Spheris will also pay to SIPL a man-month rate to be mutually agreed upon by the parties
based on arms-length negotiations per primer deployed for Priming Activity for jobs not being
transcribed by SIPL for the calendar year 2008. This man-month rate may increase each year
after 2008, as agreed to by the parties.

4. Performance of the Services.

	4.1	 	SIPL shall train the Employees to perform Services under this Agreement in accordance with
the terms of this Agreement including the use of the technology and equipment and the
transcription of Voice Files into Transcribed Lines.
	 
	4.2	 	SIPL shall indicate to Spheris the details and number of Employees who are, in its opinion
and based on the training imparted by SIPL to the Employees, sufficiently qualified to carry
out the Services in respect of Job and Work Type.

5. Turnaround Time.

	5.1	 	If the Client is using Spheris voice dictation system, TAT is measured from the time a
dictation is ended (phone is hung up) until the finished document is delivered back to the
Client, ready for printing. If Spheris is extracting from a Client-owned dictation device, TAT
is measured from the time the dictation is extracted into the Spheris system until the
finished document is delivered back to the Client, ready for printing. Dictation that is
unintelligible (other than that due to system failure at SIPL’s end) resulting in the work
being sent to a collaborator or technical service personnel is exempt from TAT requirements.
Dictation that is not properly signed off, multiple dictations, refusal of dictator to make
proper use the system or other dictator errors are exempt from TAT requirements.
	 
	5.2	 	Each Job must be returned to the Client within the Turnaround Time specified in respect of
the Client and the Work Type. SIPL shall also complete the Stat Jobs within the Turnaround
Time stipulated by the Client in respect of each Stat Job. SIPL agrees to route the Stat Jobs
to the next available transcriptionist and/or editor for immediate processing. Furthermore,
should a Job, whether a Stat Job or otherwise, require proofreading in the US, then the Job
must be delivered back to Spheris with sufficient time remaining so that Spheris can proofread
the Job and still return the Job to the Client within the required TAT. SIPL and Spheris
shall mutually agree upon the required time for delivery for each Client. Unless otherwise
mutually agreed, the Transcription TAT for Jobs requiring proofreading by Spheris shall be one
half of the Job TAT specified by the Client.

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	5.3	 	SIPL commits to deliver Transcribed Jobs to Spheris within its contracted time requirements
with the Client not less than 95% of the time (measured monthly as a percentage of Lines
delivered within the time periods required by the terms of this Agreement), with no greater
than 1% of all reports being delivered more than 24 hours overdue. This is a standard with
adjustments for the following factors:

	 	1)	 	Edits do not count in the return times
	 
	 	2)	 	Dictation issues caused by the Client or its dictation system supplier
	 
	 	3)	 	Force Majeure
	 
	 	4)	 	Clients that allow more turn-around-time will have their TAT adjusted

	 	 	Notwithstanding the foregoing, the parties may agree to more stringent TAT terms where TAT
requirements of any applicable Client are more stringent than identified above. In such
cases, Spheris agrees to provide SIPL with 30 days notification of such additional TAT
requirements.

6. Quality.

	6.1	 	SIPL commits to deliver Transcribed reports to Clients that exceed 98% accuracy 95% of the
time, with no reports less than 95% accurate. The percentage accuracy shall be based upon the
applicable percentage point system or scoring method that Spheris has with the applicable
Spheris customer, and shall be measured monthly, with adjustments for the following factors:

	 	1.	 	Edits do not count in the quality standards
	 
	 	2.	 	Dictation issues caused by the Client or its dictation system supplier
	 
	 	3.	 	Force Majeure

	 	 	Notwithstanding the foregoing, the parties may agree to more stringent quality requirements
where quality requirements of any applicable Client are more stringent than identified
herein. In such cases, Spheris agrees to provide SIPL with 30 days notification of such
additional quality requirements.
	 
	6.2	 	Spheris shall from time to time, at its sole discretion, proofread a random sample comprising
up to 1% but in no event less than 1/2% of the Lines produced by each of the Employees of SIPL
to determine the level of accuracy of the respective Employees (“QA Proofreading”). All costs
incurred in respect of QA Proofreading shall be borne by Spheris.

7. Term

	7.1	 	The term of this Agreement shall commence on the date hereof, and unless terminated pursuant
to Clause 7.2 hereof shall continue to be in force through December 31, 2011. This Agreement
shall automatically renew for successive one year periods, unless either party provides the
other with six (6) months’ notice of its intent to terminate this Agreement at the end of the
then current term.
	 
	7.2	 	This Agreement may be terminated by either party (“Non-Defaulting Party”) upon written notice
thereof in the event the other party (“Defaulting Party”) is in material breach of the terms
of this Agreement and if such breach is not remedied by the Defaulting Party within six (6)
months from the Non-Defaulting Party’s notice to the Defaulting Party to this effect. In the
event of a termination of this Agreement, Spheris shall promptly pay SIPL any Services Fee
payable to SIPL for Services rendered prior to the effective date of such termination and SIPL
shall promptly pay any amount payable to Spheris under this Agreement.
	 
	7.3	 	For the avoidance of doubt, unless otherwise specifically set forth herein, the parties agree
that Spheris can only be in material breach of this Agreement for failure to pay amounts due
hereunder (provided that following the payment of any disputed amounts hereunder by Spheris
into escrow, SIPL shall not be permitted to so terminate).

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8. Covenants of Spheris. Spheris, for itself, hereby covenants as follows:

	8.1	 	Confidential Agreement. Unless Spheris has obtained SIPL’s prior written consent (which
consent may be given or withheld in SIPL’s sole and absolute discretion), Spheris shall keep
the terms and conditions of this Agreement confidential and prevent disclosure thereof to any
Person other than its employees and advisors for purposes directly related to Spheris’s
operation of its business. Spheris’s obligation of confidentiality shall not apply to
information which:

	 	(i)	 	is obtained from a third party that did not make a disclosure of such
information (whether to Spheris, to a third party, or to the general public) in
violation of a non-disclosure obligation,
	 
	 	(ii)	 	is in the public domain not as a result of action by Spheris,
	 
	 	(iii)	 	is required to be disclosed by applicable law or an order issued by a court of
competent jurisdiction; provided, however, that in the event of any
such required disclosure, Spheris shall immediately notify SIPL thereof and shall
cooperate with SIPL in any attempt to quash, limit or otherwise prevent or limit
disclosure, or
	 
	 	(iv)	 	in so far as it is disclosed to Spheris’s employees, directors, bankers,
potential financiers or professional advisors as confidential, provided that it shall
ensure that such persons treat such information as confidential.

	8.2	 	Notice. Except as otherwise mutually agreed between the Parties, Spheris agrees that it
shall give SIPL at least thirty (30) days notice before requiring SIPL to commence work in
respect of any new Clients or any new Work Type.
	 
	8.3	 	Forecast. Spheris shall provide SIPL a three (3) month rolling forecast of the Lines to be
produced by SIPL each month not later than the twentieth day of each month. Spheris and SIPL
must agree on transcription volume objectives as well as proofing, volume and capacity
objectives of Spheris not less than 30 days prior to the end of each quarter for the next
quarter.
	 
	8.4	 	Compliance with the Regulations. Spheris shall to the extent applicable comply with HIPAA
and other applicable regulations in the United States for such locations where SIPL is
providing transcription services.

9. Covenants of SIPL. SIPL hereby covenants to Spheris as follows:

	9.1	 	Forecast. SIPL shall provide Spheris a three (3) month estimate of its Capacity and
estimated requirement for proofreading each month not later than the tenth day of each month.
Spheris and SIPL must agree on the capacity objectives as well as proofing volume of Spheris
not less than 30 days prior to the end of each quarter for the next quarter.
	 
	9.2	 	Confidential Information. Unless SIPL has obtained Spheris’ prior written consent (which
consent may be given or withheld in Spheris’ sole and absolute discretion), SIPL shall keep
the terms and conditions of this Agreement confidential and prevent disclosure thereof to any
person other than its employees for purposes directly related to SIPL’s operation of its
business. SIPL’s obligation of confidentiality shall not apply to information which:

	 	(i)	 	is obtained from a third party that did not make a disclosure of such
information (whether to SIPL, to a third party, or to the general public) in violation
of a non-disclosure obligation,
	 
	 	(ii)	 	is in the public domain not as a result of action by SIPL,
	 
	 	(iii)	 	is required to be disclosed by applicable law or an order issued by a court of
competent jurisdiction; provided, however, that in the event of any
such required disclosure, SIPL shall immediately notify Spheris thereof and shall
cooperate with Spheris in any attempt to quash, limit or otherwise prevent or limit
disclosure, or
	 
	 	(iv)	 	in so far as it is disclosed to its employees, directors, bankers, potential
financiers or professionals, provided that such party shall ensure that such persons
treat such information as confidential.

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	9.3	 	SIPL undertakes and covenants that it shall, during the term of this Agreement, provide the
Services to Spheris or to any other person that Spheris may, in writing, nominate. SIPL
further undertakes and covenants that, in the event SIPL has approved of the quality of the
sample Voice Files of a particular Client, SIPL is not entitled, at any subsequent point in
time to raise any issues with regard to the quality of the Voice Files, nor shall any alleged
lack of Voice File quality be deemed to be a material breach of the terms of this Agreement.
	 
	9.4	 	SIPL agrees and undertakes that it shall maintain the quality of the Services rendered to
Spheris at such a level that these Services meet the quality standards of similar services
purchased by Spheris in the United States of America. Spheris may conduct, at its discretion,
quality control checks in addition to those specified herein at no cost to SIPL.
	 
	9.5	 	Compliance with the Regulations. SIPL shall to the extent applicable to it comply with HIPAA
and other applicable regulations in the United States in its provision of the Services. In
addition, SIPL shall comply with all business associate agreements executed by it, including
the business associate agreement attached as Exhibit B. Furthermore, if Spheris
determines that SIPL must agree to additional terms to comply with HIPAA or any other privacy
law or regulation, SIPL shall agree to amend the terms of any Business Associate Agreement
signed by it in order to so comply. SIPL AND SPHERIS SPECIFICALLY ACKNOWLEDGE THAT SIPL’S
NON-COMPLIANCE WITH HIPAA OR ANY OTHER PRIVACY LAW OR REGULATION, COULD PRODUCE SIGNIFICANT
AND POTENTIALLY CATASTROPHIC DAMAGES. IN CONSIDERATION OF PROVIDING SERVICES HEREUNDER, SIPL
EXPLICITLY ACKNOWLEDGES AND ASSUMES THE RISKS OF DAMAGES FOR SPHERIS’ BUSINESS LOSSES, LOSS OF
REPUTATION, COSTS OF GOVERNMENT INVESTIGATION, COSTS OF NOTIFYING AFFECTED PERSONS OF PRIVACY
RIGHT INFRINGEMENT, AND ANY OTHER TYPE OF LOSS ATTRIBUTABLE TO SIPL’S VIOLATION OF HIPAA OR
ANY OTHER PRIVACY LAW OR REGULATION. THESE DAMAGES ARE IN ADDITION TO ALL OTHER REMEDIES
AVAILABLE TO SPHERIS INCLUDING THEORIES BASED IN CONTRACT OR TORT, INSURANCE RIGHTS, AND
SIPL’S INDEMNIFICATION DUTIES.
	 
	9.6	 	SIPL agrees that it shall at all times abide by all relevant local laws and regulations such
as relate to the employment of the Employees in SIPL. In particular, SIPL shall abide by all
the statutory provisions relating to provident funds, pension funds, the payment of wages, the
payment of gratuity, the payment of bonus, employee insurance, the payment of minimum wages,
statutory holidays, hours of employment, overtime employment, nightshift employment, leave
regulations, conditions of the workplace and healthcare benefits. In addition, SIPL agrees
that in the event of any termination of the Services or retrenchment or lay-off of any
Employee, SIPL shall abide by the rules, regulations, practices and procedures required by law
to be followed in respect of such termination, retrenchment or lay-off.
	 
	9.7	 	Subcontracting. Except as agreed to by the parties in writing or as otherwise permitted in
this Clause 9.7, SIPL must not use a Subcontractor in the provision of any services hereunder.
“Subcontractor” must be interpreted broadly to mean any person or business entity that
performs part or all of SIPL’s obligations in providing Services hereunder, and it includes
any third parties engaged by the Subcontractor to provide any of Subcontractor’s obligations.

	 	9.7.1	 	Upon advance written notice to Spheris and subject to Clause 9.7.2, SIPL may
use certain Subcontractors if SIPL complies with all conditions of this paragraph: (a)
SIPL must warrant that all Subcontractors are located entirely in India; (b) SIPL must
bind Subcontractors in writing to confidentiality terms similar to those contained in
this Agreement and to the audit provisions of this Agreement; and (c) SIPL must obtain
HIPAA business associate agreements in a form approved by Spheris from each
Subcontractor.
	 
	 	9.7.2	 	Notwithstanding the foregoing, if so stated in writing by Spheris, Spheris can
require that certain Jobs be performed without the use of Subcontractors.
	 
	 	9.7.3	 	SIPL bears full responsibility and all liability for Services performed by
Subcontractors. All Subcontractors are held to SIPL’s standards for service as
outlined in the Agreement. SIPL is responsible for and is accountable for all Services
pursuant to the Agreement, regardless of whether it uses a Subcontractor. Whenever
SIPL uses a Subcontractor, SIPL incurs all relevant penalties outlined in this
Agreement for under or non-performance of Services.
	 
	 	9.7.4.	 	Any agreement between SIPL and a Subcontractor shall provide that Spheris is a third
party beneficiary of such agreement.

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	 	9.7.5	 	SPHERIS AND SIPL SPECIFICALLY ACKNOWLEDGE THAT SIPL’S NON-COMPLIANCE WITH THIS
CLAUSE 9.7 COULD PRODUCE SIGNIFICANT AND POTENTIALLY CATASTROPHIC DAMAGES. IN
CONSIDERATION OF THE FOREGOING, SIPL EXPLICITLY ACKNOWLEDGES AND ASSUMES THE RISKS OF
DAMAGES FOR SPHERIS’ BUSINESS LOSSES, LOSS OF REPUTATION, COSTS OF GOVERNMENT
INVESTIGATION, COSTS OF NOTIFYING AFFECTED PERSONS OF PRIVACY RIGHT INFRINGEMENT, AND
ANY OTHER TYPE OF LOSS ATTRIBUTABLE TO SIPL’S USE OF A SUBCONTRACTOR FOR PERFORMANCE OF
SERVICES. THESE DAMAGES ARE IN ADDITION TO ALL OTHER REMEDIES AVAILABLE TO SPHERIS
INCLUDING THEORIES BASED IN CONTRACT OR TORT, INSURANCE RIGHTS, AND SUPPLIER’S
INDEMNIFICATION DUTIES.

10. Consequences of Force Majeure Events.

	10.1	 	In the event either party is unable to perform its obligations under this Agreement as a
result of the occurrence of any Force Majeure event, the obligations of such party under this
Agreement shall be suspended for the duration that the disruption due to the Force Majeure
event continues.
	 
	10.2	 	Should Spheris be unable to utilize SIPL’s capacity for 90 consecutive days because of a
Force Majeure event, SIPL may, in its sole discretion, contract for such capacity with another
purchaser without penalty to Spheris.

11. Severability. If any of the terms and conditions of this Agreement shall be held to be
illegal, invalid or otherwise non-enforceable by a court of competent jurisdiction, all remaining
terms and conditions shall remain in full force and effect.

12. Entire Agreement; Amendment. This Agreement and all exhibits annexed hereto, the Software
License Agreement, and any additional agreements related to confidentiality of the parties’ (or
third parties’) confidential information, contain the entire agreement between the parties with
respect to the subject matter hereof, supersede all prior oral and written understandings of the
parties with respect to the subject matter hereof, and may only be amended by a writing executed by
both Spheris and SIPL.

13. Notices. All notices, demands and other communications required or permitted hereunder shall
be in writing, and shall be deemed to have been duly given: (i) on the date delivered if delivered
in person; (ii) upon delivery, if sent overnight by prepaid Federal express or other similar
prepaid and receipted overnight or express courier service; (iii) upon electronic acknowledgment of
receipt, if delivered by facsimile; or (iv) fifteen (15) days after being sent by certified mail
(or registered airmail in the case of international delivery), postage prepaid, properly addressed
to the addressee as follows:

If to Spheris:

Spheris

9009 Carothers Parkway, Suite C-3

Franklin

Tennessee 370767

U.S.A.

Attention: Gregory T. Stevens, Chief Administrative Officer and General Counsel

Facsimile: (615) 261-1792

If to SIPL:

Spheris, India Private Limited

One HealthScribe Plaza

Koramangala Block 8

Bangalore — 560 008

India

Attention: Suresh Nair

Chief Operating Officer

Facsimile: (91) (80) 571-5345

or, with respect to any of the foregoing, at such different address as shall be specified by notice
given in the manner herein provided. Notwithstanding the foregoing, in the event the delivery of
any notice is refused or returned unopened, having been addressed to the most recent address
provided by the intended recipient in accordance with this Clause 13, such notice shall be deemed
to have been delivered on the date of the attempted delivery.

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14. Relationship of Parties. The parties to this Agreement are independent contractors. Nothing
in this Agreement shall be deemed to create a relationship between the parties of partnership,
agency, employment, franchise or joint venture. No party, solely by virtue hereof, has the
authority to bind the other or to incur any obligation on the other’s behalf.

15. Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the
substantive laws of the State of Tennessee, United States of America. The Federal Courts for the
Middle District of the State of Tennessee shall have exclusive jurisdiction with respect to any
disputes arising out of or in connection with this Agreement.

16. No Waiver. No failure on the part of SIPL or Spheris to exercise, and no delay in exercising
any right, power or remedy hereunder shall operate as or be deemed a waiver thereof by such party.

17. Headings. The headings in the clauses of this Agreement are inserted for convenience only and
in no way alter, amend, modify, limit or restrict the contractual obligations of the parties.

18. Rules of Construction. Unless the context otherwise requires, “or” is not exclusive, and
references to clauses or subclauses refer to clauses or subclauses of this Agreement.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which, when
so executed, shall be deemed an original but all of which shall constitute one and the same
instrument. Signature pages transmitted by facsimile shall be deemed originals.

20. No Third Party Beneficiaries. There are and shall be no third party beneficiaries of this
Agreement.

21. Confidentiality. Spheris and SIPL agree to take all steps reasonably necessary to hold each
others Proprietary Information in trust and confidence. By way of illustration but not limitation
“Proprietary Information” includes (a) trade secrets, inventions, mask works, ideas, processes,
formulas, source and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques; and (b) information regarding
plans for research, development, new products, marketing and selling, business plans, budgets and
unpublished financial statements, licenses, prices and costs, suppliers and customers. Spheris and
SIPL agree never to, directly or indirectly, use, disseminate, disclose, lecture upon or publish,
or divulge in any way, any of the other’s Proprietary Information disclosed to Spheris or SIPL or
known to Spheris or SIPL as a consequence of or through Spheris’s relationship with SIPL and the
reciprocal. Upon termination of this Agreement for any reason, each of Spheris and SIPL covenants
and agrees that all training materials and other repositories of Proprietary Information of the
other then in Spheris’s or SIPL’s possession shall be returned to the owner of the Proprietary
Information, or certified as being destroyed, on or before the effective date of termination. The
foregoing is in addition to any other confidentiality agreement between the parties hereto.

22.
Survival. The Clauses 3.3, 3.6, 3.6.1, 8.1, 9.2, 9.5, 9.7.5, and 11 though 22 shall survive
termination and, or early expiration of this Agreement.

[Signatures on following pages]

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

	 	 	 	 	 
	SPHERIS OPERATIONS LLC

 	 	 
	By:  	/s/ Gregory T. Stevens
 	 	 
	 	Name:  	Gregory T. Stevens 	 	 
	 	Title:  	Chief Administrative Officer and General Counsel 	 	 
	 
	SPHERIS, INDIA PRIVATE LIMITED

 	 	 
	By:  	/s/ Gregory T. Stevens
 	 	 
	 	Name:  	Gregory T. Stevens 	 	 
	 	Title:  	Chief Administrative Officer and General Counsel 	 	 

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Exhibit A

Part A

Line Rate:

Subject to the terms of this Agreement, Spheris will pay to SIPL per Line an amount to be mutually
agreed upon by the parties based on arms-length negotiations. Payments made by Spheris pursuant
to, and in the amounts indicated by, invoices prepared by SIPL shall indicate the parties’
agreement as to the Line Rate for such invoiced period.

Both parties agree to review the contracted Line rate quarterly and, if necessary, to adjust the
Line rate.

10

 

Exhibit B

HIPAA VENDOR ADDENDUM

11

 

HIPAA VENDOR ADDENDUM

          This HIPAA Vendor Addendum (“Addendum”) is made part of that certain Services Agreement, dated
January 1, 2008 (“Agreement”) by and between Spheris Operations LLC, a Tennessee limited liability
company (“SPHERIS”), and Spheris, India Private Limited, a company registered under the Indian
Companies Act, 1956 (“Vendor”). This Addendum is effective as of the effective date of the
Agreement.

          Vendor and SPHERIS agree that the parties incorporate this Addendum into the Agreement in
order to comply with the terms of SPHERIS’s contracts with its customers (“Customers”) that are
Covered Entities under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)
and its implementing regulations (45 C.F.R. Parts 160 and 164) (the “Privacy and Security Rules”).
It is the understanding of the parties that Vendor may create or receive Protected Health
Information when performing its obligations under the Agreement. References in this Addendum to
“PHI” refer to Protected Health Information created or received by Vendor for or from SPHERIS, any
subcontractor of SPHERIS, or any Customer.

	1.	 	Prohibition on Unauthorized Use or Disclosure. Vendor will neither use nor disclose PHI
except as permitted or required by this Addendum or as Required By Law.
	 
	2.	 	Permitted Uses and Disclosures. Vendor is permitted to use and disclose PHI to perform any
and all obligations of Vendor as described in the Agreement as may be amended, provided that
(i) such use or disclosure would be permitted under HIPAA if done by a Customer directly and
(ii) Vendor shall only use, disclose and request the minimum amount of PHI necessary for the
purpose of the use, disclosure or request. Vendor may also use PHI as necessary for Vendor’s
proper management and administration and to carry out Vendor’s legal responsibilities
(collectively, “Vendor’s Operations”). Vendor may disclose PHI as necessary for Vendor’s
Operations only if:

	 	2.1	 	the disclosure is Required By Law; or
	 
	 	2.2	 	Vendor obtains reasonable assurances in writing from any person or organization
to which Vendor will disclose such PHI that the person or organization will: (i) hold
such PHI in confidence and use or further disclose it only for the purpose for which
Vendor disclosed it to the person or organization or as Required By Law; and (ii)
notify Vendor of any instance of which the person or organization becomes aware in
which the confidentiality of such PHI was breached. In the case of a breach, Vendor
will notify SPHERIS of the breach.

	3.	 	Additional Restrictions. Unless SPHERIS gives its prior, express written consent, Vendor
agrees that Vendor will not disclose any PHI to any agent, subcontractor or other person or
entity that is located or organized outside of the United States of America. Further, Vendor
agrees not to allow any PHI to be transmitted to, received by, or stored at any location
outside of the United States of America and not to permit any person outside of the United
States of America to access or view PHI. Unless SPHERIS gives its prior, express written
consent, Vendor shall not de-identify any PHI except as necessary to perform its obligations
under the Agreement or for Vendor’s Operations.
	 
	4.	 	Information Safeguards. Vendor will use appropriate administrative, technical and physical
safeguards to prevent the use or disclosure of PHI (except for uses or disclosures provided
for by this Addendum). Vendor will maintain administrative, technical and physical safeguards
that reasonably and appropriately protect the confidentiality, integrity and availability of
electronic PHI, consistent with the requirements applicable to Covered Entities under the
Privacy and Security Rules.
	 
	5.	 	Sub-Contractors and Agents. Vendor will require any of its subcontractors and agents, to
which Vendor discloses any of PHI, to agree in writing to comply with the same privacy and
security obligations as Vendor with respect to such PHI. Notwithstanding the foregoing, unless
SPHERIS gives its prior, express written consent, Vendor shall not subcontract or assign any
portion of its rights or obligations under the Agreement, and Vendor shall only furnish
services under the Agreement through its employees. In the event SPHERIS consents to any
subcontracting of Vendor’s obligations under the Agreement, Vendor shall only subcontract in
compliance with Section 3 and shall otherwise comply with all of the terms of this Addendum.
	 
	6.	 	Training. Vendor shall train or adequately inform its employees, agents and subcontractors
regarding its obligations to handle PHI confidentially.

12

 

	7.	 	Access. To the extent Vendor maintains PHI in a Designated Record Set, Vendor will permit
SPHERIS, the applicable Customer, or at SPHERIS’s request an individual (or the individual’s
personal representative) to inspect and obtain copies of any PHI about the individual and that
is in Vendor’s custody or control. Vendor will follow the procedures for access set forth in
45 C.F.R. § 164.524.
	 
	8.	 	Amendment. Vendor will, upon receipt of notice from SPHERIS, promptly amend or permit
SPHERIS access to amend any portion of PHI maintained in a Designated Record Set as required
for Customers to meet their amendment obligations under 45 C.F.R. § 164.526.
	 
	9.	 	Disclosure Accounting. For each disclosure of PHI not excepted from disclosure accounting
under 45 CFR § 164.528 that Vendor makes, Vendor will record such information as would be
required for a Customer to respond to a request for an accounting of disclosures pursuant to
45 C.F.R. §164.528(b). Vendor will make this information available to SPHERIS or a Customer
promptly upon SPHERIS’s or such Customer’s request. Vendor shall have available the
information required by this Addendum Section 9 for the six (6) years preceding the request
for the information (except Vendor need not have information for disclosures occurring before
the effective date of this Addendum or the effective date of any other business associate
agreements between the parties, whichever date is earlier).
	 
	10.	 	Inspection of Books and Records. Vendor will make its internal practices, books, and
records, relating to its use and disclosure of the PHI, available upon request to Customers or
to the U.S. Department of Health and Human Services to determine any Customer’s compliance
with the Privacy and Security Rules. Notwithstanding the foregoing, no attorney-client
privilege or other legal privilege shall be deemed waived by SPHERIS or Vendor by virtue of
this provision.
	 
	11.	 	Reporting. Vendor shall report immediately to SPHERIS any use or disclosure of PHI not
permitted by this Addendum of which Vendor becomes aware. Vendor shall also immediately report
to SPHERIS any Security Incident of which Vendor becomes aware. All reports shall be sent to
Spheris Operations LLC, 720 Cool Springs Boulevard, Suite 200, Franklin, TN 37067, Attn:
General Counsel or to such other address or contact designated by SPHERIS in writing. Vendor
shall take reasonable steps as requested by SPHERIS or its Customers to mitigate any harm
caused by the improper use or disclosure of PHI or any Security Incident.
	 
	12.	 	Termination.

	 	12.1	 	Automatic Termination. This Addendum shall automatically terminate upon the
termination of the Agreement.
	 
	 	12.2	 	Right to Terminate for Breach. SPHERIS may terminate this Addendum and the
Agreement immediately upon written notice to Vendor if it determines that Vendor has
breached a material provision of this Addendum.
	 
	 	12.3	 	Obligations upon Termination. Upon termination of this Addendum, Vendor will
return to SPHERIS or destroy all PHI maintained by Vendor in any form or medium,
including all copies of such PHI and PHI held by any subcontractors or agents of
Vendor. Unless SPHERIS notifies Vendor otherwise (in response to a Customer
requirement), Vendor may maintain any PHI that cannot feasibly be returned to SPHERIS
or destroyed but will continue to abide by the terms and conditions of this Addendum
with regard to such information and will limit its further use or disclosure of such
information to those purposes that make return or destruction of the information
infeasible, for so long as Vendor maintains such information. The terms of this
Addendum Section 12.3 shall survive termination of this Addendum.

	13.	 	General Provisions.

	 	13.1	 	Definitions. Unless otherwise indicated in this Addendum, all capitalized terms
shall have the meanings set forth in the Privacy and Security Rules.

13

 

	 	13.2	 	Amendment. In the event that any final regulation or amendment to final regulations
is promulgated by the U.S. Department of Health and Human Services or other
government regulatory authority with respect to PHI or in the event of an amendment
to SPHERIS’s contractual obligations to its Customers with respect to PHI, this
Addendum shall automatically be amended to remain in compliance with such
requirements.
	 
	 	13.3	 	Interpretation. Any ambiguity in this Addendum shall be resolved in favor of a
meaning that permits SPHERIS to comply with its contractual obligations to its
Customers. Nothing in this Addendum shall be construed to create any rights or
remedies in any third parties. A reference in this Addendum to a section in 45 C.F.R.
Parts 160 or 164 means the section as in effect or as amended.
	 
	 	13.4	 	Conflicts. The terms and conditions of this Addendum override and control any
conflicting term or condition of the Agreement. All non-conflicting terms and
conditions of the Agreement remain in full force and effect.

          IN WITNESS WHEREOF, the parties have executed this Addendum by their duly authorized
representatives on the dates indicated below.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Vendor	 	Spheris Operations LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Gregory T. Stevens	 	By:	 	/s/ Gregory T. Stevens	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Gregory T. Stevens
	 	 	 	Name:
	 	Gregory T. Stevens	 	 
	 

	 	Title:
	 	Chief Administrative Officer
and General Counsel
	 	 	 	Title:
	 	Chief Administrative Officer and
General Counsel	 	 
	 

	 	Date:
	 	January 2, 2008
	 	 	 	Date:
	 	January 2, 2008	 	 

14EX-10.1 LOAN AGREEMENT

 

Exhibit 10.1

Loan Agreement

Dated            March 25, 2008

Santander BanCorp (“Santander”)

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
	 	 	7	 
	1.3 Number
	 	 	8	 
	1.4 Headings
	 	 	8	 
	2 The Facility and Facility Limits
	 	 	8	 
	2.1 Bank to fund
	 	 	8	 
	2.2 Maximum accommodation — Limits
	 	 	8	 
	2.3 Liability of the Borrowers
	 	 	8	 
	2.4 Purpose
	 	 	9	 
	3 Using the Facility
	 	 	9	 
	3.1 Drawing down
	 	 	9	 
	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
	 	 	10	 
	4 Interest
	 	 	10	 
	4.1 Interest charges
	 	 	10	 
	4.2 When Interest Periods begin and end
	 	 	10	 
	5 Repaying and prepaying
	 	 	10	 
	5.1 Repayment
	 	 	10	 
	5.2 Prepayment
	 	 	11	 
	5.3 Prepayments not available for redrawing
	 	 	11	 
	6 Payments
	 	 	11	 
	6.1 Manner of payment
	 	 	11	 
	6.2 No Withholding
	 	 	12	 
	7 Cancellation
	 	 	12	 
	8 Increased costs
	 	 	12	 
	8.1 Compensation
	 	 	12	 
	8.2 Possible minimization
	 	 	13	 
	9 Illegality or impossibility
	 	 	13	 
	9.1 Bank’s right to suspend or cancel
	 	 	13	 
	9.2 Extent and duration
	 	 	13	 
	9.3 Notice requiring prepayment
	 	 	13	 
	10 Representations and warranties
	 	 	14	 
	10.1 Representations and warranties
	 	 	14	 
	10.2 Repetition of representations and warranties
	 	 	15	 
	10.3 Reliance
	 	 	15	 
	11 Undertakings
	 	 	15	 
	11.1 General undertakings
	 	 	15	 

 

 

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

 

 

Details

Parties

	 	 	 	 	 
	Parties
	 
	Santander, Santander FS and Bank

	 
	 
	 	 	 	 
	Santander BanCorp

	 	Name
	 	Santander 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

 

	 	 	 	 	 
	Parties
	 	Santander,
Santander FS and Bank

	 
	 	 	 	 
	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	 	$640,000,000
	 
	 	 	 	 
	 
	 	Santander BanCorp Facility	 	$186,000,000
	 
	 	Limit	 	 
	 
	 	 	 	 
	 
	 	Santander FS Facility Limit	 	$454,000,000
	 
	 	 	 	 
	 
	 	Availability Period	 	The period from the date of this
agreement to September 24, 2008
	 
	 	 	 	 
	 
	 	Maturity Date	 	September 24, 2008
	 
	 	 	 	 
	 
	 	Margin	 	0.465% per annum
	 
	 	 	 	 
	 
	 	Purpose	 	To refinance borrowings from National Australia Bank Limited 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 24, 2008.
	 
	 	 	Bank means the person so described above in the Details.
	 
	 	 	Borrower means Santander or Santander FS, as the context requires.
	 
	 	 	Borrowers means Santander 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,
	 
	 	(c)	 	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 includes costs, charges and expenses, including those incurred in connection with
advisors.
	 
	 	 	Default Rate means the Interest Rate plus 2% per annum. For the purpose of this definition,
the Interest Rate is calculated as if the overdue amount is a Drawing with Interest Periods
of

3

 

	 	 	30 days (or another period chosen from time to time by the Bank) with the first Interest
Period starting on and including the due date.
	 
	 	 	Details means the section of this agreement headed “Details.”
	 
	 	 	Directive means:

	 	(a)	 	a law; or
	 
	 	(b)	 	a treaty, an official directive, request, guideline or policy (whether or not
having the force of law) with which responsible financiers 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 (“Default”).
	 
	 	 	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’ declaration about the financial statements and notes,

	 	 	together with any reports (including any directors’ reports) attached to any of those
documents or intended to be read with any of them.
	 
	 	 	A person is Insolvent if:

	 	(a)	 	it is (or states that it is) an insolvent under administration or insolvent
(within the meaning of any relevant law); or
	 
	 	(b)	 	it is in liquidation, in provisional liquidation, under administration or wound
up or has had a controller appointed to its property; or
	 
	 	(c)	 	it is subject to any arrangement, assignment, moratorium or composition,
protected from creditors under any statute or dissolved (in each case, other than to
carry out a reconstruction or amalgamation while solvent on terms approved by the
Bank); or

4

 

	 	(d)	 	an application or order has been made (and, in the case of an application, it
is not stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put
forward, or any other action taken, in each case in connection with that person, which
is preparatory to or could result in any of (a), (b) or (c) above; or
	 
	 	(e)	 	it is otherwise unable to pay its debts when they fall due; or
	 
	 	(f)	 	something having a substantially similar effect to (a) to (e) happens in
connection with that person under the law of any jurisdiction.

	 	 	Interest Payment Date means the last day of an Interest Period.
	 
	 	 	Interest Period means, subject to clause 4.2, a period of 30 days.
	 
	 	 	Interest Rate means LIBOR plus the Margin.
	 
	 	 	LIBOR means, for any date (“Relevant Date”) and period (“Relevant Period”) and amount
(“Relevant Amount”), the rate per annum (rounded upwards, if necessary, to the nearest
1/100,000 of 1%) appearing on the Dow Jones Market Service (formerly Telerate page 3750) as
the London interbank offered rate for deposits in dollars at approximately 11:00 A.M.
(London time) two Business Days preceding the Relevant Date. If such rates does not appear
on the Dow Jones Market Service, the rate for the Relevant Date will be the rate per annum
(rounded upwards, if necessary, to the nearest 1/100,000 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in dollars at approximately
11:00 A.M. (London time) two Business Days preceding the Relevant Date for the Relevant
Period commencing on the Relevant Date and in the Relevant Amount; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100,000 of 1%).
	 
	 	 	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.

5

 

	 	 	Margin means a margin of 0.465% per annum.
	 
	 	 	Maturity Date means September 24, 2008.
	 
	 	 	Moody’s means Moody’s Investors Service, Inc. and any successor or successors.
	 
	 	 	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.
	 
	 	 	Reference Banks means four major banks in the London interbank market selected by the Bank.
	 
	 	 	S&P means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.,
and any successor or successors.
	 
	 	 	Santander BanCorp Facility means the facility made available to Santander under this
agreement.
	 
	 	 	Santander BanCorp Facility Limit means $186,000,000.
	 
	 	 	Santander FS Facility means the facility made available to Santander FS under this
agreement.
	 
	 	 	Santander FS Facility Limit means $454,000,000.
	 
	 	 	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.
	 
	 	 	Subsidiary of an entity means another entity which:

	 	(a)	 	is a subsidiary of the first entity within the meaning of any applicable
legislation, 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 taxes, levies, imposts, deductions, charges, withholdings and duties (including
any withholding tax, stamp duties and transaction duties) imposed by any authority together
with any related interest, penalties, fines and expenses in connection with them, except if
imposed on, or calculated having regard to, the net income of the Bank or any tax imposed on
the Bank as a result of conducting business operations in Puerto Rico.
	 
	 	 	Transaction Documents means:

6

 

	 	(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;
	 
	 	(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 an individual, a firm, a body corporate, an
unincorporated association and an authority;
	 
	 	(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.

7

 

	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 financial accommodation requested by the Borrowers under this
agreement.
	 
	2.2	 	Maximum accommodation — Limits

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

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

	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 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, are repayable or
payable (as the case may be) by Santander 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

8

 

	 	 	 	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.

	 	 	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 borrowings from National
Australia Bank Limited 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.
	 
	3.2	 	Requesting a drawdown
	 
	 	 	If a Borrower wants a drawdown, it agrees to give a Drawdown Notice to the Bank by 11:00 am
(Puerto Rico time) 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 a secretary or a director 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 financial accommodation unless:

	 	(a)	 	it is to be provided during the Availability Period; and
	 
	 	(b)	 	it is satisfied that the financial accommodation is to be used solely for the
purpose described in clause 2.4; and

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	 	(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 accommodation 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 accommodation 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.

	 
	4	 Interest
	 
	4.1	Interest charges
	 
	 	Each Borrower agrees to pay interest on the Drawing for each of its Interest Periods at the
applicable Interest Rate. Interest:

	 	(a)	 	accrues daily from and including the first day of an Interest Period to but
excluding the last day of the Interest Period; and
	 
	 	(b)	 	is payable on each Interest Payment Date; and
	 
	 	(c)	 	is calculated on actual days elapsed and a year of 360 days.

	4.2	 	When Interest Periods begin and end

	 	(a)	 	The first Interest Period for a Drawing begins on the Drawdown Date.
	 
	 	(b)	 	Each subsequent Interest Period begins on the day when the preceding Interest
Period for the Drawing ends.
	 
	 	(c)	 	An Interest Period which would otherwise end on a day which is not a Business
Day ends on the previous Business Day.
	 
	 	(d)	 	However, an Interest Period which would otherwise end after the Maturity Date
ends on the Maturity Date.

	5	 	Repaying and prepaying
	 
	5.1	 	Repayment
	 
	 	 	Each Borrower agrees to repay the Drawing in full on the Maturity Date.

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	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 am (Puerto Rico time) 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 the prepayment is made on the last day of the Interest Period for the Drawing, no break
costs or other fees or charges are payable. However, if a Borrower prepays on a day other
than the last day of the Interest Period for the Drawing, 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 am, Puerto Rico time; and
	 
	 	(c)	 	in United States dollars in immediately available funds; and
	 
	 	(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 PR

Account No.: 04201408

	 	 	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.

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	 	 	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

	 	 	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.

12

 

	 	 	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, financial accommodation 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.
	 
	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

13

 

	 	 	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
(if any) 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,
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

	 	(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

14

 

	 	(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 each Drawdown Date and (in the case of those
in clause 10.1(d), (g), (h), (n) and (o)) on each Interest Payment 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
	 
	 	(b)	 	(conduct of business) to conduct its business (including collecting debts owed
to it) in the ordinary course consistent with its practices as at the date of this
agreement; and

15

 

	 	(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 preference 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

	 	(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

16

 

	 	(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 or Banco Santander 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 reconstruct or amalgamate while solvent on terms
approved 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
	 
	 	(ii)	 	immediately due for payment;

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

17

 

	 	 	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 co-operate 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 stamp duty 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)	 	financial accommodation requested under a Transaction Document not being
provided in accordance with the request for any reason except default of the Bank; or
	 
	 	(b)	 	financial accommodation under a Transaction Document being repaid, discharged
or made payable other than at its maturity or on an Interest Payment Date applicable to
it 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
	 
	 	(f)	 	any indemnity the Bank gives a controller or administrator of the Borrowers.

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

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	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 at intervals
which the Bank determines from time to time or, if no determination is made, every 30 days.
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.
	 
	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.

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	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 post (airmail, if appropriate) 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.

	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:

20

 

	 	(a)	 	if sent by post, three days after posting (or seven days after posting if sent
from one country to another); 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 pm in the
place of receipt or on a non-Business Day, they are taken to be received at 9:00 am 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”):

	 	(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.

21

 

	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 (including
varying the date for payment of any amount owing by the Bank to a Borrower and making
currency exchanges). 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
	 
	 	 	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.
	 
	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 continues after the
Transaction Document ends. It is not necessary for the Bank to incur expense or make
payment before enforcing a right of indemnity under a Transaction Document.

22

 

	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.

	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.

EXECUTED as an agreement

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 a director or secretary 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 March 25, 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:
March 25, 2008

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SANTANDER BANCORP

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	/s/
Carlos M. García

	 	 	)	 	 	/s/ María Calero
	 

	 	 	 	 	 	 
	Signature

	 	 	)	 	 	Signature
	 

	 	 	)	 	 	 
	Name:
Carlos M. García

	 	 	)	 	 	Name: María Calero
	 

	 	 	)	 	 	 
	Title:
First Executive Vice President and
Chief Operating Officer

	 	 	)	 	 	Title: Executive Vice
President and
Chief Accounting Officer
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SANTANDER FINANCIAL

	 	 	)	 	 	 
	SERVICES, INC.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	/s/
María Calero

	 	 	)	 	 	/s/ Rafael S. Bonilla
	 

	 	 	 	 	 	 
	Signature

	 	 	)	 	 	Signature
	 

	 	 	)	 	 	 
	Name: María Calero

	 	 	)	 	 	Name: Rafael S. Bonilla
	 

	 	 	)	 	 	 
	Title:
Authorized Officer

	 	 	)	 	 	Title: Authorized Officer
	 

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	BANCO SANTANDER PUERTO

	 	 	)	 	 	 
	RICO

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	/s/
Carlos M. García

	 	 	)	 	 	/s/ José Santoni Gordon
	 

	 	 	 	 	 	 
	Signature

	 	 	)	 	 	Signature
	 

	 	 	)	 	 	 
	Name:
Carlos M. García

	 	 	)	 	 	Name: José Santoni Gordon
	 

	 	 	)	 	 	 
	Title:
First Executive Vice President and
Chief Operating Officer

	 	 	 	 	 	Title: First Senior Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]