Document:

exv10w35

Exhibit 10.35

SECURITY AGREEMENT

     THIS SECURITY AGREEMENT (this “Agreement”), dated as of December 15, 2008 (the “Effective
Date”), is made by and between RIT ONCOLOGY, LLC, a Delaware limited liability company (“RIT”), and
BIOGEN IDEC INC., a Delaware corporation (“BIIB”).

     WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of August 15, 2007, by
and between Cell Therapeutics, Inc., a Washington corporation (“CTI”), and BIIB, as amended by that
certain First Amendment to Asset Purchase Agreement by and between CTI and BIIB dated as of
December 9, 2008 (as amended, the “Asset Purchase Agreement”), CTI has purchased certain assets
(the “Acquisition”) from BIIB relating to the Product (as defined for purposes of the Asset
Purchase Agreement) in exchange for, among other items, certain Milestone Payments (as defined in
the Asset Purchase Agreement) and certain Yearly Royalty Payments (as defined in the Asset Purchase
Agreement);

     WHEREAS, in connection with the Acquisition, BIIB agreed to various arrangements and
accommodations for CTI pursuant to the agreements and arrangements contemplated by the Asset
Purchase Agreement, including that certain Services Agreement, dated as of December 21, 2007, by
and between CTI and BIIB (the “Services Agreement”);

     WHEREAS, CTI has requested that BIIB consent to a transaction pursuant to which CTI will: (i)
enter into a joint venture with Spectrum Pharmaceuticals, Inc., a Delaware corporation
(“Spectrum”), for the marketing and development of the Product in the United States (the “Joint
Venture Transaction”); (ii) sell, assign and transfer to RIT all of CTI’s right, title and interest
in the Purchased Assets (as defined in the Asset Purchase Agreement) and CTI’s other properties,
assets and rights related to the Product (collectively and as further defined in the Purchase and
Formation Agreement (as defined below), the “Conveyed Assets”); and (iii) receive from RIT, in
consideration for the Conveyed Assets, a cash purchase price and a fifty percent (50%) membership
interest in RIT;

     WHEREAS, the other fifty percent (50%) membership interest in RIT is being issued to Spectrum
in consideration of its initial capital contribution;

     WHEREAS, the foregoing transactions and arrangements with respect to RIT are taking place
pursuant to the terms and conditions of that certain Purchase and Formation Agreement, dated
November 26, 2008, by and among RIT, CTI and Spectrum (the “Purchase and Formation Agreement”) and
that certain Amended and Restated Limited Liability Company Agreement of RIT to be entered into by
and between CTI and Spectrum at the closing contemplated by the Purchase and Formation Agreement;

     WHEREAS, BIIB is willing to consent to the Joint Venture Transaction and the transfer to RIT
of all of CTI’s right, title and interest in the Conveyed Assets, but only upon various conditions,
including the condition that RIT executes and delivers to BIIB this Agreement; and

     WHEREAS, unless otherwise defined herein, all capitalized terms shall have the meanings as set
forth in the Asset Purchase Agreement.

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
RIT and BIIB agree as follows:

 

 

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions. As used in this Agreement, the following terms shall have
the meanings ascribed to them below:

     “Acquisition” has the meaning set forth in the recitals.

     “Agreement” has the meaning set forth in the introductory paragraph.

     “Asset Purchase Agreement” has the meaning set forth in the recitals.

     “Assigned Contracts” has the meaning set forth in the Asset Purchase Agreement.

     “BIIB” has the meaning set forth in the introductory paragraph.

     “Collateral” has the meaning set forth in Article II.

     “Conveyed Assets” has the meaning set forth in the recitals.

     “CTI” has the meaning set forth in the recitals.

     “Effective Date” has the meaning set forth in the introductory paragraph.

     “Encumbrance” has the meaning set forth in the Asset Purchase Agreement.

     “Event of Default” means: (i) any failure by RIT to pay or perform any of the Secured
Obligations within fourteen (14) days after receipt by RIT of BIIB’s written notice of default;
(ii) any breach by RIT of any warranty, representation or covenant set forth herein that remains
uncured thirty (30) days after receipt by RIT of BIIB’s written notice of default; (iii) RIT
applies for, or consents to, the appointment of a receiver, trustee or liquidator of all or a
substantial portion of its assets; (iv) RIT transfers its assets to a third Person as part of a
general assignment for the benefit of creditors or otherwise seeks a similar voluntary arrangement
with its creditors or other form of relief from its creditors under state or federal law; (v) RIT
becomes and remains insolvent or generally fails to pay its obligations as they become due; (vi)
RIT files a voluntary petition for an order for relief under the United States Bankruptcy Code or
any successor or similar statute (the “Bankruptcy Code”); (vii) RIT consents to, or fails to
successfully contest within sixty (60) days of filing, an involuntary petition filed against it
under the provisions of the Bankruptcy Code; (viii) RIT suffers, or permits to become final, any
judgment, decree or order of any court that appoints a receiver, trustee or liquidator of all or a
substantial portion of its assets; or (ix) RIT suffers the attachment or execution upon, or other
judicial or governmental seizure of, all or a substantial portion of its assets and fails to
successfully contest such attachment, execution or seizure within sixty (60) days.

     “FDA” means the United States Food and Drug Administration.

     “Governmental Entity” has the meaning set forth in the Asset Purchase Agreement.

     “Governmental Rule” has the meaning set forth in the Asset Purchase Agreement.

     “Joint Venture Transaction” has the meaning set forth in the recitals.

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     “License Agreement” means the License Agreement defined in the Asset Purchase Agreement, as
the same may be modified pursuant to its terms from time to time.

     “Losses” has the meaning set forth in the Asset Purchase Agreement.

     “Milestone Payments” has the meaning set forth in the Asset Purchase Agreement.

     “Permitted Encumbrance” means: (i) any Encumbrance for Taxes or other fees, assessments or
charges of a Governmental Entity not delinquent or being contested in good faith by appropriate
proceedings; (ii) Encumbrances arising solely by virtue of any Governmental Rule relating to
banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; (iii) Encumbrances on items of equipment
and other personal property (including proceeds thereof and accessions thereto) securing capital or
operating lease obligations with respect solely to such items of equipment or property; (iv)
security interests for bank financings that, by their terms (with the form and substance of such
terms subject to the prior written consent of BIIB), are expressly subordinate to the security
interest granted by RIT to BIIB in this Agreement and that only secure Subordinated Obligations;
and (v) Encumbrances not otherwise permitted that do not in the aggregate exceed Twenty-Five
Thousand Dollars ($25,000) at any one time.

     “Person” means any individual, corporation, partnership, limited liability company, joint
venture, trust, business association, organization, Governmental Entity or other entity.

     “Product” has the meaning set forth in the Asset Purchase Agreement.

     “Purchase and Formation Agreement” has the meaning set forth in the recitals.

     “Purchased Assets” has the meaning set forth in the Asset Purchase Agreement.

     “Required Filings” has the meaning set forth in paragraph (c) of Article IV.

     “RIT” has the meaning set forth in the introductory paragraph.

     “Secured Obligations” mean any and all obligations of RIT under: (i) this Agreement (including
obligations to indemnify or pay BIIB for claims, losses, liabilities and expenses as contemplated
by Article VII); (ii) the Services Agreement (including obligations to pay or reimburse
BIIB with respect to amounts due and payable pursuant to the Services Agreement); (iii) the Asset
Purchase Agreement (including obligations: (a) to make Milestone Payments; (b) to make Yearly
Royalty Payments; (c) under Section 12.3(iv) of the Asset Purchase Agreement (i.e.,
indemnification for certain liabilities of BIIB under Section 15.2 of the Schering License
Agreement (as defined in the Asset Purchase Agreement); and (d) under Section 12.3(ii) of the Asset
Purchase Agreement as it relates to any Sublicense Agreement (i.e., indemnification for breach by
RIT of any of its covenants contained in any Sublicense Agreement)); (iv) the Supply Agreement
(including obligations to pay or reimburse BIIB with respect to amounts due and payable pursuant to
the Supply Agreement); (v) the Sublicense Agreements (including obligations to pay or reimburse
third Persons with respect to amounts due and payable pursuant to the Sublicense Agreements,
whether or not any such third Person asks, demands, collects or sues for payment or reimbursement
of such amounts by BIIB and/or BIIB pays or reimburses any such third Person for any such amount);
(vi) the Indemnification Agreement dated as of the Effective Date between RIT and BIIB pursuant to
which RIT has agreed

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to indemnify BIIB in respect of certain matters; and (vii) any agreement or other arrangement
with BIIB related to the Product (including obligations to pay or reimburse BIIB with respect to
amounts due and payable pursuant thereto). For the avoidance of doubt, Secured Obligations shall
not include any obligations relating to the Schering License Agreement (as defined in the Asset
Purchase Agreement) as to which BIIB is indefeasibly released by Schering (as defined in the Asset
Purchase Agreement) as contemplated by Section 2.3 of the Services Agreement (but only from and
after the effectiveness of such release).

     “Services Agreement” has the meaning set forth in the recitals.

     “Spectrum” has the meaning set forth in the recitals.

     “Sublicense Agreements” mean (i) the Sublicense Agreements defined in the Asset Purchase
Agreement, as the same may be modified pursuant to their respective terms from time to time, and
(ii) any agreements pursuant to which any of the intellectual property rights that are a subject of
any of the Sublicense Agreement are provided or made available to RIT, as the same may be modified
pursuant to their respective terms from time to time.

     “Sublicensed Patent Rights” has the meaning set forth in the Asset Purchase Agreement.

     “Sublicensed Patent Rights Agreements” means the Sublicensed Patent Rights Agreements defined
in the Asset Purchase Agreement, as the same may be modified pursuant to their respective terms
from time to time.

     “Subordinated Obligations” mean bank financings that, by their terms (with the form and
substance of such terms subject to the prior written consent of BIIB), are expressly subordinate in
right of payment to the Secured Obligations.

     “Supply Agreement” means the Supply Agreement defined in the Asset Purchase Agreement, as the
same may be modified pursuant to its terms from time to time.

     “UCC” means the Uniform Commercial Code as the same may from time to time be in effect in the
State of California (and each reference in this Agreement to an Article (or Division) thereof shall
refer to that Article (or Division, as applicable) as from time to time in effect); provided,
however, if by reason of mandatory provisions of Governmental Rule any or all of the attachment,
perfection or priority of BIIB’s security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of California, then such term
shall mean the Uniform Commercial Code (including the Articles or Divisions thereof) as in effect
at such time in such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to such provisions.

     “United States” has the meaning set forth in the Asset Purchase Agreement.

     “USPTO” has the meaning set forth in the Asset Purchase Agreement.

     “Yearly Royalty Payments” has the meaning set forth in the Asset Purchase Agreement.

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     Section 1.2 Interpretation.

          (a) When used in this Agreement, the words “include,” “includes” and “including” shall be
deemed to be followed by the words “without limitation.”

          (b) Any terms defined in the singular shall have a comparable meaning when used in the plural,
and vice-versa.

          (c) All references to any introductory paragraph, recitals, Articles, Sections, Exhibits and
Schedules shall be deemed references to the introductory paragraph, recitals, Articles, Sections,
Exhibits and Schedules to this Agreement unless otherwise specifically set forth herein.

          (d) This Agreement shall be deemed drafted jointly by RIT and BIIB and shall not be
specifically construed against either party based on any claim that such party or its counsel
drafted this Agreement.

ARTICLE II

GRANT OF SECURITY INTEREST

     Section 2.1 Collateral. As collateral security for the full, prompt, complete and
final payment and performance when due of all the Secured Obligations and in order to induce BIIB
to consent to the Joint Venture Transaction, RIT hereby grants to BIIB a first priority security
interest in all of RIT’s right, title and interest in, to and under all of its personal property
and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor
of, RIT, including (collectively, the “Collateral”):

          (a) the Purchased Assets, together with any other assets or rights related to any of the
Purchased Assets or otherwise used in the development, manufacture or commercialization of the
Product in the United States;

          (b) the Asset Purchase Agreement;

          (c) the Services Agreement;

          (d) the License Agreement;

          (e) the Supply Agreement;

          (f) the Sublicense Agreements and any other agreements executed and delivered by RIT at any
time related to the Sublicensed Patent Rights and/or the Sublicensed Patent Rights Agreement as
replacements to or in lieu of a Sublicense Agreement;

          (g) the following (as defined in the UCC): (i) all Accounts; (ii) all Chattel Paper; (iii) all
Documents; (iv) all General Intangibles (including Payment Intangibles and Software); (v) all Goods
(including Inventory, Equipment and Fixtures); (vi) all Instruments; (vii) all Investment Property;
(viii) all Deposit Accounts; Blocked Accounts, Concentration Accounts and all other bank accounts
and all deposits in such bank accounts; (ix) all money, cash or cash equivalents; (x) all
supporting obligations and Letter of Credit Rights; (xi) all Intellectual Property; and (xii) all
Software; and

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          (h) to the extent not otherwise included in the foregoing, all Proceeds (as defined in the
UCC), tort claims, insurance claims and other rights to payment as well as all products, rents,
profits and proceeds of the foregoing, all substitutions and replacements for the foregoing and all
accessions thereto.

     Section 2.2 Exception. Notwithstanding the foregoing provisions of this Article
II, the grant of a security interest as provided herein shall not extend to, and the term
“Collateral” shall not include, any Assigned Contract in which RIT has any right, title or interest
if and to the extent such Assigned Contract includes a provision containing a restriction on
assignment such that the creation of a security interest in the right, title or interest of RIT
therein would be prohibited and would, in and of itself, cause or result in a default thereunder
enabling another Person party to such Assigned Contract to enforce any remedy with respect thereto;
provided, however, that the foregoing exclusion shall not apply if (i) such prohibition has been
waived or such other Person has otherwise consented to the creation hereunder of a security
interest in such Assigned Contract or (ii) such prohibition would be rendered ineffective pursuant
to the UCC, as applicable and as then in effect in any relevant jurisdiction, or any other
Governmental Rule or principles of equity; provided, further, that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and RIT
shall be deemed to have granted a security interest in, all its rights, title and interests in and
to such Assigned Contract as if such provision had never been in effect; and provided, finally,
that the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise
affect BIIB’s unconditional continuing security interest in and to all rights, title and interests
of RIT in or to any payment obligations or other rights to receive monies due or to become due
under any such Assigned Contract and in any such monies and other proceeds of such Assigned
Contract.

ARTICLE III

ASSIGNED CONTRACTS

     Section 3.1 Assigned Contracts. Notwithstanding anything contained in this Agreement
to the contrary, RIT expressly agrees that, as between the parties, RIT shall be and remain liable
under each of the Assigned Contracts and other items of Collateral to observe and perform all the
conditions and obligations to be observed and performed by it thereunder or with respect thereto.

     Section 3.2 No Release of RIT. The exercise by BIIB of any of its rights under this
Agreement shall not release RIT from any of RIT’s duties or obligations whatsoever.

     Section 3.3 No Duty for BIIB. The powers conferred on BIIB hereunder are solely to
protect the interests of BIIB in the Collateral, and shall not impose any duty upon BIIB to
exercise any such powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, BIIB shall have no duty as to any
Collateral or as to the taking of any steps to preserve rights against prior parties or any other
rights or obligations pertaining to any Collateral.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     RIT represents and warrants to BIIB as follows:

          (a) Except for the security interest granted to BIIB under this Agreement and Permitted
Encumbrances, RIT (i) is the sole legal and equitable owner of each item of (or representing) the
Collateral and (ii) will remain so during the term of this Agreement except with respect to any
disposition of Collateral to the extent permitted under Section 5.3.

          (b) No security agreement, financing statement, equivalent security or lien instrument or
continuation statement covering all or any part of the Collateral exists or, except in respect of a
Subordinated Obligation entered into after the Effective Date or any filed in favor of BIIB
pursuant to this Agreement, will exist during the term of this Agreement.

          (c) During the term of this Agreement, this Agreement creates a legal, binding and valid first
priority security interest in favor of BIIB in all of the Collateral securing the Secured
Obligations, and upon the filing of a financing statement with the Secretary of State for the State
of Delaware as executed and delivered by RIT to BIIB in connection with the execution and delivery
of this Agreement (in substantially the form attached hereto as Exhibit A) and the filing
with the USPTO of notices in respect of the Assigned Patents and the Product Trademark (each as
defined in the Asset Purchase Agreement) as executed and delivered by RIT to BIIB in connection
with the execution and delivery of this Agreement (in substantially the forms attached hereto as
Exhibits B-1 and B-2) (such financing statement and notices, collectively, the
“Required Filings”) all filings and other actions necessary to perfect in BIIB and protect for BIIB
such security interest will have been duly taken.

          (d) No consent, authorization, approval or other action by, and no notice to or RIT filing
with, any Governmental Entity or other person or entity is required either for (i) the grant by RIT
of the security interest granted hereby or for the execution, delivery or performance of this
Agreement by RIT or (ii) the perfection or exercise by BIIB of its rights and remedies hereunder,
other than the filing of the Required Filings as contemplated by the foregoing paragraph (c) and
any necessary continuations thereof.

          (e) RIT’s federal taxpayer identification number is 26-3664987, its jurisdiction of
organization is the State of Delaware and its chief executive office, principal place of business
and the place where it maintains its records concerning the Collateral are in the State of
Washington. The Collateral is presently located at such Seattle, Washington address of RIT as is
set forth in Section 8.2(a).

ARTICLE V

COVENANTS

     Section 5.1 Change of Jurisdiction of Organization; Relocation of Business. RIT shall
not change its jurisdiction of organization from the State of Delaware or relocate its chief
executive office, principal place of business or place where it maintains its records concerning
the Collateral from its current location without at least thirty (30) days prior written notice to
BIIB.

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     Section 5.2 Limitation on Encumbrances on Collateral. RIT shall not, directly or
indirectly, create, permit or suffer to exist, and shall defend the Collateral against and take
such other action as is necessary to remove, any Encumbrance on the Collateral other than the
security interest granted to BIIB under this Agreement and Permitted Encumbrances.

     Section 5.3 Disposition of Collateral. RIT shall not sell, lease, license, transfer
or otherwise dispose of any of the Collateral, or attempt or contract to do so, other than: (i) the
sale of inventory in the ordinary course of business; (ii) the disposal of worn-out or obsolete
equipment; or (iii) with the prior written consent of BIIB (which may be conditioned in BIIB’s
reasonable discretion).

     Section 5.4 Taxes; Claims. RIT shall pay promptly when due all Taxes or other fees,
assessments or charges of a Governmental Entity imposed upon, and all claims (including claims for
labor, materials and supplies) of any Person against, the Collateral, except to the extent the
validity or amount thereof is being contested in good faith and adequate reserves are being
maintained in connection therewith.

     Section 5.5 Further Assurances. At any time and from time to time, upon the written
request of BIIB, RIT shall promptly and duly execute and deliver any and all such further
instruments and documents and take such further action as BIIB may reasonably deem necessary or
desirable to obtain the full benefits of this Agreement, including (i) executing any financing or
continuation statements (including “in lieu” continuation statements) under the UCC with respect to
the security interests granted hereby and (ii) cooperating with BIIB in connection with BIIB’s
filing of any forms or other documents required to be recorded or filed with the USPTO, any other
Governmental Entity (including the FDA) or any other Person. RIT also hereby authorizes BIIB to
file any such financing or continuation statement (including “in lieu” continuation statements) or
such forms or other documents without the signature of RIT.

ARTICLE VI

RIGHTS AND REMEDIES UPON DEFAULT; REINSTATEMENT

     Section 6.1 Remedies. If any Event of Default shall have occurred and be continuing:

          (a) RIT hereby irrevocably appoints BIIB as RIT’s attorney-in-fact, with full authority in the
place and stead of RIT and in the name of RIT, from time to time in BIIB’s discretion, to take any
action and to execute any instrument that BIIB may deem necessary or advisable to accomplish the
purposes of this Agreement including: (i) to obtain and adjust insurance in respect of any of the
Collateral; (ii) to ask, demand, collect, sue for, recover, compound, receive, settle, compromise
and give acquittance and receipts for, money due and to become due under or in respect of any of
the Collateral; (iii) to receive, endorse and collect any drafts or other instruments and documents
in connection with the foregoing clauses (i) or (ii); and (iv) to file claims or take any action or
institute any proceedings that BIIB may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of BIIB with respect to any of the Collateral.
The foregoing power of attorney is coupled with an interest and is intended to constitute an
irrevocable durable power of attorney which will not be affected by any subsequent disability or
incapacity of RIT.

          (b) In lieu of or in addition to exercising any other power hereby granted or otherwise
available to BIIB, it may proceed by an action or actions in equity or at law for the seizure

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and sale of the Collateral or any part thereof, for the specific performance of any covenant
or agreement herein contained or in aid of the execution of any power herein granted, for the
foreclosure or sale of the Collateral or any part thereof under the judgment or decree of any court
of competent jurisdiction, for the appointment of a receiver pending any foreclosure hereunder or
the sale of the Collateral or any part thereof, or for the enforcement of any other appropriate
equitable or legal remedy; and upon the commencement of judicial proceedings by BIIB to enforce any
right under this Agreement, BIIB shall be entitled as a matter of right against RIT to such
appointment of a receiver, without regard to (i) the adequacy of the security by virtue of this
Agreement or any other collateral or (ii) the solvency of RIT.

          (c) In addition to other rights and remedies provided for herein or otherwise available to
BIIB, it may exercise in respect of the Collateral all the rights and remedies of a secured party
upon default under the UCC, whether or not the UCC applies to the affected Collateral, and also may
(i) require RIT to, and RIT hereby agrees that, at its expense and upon the request of BIIB, it
forthwith shall assemble all or any part of the Collateral as directed by BIIB and make it
available to BIIB at such places as BIIB may designate, and (ii) sell the Collateral or any part
thereof in one or more sales at public or private sales, at any of BIIB’s offices or elsewhere, for
cash, on credit or for future delivery and at such price or prices and upon such other terms as is
commercially reasonable. RIT agrees that to the extent notice of sale shall be required by law,
five (5) business days’ notice to RIT of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. BIIB shall not be
obligated to make any sale of Collateral, regardless of notice of sale having been given. BIIB may
adjourn any public or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and place to which it was
so adjourned. BIIB shall have the right to become the purchaser at any public sale and shall have
the right to credit against the amount of the bid made therefor the amount payable to BIIB out of
the net proceeds of such sale.

          (d) All cash proceeds received by BIIB in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as follows:

               (i) First, to the payment of all reasonable costs and expenses incident to the enforcement of
this Agreement, including the reasonable expenses of retaking, holding, preparing for sale or
lease, selling, leasing and the like, and the reasonable attorneys’ fees and legal expenses
incurred by BIIB;

               (ii) Second, to the payment of all other Secured Obligations; and

               (iii) Third, the remainder, if any, to RIT or to whomever may be lawfully entitled to receive
such remainder;

provided, however, that RIT shall remain liable to BIIB for any deficiency in the Secured
Obligations remaining unpaid after the application of such proceeds; and provided, further, that,
to the extent not prohibited by applicable law, nothing herein contained shall in any way limit or
restrict BIIB’s rights to proceed directly against RIT without first causing BIIB to exhaust, or in
any manner to exercise its rights in respect of, the Collateral.

          (e) Any sale of the Collateral or any part thereof pursuant to the provisions of this
Section 6.1 shall operate to divest all right, title, interest, claim and demand of RIT in
and to the property sold and shall be a perpetual bar against RIT. Nevertheless, if requested by
BIIB so to do,

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RIT shall join in the execution, acknowledgment and delivery of all proper conveyances,
assignments and transfers of the property sold. It shall not be necessary for BIIB to have
physically present or constructively in BIIB’s possession any of the Collateral at any such sale,
and RIT shall deliver all of the Collateral to the purchaser at such sale on the date of sale and,
if it should be impossible or impracticable then to take actual delivery of the Collateral, the
title and right of possession to the Collateral shall pass to the purchaser at such sale as
completely as if the same had been actually present and delivered. RIT agrees that if RIT retains
possession of the property or any part thereof subsequent to such sale, RIT shall be considered a
tenant at sufferance of the purchaser and shall, if RIT remains in possession after demand to
remove, be guilty of forceful detainer and be subject to eviction and removal, forcible or
otherwise, with or without process of law, and all damages by reason thereof are hereby expressly
waived by RIT.

          (f) BIIB may use, assemble, complete, produce, develop, process, market or operate the
Collateral to the extent that BIIB deems appropriate for the purpose of caring for, preserving or
disposing of the Collateral or for any other purpose that BIIB deems appropriate.

          (g) Subject to any requirements of applicable law, RIT agrees that neither RIT nor any of
RIT’s affiliates shall at any time have or assert any right under any law pertaining to the
marshalling of assets, the sale of property in the inverse order of alienation, the administration
of estates of decedents, appraisement, valuation, stay, extension or redemption now or hereafter in
force in order to prevent or hinder the rights of BIIB or any purchaser of the Collateral or any
part thereof under this Agreement.

          (h) Upon any sale made under the powers of sale herein granted and conferred, the receipt of
BIIB shall be sufficient discharge to the purchaser or purchasers at any sale for the purchase
money, and such purchaser or purchasers, and the heirs, devisees, personal representatives,
successors and assigns thereof, shall not, after paying such purchase money and receiving such
receipt of BIIB, be obliged to see to the application thereof or be in any way answerable for any
loss, misapplication or nonapplication thereof unless such purchaser is BIIB or an Affiliate
thereof.

     Section 6.2 Effectiveness and Reinstatement. This Agreement shall remain in full
force and effect and continue to be effective should any Event of Default occur. This Agreement
shall continue to be effective or shall be automatically reinstated, as the case may be, without
the need for further action by either party hereto if at any time payment and performance of the
Secured Obligations, or any part thereof, is rescinded or reduced in amount or must otherwise be
restored or returned by any obligee of the Secured Obligations pursuant to any Governmental Rule,
whether as a “voidable preference,” “fraudulent conveyance” or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, then the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

ARTICLE VII

INDEMNITY AND EXPENSES

     Section 7.1 Indemnification of BIIB. RIT agrees to indemnify BIIB from and against
any and all Losses arising out of an Event of Default (including enforcement of this Agreement),
except claims, losses or liabilities resulting from BIIB’s gross negligence or willful misconduct.

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     Section 7.2 Payment to BIIB of Expenses. If an Event of Default has occurred, RIT
shall upon demand pay to BIIB the amount of any and all expenses, including the reasonable fees and
disbursements of counsel and any experts and agents, that BIIB may incur in connection with any of:
(a) the inspection, custody, preservation, use or operation of, the sale of, the collection from,
or other realization upon, any of the Collateral following an Event of Default; (b) the exercise or
enforcement of any of the rights of BIIB hereunder following an Event of Default or under any
judgment awarded to BIIB in respect of its rights hereunder (which obligation shall be severable
from the remainder of this Agreement and shall survive the entry of any such judgment); and (c) the
failure by RIT to perform or observe any of the provisions hereof. The foregoing shall include any
and all expenses and fees incurred by BIIB in connection with a bankruptcy, reorganization,
receivership or similar debtor-relief proceeding by or affecting RIT or any other event
constituting an Event of Default.

ARTICLE VIII

MISCELLANEOUS

     Section 8.1 Term. This Agreement shall commence on the Effective Date and shall
continue until the later of: (i) the expiration or termination of the Services Agreement by its
terms (or, if later, complete satisfaction of the obligations of RIT thereunder); (ii) such date as
BIIB is no longer a manufacturer or supplier of the Product (or any component thereof) for RIT or
any direct or indirect assignee or successor to RIT (or, if later, the complete satisfaction of all
obligations under any manufacturing or supply agreement for which BIIB might otherwise have
liability); (iii) such date as BIIB has no liability under any Sublicense Agreement (or, if later,
the complete satisfaction of all obligations under any Sublicense Agreement for which BIIB might
otherwise have liability); or (iv) the expiration or termination of all obligations of RIT pursuant
to the Asset Purchase Agreement and all Assigned Contracts (or, if later, RIT’s complete
satisfaction of its obligations thereunder).

     Section 8.2 Notice. All notices, requests and other communications hereunder shall be
in writing and shall be sent, delivered or mailed, addressed as follows:

          (a) if to RIT:

c/o Cell Therapeutics, Inc.

501 Elliott Avenue Suite 400

eattle, WA 98119

Telephone: (206) 284-5774

Facsimile: (206) 284-6114

Attn: James A. Bianco, M.D.

and

Spectrum Pharmaceuticals, Inc.

157 Technology Drive

Irvine, CA 92618

Telephone: (949) 788-6700

Facsimile: (949) 788-6706

Attn: Legal Department

11

 

with copies to:

Orrick, Herrington & Sutcliffe LLP

405 Howard Street

San Francisco, CA 94105

Telephone: (415) 773-5700

Facsimile: (415) 773-5759

Attn: Karen A. Dempsey, Esq.

and

Bingham McCutchen LLP

600 Anton Blvd., 18th Floor

Costa Mesa, CA 92626

Telephone: (714) 830-0600

Facsimile: (714) 830-0700

Attn: Robert C. Funsten, Esq.

          (b) if to BIIB:

Biogen Idec Inc.

14 Cambridge Place

Cambridge, MA 02142

Telephone: (617) 679-2000

Facsimile: (617) 679-2838

Attn: General Counsel

with a copy to:

Pillsbury Winthrop Shaw Pittman LLP

12255 El Camino Real, Suite 300

San Diego, CA 92130

Telephone: (858) 509-4000

Facsimile: (858) 509-4010

Attn: Mike Hird, Esq.

Each such notice, request or other communication shall be given by: (i) hand delivery; (ii) by
certified mail; or (iii) nationally recognized courier service. Each such notice, request or
communication shall be effective when delivered at the address specified above (or in accordance
with the latest unrevoked direction from the receiving party).

     Section 8.3 Continuing Security Interest. This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and effect until payment in
full of the Secured Obligations and performance of all other obligations secured hereby, (b) be
binding upon RIT and RIT’s successors and assigns (provided, however, that RIT shall not have the
right to assign RIT’s rights or obligations hereunder or any interest herein), and (c) inure to the
benefit of, and be enforceable by, BIIB and its successors and assigns (BIIB having the right to
assign its rights hereunder or any interest herein in its discretion without the consent of RIT).

     Section 8.4 Severability. If any provision of this Agreement shall be deemed or held
to be invalid or unenforceable for any reason, it shall be adjusted, if possible, rather than
voided, so as

12

 

to achieve the intent of the parties to the fullest extent possible. In any event, such
provision shall be severable from, and shall not be construed to have any effect on, the remaining
provisions of this Agreement, which shall continue to be in full force and effect.

     Section 8.5 Rights Cumulative; No Waiver. BIIB’s options, powers, rights, privileges
and immunities specified herein or arising hereunder are in addition to, and not exclusive of,
those otherwise created or existing now or at any time, whether by contract, by statute or by rule
of law. BIIB shall not, by any act, delay, omission or otherwise, be deemed to have modified,
discharged or waived any of BIIB’s options, powers or rights in respect of this Agreement, and no
modification, discharge or waiver of any such option, power or right shall be valid unless set
forth in writing signed by BIIB or BIIB’s authorized agent, and then only to the extent therein set
forth. A waiver by BIIB of any right or remedy hereunder or any one occasion shall be effective
only in the specific instance and for the specific purpose for which given, and shall not be
construed as a bar to any right or remedy that BIIB otherwise would have on any other occasion.

     Section 8.6 Governing Law; Terms; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applied to contracts between
residents thereof, to be wholly performed within the State of California, except to the extent that
the validity or perfection of the security interest hereunder, or remedies or other provisions
hereunder, in respect of any particular Collateral are governed by the laws of a jurisdiction other
than the State of California, including federal law. No claim, dispute or proceeding of any kind
or nature whatsoever arising out of or in any way relating to this Agreement may be commenced,
prosecuted or continued in any court other than the courts of the State of California located in
the City of San Diego or in the United States District Court for the Southern District of
California located in San Diego County, which courts shall have exclusive jurisdiction over the
adjudication of such matters, and RIT consents to the jurisdiction of such courts and personal
service with respect thereto.

     Section 8.7 Releases. No release from the lien of this Agreement of any part of the
Collateral by BIIB shall in any way alter, vary or diminish the force, effect or lien of this
Agreement on the balance of the Collateral.

     Section 8.8 Subrogation. This Agreement is made with full substitution and
subrogation of BIIB in and to all covenants and warranties by others heretofore given or made in
respect of the Collateral or any part thereof.

     Section 8.9 Headings. The section headings used in this Agreement are intended
principally for convenience and shall not by themselves determine the rights and obligations of the
parties to this Agreement.

     Section 8.10 Entire Agreement. This Agreement and the agreements expressly referenced
herein contain the entire agreement between RIT and BIIB with respect to the subject matter hereof.
No supplement to or modification of this Agreement shall be binding unless executed in writing by
RIT and BIIB.

[SIGNATURE PAGE FOLLOWS]

13

 

     IN WITNESS WHEREOF, the parties have caused this Security Agreement to be signed by their
respective representatives thereunto duly authorized, all as of the Effective Date.

	 	 	 	 	 
	 	RIT ONCOLOGY, LLC

 	 
	 	By:  	/s/ Shyam Kumaria
 	 
	 	 	Name:  	Shyam Kumaria 	 
	 	 	Title:  	Manager 	 
	 
	 	BIOGEN IDEC INC.

 	 
	 	By:  	/s/ Paul J. Clancy
 	 
	 	 	Name:  	Paul J. Clancy 	 
	 	 	Title:  	Chief Financial Officerexv10w16

Exhibit 10.16

EMPLOYMENT AGREEMENT

BETWEEN

ORIENTAL FINANCIAL GROUP INC.

AND

JOSÉ RAFAEL FERNÁNDEZ

     This Employment Agreement (the “Agreement”) is made and entered into as of the 3rd day of
December, 2010, by and between ORIENTAL FINANCIAL GROUP INC., a financial holding company that has
its principal office in San Juan, Puerto Rico (the “Company”), and JOSÉ RAFAEL FERNÁNDEZ (the
“President and CEO” or “Mr. Fernández”).

WITNESSETH:

     WHEREAS, Mr. Fernández has been an executive officer of the Company since June 1991, is
presently the Company’s President, Chief Executive Officer, and Vice Chairman of the Board of
Directors, and the retention of his services for and on behalf of the Company is of material
importance to the preservation and enhancement of the value of the Company’s business;

     WHEREAS, the Company and the President and CEO wish to enter into this Agreement and intend
that this Agreement shall become effective on January 1, 2011 (the “Effective Date”), and replace
the Employment Agreement, dated October 31, 2007 (the “2007 Employment Agreement”), between the
Company and the President and CEO, which is now in effect;

     NOW THEREFORE, in consideration of the mutual covenants herein set forth, the Company and the
President and CEO do hereby agree as follows:

1. TERM OF EMPLOYMENT

     1.1 The Company hereby employs Mr. Fernández as its President and Chief Executive Officer, and
Mr. Fernández hereby accepts said employment and agrees to render such services to the Company on
the terms and conditions set forth in this Agreement for a term of three (3) years commencing on
the Effective Date and terminating on December 31, 2013, unless further extended or sooner
terminated in accordance with the terms and conditions herein set forth.

     Not less than one hundred twenty (120) days in advance of the expiration of the term of this
Agreement, the parties will determine whether to extend the term and, if extended, under what terms
and conditions. Unless otherwise agreed to in writing by Mr. Fernández and the Company, and except
in the event of a termination for just cause pursuant to Section 6.1 hereof or a removal or bar
from office pursuant to Section 6.5 hereof, Mr. Fernández shall remain as an employee of the
Company after the expiration of the term of this Agreement and shall be entitled to all the rights
and benefits of an employee under the laws of the Commonwealth of Puerto Rico.

     1.2 During the term of this Agreement, the President and CEO shall devote his best efforts to
performing such services for the Company as may be consistent with his title of President and Chief
Executive Officer and those which from time to time may be assigned to him by the Company’s Board of Directors (the “Board of Directors”).

     1.3 The services of the President and CEO to the Company shall be rendered principally in the
Commonwealth of Puerto Rico, but he shall do such traveling on behalf of the Company as may be
reasonably required by his duties.

     1.4 The President and CEO shall report directly to the Board of Directors and shall have
overall responsibility for all of the business and affairs of the Company, including making all
determinations concerning hiring, dismissal and compensation for all classes of employees of the
Company (exception in the case of the Head of the Company’s Internal Audit Department), which
determinations shall be in accordance with the policies for such hiring, dismissal and compensation
established by the Compensation Committee of the Board of Directors (the “Compensation Committee”)
from time to time and in accordance with applicable laws, rules and regulations, including the
applicable regulations of the Federal Deposit Insurance Corporation (the “FDIC”), the Board of
Governors of the Federal Reserve System (the “FRB”), the Securities and Exchange Commission
(“SEC”), and the Office of the Commissioner of Financial Institutions of Puerto Rico (the “OCFI”).

     1.5 The President and CEO shall continue to occupy his position as Vice Chairman of the Board
of Directors. Furthermore, during the term of this Agreement and any extension thereof, and in any
election of directors in which his term as a member of the Board of Directors will expire, the Board of Directors shall nominate
and recommend to the Company’s stockholders the election of Mr. Fernández to the Board of Directors
and, if elected, the Board of Directors shall appoint him as its Vice Chairman.

2. COMPETITIVE ACTIVITIES

     2.1 The President and CEO agrees that during the term of this Agreement, except with the
express written consent of the Board of Directors, he will not, directly or indirectly, engage or
participate in, become a director of, or render advisory or other services for, or in connection
with, or become interested in, or make financial investment in any firm, corporation, business
entity or business enterprise; provided, however, that the President and CEO shall not thereby be
precluded or prohibited from owning passive investments including investments in the securities of
other financial institutions, so long as such ownership does not require him to devote substantial
time to management or control of the business or activities in which he has invested.

     2.2 The President and CEO agrees and acknowledges that during the time that he is employed by
the Company, he will maintain an intimate knowledge of the activities and affairs of the Company
including trade secrets and other confidential matters. As a result, and also because of the
special, unique, and extraordinary services that the President and CEO is capable of performing for
the Company or one of its competitors, the President and CEO recognizes that the

 

 

services to be rendered by him hereunder are of a character giving them a peculiar value, the loss
of which cannot be adequately or reasonably compensated for by damages. Therefore, if during the
time he is employed by the Company, the President and CEO renders services to a competitor of the
Company other than as authorized pursuant to Section 2.1 hereof, the Company shall be entitled to
immediate injunctive or other equitable relief to restrain the President and CEO from rendering his
services to the competitor of the Company, in addition to any other remedies to which the Company
may be entitled under law; provided, however, that the right to such injunctive or other equitable
relief shall not survive the termination of the President and CEO’s employment with the Company.

3. COMPENSATION AND REIMBURSEMENT OF EXPENSES

     3.1 Compensation.

          (a) The Company will compensate and pay the President and CEO an annual base salary of five
hundred thousand dollars ($500,000) equivalent to forty-one thousand six hundred and sixty-six
dollars with sixty-six cents ($41,666.66) per month for his services to the Company during the term
of this Agreement.

          (b) Not later than March 31 of each contract year subsequent to the first contract year of
this Agreement, the Compensation Committee shall evaluate and determine the amount of any increase
to the President and CEO’s annual base salary. Any increases to the President and CEO’s annual base
salary determined by the Compensation Committee shall be retroactive to January 1 of the then running contract year and the increased annual base salary shall become
the President and CEO’s new contractual annual base salary.

     3.2 Bonus. The Company shall set for the President and CEO an annual target bonus of
one hundred fifty percent (150%) of his annual base salary and car allowance as may be earned by
him under the Company’s non-equity incentive bonus plan. The bonus shall be due and payable on or
before March 31 following the expiration of each contract year of this Agreement.

     3.3 Car Allowance. During the term of this Agreement and any extension thereof, the
Company shall provide the President and CEO an annual car allowance in the amount of thirty
thousand dollars ($30,000) from which the President and CEO shall pay all his car-related expenses.

     3.4 Memberships and Professional Expenses. During the term of this Agreement and any
extension thereof, the Company shall provide the President and CEO with an annual allowance in the
sum of thirty thousand dollars ($30,000). From such allowance, the President and CEO shall pay his
membership expenses for such social, business or professional organizations and other expenses
which, in his judgment, are reasonably appropriate for the performance of his duties under this
Agreement. All such membership(s) shall be maintained in the name of the President and CEO.

     3.5 Reimbursement of Expenses. Not less frequently than monthly, the Company shall
pay for or reimburse the President and CEO for all reasonable travel and other expenses incurred by
the President and CEO in the performance of his duties under this Agreement, including, without
limiting the generality of the foregoing, the allowance and reimbursable expenses provided for in
Sections 3.3 and 3.4 above.

     3.6 Life Insurance. The Company shall provide a ten (10) year term life insurance
policy in the sum of three million dollars ($3,000,000) covering the life of the President and CEO
and having as its beneficiary the spouse and heirs of Mr. Fernández or any other person or entity
which the President and CEO may designate in writing from time to time. The President and CEO
hereby authorizes the Company to obtain a ten million dollar ($10,000,000) key-man term life
insurance policy covering his life and having the Company as its beneficiary. For as long as the
President and CEO is employed by the Company, all premiums and costs associated with such term life
insurance policies shall be for the account of the Company.

     3.7 Vacation. The President and CEO shall be entitled to twenty-five (25) days of
paid vacation each year during the term of this Agreement.

4. DISABILITY

     4.1 If the President and CEO shall become physically or mentally disabled or incapacitated to
the extent that he is unable to perform his duties under this Agreement, and so long as such disability continues, the President and CEO shall, subject to the provisions of Section 6.2
and 6.3 hereof, and for a period not to exceed the remaining term of this Agreement, continue to
receive his full compensation, as set forth in Section 3 hereof, including an annual cash bonus
equal to the annual cash bonus paid to him in the last fiscal year prior to his disability or
incapacitation.

     4.2 There shall be deducted from the amounts paid to the President and CEO hereunder during
any period of disability or incapacitation, as described in Section 4.1 hereof, any amounts
actually paid to the President and CEO pursuant to any disability insurance or other similar
program(s) which the Company has instituted or may institute on behalf of its employees for the
purpose of providing compensation in the event of disability.

5. ADDITIONAL COMPENSATION AND BENEFITS

     5.1 During the term of this Agreement, the President and CEO will be entitled to participate
in, and receive the benefits of, any equity-based compensation plan, profit sharing plan, or other
plans, benefits and privileges given to employees and executives of the Company or its subsidiaries
and affiliates which may now exist or come into existence hereinafter, to the extent commensurate
with his then duties and responsibilities, as fixed by the Compensation Committee, and, to the
extent that the President and CEO is otherwise eligible and qualifies, to so participate in, and
receive such benefits or privileges. The Company shall not make any changes in such plans,
benefits or privileges which would adversely

-2-

 

affect the President and CEO’s rights or benefits thereunder, unless such change or changes are
made pursuant to a program applicable to all executives of the Company and does not result in a
proportionately greater adverse change in the rights of or benefits to the President and CEO as
compared to any executive officer of the Company. Nothing paid to the President and CEO under any
plan or arrangement presently in effect or made available in the future shall be deemed in lieu of
the annual base salary or bonus payable to the President and CEO pursuant to Sections 3.1 and 3.2
hereof.

     5.2 (a) On the date hereof, and upon the execution of this Agreement, the Compensation
Committee shall award the President and CEO (i) qualified stock options to purchase one hundred
thousand (100,000) shares of the Company’s common stock and (ii) fifty thousand (50,000) restricted
stock units. Both awards are made under and are subject to the provisions of the Company’s Amended
and Restated 2007 Omnibus Performance Incentive Plan (the “Plan”), as further amended from time to
time.

          (b) The Compensation Committee shall consider in each contract year of this Agreement granting
the President and CEO additional incentive compensation under the Plan based on his performance
scorecard, as approved by the Compensation Committee, up to an annual amount equal to one hundred
percent (100%) of his annual base salary.

          (c)(i) Up to twenty-five percent (25%) of the stock options granted to the President and CEO
hereunder may be exercised by the President and CEO each year during a period commencing on the second anniversary
of the award and ending on the tenth anniversary thereof, provided that the stock options will
become fully vested and exercisable in the event of a Change of Control of the Company, as defined
in the Change in Control Compensation Agreement between the Company and the President and CEO,
dated December 15, 2004, as amended (the “Change in Control Compensation Agreement”), or if the
President and CEO dies or becomes disabled; and

               (ii) Restrictions on the restricted stock units granted to the President and CEO hereunder
will expire on the third anniversary of the award or earlier in the event of a Change of Control of
the Company, as defined in the Change in Control Compensation Agreement, or if the President and
CEO dies or becomes disabled.

     5.3 In consideration of the equity awards provided in Section 5.2(a) hereof, the President and
CEO hereby waives his right to receive any equity awards for 2010 under the 2007 Employment
Agreement.

6. TERMINATION

     6.1 The Board of Directors shall have the right, at any time upon prior written Notice of
Termination (as defined in Section 6.8(b) hereof), to terminate the President and CEO’s employment
hereunder for just cause or in connection with a removal or bar from office pursuant to Section 6.5
hereof. For purposes of this Agreement, the term “termination for just cause” shall mean
termination because of the willful and continued failure of the President and CEO to perform his duties under this Agreement, or
the willful engaging by the President and CEO in illegal conduct or gross misconduct materially
injurious to the Company as determined by a court of competent jurisdiction or a federal or state
regulatory agency having jurisdiction over the Company. For purposes of this paragraph, no act, or
failure to act, on the part of the President and CEO shall be considered “willful” unless done, or
omitted to be done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company; provided, however, that any act or omission to
act by the President and CEO in reliance upon an opinion of counsel to the Company or counsel to
the President and CEO shall not be deemed to be willful.

     6.2 In the event the President and CEO’s employment is terminated for just cause pursuant to
Section 6.1 hereof or he is removed or barred from office pursuant to Section 6.5 hereof, the
President and CEO shall have no right to compensation or other benefits for any period after such
date of termination. If the President and CEO is terminated by the Company other than for just
cause pursuant to Section 6.1 hereof, other than in connection with a removal or bar from office
pursuant to Section 6.5 hereof, and other than in connection with a Change of Control of the
Company, as defined in the Change in Control Compensation Agreement, the President and CEO’s right
to compensation and other benefits under this Agreement shall be as set forth in Sections 6.8(c) and (d) hereof.

     6.3 The President and CEO shall have the right, upon prior written Notice of Termination of
not less than thirty (30) days, to terminate his employment hereunder. In such event, the
President and CEO shall have the right, as of the date of termination, to receive all accrued
compensation and other benefits provided for in this Agreement; provided, however, that if the
President and CEO terminates his employment hereunder for “good reason” pursuant to Section 6.8(a)
hereof he shall be entitled to receive the severance payment provided for in Section 6.8(c) hereof.
If the President and CEO provides a Notice of Termination for good reason, the date of termination
shall be the date on which the Notice of Termination is given to the Company.

     6.4 If the President and CEO is suspended from office and/or temporarily prohibited from
participating in the conduct of the Company’s affairs pursuant to a notice served under the Federal
Deposit Insurance Act (“FDIA”), the Federal Reserve Act (“FRA”), the Bank Holding Company Act of
1956 (the “BHCA”), the Securities Exchange Act of 1934 (the “SEA”), or the Puerto Rico Banking Act
(the “PRBA”), each as amended from time to time, the Company’s obligations under this Agreement
shall be suspended as of the date of service unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Company shall: (i) pay the President and CEO all the compensation withheld while
contractual obligations were suspended, and (ii) reinstate in whole or in part, as applicable, any
of the Company’s obligations which were suspended.

     6.5 If the President and CEO is removed from office and/or permanently prohibited from
participating in the conduct of the Company’s affairs by an order issued under the FDIA, the FRA,
the BHCA, the SEA, or the PRBA all obligations of the Company under this Agreement shall terminate,
as of the effective date of the order, but the rights of the President and CEO to compensation
earned as of the date of termination shall not be affected.

-3-

 

     6.6 If the Company is in default, as defined to mean an adjudication or other official
determination of a court of competent jurisdiction or other public authority pursuant to which a
conservator, receiver or other legal custodian is appointed for the Company for the purpose of
liquidation, all obligations under this Agreement shall terminate as of the date of default, but
the rights of the President and CEO to compensation and benefits accrued as of the date of
termination shall not be affected.

     6.7 In the event that the President and CEO is terminated in a manner which violates the
provisions of Section 6.1 hereof, as determined by a court of competent jurisdiction, the President and CEO shall be entitled
to reimbursement for all reasonable costs, including attorneys’ fees, in challenging such
termination. Such reimbursement shall be in addition to all rights to which the President and CEO
is otherwise entitled under this Agreement.

     6.8 (a) The President and CEO may terminate his employment hereunder for good reason. For
purposes of this Agreement, the term “good reason” shall mean (i) a failure by the Company to
comply with any material provision of this Agreement, which failure has not been cured within ten
(10) days after a notice of such noncompliance has been given by the President and CEO to the
Company; (ii) any purported termination of the President and CEO’s employment hereunder which is
not effected pursuant to a Notice of Termination (and for purposes of this Agreement no such
purported termination shall be effective); (iii) any reduction in the President and CEO’s
compensation and fringe benefits, including a reduction in his target bonus opportunity, without
his written consent; (iv) failure to nominate the President and CEO for reelection as a member of
the Board of Directors and, if elected, failure to appoint him as Vice Chairman of the Board of
Directors; (v) a material diminution in his positions, duties and authorities as President and
Chief Executive Officer of the Company; (vi) if President and CEO is not the President and Chief
Executive Officer of the ultimate parent entity resulting from a Change of Control of the Company, as defined in the Change in Control Compensation Agreement; (vii) a
change in reporting structure so that the President and CEO reports to someone other than the Board
of Directors, or (viii) the failure of any successor to all or substantially all of the Company’s
assets to assume this Agreement whether in writing or by operation of law.

          (b) Any termination of the President and CEO’s employment by the Company or by the President
and CEO shall be communicated by a written Notice of Termination to the other party hereto. For
purposes of this Agreement, the term “Notice of Termination” shall mean a dated notice which shall
(i) indicate the specific termination provision in the Agreement relied upon; (ii) set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
President and CEO’s employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than thirty (30) nor more than ninety (90) days after such
Notice of Termination is given, except in the case of the Company’s termination of the President
and CEO’s employment for just cause pursuant to Section 6.1 hereof or in connection with a removal
or bar from office pursuant to Section 6.5 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is given; and (iv) be given
in the manner specified in Section 9.1 hereof.

          (c) In the event that: (i) the President and CEO shall terminate his employment for good
reason as defined in Section 6.8(a) hereof, or (ii) if the President and CEO is terminated by the
Company other than for just cause pursuant to Section 6.1 hereof, other than in connection with a
removal or bar from office pursuant to Section 6.5 hereof, and other than in connection with a
Change of Control of the Company, as defined in the Change in Control Compensation Agreement, then
in lieu of any further compensation to the President and CEO for periods subsequent to the
date of termination, the Company shall pay as severance to the President and CEO an amount equal
to the product of (A) the aggregate annual compensation paid to or payable by the Company and any
of its subsidiaries to the President and CEO during the year in which the termination of the
President and CEO’s employment occurs, which amount shall include the President and CEO’s (i)
annual base salary, (ii) bonus (equal to the average cash bonus paid to the President and CEO in
the last two fiscal years prior to the date of termination of employment), (iii) car allowance, and
(iv) equity awards (equal to the average of the aggregate grant date fair value of the equity
awards granted to the President and CEO in the last two fiscal years prior to the date of
termination of employment; provided, however, that solely for purposes of this Section 6.8(c), of
the total number of equity awards provided in Section 5.2(a) hereof, seventy—five percent (75%)
shall be deemed to have been granted in the first contract year of this Agreement and twenty-five
percent (25%) shall be deemed to have been granted in the second contract year of this Agreement),
multiplied by (B) 3.00, such payment to be made in a lump sum on or before the fifth day following
the date of termination.

          (d) Unless the President and CEO’s employment is terminated for just cause pursuant to
Section 6.1 hereof, or in connection with a removal or bar from office pursuant to Section 6.5
hereof, or in connection with a Change of Control of the Company, as defined in the Change in
Control Compensation Agreement, the Company shall maintain in full force and effect, for the
continued benefit of the President and CEO for the balance of the term of this Agreement (as such
term may have been extended as provided herein), all employee benefit plans and programs in which
the President and CEO was entitled to participate immediately prior to the date of termination,
provided that the President and CEO’s continued participation is possible under the general terms
and provisions of such plans and programs.

          (e) The President and CEO shall not be required to mitigate the amount of any payment
provided for in paragraphs (c) and (d) of this Section 6.8 by seeking other employment or
otherwise.

7. INDEMNIFICATION

     7.1 The Company shall indemnify the President and CEO to the fullest extent authorized by
applicable federal and Commonwealth of Puerto Rico laws and regulations, with respect to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the Company) that the
President and CEO is a party or is threatened to made a party by reason of the fact that he is or
was the President and Chief Executive Officer of the Company or that he is or was a member of the
Board of Directors, or is or was serving at the written request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against costs and expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a matter he reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful, provided that the Company shall not be
liable for any amounts which may be due to the President and CEO in connection with a settlement of
any action, suit or proceeding effected without its prior written consent or any action, suit or
proceeding initiated by the President and CEO seeking indemnification hereunder without its prior
written consent. The provisions of this Section 7.1 shall also extend the conjugal partnership of the President and CEO and his spouse and to the
President and CEO’s spouse, when applicable, and shall survive the termination of this Agreement.

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8. SUCCESSORS OF THE PARTIES

     8.1 This Agreement shall inure to the benefit of and be binding upon the President and CEO,
and, to the extent applicable, his assigns, executors, and personal representatives and the
Company, its successors, and assigns, including, without limitation, any person, partnership, or
corporation which may acquire all or substantially all of the Company’s assets and business, or
with or into which the Company may be consolidated or merged, and this provision shall apply in the
event of any subsequent merger, consolidation, or transfer.

     8.2 This Agreement is personal to each of the parties hereto and neither party may assign or
delegate any of his or its rights or obligations hereunder without first obtaining the written
consent of the other party.

9. NOTICES

     9.1 All notices required by this Agreement to be given by one party to the other shall be in
writing and shall be deemed to have been delivered either:

     (a) When personally delivered to the office of the Secretary of the Company at his
regular corporate office, or the President and CEO in person; or

     (b) Five days after depositing such notice in the United States mails, certified mail with
return receipt requested and postage prepaid to:

	 	(i)	 	José Rafael Fernández

Narciso 1893

Urb. Santa María

Río Piedras, PR 00927
	 
	 	(ii)	 	Oriental Financial Group Inc.

P.O. Box 195115

San Juan, Puerto Rico 00919-5115

Attention: Chairman — Compensation Committee

or such other address as either party may designate to the other by notice in writing in accordance
with the terms hereof.

10. AMENDMENTS OR ADDITIONS

     10.1 No amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties. The prior approval by a two-thirds affirmative vote of the full Board of
Directors shall be required in order for the Company to authorize any amendments or additions to
this Agreement, to give any consent or waivers of provisions of this Agreement, or to take any
other action under this Agreement including any termination of the employment of the President and
CEO with or without just cause under Section 6.1 hereof.

11. MISCELLANEOUS

     11.1 No course of conduct between the Company and President and CEO to exercise any right or
power given under this Agreement shall: (i) impair the subsequent exercise of any right or power,
or (ii) be construed to be a waiver of any default or any acquiescence in or consent to the curing
of any default while any other default shall continue to exist, or be construed to be a waiver of
such continuing default or of any other right or power that shall theretofore have arisen; and,
every power and remedy granted by law and by this Agreement to any party hereto may be exercised
from time to time, and as often as may be deemed expedient. All such rights and powers shall be
cumulative to the fullest extent permitted by law.

     11.2 The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

     11.3 This Agreement shall be governed in all respects and be interpreted by and under the laws
of the Commonwealth of Puerto Rico, except to the extent that such law may be preempted by
applicable federal law, including applicable regulations, opinions or orders duly issued by the
FDIC, the FRB or the SEC (“Federal Law”), in which event this Agreement shall be governed and be
interpreted by and under Federal Law. Venue for the litigation of any and all matters arising
under or in connection with this Agreement shall be laid in the United States District Court for
the District of Puerto Rico, in the case of federal jurisdiction, and in the Court of First Instance, Superior Part of San Juan, of the Commonwealth of Puerto Rico, in the case of state court
jurisdiction.

     11.4 Notwithstanding anything to the contrary herein contained, the payment or obligation to
pay any monies or granting of any rights or privileges to the President and CEO as provided in this
Agreement shall not be in lieu or derogation of the rights and privileges that the President and
CEO now has under any plan or benefit presently outstanding.

     11.5 As used herein, the term “Company” shall include all of the Company’s subsidiaries.

     11.6 This Agreement constitutes the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and, as of the Effective Date, supersedes all
prior agreements and understandings, whether written or oral, relating to such subject matter.

     11.7 This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original and all of which taken together shall constitute one and the same agreement.

     11.8 The heading of each section or paragraph of this Agreement is for reference purposes only
and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement in San Juan,
Puerto Rico, as of the date first above written.

	 	 	 	 	 
	PRESIDENT AND CEO

 	 
	/s/José Rafael Fernández
 	 
	José Rafael Fernández 	 
	 	 
	 
	ORIENTAL FINANCIAL GROUP INC.

 	 
	By:  	Compensation Committee of the
 Board of Directors
 	 
	 	 
	By:  	                               /s/ Pedro Morazzani
 	 
	 	Pedro Morazzani 	 
	 	Chairman — Compensation Committee 	 
	 

-6-

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