Document:

EX-10.11 CONTRACT FOR PURCHASE OF BUILDING

 

Exhibit 10.11

DEED
NUMBER SEVEN (7)

DEED OF PURCHASE AND SALE

     In
the city of San Juan, Puerto Rico, on the twenty-fifth (25) day of August, two thousand six
(2006).

BEFORE ME

     Pilar Muñoz Nazario, attorney at law and notary public with authority to exercise in the
Commonwealth of Puerto Rico with a place of residence and office in Ponce, Puerto Rico.

APPEARS

     AS PARTY OF THE FIRST PART: Bairoa River Park, Inc. a corporation organized under the laws of
Puerto Rico, with Employer Identification Number sixty-six dash, zero
five hundred and ninety-nine
thousand seventy-eight (66-0599078) with its principal place of business in San Juan, Puerto Rico,
represented in this act by Mr. Antonio Muñoz Grajales, of legal age, married, an executive and
resident of San Juan, Puerto Rico. Mr. Muñoz Grajales is authorized to execute this deed pursuant
to the Corporate Resolution of the eighteenth (18th) day of August of two thousand six (2006), by
sworn statements numbered two hundred and fourteen (214) and
two-hundred and eighty-six (286),
before the notary publics Luis Javier Hernandez Ortiz and Francisco Villanueva Acevedo,
respectively, which documents I have had in my presence during the execution of this
act.

     Bairoa River Park, Inc. shall hereinafter be referred to as “Seller”.

     AS PARTY OF THE SECOND PART: FirstBank Puerto Rico (“FirstBank”) a banking institution
organized under the laws of Puerto Rico, with Employer Identification Number sixty six, dash, zero
one hundred and eighty-three thousand one hundred and three (66-0183103), with its principal place
of business in San Juan, Puerto Rico. FirstBank, represented in this act by Mr. Dacio Pasarell
Colón, of legal age, married, an executive and resident of San Juan, Puerto Rico, with social
security number five hundred eighty-three, dash, zero seven, dash, two thousand seven hundred and
eighty -

 

 

three
(###-##-####). Mr. Pasarell is authorized to execute this deed pursuant to the
Corporate Resolution of the seventh (7th) day of April of two-thousand six (2006) under testimony
number one thousand eight hundred and fifty-five (1,855), before the notary public Miguel B.
Hernández Vivoni, document which I have had in my presence during the execution of this act.

     FirstBank shall hereinafter be referred to as the “Buyer”.

I ATTEST AND GIVE FAITH

     That I identified Mr. Antonio Muñoz Grajales through his driver’s license number one million
three hundred and fifteen thousand seven hundred and eighty (1315780) issued by the Commonwealth of
Puerto Rico; and that I identified Mr. Dacio Pasarell Colón
through his driver’s license number zero four-hundred and thirty-eight thousand four hundred
thirty-eight (0438438) issued by the Commonwealth of Puerto Rico, shown to me as set forth in
Article seventeen c (17 c) of the Notarial Law, for not knowing them personally, and based on their
word I also attest and give faith as to their respective personal circumstances. The appearing
parties assure me that they have, and in my judgment they do have, the necessary legal capacity to
execute this deed, and therefore, they freely and voluntarily

STATE

     FIRST:
The Seller is the owner in fee simple of the property described in overleaf sixty-six
(66 v.) of volume one thousand two hundred nineteen (1,219) of Río Piedras, Registry of Property,
Second Section of San Juan, property number eight thousand and thirty-six (8,036), [described in
the Spanish language as follows]:

     “RUSTICA: Parcela de terreno radicada en Río Piedras, compuesta por tres punto cuatro mil
setecientos noventa y uno cuerdas (3.4791 cdas.), equivalentes a una hectárea, treinta y seis (36)
áreas, setenta y cuatro (74) centiáreas y treinta (30) centésimas de centiáreas y a trece mil
seiscientos setenta y cuatro metros cuadrados con treinta décimas (13,674.30 m.c.). Colinda por el
Norte, con terrenos de Don Manuel Rodríguez; por el Este, con el Ramal de la Carretera Insular
número uno y en parte con la Autoridad de las Fuentes Fluviales de Puerto Rico; por el Sur, con una
quebrada y con terrenos de Don Manuel Canino y en parte con la Autoridad de las Fuentes Fluviales
de Puerto Rico; y por el Oeste, con el Río Piedras.

     Sobre esta parcela de terreno, enclava un edificio de dos (2) plantas de hormigón reforzado,
con bloques de concreto y cimientos para un total de ocho (8) plantas,

 

 

dedicado a negocio. La
planta primero del edificio tiene un área de cuarenta y cinco mil pies cuadrados (45,000 p.c.) y la
segunda planta tiene un área total de cuarenta y cinco mil pies cuadrados (45,000 p.c.) también.

     SECOND: The above mentioned property was acquired by the Seller pursuant to Deed Number
Twenty-Nine (29) of Purchase and Sale executed in San Juan,
Puerto Rico, on June fifth (5), two-thousand one (2001), before notary public Luis Roberto Rodríguez Nevárez.

     THIRD: The property described above is by its origin, free and clear from liens
and encumbrances.

     FOURTH: The above described property is subject to the following liens and encumbrances:

          a) A servitude over a parcel in this property in favor of the Commonwealth of Puerto Rico,
pursuant to the Order of the Superior Court of Puerto Rico,
Expropriations Division, case number
“E” dash sixty-two dash, six-hundred fifty-four (E-62-654), of the seventeenth (17th) day of May,
nineteen sixty-two (1962). Said servitude was transferred to Sewer and Aqueduct Authority, pursuant
to the Resolution of the fourteenth (14th) day of October, nineteen
sixty-three (1963) issued in
the same case.

          b) A reciprocal servitude over this property as servient tenement and dominant tenement over
the property number eleven thousand nine hundred and forty-four (11,944), property of Río Piedras
Commercial, Inc., with the value of one dollar ($1.00), pursuant to
Deed Number Twenty-Five (25),
executed in San Juan, Puerto Rico, on
January twenty-eight (28) of nineteen seventy-four (1974), before notary public Francisco Luis
García Enchaustegui,, and registered at page one hundred seventy-seven (177) of volume nine hundred
and sixty-one (961) of Río Piedras North, property number
eight thousand and thirty-six (8,036),
sixteenth (16th) inscription.

          Said servitude serves as the entrance for both properties.

          c) The property is subject to a mortgage guarantying a promissory note in favor of Banco
Popular de Puerto Rico, or to its order in the principal amount of
fourteen million-seven hundred
thousand dollars ($14,700,000.00), due upon presentation, bearing an

 

 

annual interest rate of
two percent (2%) over the prime rate pursuant to Deed Number Twenty-Six (26) executed in San Juan
on the fifth (5th) day of June, two thousand one (2001), before notary public Gustavo J.
Umpierre Ponton. It was recorded in the Property Registry as the
twenty-seventh (27th)
inscription on page sixty-seven (67) of volume one thousand two hundred and nineteen (1,219) of Río
Piedras, property number eight thousand and thirty-six (8,036).

     The Seller manifests that the principal balance of the mentioned mortgage has been reduced to
thirteen million eight hundred and forty thousand five hundred and
ninety-four dollars with
nineteen cents ($13,840,594.19). In addition, the parties have showed to the notary public a
Certification from Banco Popular de Puerto Rico with the date of
August twenty-first (21st), two
thousand six (2006), which indicates that the above mentioned amount is the present balance of the
Mortgage. Such certification is signed by Mrs. Liza Lúgaro,
Vice-President of the Corporate
Banking Division.

     FIFTH: All of the above expressed is based on a title study done by Hato Rey Title Insurance
Agency, Inc. and not by the Notary Public. Said study is dated the thirteenth (13th) day of July,
two thousand six (2006).

     SIXTH: Today, the authorizing Notary Public has executed Deed Number six (6) with respect to
the Rectification of Surface Area, which in accordance to a survey done it appeared that the
property described had more surface area than that described in the Property Registry. As a
result, description of the property is [in the Spanish language] as follows:

     “RUSTICA: Parcela de terreno radicada en Río Piedras, San Juan, Puerto Rico, con una cabida
superficial de quince mil ciento cincuenta y dos metros cuadrados con seis mil setecientos
cincuenta y una milésima de metro (15,152,6751 m.c.), equivalentes a tres cuerdas con ocho mil
quinientas cincuenta y tres milésimas de otra (3.8553 cdas.); en lindes por el Noroeste, en varias
alineaciones que totalizan ciento sesenta y cinco metros con seiscientos catorce centésimas de otro
(165.614m), divididos en sesenta y nueve metros con cuatrocientos diez de otro (69.410 m),
veintidós metros quinientos ochenta y cuatro de otro (22.584m) y setenta y tres metros con
seiscientos veinte de otro (73.620 m), con terrenos de Don Manuel Rodríguez, hoy (físicamente
Toyota de Puerto Rico); por el Este, en varias alineaciones que totalizan ciento dieciocho metros
con treinta y una décima de otro (118.31 m), divididos en seis metros quinientos noventa y uno de
otro (6.591 m), veintitrés metros novecientos setenta décimas de otro(23.970 m), doscientas
centésimas de metro (.200 m), veintitrés metros novecientas sesenta y siete centésimas de otro
(23.967 m)y cuatro metros con cuatrocientos cuarenta centésimas de otro (4.440 m)

 

 

que colindan con
la Avenida Muñoz Rivera, y seis metros ciento noventa y ocho centésimas de otro (6.198 m), catorce
metros seiscientos quince centésimas de otro (14.615 m), diecinueve metros quinientas setenta
centésimas de otro (19.570 m) y
dieciocho metros setecientos cincuenta y nueve de otro (18.759 m) que colindan con la Autoridad de
Energía Eléctrica de Puerto Rico; por el Sureste, en varias alineaciones que totalizan ciento
sesenta y siete metros con cuatrocientos setenta ocho de otro (167.478 m), divididos en diecisiete
metros ciento treinta y siete de otro (17.137 m) con terrenos de Don Manuel Canino y en parte con
la Autoridad de Energía Eléctrica de Puerto Rico, treinta y cinco metros con cuatrocientas setenta
centésimas de otro (35.470 m), nueve metros con novecientos cuarenta y siete centésimas de otro
(9.947 m) y dos metros con doscientos cinco centésimas (2.205 m) con terrenos de Don Manuel Canino,
y cuatro metros con ciento cincuenta centésimas de otro (4.150 m), dieciocho metros con ochocientos
treinta y dos centésimas de otro (18.832 m), siete metros con seiscientos sesenta y nueve
centésimas de otro (7.669 m), seis metros con trescientos setenta y una centésimas de otro (6.371
m), catorce metros con setecientos setenta y ocho centésimas de otro (14.778 m), dos metros con
quinientos setenta y ocho centésimas de otro (2.578 m), cuatro metros con novecientos veinte
centésimas de otro (4.920 m), tres metros con novecientos cincuenta y dos ocho centésimas de otro
(2.578 m), cuatro metros con novecientos veinte centésimas de otro (4.920 m), tres metros con
novecientas cincuenta y dos centésimas de otro (3.952 m), nueve metros con trescientos dieciséis
centésimas de otro (9.316 m), ocho metros con doscientos cinco centésimas de otro (8.205 m), tres
metros con ochocientos veintiséis centésimas de otro (3.826 m), ocho metros con setecientos
veintiocho centésimas de otro (8.728 m) y nueve metros con trescientas noventa y cuatro centésimas
de otro (9.394 m) con una quebrada; y por el Oeste , en varias alineaciones que totalizan cientos
dos metros con ciento cincuenta y dos centésimas de otro (102.152 m), divididos en nueve metros con
setecientos sesenta y dos centésimas de otro (9.762 m), dos metros con quinientos cincuenta y ocho
centésimas de otro (2.558 m), siete metros con ochocientos diecisiete centésimas de otro (7.817 m),
tres metros con seiscientos ochenta centésimas de otro (3.686 m), cuatro metros con cuatrocientos
ochenta y nueve centésimas de otro (4.489 m), quince metros con doscientos ochenta y cinco
centésimas de otro (15.285 m), once metros con doscientos setenta y nueve centésimas de otro
(11.279 m), dos metros con doscientos quince centésimas (2.215 m), dos metros con novecientos
ochenta y tres centésimas de otro (2.983 m), dieciocho metros con treinta y seis centésimas de otro
(18.036 m), veintidós metros con trescientos noventa y dos centésimas de otro (22.392 m) y un metro
con seiscientos cincuenta centésimas de otro (1.650 m) con el Río Piedras.

     Sobre esta parcela de terreno, enclava un edificio de dos (2) plantas de hormigón reforzado,
con bloques de concreto y cimientos para un total de ocho (8) plantas, dedicado a negocio. La
planta primera de edificio tiene un área de cuarenta y cinco mil pies cuadrados (45,000 p.c.) y la
segunda planta tiene un área total de cuarenta y cinco mil pies cuadrados (45,000 p.c.) también.”

     It is made known that in this act the Buyer was given a simple copy of the referenced
deed.

     SEVENTH: The parties have agreed to the purchase and sale of the described property, under the
following conditions:

TERMS AND CONDITIONS

 

 

     EIGHTH: The Seller does hereby sell, convey and transfer to the Buyer the property described
in the SIXTH clause for the agreed upon and adjusted price of twenty-three million dollars
($23,000, 000), allocated in the following manner:

          a)
thirteen million eight hundred and forty thousand five hundred and ninety-four dollars
and nineteen cents ($13,840,594.19) that was reserved for the total cancellation of the mortgage,
money that will be given, in this same act, to Banco Popular de Puerto Rico, through wire transfer
in favor of Banco Popular de Rico for the above-mentioned amount.

     The Buyer recognizes and is warned that the notarial cancellation of said mortgage will be
executed after the execution of this deed, but in the same act, so long as in the same act of
execution Banco Popular de Puerto Rico will give to the Notary Public the original promissory note
for the execution of the corresponding cancellation pursuant to Deed Number Eight (8).

          b)
The remaining nine million one hundred fifty-nine thousand four hundred five dollars and
eighty-one cents ($9,159,405.81), money which through this act the Buyer gives to the Seller
through wire transfer in favor of Banco Popular de Puerto Rico. For which as evidence the Seller
has given the Buyer a formal receipt and letter of payment to such effect.

     NINTH: The Seller promises to obtain from the mortgagee the corresponding liberation from the
obligation that encumbers the property, leaving this property free from said encumbrance.

     TEN: The sale price expressed in paragraph eight includes some Trane brand air conditioners
(“chillers”) and a Generac brand electric generator, equipment that is installed in the building
object of the purchase and sale.

     ELEVENTH: Through the July eighteenth (18) two thousand six (2006)
Administrative Order, notified on August second (2) two thousand six (2006), the Rules
and Permits Administration (“ARPE”, [by its Spanish acronym]), in case number zero
five, “A”, “A”, two dash, “C”,
“E”, “T”, zero one dash, zero nineteen thirty-three

 

 

(05AA2
-CET01-01933), which is a reference to case number, zero
five, “A”, “A”, two dash, “C”,
“E”, “T”, zero zero dash, zero nineteen thirty-three
(05AA2-CET00-01933) the plan for construction submitted by the Seller. Through this act, the Seller
transfers the aforesaid permit to the Buyer. In the same manner, the Seller guarantees to
the Buyer that the permit was validly obtained, that it is in full force and effect, and in
virtue of the same can begin to construct, as soon as the plans for construction are
prepared and certified, pursuant with what is set forth in the permit.

     The parties are aware that the Buyer has entered into this purchase and sale for the
construction of the first phase of the project; in other words, the construction of an additional
floor on the building of approximately forty-five thousand square feet (45,000 sq. ft.) and a
building exclusively for parking which shall have approximately seven
hundred and forty-six (746)
parking spaces and that for said reason the validity of not only the permit, but transfer of the
same to the Buyer is an essential condition of this purchase and sale contract. In the same manner,
the Buyer recognizes all the requirements and recommendations included in the Administrative Order
of the Rules and Permits Administration and commits to comply with them.

     TWELFTH: The Seller does not owe property taxes on the property in accordance with a
certification to that effect shown to the Notary Public and examined by her, which was issued by
the Municipal Revenues Collections Center (“CRIM” [by its Spanish acronym]), for the cadaster
number zero eighty-seven, dash, zero twenty-one, dash, eight hundred
thirty-seven, dash, ten, dash,
zero zero one (087-021-837-10-001), from August seventeen (17), two thousand six (2006).

     The parties agree and manifest that the taxes that may be imposed in the future, from the date
of execution of this deed, over the property will be paid by the Buyer. If any tax debt were to
arise related to the property, with an earlier date than that of the execution of this deed, said
debt will be paid by the Seller.

     THIRTEENTH: The Buyer acquires the property described in the SIXTH clause, and the Seller
delivers it free of occupants. In other words, the Buyer expressly does not

 

 

recognize any
contracts, if any, that the tenants may have had with the Seller and, therefore, is neither
obligated for the fulfillment of the same nor any agreement to which it may have arrived with the
tenants.

     FOURTEENTH: The Buyer enters into possession and enjoyment of the property acquired by virtue
of this deed. For its own part, the Seller obligates itself to cure as a result of eviction in
compliance with the law.

     FIFTEENTH: The Seller guarantees and represents to the Buyer that there are no dangerous
substances, contaminants, toxic materials, toxic wastes, nor any potential danger of contamination
in the property, not only in the land, but also in the buildings erected on the land and that all
use that has been given to the property in the past has been in compliance with the laws of
environmental protection. The Seller will indemnify the Buyer and releases the Buyer of all
responsibility (“hold harmless”) with respect to any claims, costs or losses that arise from
directly or indirectly from the violation of any of the guarantees given in this clause or from the
presence or suspected presence of any (upon proof of the presences of such substances), prior to
the date of execution of this deed, of environmental contaminants in the property or under it.
This limitation includes, but is not limited to, all the expenses incurred in any study or
investigation of the land or of the building as a result of any cleaning that may have to be
performed on the building or the land by request of any governmental agency. The indemnification
must include all the costs related to the contaminated substances that flow or infiltrate in, on or
under the property object of this purchase and sale.

     SIXTEENTH: The Buyer will be responsible of the notarial tariff of the first certified copy
of the present deed. The Buyer will also be responsible of the registration fees of the deed of
purchase and sale in the corresponding Property Registry.

     The Seller is responsible for the attorney’s fees and notarial tariffs of this deed. In
addition, the Seller will be responsible for attorney’s fees and other costs related to the
execution of the deed canceling the mortgage, such as the registration in the Property Registry of
the previously mentioned deed.

 

 

     SEVENTEENTH: The parties agree to execute any deed to clarify or to correct, or deliver any
document that would be necessary in order to register this transaction in the corresponding
Property Registry.

ACCEPTANCE

     The appearing parties accept this deed in all of its parts as they find them in accordance with
their wishes.

WARNINGS

     I, the Notary made to the appearing parties the necessary legal warnings, among which are the
following:

          A. The meaning and the legal effects of the acts that have been expressed in this document
and the appearing parties have been asked if they have any additional questions with respect to the deed and
the direct and indirect consequences of the same.

          B. That this deed was executed in accordance with the title study of July thirteen (13),
two thousand six (2006), prepared by Hato Rey Title Insurance Agency, Inc. and not by the appearing
notary public. The appearing parties recognize that the notary public has explained the reach and
meaning of what the title study sets forth and the parties manifest that to the best of their
knowledge said certification reflects the reality about the ownership and encumbrances of the
property to date hereof.

          C. The foregoing title study is not a title insurance policy and only reflects the reality of
what is set forth in the Registry at the time of its preparation, that no matter how recent it was
done, it does not close the Property Registry nor does it exclude the possibility that other
documents related to this property could have been presented on a later date.

          D. Of the right that they have as owners to obtain title insurance that guarantees their
title and indemnifies them in case that they suffer loss or reduction of their property right.

 

 

          E.
The appearing Notary Public has warned the appearing parties of the convenience of presenting this
deed at the Property Registry as soon as possible.

          F. The requirement of paying the Internal Revenue Stamps based on the sale price, in order
to be able to record the deed in the Property Registry.

          G. The need and the duty to carry out the corresponding transfer of the title in the
Municipal Revenues Collections Center (“CRIM” [by its Spanish acronym]), and the transfer of
property tax of the Department of Treasury, and the consequences of sending the Informative Form
with respect to the transfer of property to the Department of Treasury, that the parties have to
sign under their responsibility, after verifying the information contained in it.

          H. About the content, reach and limitations of the payment receipts over the property
taxes, issued by the corresponding Office of Valuation, and the risks that the Department of
Treasury or said office issue bills for additional payments.

          I. The transaction which by virtue of the execution of this deed is formalized will be
notified to the Department of Treasury Puerto Rico that in favor of the Commonwealth of Puerto Rico
there is a preferred legal right reserved for the taxes over the property being sold.

          J. The appearing Notary Public has warned the parties, and specifically the Buyer that with
the purchase price the balance of the cancellation of the mortgage previously mentioned in the deed
is being paid, with a check shown to the appearing parties, which will be delivered to the
mortgagee, with the purpose of canceling the mortgage that encumbers the property.

     In the same manner, it is clarified that simultaneously upon the execution of the deed, the
mortgage encumbrance that affects the property will be canceled, through the execution of deed
number eight(8) before the appearing Notary Public.

          K. If the property involved in this transaction is in a flood zone, any owner and/or
occupant present and future, is obligated to by law to observe and comply with the requirements and
dispositions of the Regulations of Zones Prone to Flooding, under

 

 

warning
that non-compliance with
same it will result in an illegal act, in accordance with the disposition of section three of Law
Eleven (11) of March eight (8), nineteen eighty-eight
(1988) about flood zones. Title twenty-three
(23) of the Puerto Rico Laws Annotated (“LPRA” [by its Spanish acronym]), section two hundred and
twenty-five (225) subpart g; pursuant to which the appearing parties recognized being fully warned
of this requirement and obligate themselves to faithfully fulfill it in case it is ever necessary.

          L. The Seller is obligated to deliver and cure the item which is the object of the
purchase and sale. The responsibility to cure will expire in six (6) months from the date of
delivery of the object being sold.

          M. In virtue of the responsibility to cure that is mentioned in the previous warning, the
Seller will respond to the Buyer with respect to: (1) the legal and peaceful possession of the
object being sold; (2) of the hidden defects or damages that it may have.

EXECUTION

     So it is executed before me by the appearing parties after having waived the right, that I made
known to them that they had, of requesting that instrumental witnesses be present during the
execution.

READING

     Read personally by the appearing parties, and finding it to their satisfaction, they ratified
it and signed it before me, on the same day of its execution, placing as well their initials on the
left margin of each page of this deed.

     Of everything contained in this instrument, such as affixing and canceling the corresponding
Internal Revenue stamps and the notarial stamp, I, the appearing Notary Public that signs and sets
forth her rubrics and seal.

I GIVE FAITH

/s/ Antonio Muñoz Grajales

Appearing Party

 

 

/s/
Dacio Pasarell

Appearing Party

/s/
Pilar Muñoz Nazario

Attorney and Notary PublicEX-10.12 EMPLOYMENT AGREEMENT FORM

 

Exhibit
10.12

EMPLOYMENT AGREEMENT

     AGREEMENT dated ______by and between FIRST BANCORP PUERTO RICO (the “Company”) and ______.

     WHEREAS, the Company wishes to retain the services of ______and the retention of ______
services for and on behalf of the Company and FirstBank Puerto Rico (the “Bank”) is of material
importance to the preservation and enhancement of the value of the Company’s and the Bank’s
business;

     WHEREAS, the Board of Directors of the Company has approved and authorized the execution of
this Agreement with ______to take effect as of the date above written.

     WHEREAS, the Compensation Committee of the Board of Directors of the Company has approved the
granting to ______an amount of options to purchase stock of the Company provided in Section 6
herein, as partial consideration for entering into this Agreement, which will become effective upon
execution of this Agreement.

     WHEREAS, the parties desire to enter into this Agreement setting forth the terms and
conditions of the employment relationship of the Company, the Bank and ______;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein, the parties agree as follows:

     1. Employment. The Company agrees to employ ______and ______agrees the employment by
the Company for the period stated in Paragraph 4 hereof and subject the other terms and conditions
herein provided.

     2. Position and Responsibilities. The Company hereby employs ______as ______and shall
carry out and render to the Company and to the Bank such services as are customarily performed by
persons holding a similar position. ______shall also perform such other related duties as he
may from time to time be reasonably directed in writing, including, but not limited to performing
duties for the Company, the Bank and other subsidiaries of the Company. ______shall report to
the ______of the Company. In the absence of the President and ______of the Company,
______shall report to the Board of Directors, through the Chairman of the Board, or such other
Director as may be designated by the Board of Directors. Notwithstanding the foregoing, the Board
of Directors of

1

 

the Bank may delegate or assign specific tasks to ______, provided that the
assignment clearly sets for the priority of the task, and whether it takes precedence over other
duties and obligations of ______.

     3. Duties. During the period of employment hereunder, and except for illness, vacation
periods, and leaves of absence, the Executive shall devote his business time, attention, skill, and
efforts to the faithful performance of his duties as provided herein as is customary for an
executive holding a similar position in a financial institution of comparable size.

     ______agrees that, during the term of his employment hereunder, except with the express
consent of the Board of Directors, he will not, directly or indirectly, engage or participate,
become director of, or render advisory or other services for, or in connection with, or become
interested in, or make any financial investment in any firm, corporation, business entity or
business enterprise that directly competes with the Company or its subsidiaries in Puerto Rico;
provided, however, that ______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 the management or control of the
business or activities of any such firm, corporation, business entity or enterprise.

     4. Term. The initial term of employment under this Agreement shall be for a period of
______years, commencing on ______and terminating on ______. On each anniversary of the
date of commencement of this Agreement, the term of the employment hereunder shall automatically be
extended for an additional one (1) year period beyond the then effective expiration date, unless
either party receives written notice, not less than 90 days prior to the anniversary date, advising
the other party that this Agreement shall not be further extended. Any such written notice shall
not affect any prior extensions of the term of employment hereunder.

     5. Standards. ______shall perform his duties and responsibilities under this Agreement,
in accordance with such reasonable standards as established from time to time by the Board of
Directors and/or management of the Company and conveyed in writing to ______. The

2

 

reasonableness of such standards shall be measured against standards for executive performance
generally prevailing in the financial industry (in Puerto Rico).

     Notwithstanding anything to the contrary, nothing in this Agreement will be interpreted in any
manner which would tend to limit or interfere with the authority or oversight duties and discretion
of the Board of Directors to establish adequate guidelines for the effective management of the
Company.

     6. Compensation and Reimbursement of Expenses.

          a) Compensation

     The Company agrees to pay ______during the term of this Agreement a base salary of not
less than $______a year.

          b) Performance Bonus

              In addition to the base salary set forth above, the performance of the Executive and of the
Bank during each year of employment shall be evaluated on the basis of the Bank’s achievement of
the predetermined business objectives contained in the Company’s annual business plan in connection
with the areas of endeavor assigned to ______. The contribution of ______to the achievement
of the Company’s annual business objectives and his performance in such other functions, as may be
reasonably assigned under his charge, will be evaluated by the President and Chief Executive
Officer who will recommend to the Compensation Committee payment of a performance bonus in an
amount which the Compensation Committee, and ultimately the Board of Directors, may determine their
discretion.

          c) Stock Options

              ______shall be entitled to participate in and receive the benefits of any stock
option, profit sharing, or other plans, benefits and privileges granted to employees and executives
of the Company or its subsidiaries and affiliates which now exist or may come into existence
hereafter, to the extend commensurate with his then assigned duties and responsibilities, as
recommended by the Compensation Committee and approved by the Board of Directors. The terms and
conditions of such stock options will be within the parameters set forth in the employee stock
option plan of the Company and/or its subsidiaries or other similar plan under which a benefit or
privilege is made available to ______. Notwithstanding the above, the Company agrees that the
Initial Stock Option grant is independent from,

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and shall never be taken into consideration in the determination and approval of the
participating rights to be granted to ______, with respect to all or any of the benefits
referred to in this subsection (c).

          d) Automobile Expenses

          (i) The Company shall provide ______with a company owned automobile. Such automobile will
be furnished in accordance with the existing Company’s executive automobile policy as approved by
the Board of Directors. All expenses, including but not limited to insurance, maintenance,
repairs, fuel, and lubrication services, shall be provided by the Company.

          (ii) The Company agrees that on a monthly basis, but never more than thirty (30) days after
the expenses is incurred by ______, it shall pay or reimburse ______for any gasoline, oil
and maintenance or repair expenses incurred by him in the operation of the automobile provided
hereunder.

          e) Reimbursement of Expenses

          Not less frequently than monthly, the Company shall pay or reimburse ______for all
reasonable travel and other expenses incurred by ______in the performance of his duties under
this Agreement.

          f) Club Membership

            The Company will pay for the initiation dues of the Dorado Beach Resort, or any
similar club, plus the yearly membership dues during the term of this Agreement or any renewal
thereof.

          g) Office

              The Company shall furnish ______with a private office, a private secretary and such other
assistance and accommodations as shall be suitable to the character of ______position with the
Company and adequate for the performance of his duties hereunder.

     7. Participation in Benefit Plans. The payment and benefits provided in this Agreement are
independent and separate of any payment and benefits to which ______may be or may become
entitled to under any other present or future group employee benefit plan or insurance programs of
the Company for which executives of the Company and or its subsidiaries are or shall become
eligible, and

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______shall be eligible to receive all benefits and entitlements for which said executives are
eligible under every such plan or program.

     8. Voluntary Absences; Vacations and Sick Leave. ______shall be entitled, without loss
of pay, to absent himself voluntarily for reasonable periods of time from the performance of his
duties and responsibilities under this Agreement. All such voluntarily absences shall count either
as paid vacation time or sick leave, unless otherwise provided by the Board of Directors.
______shall be entitled to an annual paid vacation of eighteen (18) working days per every
twelve (12) month period, or such longer periods as the Board of Directors may approve, which
vacations shall be scheduled by ______with the prior approval of the President and Chief
Executive Officer, taking into account the needs of the Company. ______may accumulate unused
paid vacation time from twelve (12) month period to the next; provided that such accumulation shall
not exceed eighteen (18) working days of unused vacation time from prior twelve (12) month periods.
______shall be entitled to up to fifteen (15) non-cumulative working days of paid sick leave
for each twelve (12) month period or such longer non-cumulative working days as the Board of
Directors may approve. Upon termination of employment with or without cause, or for any reason,
the Company shall pay all accrued and unused vacation days, at the highest rate of salary earned by
the Executive, during his tenure.

     9. Benefits Payable Upon Disability or Death. The Company shall, at all times, maintain in
effect disability and death benefits insurance for the benefit of ______in an amount at least
equal to that maintained for executives of similar rank and which will not be less than that
maintained by the Company for all officers and employees. Provided that the Company may increase,
but never decrease the benefits which ______and/or the Executive’s heirs would be entitled to
thereunder.

     10. Termination of Employment.

          (a) Without cause. The Board of Directors may, without cause, terminate this
Agreement at any time, by giving ninety (90) days written notice to ______. In such event, the
Executive, if requested by the Board of Directors, shall continue to render his services, and shall
be paid his regular salary up to the date of termination. In addition, ______shall be paid from
the date of

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termination a severance payment equal to the annual base compensation amount to which ______
would be entitled to under this Agreement prorated to cover the balance of the three (3) year term.

          ______may, without cause, terminate the Agreement by giving ninety (90) days written
notice to the Board of Directors. In such event, the Executive shall continue to render his
services and shall be paid his regular salary up to the date of termination, but shall not receive
any severance payment.

          (b) With Cause: The Board of Directors may, at any time, terminate this Agreement for
cause. In such event, ______shall not be entitled to receive any further compensation from the
date of notice of termination. The notice of termination shall be in writing, shall set forth the
date of delivery to ______, and the effect of termination shall not be retroactive to a date
prior to delivery of such notice. For the purpose of this Agreement, “termination for cause” shall
include any act or omission on the part of ______which involves personal dishonesty, willful
misconduct, material breach of fiduciary duty, a material violation of any law, rule or regulation
relating to the banking industry or a material breach of any provision of this Agreement, such as
the willful and continue failure of ______to perform the duties herein set forth. No act or
failure to act on the Executive’s part shall be considered “willful” unless done, or omitted to be
done, not in good faith and without reasonable belief that his action or omission was in the best
interest of the Company. For purposes of this paragraph, any act or omission to act on the part of
______in reliance upon an opinion of counsel, outside auditor or advisor to the Company or to
______shall not be deemed to be willful or without reasonable belief that the act or omission
to act was in the best interest of the Company.

          ______may, with cause, terminate this Agreement. For purposes of this section, termination
with cause shall mean a failure of the Company to comply with any material provision of this
Agreement, which failure has not been cured within fifteen (15) days of receipt of a written notice
by ______of such noncompliance by the Company.

          Either party may submit for arbitration, as provided in Section 22 of this Agreement, among
other matters, any controversy that may arise with regard to the cause for termination that is set
forth in the written notice of termination provided by the Board of Directors or the Executive, as
the case may be.

6

 

          (c) If ______is suspended and/or prohibited from participating in the conduct of the
Company’s affairs by a notice or order served under Section 8(e)(3),(e)(4) or (g)(1) of the Federal
Deposit Insurance Act [12 USC 1818(e)(3), (e)(4) and (g)(1)], or any other similar provision of
state or federal law now in place or enacted in the future, the Company’s obligations under this
Agreement shall be suspended as of the date of service, unless such prohibition and/or suspension
is stayed by appropriate proceedings. If after a hearing is held and upon judicial review, the
notice or order suspending and/or prohibiting ______from participating in the affairs of the
Company is confirmed, then this Agreement shall be terminated with cause. If the charges in the
notice or order are dismissed, the Company shall: (i) pay ______all the compensation withheld
while the contractual obligations were suspended and (ii) reinstate, in whole or in part, any of
the obligations which were suspended.

          (d) In the event that ______is terminated or he terminates this Agreement, in a manner
which violates the provisions of this Section 11, as determined by the arbitration procedure
provided in Section 22, ______or the Company, as the case may be, shall be entitled to
reimbursement for all reasonable costs, including attorney’s fees, incurred by ______or the
Company, as the case may be, in challenging such termination.

     11. Change in Control:

          (a) If during the term of this Agreement there is “change in control” of the Company, as such
term is defined in Sub-section (b) hereunder, ______shall be entitled to receive from the
Company a severance payment in consideration of having bound himself to employment by the Company
and having foregone other business or professional opportunities, actual or potential. The
severance payment shall be a lump sum cash payment equal to ______times the base annual
compensation, plus ______times the highest cash Performance Bonus paid to ______in any of
the three (3) fiscal years prior to the date of the change in control, and (ii) the value of any
other benefits provided to ______during the year in which the change in control occurs which
are listed and attached hereto as Exhibit A, as it may be amended from time to time. Payment of
the amounts set forth in this section 12(a) shall be made on or before the fifth day following the
date on which the change of control occurs. If the change of control occurs during the course of
the first year and the Performance Bonus has not been paid,

7

 

the payment hereunder shall be ______times the base annual compensation plus ______times
$______.

          (b) The term “change in control” shall be deemed to have taken place if: (i) a third person,
including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the beneficial owner of shares of the Company having 25% or more of the total number of votes which
may be cast for the election of directors of the Company or which, by cumulative voting, if
permitted by the Company’s charter or bylaws, would enable such third person to elect 50% or more
of the directors of the Company; or (ii) as the result of, or in connection with, any cash tender
or exchange offer, merger or any other business combination, sales of assets or contested election,
or any combination of the foregoing transactions, the person who were directors of the Company
before such transaction shall cease to constitute a majority of the Board of the Company or any
successor institution.

          (c) Any payment made to ______pursuant to this Agreement are subject to and conditioned
upon their compliance with 12 USC 1828(k) and any regulations promulgated thereunder. The Company
through the Bank shall in good faith seek to obtain, if necessary or required, any consents or
approvals from the FDIC or any other applicable regulatory agency and any successors thereto with
respect to any payments to be made or any benefits to be provided to ______pursuant to the
terms of this Agreement.

     12. Confidentiality; Injunctive Relief: Recognizing that the knowledge and information
about, or relationships with, the business associates, customers, clients, and agents of the
Company and its affiliated companies and the business methods, systems, plans, and policies of the
Company and of its affiliated companies which ______will receive, obtain, or establish as an
employee of the Company or otherwise are valuable and unique assets of the Company, ______
agrees that, during the continuance of this Agreement and thereafter, he shall not (otherwise than
pursuant to his duties hereunder) disclose without the written consent of the Company, any material
or substantial, confidential, or proprietary know-how, data, or information pertaining to the
Company, or its business, personnel, or plans, to any person, firm, corporation, or other entity,
for any reason or purpose whatsoever. ______acknowledges and agrees that all memoranda, notes,
records, and other documents made or complied by
______or made

8

 

available to ______concerning the Company’s business shall be the Company’s
exclusive property and shall be delivered by ______to the Company upon expiration or
termination of this Agreement or at any other time upon the request of the Company.

          The provision of this Section 13 shall survive the expiration or termination of this Agreement
or any part thereof, without regard to the reason therefore.

          ______hereby acknowledges that the services to be rendered by him are of special, unique,
and extraordinary character and, in connection with such services he will have access to
confidential information concerning the Company’s business. By reason of this, ______consents
and agrees that if he violates any of the provisions of this Agreement with respect to
confidentiality, the Company would sustain irreparable harm and, therefore, in addition to any
other remedies which the Company may have under this Agreement or otherwise, the Company will be
entitled to an injunction to be issued by any court of competent jurisdiction restraining ______
from committing or continuing any such violation of this Agreement. The term “Confidential
Information” means: (i) proprietary information of the Company; (2) information marked or
designated by the Company as confidential; (3) information, whether or not in written form and
whether or not designated as confidential, which is known to ______as treated by the Company as
confidential; and (4) information provided to the Company by third parties which the Company is
obligated to keep confidential, specifically including customer lists and information. Confidential
information does not include any information now or hereafter voluntarily disseminated by the
Company to the public, or which otherwise becomes part of the public domain through lawful means.

     13. No Assignments. This Agreement is personal to each of the parties hereto. 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. However, in the event of the death of ______all his
rights to receive payments hereunder shall become rights of his estate.

     14. Benefits. Any benefits due or provided hereunder to ______shall be in addition to,
and not in substitution of, any benefit to which ______is otherwise entitled to without regard
to the Agreement.

9

 

     15. Mitigation. ______shall not be obligated to seek other employment in mitigation of the
amounts payable or arrangements made under any provision of this Agreement, and the obtaining of
any such other employment shall in no event effect any reduction of the Company’s obligation to
make the payments and arrangements required to be made under this Agreement.

     16. Notices. 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 ______in person; or

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

	 	i.	 	the Company:

C/O Office of the Secretary of the Company

First BanCorp Puerto Rico

PO Box 9146

Santurce, PR 00908-0146

	 
	 	ii.	 	______

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

     17. Amendments or Additions; Action by Board of Directors. 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 of the Company 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 ______with or without cause under
Section 11 hereof.

     18. Sections Headings. The Section headings used in this agreement are included solely for
convenience and shall not affect, or be used in connection with, the interpretation of this
Agreement.

10

 

     19. Severability. 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 hereto.

     20. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Puerto
Rico. Venue for the litigation of any and all matters arising under or in connection with this
Agreement shall be in the Court of First Instance, San Juan Superior Part for the Commonwealth of
Puerto Rico, in the case of state court jurisdiction, or in the U.S. District Court for the
District of Puerto Rico, in the case of federal court jurisdiction.

     21. Arbitration. Any controversy as to the interpretation of this Agreement must be submitted
before three arbitrators to be appointed by the American Arbitration Association (“AAA”). The
rules and regulations of the AAA shall govern the procedures of said arbitration. The award of a
majority of arbitrators shall be binding and final on the parties.

     22. The Company agrees to reimburse ______for all reasonable legal fees incurred by him in
connection with the negotiation, drafting and execution of this Agreement.

FIRST BANCORP PUERTO RICO

By:

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