Document:

EXHIBIT 10.12

 

RIVERVIEW NATIONAL BANK

DIRECTOR EMERITUS AGREEMENT

 

THIS AGREEMENT is made this 19th day of May, 2010 by and between RIVERVIEW NATIONAL BANK, a national bank located in
Marysville, Pennsylvania (the “Bank”), and Paul Reigle, (the “Director”), to be
effective , June 1, 2010.

 

INTRODUCTION

 

To promote orderly succession of the Bank’s Board of
Directors, the Bank is willing to provide benefits to certain former Directors
who agree to become Director Emeritus and provide the services outlined in this
Agreement. The Bank will pay the benefits from its general assets according to
the terms of this Agreement.

 

AGREEMENT

 

The Director and the Bank agree as follows:

 

Article 1

Definitions

 

1.1           Definitions.  Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:

 

1.1.1                        “Change in Control”
means a change in the ownership or effective control of the Corporation or the
Bank as described in Section 409A(a)(2)(A)(v) of the Code.

 

Notwithstanding anything
else to the contrary set forth in this Agreement, if (i) an agreement is
executed by the Corporation or the Bank providing for any of the transactions
or events constituting a Change in Control as defined herein, and the agreement
subsequently expires or is terminated without the transaction or event being
consummated, and (ii) Director’s service did not terminate during the
period after the agreement and prior to such expiration or termination, for
purposes of this Agreement it shall be as though such agreement was never
executed and no Change in Control event shall be deemed to have occurred as a
result of the execution of such agreement.

 

1.1.2                        “Code” means the Internal Revenue
Code of 1986, as amended and the regulations promulgated there under.

 

1.1.3                        “Corporation” means Riverview
Financial Corporation.

 

1.1.4                        “Disability” means the Director’s
inability to perform substantially all normal duties of a director, provided
such disability complies with the definition provided under Code Section 
409A. As a condition to receiving any benefits, the Bank may require the
Director to submit to such physical or mental evaluations and tests as the
Board of Directors deems appropriate.

 

1

 

1.1.5        “Final Fee” means the Director’s annualized Board fee in the year of Termination of
Service as a Director of the Bank.

 

1.1.6        “Termination of Service”
means the Director’s ceasing to be a member of the Bank’s Board of Directors
for any reason other than death, provided such termination of service complies
with the definition of termination of service under Code Section 409A.

 

Article 2

Lifetime Benefits

 

2.1           Director Emeritus Benefit.  Upon Termination of Service on
or after age 65, provided the Director has 10 or more years of continuous service
at the date of termination and is willing to provide the ongoing services
described in Section 2.1.3, the Bank shall pay to the Director the benefit
described in this Section 2.1 in lieu of any other benefit under this
Agreement.

 

2.1.1                        Amount of Benefit.  The annual Director Emeritus Benefit under
this Section 2.1 is a percentage of the Director’s Final Fee based on the
distribution period elected by the Director in Exhibit A. The Bank may
increase the annual benefit under this Section 2.1 at the sole and
absolute discretion of the Bank’s Board of Directors.

 

2.1.2                        Payment of Benefit.  The Bank shall pay the annual benefit to the
Director in 12 equal monthly installments payable on the first day of each
month commencing with the month following the Director’s Termination of Service
and payable for the number of months specified in Exhibit A.

 

2.1.3                        Contingencies.  The benefit payments described in Section 2.1
are contingent on the Director (i) electing to become a Director Emeritus,
(ii) being available to the Board for advice and consultation when called
upon, (iii) continuing to act as a “Goodwill Ambassador” for the Bank, and
(iv) avoiding any competitive arrangement (see Section 5.3) which is
contrary to the best interests of the Bank. The Bank’s request for the Director’s
time and service must be reasonable in nature and amount.

 

2.2           Disability
Benefit.  If the
Director terminates service due to Disability prior to age 65, the Bank shall
pay to the Director the benefit described in Section 2.1 in lieu of any
other benefit under this Agreement, except that only item (iv) of Section 2.1.3
shall apply.

 

2.3           Change in Control Benefit.  If the Director is in the
active service as a Director or a Director Emeritus of the Bank at the time of
a Change in Control, the Bank shall pay to the Director the benefit described
in Section 2.1 in lieu of any other benefit under this Agreement, except
that Section 2.1.3 shall not apply.

 

Article 3

Death Benefits

 

3.1           Death During Active Service.  If the Director dies after
electing to become a Director Emeritus but before benefit payments have
commenced, the Bank shall pay to the

 

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Director’s
beneficiary the benefit described in this Section 3.1. This benefit shall
be paid in lieu of the Lifetime Benefits of Article 2.

 

3.1.1                        Amount of Benefit.  The annual benefit under this Section 3.1
is a percentage of the Director’s Final Fee based on the distribution period
elected by the Director in Exhibit A.

 

3.1.2                        Payment of Benefit.  The Bank shall pay the annual benefit to the
beneficiary in 12 equal monthly installments payable on the first day of each
month commencing within 60 days of the Director’s death and payable for the
number of months specified in Exhibit A.

 

3.2           Death During Benefit Period.  If the Director dies after the
benefit payments have commenced under this Agreement but before receiving all
120 payments, the Bank shall pay the remaining benefits to the Director’s
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.

 

Article 4

Beneficiaries

 

4.1           Beneficiary Designations.  The Director shall designate a
beneficiary by filing a written designation with the Bank. The Director may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Director and
accepted by the Bank during the Director’s lifetime. The Director’s beneficiary
designation shall be deemed automatically revoked if the beneficiary
predeceases the Director, or if the Director names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Director dies without a valid
beneficiary designation, all payments shall be made to the Director’s estate.

 

4.2           Facility of Payment.  If a benefit is payable to a
minor, to a person declared incompetent or to a person incapable of handling
the disposition of his or her property, the Bank may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person. The Bank may require proof of
incompetency, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Bank from all liability with respect to such benefit.

 

Article 5

General Limitations

 

Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not pay any benefit under this Agreement:

 

5.1           Excess Parachute or Golden
Parachute Payment.  To the extent the benefit would be an excess
parachute payment under Section 280G of the Code or would be a prohibited
golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the
appropriate federal banking agency has not given written consent to pay
pursuant to 12 C.F.R. §359.4.

 

5.2           Termination for Cause.  If the Bank terminates the Director’s service
for:

 

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5.2.1                        Gross negligence or gross neglect of duties;

 

5.2.2                        Commission of a felony or of a gross misdemeanor involving moral
turpitude; or

 

5.2.3                        Fraud, disloyalty, dishonesty or willful violation of any law or
significant Bank policy committed in connection with the Director’s service and
resulting in an adverse effect on the Bank.

 

5.3           Removal.  If the Director is subject to a
final removal or prohibition order issued by an appropriate federal banking
agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

 

5.4           Competition After
Termination of Service.  If the Director, without the prior written
consent of the Bank, engages in, becomes interested in, directly or indirectly,
as a sole proprietor, as a partner in a partnership, or as a substantial
shareholder in a corporation, or becomes associated with, in the capacity of
employee, director, officer, principal, agent, trustee or in any other capacity
whatsoever, any enterprise conducted in the trading area (a 50 mile radius of
the main office of the Bank), which enterprise is, or may deemed to be,
competitive with any business carried on by the Corporation as of the date of
termination of the Director’s service or his retirement. This section shall not
apply following a Change in Control.

 

5.5           Suicide.  If the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Bank.

 

Article 6

Claims and Review Procedures

 

6.1           Claims Procedure.  The Bank shall notify any
person or entity that makes a claim against the Agreement (the “Claimant”) in
writing, within ninety (90) days of Claimant’s written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Bank determines that the Claimant is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific
reasons for such denial, (2) a specific reference to the provisions of the
Agreement on which the denial is based, (3) a description of any
additional information or material necessary for the Claimant to perfect his or
her claim, and a description of why it is needed, and (4) an explanation
of the Agreement’s claims review procedure and other appropriate information as
to the steps to be taken if the Claimant wishes to have the claim reviewed. If
the Bank determines that there are special circumstances requiring additional
time to make a decision, the Bank shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may extend
the time for up to an additional ninety-day period.

 

6.2           Review Procedure.  If the Claimant is determined
by the Bank not to be eligible for benefits, or if the Claimant believes that
he or she is entitled to greater or different benefits, the Claimant shall have
the opportunity to have such claim reviewed by the Bank by filing a petition
for review with the Bank within sixty (60) days after receipt of the notice
issued by the Bank. Said petition shall state the specific reasons which the
Claimant believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Bank of the petition, the
Bank shall afford the Claimant (and counsel, if any) an opportunity to present
his 

 

4

 

or her position to the Bank orally or in writing, and
the Claimant (or counsel) shall have the right to review the pertinent
documents. The Bank shall notify the Claimant of its decision in writing within
the sixty-day period, stating specifically the basis of its decision, written
in a manner calculated to be understood by the Claimant and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Bank, but
notice of this deferral shall be given to the Claimant.

 

Article 7

Amendments and Termination

 

This Agreement may be amended or terminated
only by a written agreement signed by the Bank and the Director, except as
specified in Article 5.

 

Article 8

Miscellaneous

 

8.1                                 Binding Effect.  This Agreement shall bind the Director and
the Bank, and their beneficiaries, survivors, executors, successors, administrators
and transferees.

 

8.2                                 No Guarantee of Service.  This Agreement does not give the Director the
right to remain a member of the Bank’s Board of Directors, nor does it
interfere with the Bank’s right to terminate the service of the Director. It
also does not interfere with the Director’s right to terminate his or her
service at any time.

 

8.3                                 Non-Transferability.  Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

 

8.4                                 Tax Withholding.  The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.

 

8.5                                 Applicable Law.  The Agreement and all rights hereunder shall
be governed by the laws of the Commonwealth of Pennsylvania, except to the extent
preempted by the laws of the United States of America. This Agreement shall
also be interpreted as is minimally required to qualify any payment hereunder
as not triggering any penalty on the Director pursuant to Code Section 409A
and the regulations promulgated thereunder.

 

8.6                                 Unfunded Arrangement.  The Director and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Director’s life is a general
asset of the Bank to which the Director and beneficiary have no preferred or
secured claim.

 

8.7                                 Recovery of Estate Taxes.  If the Director’s gross estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Agreement, and if the beneficiary is other than the Director’s
estate, then the Director’s estate shall be entitled to recover from the
beneficiary receiving such benefit under the terms of the Agreement, an amount
by which the total estate tax due by the Director’s estate, exceeds the total
estate tax which would have been payable if the value of such benefit had not
been included in the Director’s gross

 

5

 

estate. If there is more than one person receiving
such benefit, the right of recovery shall be against each such person. In the
event the beneficiary has a liability hereunder, the beneficiary may petition
the Bank for a lump sum payment in an amount not to exceed the beneficiary’s
liability hereunder.

 

8.8           Entire Agreement.  This Agreement constitutes the
entire agreement between the Bank and the Director as to the subject matter
hereof. No rights are granted to the Director by virtue of this Agreement other
than those specifically set forth herein.

 

8.9           Administration.  The Bank shall have powers
which are necessary to administer this Agreement, including but not limited to:

 

8.9.1                        Interpreting the provisions of this Agreement;

 

8.9.2                        Establishing and revising the method of accounting for the Agreement;

 

8.9.3                        Maintaining a record of benefit payments; and

 

8.9.4                        Establishing rules and prescribing any forms necessary or desirable
to administer the Agreement.

 

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8.10                           Named Fiduciary.  The Bank shall be the named fiduciary and
plan administrator under this Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the service of advisors and the delegation of ministerial duties
to qualified individuals.

 

IN WITNESS WHEREOF, the Director and a duly
authorized Bank officer have signed this Agreement.

 

	
   

  	
  BANK:

  
	
  ATTEST:

  	
  RIVERVIEW NATIONAL BANK

  
	
   

  	
   

  
	
  /s/ Theresa M. Wasko

  	
   

  	
  By 

  	
  /s/ Robert M. Garst

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title 

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date 

  	
  May 19, 2010

  

 

By execution hereof, Riverview National
Corporation, consents to and agrees to be bound by the terms and conditions of
this Agreement.

 

 

	
  ATTEST:

  	
  CORPORATION:

  
	
   

  	
  RIVERVIEW NATIONAL 

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
  /s/ Theresa M. Wasko

  	
   

  	
  By 

  	
  /s/ Robert M. Garst

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title 

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date 

  	
  May 19, 2010

  

 

 

	
  WITNESS:

  	
   

  	
  DIRECTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Edna M. Reigle

  	
   

  	
  /s/
  Paul R. Reigle

  

 

7Exhibit 10.1

 

 

ASSET PURCHASE AGREEMENT

 

Between

 

AMERICAN HERITAGE LIFE INSURANCE COMPANY,

as Seller

 

and

 

ROAD BAY INVESTMENTS, LLC,

as Purchaser

 

Dated as of               

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.02

  	
  Other Definitional Provisions

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE OF ASSETS

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Purchase and Sale of Assets

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.02

  	
  Delivery and Payment

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.03

  	
  Forms of Notes

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  TERMS AND CONDITIONS OF REPAYMENT OF NOTES; MATURITY

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Interest

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.02

  	
  Principal

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.03

  	
  Payments by the Purchaser

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.04

  	
  Prepayment

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REGISTRATION OF NOTES; TRANSFER AND EXCHANGE

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Note Register

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 4.02

  	
  Exchanges and Transfers

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  RATIO OF DEBT TO TOTAL ASSETS COVENANT

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  EVENTS OF DEFAULT

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Events of Default

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 6.02

  	
  Remedies Upon an Event of Default

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Notices

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 7.02

  	
  Amendments, Waivers

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.03

  	
  Successors and Assigns; Third Party Beneficiaries

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.04

  	
  Severability

  	
  6

  
				

 

i

 

	
  Section 7.05

  	
  Binding Effect

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.06

  	
  GOVERNING LAW; CONSENT TO JURISDICTION

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.07

  	
  Execution in Counterparts

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.08

  	
  Entire Agreement

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.09

  	
  Headings

  	
  6

  

 

SCHEDULES
AND EXHIBITS

 

	
  Schedule
  I

  	
  Initial
  Assets

  
	
  Schedule
  II

  	
  Notice
  Information

  
	
  Exhibit A

  	
  Form of
  Note

  

 

ii

 

This
ASSET PURCHASE AGREEMENT, dated as of                ,
is made by and between American Heritage Life Insurance Company, a life
insurance company domiciled in Florida (together with its successors and
assigns, the “Seller”), and Road Bay Investments, LLC, a limited
liability company organized under the laws of the State of Delaware (together
with its successors and assigns, the “Purchaser”).

 

RECITALS

 

WHEREAS,
the Seller desires to sell to the Purchaser on the date hereof and from time to
time hereafter on or before December 31, 2010, and the Purchaser desires
to purchase from the Seller, commercial mortgage loans or participations in
commercial mortgage loans with an aggregate fair value not in excess of
25,000,000 (the “Assets”); and

 

WHEREAS,
as consideration for the sale of the Assets, the Seller shall receive one or
more notes (the “ Notes”) from the Purchaser with an aggregate principal
amount equal to the fair value of the Assets;

 

NOW,
THEREFORE, for full and fair consideration, the parties hereto agree as
follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01                     Definitions.  The
following capitalized terms shall have the following meanings:

 

“Agreement”
means this Asset Purchase Agreement, as the same may from time to time be
amended, supplemented, or otherwise modified in accordance with the terms
hereof.

 

“Assets”
has the meaning specified in the first WHEREAS clause in the recitals hereof.

 

“Business
Day” means any day other than a Saturday or a Sunday or any day on which
banking institutions in Chicago, Illinois, are authorized or obligated by law,
regulation, or executive order to be closed.

 

“Debt” means, without
duplication, the Purchaser’s liabilities for borrowed money; liabilities for
the deferred purchase price of property (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property); capital lease
obligations; all liabilities for borrowed money secured by any lien with
respect to any property owned by the Purchaser (whether or not it has assumed
or otherwise become liable for such liabilities); and any guaranty by the
Purchaser with respect to such liabilities or obligations of another person or
entity.

 

“Event of Default”
has the meaning specified in Section 6.01 hereof.

 

“Fair
Value” with respect to any Asset means the fair value of such Asset on the
date of purchase and sale under this Agreement determined in accordance with
statutory accounting principles as set forth in the National Association of
Insurance Commissioners’ Accounting Practices and Procedures Manual as then in
effect.

 

“Holder”
means, with respect to any Note, the Person in whose name such Note is
registered in the Note Register.

 

 

“Initial
Assets” has the meaning specified in Section 2.01 hereof.

 

“Interest
Payment Date” means each April 1 and October 1, commencing April 1,
2010, provided that if such day is not a Business Day, the next succeeding
Business Day.

 

“Interest
Period” means, with respect to any Note, (a) in the case of the
initial interest period with respect to such Note, the period from, and including,
the date such Note was issued to the Seller to, but excluding, the immediately
following Payment Date, (b) thereafter, the period from, and including,
the preceding Payment Date to, but excluding, the next succeeding Payment Date,
and (c) in the case of the final interest period with respect to such
Note, the period from, and including, the preceding Payment Date to, but
excluding, the Maturity Date.

 

“Interest
Rate” means, with respect to each Note, the rate set forth in such
note.  The rate for each Note shall be
equal to the sum of (a) the 7 Year CMT Rate on the issuance date of such
Note, plus (b) such spread, expressed in basis points, as shall be
agreed between the Seller and Purchaser.

 

“Maturity
Date” means, with respect to a Note, the date on which all outstanding
unpaid principal on such Note becomes due and payable, whether at the Stated
Maturity Date or by acceleration pursuant to Section 6.02.

 

“
Note Register” has the meaning specified in Section 4.01 hereof.

 

“
Notes” has the meaning specified in the second WHEREAS clause in the
recitals hereof.

 

“Payment
Date” means any Interest Payment Date or Maturity Date.

 

“Person”
means an individual, corporation (including a business trust), partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated association or
government or any agency or political subdivision thereof.

 

“Purchaser”
has the meaning specified in the introduction to this Agreement.

 

“Record Date” means the date on which the Holders of
any Note entitled to receive a payment with respect to principal or interest on
the next succeeding Payment Date are determined, such date as to any Payment
Date being five (5) Business Days prior to such Payment Date.

 

“Seller”
has the meaning specified in the introduction to this Agreement.

 

“Stated
Maturity Date” means, with respect to each Note, the seventh (7th) anniversary of the
issuance date of such Note, provided such date is a Business Day.

 

“Total
Assets” means, at any time, the total assets of the Purchaser which would
be shown as assets on a balance sheet as of such time prepared in accordance
with generally accepted accounting principles as in effect from time to time in
the United States of America.

 

“7
Year CMT Rate” for any date means the seven year Constant Maturity Treasury
Yield as reported in the Wall Street Journal for the third Business Day prior
to such date.

 

2

 

Section 1.02                     Other Definitional Provisions.

 

(a)   All
terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto.

 

(b)  The
words “hereof,” “herein,” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and Section and subsection
references contained in this Agreement are references to Sections or
subsections in or to this Agreement unless otherwise specified.

 

ARTICLE II

PURCHASE AND SALE OF ASSETS

 

Section 2.01                     Purchase and Sale of Assets.  Upon
the terms and subject to the conditions set forth in this Agreement, and in
reliance on the covenants and agreements herein set forth, on the date hereof,
the Seller shall sell and the Purchaser shall purchase the Assets listed on
Schedule I (the “Initial Assets”).  From
time to time on or after the date hereof and on or before December 31,
2010, the Seller may, on ten (10) Business Days’ notice to the Purchaser,
offer to sell to the Purchaser, and the Purchaser may purchase, additional
Assets.  Notwithstanding the foregoing
provisions of this Section 2.01, the aggregate fair value of Assets that
may be purchased and sold under this agreement shall not exceed
$25,000,000.  As security for the
performance of the Purchaser’s obligations under this Agreement, the parties
hereto shall, concurrent with this Agreement, enter into a Pledge and Security
Agreement wherein Purchaser grants a pledge of and security interest in the
Purchaser’s right, title, and interest in the Assets and the other collateral
identified therein.

 

Section 2.02                     Delivery and Payment.  The
Seller shall deliver the Initial Assets to the Purchaser on the date
hereof.  Against delivery of the Initial
Assets or any additional Assets, the Purchaser shall issue to Seller Notes with
an aggregate principal amount equal to the aggregate Fair Value of such
Assets.  Purchaser shall issue a separate
Note for the purchase of each Asset.

 

Section 2.03                     Forms of Notes.  The Notes
shall be issued substantially in the form of the Note attached as Exhibit A
hereto and shall be duly executed and delivered by the Purchaser as hereinafter
provided.

 

ARTICLE III

TERMS AND CONDITIONS OF REPAYMENT OF NOTES; MATURITY

 

Section 3.01                     Interest.  Each Note
shall bear interest during each Interest Period at the Interest Rate set forth
in such Note.  Interest shall be due and
payable on each Interest Payment Date.  Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.

 

Section 3.02                     Principal.  The
principal of each Note shall be due and payable on the Stated Maturity Date.

 

Section 3.03                     Payments by the Purchaser.

 

(a)   On
any Payment Date, the Purchaser shall pay in accordance with the terms of this
Agreement: (i) all accrued but unpaid interest on the Notes and (ii) any
principal payments due with respect to the Notes, if any.

 

3

 

(b)  Any
interest or principal that has not been paid when due shall accrue interest at
a rate per annum equal to the Interest Rate from and including, for each such
amount, the Payment Date therefor, up to but excluding the date on which each
such amount is actually paid.

 

(c)   All
payments required to be made by the Purchaser with respect to this Article III
shall be made:  (i) by wire transfer of
immediately available funds and/or the transfer of marketable securities
(valued at their fair market value) not later than 1:00 p.m., Chicago
time, and (ii) to the account of the Seller, or to such other account as
the Seller may have most recently designated in writing for such purpose by
notice to the Purchaser.

 

(d)  The Purchaser and any agent of the Purchaser may treat the
Person in whose name any Note is registered on the Note Register as the owner
of such Note on the applicable Record Date for the purpose of receiving
payments of principal and interest on such Note and on any other date for all
other purposes whatsoever (regardless of whether such payment is overdue), and
neither the Purchaser nor any agent of the Purchaser shall be affected by
notice to the contrary.

 

Section 3.04                     Prepayment.  The
Purchaser may prepay the Notes, in part or in full, at any time.  Upon Purchaser’s disposition of any Asset, or
any real estate related to such Asset, Purchaser shall prepay, in full, the
Note issued in connection with the purchase of such Asset.

 

ARTICLE IV

REGISTRATION OF NOTES; TRANSFER AND EXCHANGE

 

Section 4.01                     Note Register.  The
Purchaser shall keep a register (the “Note Register”) at its office in
Northbrook, Illinois, in which it shall provide for the registration of the
Notes and the registration of transfers of the Notes.   Such Note Register shall be in written form
or in any other form capable of being converted into written form within a
reasonable time.  Upon surrender for
registration of transfer of any Note at the office of the Purchaser and in
compliance with the restrictions set forth in any legend appearing on any Note,
the Purchaser shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized denomination
and of like terms.

 

Section 4.02                     Exchanges and Transfers.  At
the option of any Holder, any Note may be exchanged for one or more Notes, of any
authorized denomination and of like terms, upon surrender of the Note to be
exchanged at the office of the Purchaser or such other office as the Purchaser
may designate for such purposes. 
Whenever any Note is surrendered for exchange, the Purchaser shall
execute and deliver the Note that the Holder making the exchange is entitled to
receive.  Any Notes issued upon any
registration of transfer or exchange of a Note shall be the valid obligations
of the Purchaser, evidencing the same debt, and entitled to the same benefits
under this Agreement, as the Note surrendered upon such registration of
transfer or exchange.  Every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Purchaser duly executed by the Holder thereof or its
attorney duly authorized in writing.  No
service charge shall be made to a purchaser for any registration of transfer or
exchange of a Note, but the Purchaser may require payment of a sum sufficient
to cover the expenses of delivery (if any) not made by regular mail or any tax
or other governmental charge payable in connection therewith.

 

4

 

ARTICLE V

RATIO OF DEBT TO TOTAL ASSETS COVENANT

 

Until this Agreement is
terminated and all obligations of the Purchaser under this Agreement and the
Notes have been paid or performed in full, the Purchaser covenants and agrees
that it will not directly or indirectly, create, incur, assume, guarantee, or
otherwise become directly or indirectly liable with respect to any Debt, unless on the date the Purchaser
becomes liable with respect to any such Debt and immediately after giving
effect thereto and the concurrent retirement of any other Debt, no Event of
Default exists and the aggregate amount of its Debt does not exceed 50% of its
Total Assets for its then most recently ended fiscal year.

 

ARTICLE VI

EVENTS OF DEFAULT

 

Section 6.01                     Events of Default.  The
occurrence of any of the following events shall constitute an “Event of
Default” hereunder:

 

(a)   default
is made in the payment of any installment of interest on the Notes when such
interest becomes due and payable and such default continues for a period of 30
days,

 

(b)  default
is made in the payment of the principal of the Notes when such principal
becomes due and payable, or

 

(c)          default is made in the performance of the covenant set forth in Article V
of this Agreement or any other part of this Agreement as it may be amended from
time to time.

 

Section 6.02                     Remedies Upon an Event of Default.  Upon
the occurrence of an Event of Default, the Seller may give notice of such Event
of Default to the Purchaser and demand payment of the entire outstanding principal
amount of such Notes, plus all accrued but unpaid interest, plus
interest on such overdue principal and overdue interest at the Interest Rate, plus
such further amounts as shall be necessary to cover the Seller’s costs and
expenses of collection, including reasonable attorneys’ fees.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01                     Notices.  Except in
the case of notices and other communications expressly permitted to be given by
telephone, all notices and other communications provided for herein shall be
delivered by the following means:  (i) hand
delivery, (ii) overnight courier service (e.g., FedEx, or Airborne
Express); (iii) registered or certified U.S. mail, postage prepaid, and
return receipt requested; or (iv) facsimile transmission.  If any notice or other communication provided
for herein is sent by any party by electronic e-mail it shall not be deemed to
have been delivered to the addressee if the party sending such notice or
communication receives a response from the intended addressee that he or she
will not be able to retrieve e-mail due to vacation, other absence from the
office, system failure, or other reason. 
All such notices shall be delivered to the parties as set forth on Schedule
II hereof.  All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt.

 

5

 

Section 7.02                     Amendments, Waivers.

 

(a)   Except
as otherwise expressly provided herein, no amendment or waiver of any provision
of this Agreement shall in any event be effective unless the same shall be in
writing and signed by the parties hereto.

 

(b)  The
Seller and the Purchaser may amend any provision of this Agreement to effectuate
the division of any Notes held by the Seller into paid and unpaid portions and
the surrender of the paid portion.

 

(c)   Each
such amendment, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given.  A failure or delay in exercising any right,
power, or privilege with respect to this Agreement will not be presumed to
operate as a waiver, and a single or partial exercise of any right, power, or
privilege will not be presumed to preclude any subsequent or further exercise
of that right, power, or privilege or the exercise of any other right, power,
or privilege.

 

Section 7.03                     Successors and Assigns; Third Party
Beneficiaries.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors.  This Agreement
shall not be transferred or assigned under any circumstances.  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto and their respective successors and permitted transferees) any legal or
equitable right, remedy, or claim under or by reason of this Agreement.

 

Section 7.04                     Severability.  Any
provision of this Agreement held to be invalid, illegal, or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality, or unenforceability without affecting the
validity, legality, and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

Section 7.05                     Binding Effect.  This
Agreement shall remain in full force and effect until such time as all of the
Notes issued by the Purchaser shall have been repaid in full and cancelled.

 

Section 7.06                     GOVERNING LAW; CONSENT TO JURISDICTION.  THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS.

 

Section 7.07                     Execution in Counterparts.  This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

 

Section 7.08                     Entire Agreement.  This
Agreement constitutes the entire agreement between the parties relating to the
subject matter hereof and supersedes any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.

 

Section 7.09                     Headings.  Article and
Section headings used herein are for convenience of reference only, are
not part of this Agreement, and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.

 

6

 

[SIGNATURE PAGE FOLLOWS]

 

7

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the first date written
above.

 

 

	
   

  	
  AMERICAN
  HERITAGE LIFE INSURANCE COMPANY

  
	
   

  	
  as
  Seller

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROAD
  BAY INVESTMENTS, LLC

  
	
   

  	
  as
  Purchaser

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  

 

8

 

SCHEDULE I

to

Asset Purchase Agreement between American heritage life Insurance Company

and Road Bay Investments, LLC

 

1.                                       That certain
Mortgage Note dated October 1, 2004, executed by DEERFIELD PROPERTY TRUST,
a Maryland real estate investment trust and PROLOGIS DEERFIELD FUND LP, a
Delaware limited partnership to the order of 
AMERICAN HERITAGE LIFE INSURANCE COMPANY, in the original principal amount
of $2,900,000 and that certain Mortgage Note dated October 1, 2004,
executed by DEERFIELD PROPERTY TRUST, a Maryland real estate investment trust
and PROLOGIS SIX RIVERS LIMITED PARTNERSHIP, a Delaware series limited
partnership to the order of  AMERICAN
HERITAGE LIFE INSURANCE COMPANY, in the original principal amount of
$4,125,000, including all of Seller’s right, title and interest under any and
all documents and instruments securing, executed in connection with, or related
in any manner whatsoever to, such notes. 
The forgoing notes were issued in connection with a
cross-collateralized, cross-defaulted commercial mortgage loan with an
aggregate original principal amount of $123,000,000 made by Seller and certain
of its affiliates to Deerfield Property Trust and certain of its affiliates.

 

 

SCHEDULE II

to

Asset Purchase Agreement between American Heritage Life Insurance Company

and Road Bay Investments, LLC

 

NOTICE INFORMATION

 

Address
for Notices to Seller:

 

American
Heritage Life Insurance Company

3075
Sanders Road

Northbrook, Illinois
60062 

Attention: Commercial Mortgage Division

 

Address
for Notices to Purchaser:

 

Road
Bay Investments, LLC

3075
Sanders Road, Suite G5C

Northbrook, IL
60062

Attention:  President

 

 

EXHIBIT A

 

FORM OF NOTE

 

[ISSUE DATE]

 

 

Road
Bay Investments, LLC, a limited liability company duly organized and existing
under the laws of the State of Delaware (the “Company”), for value received
hereby promises to pay to
[                                              ],
or its assigns, the outstanding balance of the principal sum of [                                           ]
in cash on [STATED MATURITY DATE] and to pay interest thereon semi-annually on
the first day of April and October in each year, commencing [FIRST
INTEREST DATE], at [RATE], until the principal hereof is paid in full, except
that the final payment of any accrued and unpaid interest shall be concurrent
with the final  payment of principal.  Interest will be computed on the basis of a
360-day year of twelve 30-day months. 
All principal and interest shall be paid at the principal corporate
office of the Company or such other place, which shall be acceptable to the
Company, as the holder hereof shall designate in writing to the Company, in
collected and immediately available funds in lawful money of the United States
of America.  Principal and interest shall
be payable on the terms and conditions set forth below

 

1.                                       The Company
covenants that if:

 

(a)                                  default is made
in the payment of any installment of interest on this Note when such interest
becomes due and payable and such default continues for a period of 30 days,

 

(b)                                 default is made
in the payment of the principal of this Note when such principal becomes due
and payable, or

 

(c)                                  default is made
in the performance of the covenant set forth in Article V, or any other
part, of that certain Asset Purchase Agreement dated as of
            ,
20     between the Company and
                        ,
as it may be amended from time to time,

 

the
Company will, upon demand by the holder of this Note, pay to it the entire
outstanding principal amount of this Note, plus all accrued but unpaid
interest, plus interest on such overdue principal and overdue interest
at the interest rate borne by this Note; and, in addition thereof, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable attorneys’ fees.

 

2.                                       Each payment
made hereunder will be credited first to accrued but unpaid interest, if any,
and the balance of such payment will be credited to the principal amount
hereof.

 

3.                                       In the event
that any payment of principal or interest on this Note is scheduled to be made
on a day that is not a Business Day, then such payment shall be made on the
next following Business Day and no additional interest shall accrue as a result
of payment on such following Business Day. 
For the purpose of this paragraph, “Business Day” shall mean any day
that is not a Saturday, Sunday, or any other day on which banking institutions
in the State of Illinois are permitted or required by any applicable law to
close.

 

4.                                       The Company’s
obligations under this Note are secured pursuant to that certain Pledge and
Security Agreement dated as of
              ,
20     between the Company and                                                   ,
as it may be amended from time to time.

 

 

5.                                       The Company may
prepay this Note, in part or in full, at any time.  The Company shall prepay this Note upon
disposition of the asset, or any real estate related to such asset, purchased
by the Company with this Note.

 

6.                                       In the event
the Company consolidates or merges into another entity or transfers
substantially all of its assets to another entity, the entity into which the
Company consolidates or merges or to which the assets of the Company are
transferred must assume the liability of the Company hereunder.

 

7.                                       This Note shall
be construed in accordance with, and governed by, the laws of the State of
Illinois.

 

IN
WITNESS WHEREOF, the Company has caused this Note to be executed in its name
and attested to by its authorized officer, all as of the date first written
above.

 

	
   

  	
  ROAD
  BAY INVESTMENTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

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