Document:

Exhibit

Exhibit 10.31
CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), is dated as of the 1st day of January 2018, among Lakeland Bancorp, Inc. (the "Holding Company"), a New Jersey corporation, and Lakeland Bank (the "Bank"), a New Jersey chartered commercial bank, having offices at 250 Oak Ridge Road, Oak Ridge, New Jersey 07438 (the Holding Company and the Bank are collectively referred to herein as the "Company") and John F. Rath (the "Executive"). 

BACKGROUND
WHEREAS, the Executive is or will be employed as Executive Vice President and Chief Lending Officer of the Company; and
WHEREAS, the Company believes that the future services of the Executive are of great value to the Company and that it is important for the growth and development of the Company that the Executive continue in his position; and
WHEREAS, the Board of Directors of the Holding Company (the “Board”) believes it is imperative that the Company be able to rely upon the Executive to continue in his position in the event that Holding Company receives any proposal from a third person concerning a possible business combination with, or acquisition of equities securities of, the Company, and that they be able to receive and rely upon his advice, if they request it, as to the best interests of the Company and its shareholders, without concern that the Executive might be distracted by the personal uncertainties and risks created by such a proposal; and
WHEREAS, to achieve that goal, and to retain the Executives services prior to any such activity, the Company and the Executive have agreed to enter into this Agreement to govern the Executive's termination benefits in the event of a Change in Control, as hereinafter defined;
NOW, THEREFORE, to assure the Company that it will have the continued dedication of the Executive and the availability of his advice and counsel notwithstanding the possibility, threat or occurrence of a bid to take over control of the Company, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and the Executive, each intending to be legally bound hereby agree as follows:
1.    Definitions
a.Cause.      For purposes of this Agreement "Cause" with respect to the termination by the Company of Executive's employment shall mean: (i) failure by the Executive to materially perform his duties for the Company under this Agreement after at least one warning in writing identifying specifically any such material failure and offering a reasonable opportunity to cure such failure; (ii) the willful engaging by the Executive in material misconduct which causes material injury to the Company; or (iii) conviction of a crime (other than a traffic violation), habitual drunkenness, drug abuse, or excessive absenteeism other than for illness, after a warning (with respect to drunkenness or absenteeism only) in writing to refrain from such behavior.  No act or failure to act on the part of the Executive shall be considered willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interest of the Company.  The Company shall have the burden of proving Cause by clear and convincing evidence.
b.Change in Control.    For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events with respect to the Holding Company:
(i)the consummation of any consolidation or merger of the Holding Company in which the Holding Company is not the continuing or surviving corporation or pursuant to which shares of the Holding Company's common stock ("Common Stock") would be converted into cash, securities or other property, other than a merger of the Holding Company in which the holders of the shares of the Holding Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger; or
(ii)the consummation of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Holding Company, other than to a subsidiary or affiliate; or
(iii)an approval by the shareholders of the Holding Company of any plan or proposal for the 

liquidation or dissolution of the Holding Company; or
(iv)any action pursuant to which any person (as such term is defined in Section 13(d) of the Exchange Act), corporation or other entity (other than any person who owns more than ten percent (10%) of the outstanding Common Stock on the date this Agreement is entered into, the Holding Company or any benefit plan sponsored by the Holding Company or any of its subsidiaries) shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of capital stock entitled to vote generally for the election of directors of the Holding Company ("Voting Securities") representing fifty-one (51%) percent or more of the combined voting power of the Holding Company's then outstanding Voting Securities (calculated as provided in Rule 13d-3(d) in the case of rights to acquire any such securities), unless, prior to such person so becoming such beneficial owner, the Board shall determine that such person so becoming such beneficial owner shall not constitute a Change in Control; or
(v)the individuals (x) who, as of the date on which the Agreement is entered into, constitute the Board (the "Original Directors") and (y) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least two thirds of the Original Directors then still in office (such Directors being called "Additional Original Directors") and (z) who thereafter are elected to the Board and whose election or nomination for election to the Board was approved by a vote of at least two thirds of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute a majority of the members of the Board.
c.     Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the earlier of: (i) the second anniversary of the Change in Control; (ii) the date the Executive would attain age 65; or (iii) the death of the Executive.
d.Exchange Act.  "Exchange Act" means the Securities Exchange Act of 1934, as amended.
e.Good Reason.  When used with reference to a voluntary termination by Executive of his employment with the Company, "Good Reason" shall mean any of the following, if taken without Executive's express written consent:
(i)The assignment to Executive of any duties inconsistent with, or the reduction of authority, powers or responsibilities associated with, Executive's position, title, duties, responsibilities and status with the Company immediately prior to a Change in Control (a "Change in Assignment") or any removal of Executive from, or any failure to re-elect Executive to, any position(s) or office(s) Executive held immediately prior to such Change in Control. A change in position, title, duties, responsibilities and status or position(s) or office(s) following a Change in Control shall constitute a Change in Assignment unless the Executive's new title, duties and responsibilities are accepted in writing by the Executive, in the sole discretion of the Executive;
(ii)A reduction by the Company in Executive's annual base compensation as in effect immediately prior to a Change in Control;
(iii)A failure by the Company to continue for Executive any bonus plan in which Executive participated immediately prior to the Change in Control or a failure by the Company to continue Executive as a participant in such plan on at least the same basis as Executive participated in such plan prior to the Change in Control;
(iv)After a Change in Control, the Company's transfer of Executive to another geographic location outside of New Jersey or more than 25 miles from his present office location, except for required travel on the Company's business to an extent substantially consistent with Executive's business travel obligations immediately prior to such Change in Control;
(v)The failure by the Company to continue in effect for Executive any employee benefit plan, program or arrangement (including, without limitation any 401(k) plan, pension plan, life insurance plan, health and accident plan, disability plan, or stock option plan) in which Executive is participating immediately prior to a Change in Control (except that the Company may institute or continue plans, programs or arrangements providing Executive with substantially similar benefits); the 

taking of any action by the Company after a Change in Control which would adversely affect Executive's participation in or materially reduce Executive's benefits under, any of such plans, programs or arrangements, the failure to continue, or the taking of any action which would deprive Executive, of any material fringe benefit enjoyed by Executive immediately prior to such Change in Control; or the failure by the Company to provide Executive with the number of paid vacation days to which Executive was entitled immediately prior to such Change in Control; or
(vi)    The failure by the Company to obtain an assumption in writing of the obligations of the Company to perform this Agreement by any successor to the Company and to provide such assumption to the Executive upon consummation of the event giving rise to the Change in Control.
2.Employment.  During the Contract Period, the Company hereby agrees to employ the Executive, and the Executive hereby accepts employment, upon the terms and conditions set forth herein.
3.Position.  During the Contract Period, the Executive shall be employed as Executive Vice President and Chief Lending Officer of the Company or such other corporate or divisional profit center as shall then be the principal successor to the business, assets and properties of the Company, with the same title and the same duties and responsibilities as before the Change in Control. The Executive shall devote his full time and attention to the business of the Company, and shall not during the Contract Period be engaged in any other business activity. This paragraph shall not be construed as preventing the Executive from managing any investments of his which do not require any service on his part in the operation of such investments.
4.Cash Compensation.  The Company shall pay to the Executive salary and bonus compensation for his services during the Contract Period as follows:
a.Annual Salary.  An Annual salary equal to the annual salary in effect immediately prior to Change in Control.  The annual salary shall be payable in installments in accordance with the Company’s usual payroll method.  The annual salary shall not be reduced during the Contract Period.
b.Annual Bonus.  An Annual cash bonus equal to the highest annual bonus paid to the Executive during the three most recent fiscal years prior to the Change in Control.  The bonus shall be payable at the time and in the manner which the Company paid such bonuses prior to the Change in Control.
5.Expenses and Fringe Benefits.     During the Contract Period, the Executive shall be entitled to reimbursement for all business expenses incurred by him with respect to the business of the Company in the same manner and to the same extent as such expenses were previously reimbursed to him immediately prior to the Change in Control. If prior to the Change in Control, the Executive was entitled to the use of an automobile, he shall be entitled to the same use of an automobile at least comparable to the automobile provided to him prior to the Change in Control, and he shall be entitled to vacations and sick days, in accordance with the practices and procedures of the Company, as such existed immediately prior to the Change in Control. During the Contract Period, the Executive also shall be entitled to hospital, health, medical and life insurance, and any other benefits enjoyed, from time to time, by Executive officers of the Company, all upon terms as favorable as those enjoyed by other Executive officers of the Company. Notwithstanding anything in this section to the contrary, if the Company adopts any change in the expenses allowed to, or fringe benefits provided for, Executive officers of the Company, and such policy is uniformly applied to all Executive officers of the Company (and any successor or acquirer of the Company, if any), including the chief executive officer of such entities, then no such change shall be deemed to be contrary to this Section.
All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code (as defined in Section 9 below), including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive's lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following 

the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.

6.Termination for Cause.  The Company shall have the right to terminate the Executive for Cause, upon written notice to him of the termination which notice shall specify the reasons for the termination. In the event of a valid termination for Cause, the Executive shall not be entitled to any further compensation or benefits under this Agreement.
7.Disability.  During the Contract Period, if the Executive becomes permanently disabled, or is unable to perform his duties hereunder for six consecutive months, the Company may terminate the employment of the Executive. In such event, the Executive shall not be entitled to any further benefits under this Agreement other than payments under any disability policy which the Company may obtain for the benefit of senior officers generally.
8.Death Benefits.  Upon the Executive's death during the Contract Period, the Executive shall be entitled to the benefits of any life insurance policy paid for by the Company which provides, permits and allows the Executive to name a beneficiary other than the Company, but his estate shall not be entitled to any further benefits under this Agreement or any other life insurance policy, except for such policies or benefits customarily provided to employees of the Bank.
9.Termination Without Cause or Resignation for Good Reason.  The Company may terminate the Executive without Cause during the Contract Period by written notice to the Executive, or the Executive may resign for Good Reason during the Contract Period upon four weeks' prior written notice to the Company specifying the Good Reason. If the Company terminates the Executive's employment during the Contract Period without Cause or if the Executive resigns during the Contract Period for Good Reason, the Company shall, within 20 business days of the Executive's termination of employment, pay the Executive a lump sum equal to two times the highest annual compensation, including only salary and cash bonus, paid the Executive during any of the three calendar years immediately prior to the Change in Control (the "Lump Sum Payment"). During the remainder of the Contract Period, the Company also shall continue to provide the Executive with and pay for medical and hospital insurance, disability insurance and life insurance, as were provided and paid for at the time of the termination of his employment with the Company; provided, that such insurance coverage shall be provided only to the extent permitted under the terms and conditions of the Company's employee benefit plans.  The Executive shall also have the right to purchase from the Company, at book value price, such automobile of the Company, if any, as was used by the Executive while employed by the Company; provided, that the Executive exercises such right within 10 days of his termination of employment and completes the purchase transaction within 30 days of his termination of employment.  The Executive shall not have a duty to mitigate the damages suffered by him in connection with the termination by the Company of his employment without Cause or a resignation for Good Reason during the Contract Period.
The Lump Sum Payment is intended to be administered and interpreted in a manner such that it shall not be subject to “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. Notwithstanding any provision of this Agreement to the contrary, if and to the extent necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” the Lump Sum Payment shall be paid on the first business day of the seventh month following the Executive's separation from service with the Company, and shall be paid together with interest accrued during the period of such restriction at a rate, per annum, equal to the applicable federal short-term rate (compounded monthly) in effect under Section 1274(d) of the Code on the date of termination.  Notwithstanding provision of this Agreement to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of this Section 9 unless he would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).
The Executive acknowledges that any tax liability incurred by the Executive under Section 409A of the Code is solely 

the responsibility of the Executive.
For purposes of the foregoing, the Executive’s salary and cash bonus shall be determined without regard to any reductions to such amounts made at the election of the Executive, including without limitation, reductions pursuant to any deferral election under a 401(k) plan or deferred compensation plan or arrangement or contributions made under a “cafeteria plan” within the meaning of Section 125 of the Internal Revenue Code of 1986, as amended.
10.Resignation Without Good Reason.  The Executive shall be entitled to resign from the employment of the Company at any time during the Contract Period without Good Reason, but upon such resignation the Executive shall not be entitled to any additional compensation for the time after which he ceases to be employed by the Company, and shall not be entitled to any of the other benefits provided hereunder.  No such resignation shall be effective unless in writing with four weeks' notice thereof.
11.Non-Disclosure of Confidential Information.  In consideration of the covenants of the Company herein, the Executive agrees as follows:
a.The Executive hereby agrees and acknowledges that he has and has had access to or is aware of Confidential Information. The Executive hereby agrees that he shall keep strictly confidential and will not during and after his employment with the Company, without the Company's express written consent, divulge, furnish or make accessible to any person or entity, or make use of for the benefit of himself or others, any Confidential Information obtained, possessed, or known by him except as required in the regular course of performing the duties and responsibilities of his employment by the Company while in the employ of the Company, and that he will, prior to or upon the date on which his employment with the Company terminates (the "Date of Termination") deliver or return to the Company all such Confidential Information that is in written or other physical or recorded form or which has been reduced to written or other physical or recorded form, and all copies thereof, in his possession, custody or control. The foregoing covenant shall not apply to (i) any Confidential Information that becomes generally known or available to the public other than as a result of a breach of the agreements of the Executive contained herein, (ii) any disclosure of Confidential Information by the Executive that is expressly required by judicial or administrative order; provided however that the Executive shall have (x) notified the Company as promptly as possible of the existence, terms and circumstances of any notice, subpoena or other process or order issued by a court or administrative authority that may require him to disclose any Confidential Information, and (y) cooperated with the Company, at the Company's request, in taking legally available steps to resist or narrow such process or order and to obtain an order or other reliable assurance that confidential treatment will be given to such Confidential Information as is required to be disclosed.
b.For purposes of this Agreement, "Confidential Information" means all non-public or proprietary information, data, trade secrets, "know-how", or technology with respect to any products, designs, improvements, research, styles, techniques, suppliers, clients, markets, methods of distribution, accounting, advertising and promotion, pricing, sales, finances, costs, profits, financial condition, organization, personnel, business systems (including without limitation computer systems, software and programs), business activities, operations, budgets, plans, prospects, objectives or strategies of the Company.

12.    Post-Employment Obligations.  In consideration of the covenants of the Company herein, the Executive agrees as follows:
a.The Executive agrees that while he is in the employ of the Company and for a one year period after the Date of Termination (unless such termination is by the Company without Cause), he shall not, without the prior written consent of the Company, directly or indirectly, and regardless of the reason for his ceasing to be employed by the Company, employ, solicit for employment, or advise or recommend to any other person that they employ or solicit for employment or retention as a consultant, any person who is, or was at any time within twelve (12) months prior to the Date of Termination, an employee of, or exclusive consultant to, the Company.
b.If the Executive commits a breach or is about to commit a breach, of any of the provisions of Sections 11 or 12 hereof, the Company shall have the right to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company that money damages will not provide an adequate remedy to the Company.  In addition, the Company may take all such other actions and remedies available to them under law or in equity and shall be entitled to such damages as they can show they have sustained by reason of such breach.
c.The parties acknowledge that the type and periods of restriction imposed in the provisions of Sections 11 and 12 hereof are fair and reasonable and are reasonably required for the protection of the Company and the goodwill associated with the business of the Company; and that the provisions of Sections 11 and 12 have been specifically negotiated by sophisticated parties and are given as an integral part of this Agreement.
13.No Effect Prior to Change in Control.  This Agreement shall not affect any rights of the Company or the Executive prior to a Change in Control or any rights of the Executive granted in any other agreement, plan or arrangements. The rights, duties and benefits provided hereunder shall only become effective upon a Change in Control. If the employment of the Executive by the Company is terminated for any reason prior to a Change in Control, this Agreement shall thereafter be of no further force and effect.
14.Certain Reduction of Payments by the Company.
a.Anything in this Agreement to the contrary notwithstanding, prior to the payment of any compensation or benefits payable under Section 9 hereof, the certified public accountants of the Company immediately prior to a Change of Control (the "Certified Public Accountants") shall determine as promptly as practical and in any event within 20 business days following the termination of employment of Executive whether any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a "Payment") would more likely than not be nondeductible by the Company for Federal income purposes because of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if it is then the aggregate present value of amounts payable or distributable to or for the benefit of Executive pursuant to this Agreement are hereinafter referred to as "Agreement Payments" shall be reduced (but not below zero) to the Reduced Amount. For purposes of this paragraph, the "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Company because of said Section 280G of the Code.
b. If under paragraph a of this section the Certified Public Accountants determine that any Payment would more likely than not be nondeductible by the Company because of Section 280G of the Code, the Company shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Executive may then elect, in his sole discretion, which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Agreement Payments equals the Reduced Amount), and shall advise the 

Company in writing of his election within 20 business days of his receipt of notice. If no such election is made by the Executive within such 20-day period, the Company may elect which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Agreement Payments equals the Reduced Amount) and shall notify the Executive promptly of such election. For purposes of this paragraph, present value shall be determined in accordance with Section 280G (d) (4) of the Code. All determinations made by the Certified Public Accountants shall be binding upon the Company and Executive and shall be made within 20 days of a termination of employment of Executive. The Company may suspend for a period of up to 30 days after termination of employment the Lump Sum Payment and any other payments or benefits due to the Executive under Section 9 hereof until the Certified Public Accountants finish the determination and the Executive (or the Company, as the case may be) elect how to reduce the Agreement Payments, if necessary. As promptly as practicable following such determination and the elections hereunder, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such amounts as become due to Executive under this Agreement.
c.As a result of the uncertainty in the application of Section 280G of the Code, it is possible that Agreement Payments may have been made by the Company which should not have been made ("Overpayment") or that additional Agreement Payments which will have not been made by the Company could have been made ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Certified Public Accountants, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or Executive which said Certified Public Accountant believe has a high probability of success, determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by Executive to the Company in and to the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code.  In the event that the Certified Public Accountants, based upon controlling precedent, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.
15.Severance Compensation and Benefits Not in Derogation of other Benefits.   Anything to the contrary herein contained notwithstanding, the payment or obligation to pay any monies, or granting of any benefits, rights or privileges to Executive as provided in this Agreement now has or will have under any plans or programs of the Company, except that the Executive shall not be in lieu or derogation of the rights and privileges that the Executive now has or will have under any plans or programs of the Company, except that the Executive shall not be entitled to the benefits of any other plan or program of the Company expressly providing for severance or termination pay if the Executive is terminated without Cause or resigns for Good Reason after a Change in Control.  
16.Miscellaneous.  The terms of this Agreement shall be governed by, and interpreted and construed in accordance with the provisions of, the laws of New Jersey and, to the applicable, federal law.  This Agreement supersedes all prior agreements and understandings with respect to the matters covered hereby.  The amendment or termination of this Agreement may be made only in writing executed by the Company and the Executive, and no amendment or termination of this Agreement shall be effective unless and until made in such in writing.  This Agreement shall be binding upon any successor (whether direct or indirect, by purchase, merge, consolidation, liquidation or otherwise) to all or substantially all of the assets of the Company.  This Agreement is personal to the Executive and the Executive may not assign any of his rights or duties hereunder but this Agreement shall be enforceable by the Executive’s legal representatives, executors or administrators.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representatives pursuant to the authority of its Board, and the Executive has personally executed this Agreement, all as of the day and year first written above.
                                        
                    
	
		
	 
	LAKELAND BANCORP, INC.

	 
	/s/ Thomas J. Shara

	 
	Thomas J. Shara

	 
	President and Chief Executive Officer

	
		
	 
	LAKELAND BANK

	 
	/s/ Thomas J. Shara

	 
	Thomas J. Shara

	 
	President and Chief Executive Officer

	 
	 

	 
	/s/ John F. Rath

	 
	John F. Rath

	 
	ExecutiveExhibit 10.1

 

Release Agreement

 

THIS RELEASE AGREEMENT (the “Release
Agreement”) is made and entered into this 22nd day of February, 2018 (the “Effective Date”), by and among the
Florida Department of Economic Opportunity (“DEO”), Palm Coast Data LLC (“Palm Coast”) and AMREP Corporation
(the “Guarantor”). DEO, Palm Coast and the Guarantor are sometimes referred to collectively herein as the “Parties”
and, each, as a “Party.”

 

Recitals

 

WHEREAS, Palm Coast and DEO are parties
to a Settlement Agreement and Mutual General Release, dated May 4, 2017 (the “Settlement Agreement”);

 

WHEREAS, the Guarantor and DEO are parties
to a Guaranty Agreement, dated May 4, 2017 (the “Guaranty Agreement”); and

 

WHEREAS, Palm Coast desires to satisfy
in full its obligations under the Settlement Agreement and DEO has agreed to accept the payment to be made by Palm Coast under
this Release Agreement in satisfaction in full of Palm Coast’s obligations under the Settlement Agreement and the Guarantor’s
obligations under the Guaranty Agreement.

 

Agreement

 

NOW, THEREFORE, the Parties, for and in
consideration of the covenants, promises, undertakings and releases stated herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, hereby consent and agree as follows:

 

		1.	Prepayment Amount. Palm Coast shall pay to DEO nine hundred fifty-six thousand one hundred
ninety-two dollars and 31/100 ($956,192.31) (“Prepayment Amount”) within fifteen (15) calendar days after the Effective
Date.

 

		2.	Electronic Funds Transfer. Palm Coast shall follow DEO’s previously provided instructions
for a wire transfer of the funds from Palm Coast’s or its affiliate’s financial institutions to DEO’s financial
institution in order to facilitate the Electronic Funds Transfer (“EFT”) between Palm Coast Data and DEO.

 

		3.	Release and Covenant Not to Sue. Upon receipt by DEO of the Prepayment Amount, the Parties
shall and do forever mutually release and discharge each other and covenant not to sue or bring any other legal or administrative
action or claim against each other, or their past and current officers, directors, managers, members, employees, representatives,
stockholders, affiliates, parents, subsidiaries, partners, agents, servants, insurers, sureties, predecessors, successors and assigns,
receivers, executors, administrators, and beneficiaries, and any and all entities in which Palm Coast has had an interest, directly
or indirectly, from and concerning any and all liabilities, rights, claims, demands, damages, debts, causes of action, agreements,
warranties, controversies, promises, judgments, obligations or controversies of every kind and description, in law or equity, whether
arising in law or equity or by statute, by regulation, or otherwise, and regardless of the legal theory, whether known or unknown,
suspected or unsuspected, unanticipated as well as anticipated and that now exist or may hereafter accrue based on matters now
unknown as well as known under, related to, arising from, or in any way connected with the Funding Agreement (as defined in the
Settlement Agreement), the Guaranty Agreement or Sections 1 through 5 of the Settlement Agreement. It is understood and agreed
by all Parties that the release in this Section 3 is a general release of the Parties, and it is to be construed in the broadest
possible manner consistent with applicable law.

 

    
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Each Party represents and warrants
that it is the exclusive owner of the claims such Party is releasing in the prior paragraph and that, as of the Effective Date,
such Party has not assigned, sold, transferred or otherwise conveyed those claims to any other person. Each Party represents and
warrants that they have not filed with any court, tribunal or alternative dispute resolution organization any claim, demand, action,
joinder or cause of action against any other Party or their past and current officers, directors, managers, members, employees,
representatives, stockholders, affiliates, parents, subsidiaries, partners, agents, servants, insurers, sureties, predecessors,
successors and assigns, receivers, executors, administrators, and beneficiaries, or any and all entities in which Palm Coast has
had an interest, directly or indirectly under, related to, arising from, or in any way connected with the Funding Agreement (as
defined in the Settlement Agreement), the Guaranty Agreement or Sections 1 through 5 of the Settlement Agreement.

 

		4.	Termination of Further Obligations. Upon receipt by DEO of the Prepayment Amount, Sections
1 through 5 of the Settlement Agreement shall be deemed terminated, void and of no further force and effect, and none of the Parties
or any other person shall have any further liabilities or obligations under Sections 1 through 5 of the Settlement Agreement whatsoever.
Upon receipt by DEO of the Prepayment Amount, the Guaranty Agreement shall be deemed terminated, void and of no further force and
effect, and none of the Parties or any other person shall have any further liabilities or obligations under the Guaranty Agreement
whatsoever.

 

		5.	Authority. The Parties represent and warrant that they have all necessary and appropriate
authority to enter into and execute this Release Agreement and be legally bound thereby. Each person signing this Release Agreement
in a representative capacity represents and warrants that he/she has the full and complete authority to execute this Release Agreement
on behalf of his/her principal or employer, and that upon execution the Release Agreement shall be binding upon his/her principal
or employer.

 

		6.	Attorneys’ Fees, Costs, and Expenses. All fees, costs, and expenses incurred by the
Parties in negotiating and entering into this Release Agreement, shall be paid by the Parties incurring them, including, but not
limited to, legal fees and costs. In the event of a dispute arising under this Release Agreement, whether or not a lawsuit or other
proceeding is filed, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs, including
attorneys’ fees and costs incurred in litigating entitlement to attorneys’ fees and costs, as well as in determining
or quantifying the amount of recoverable attorneys’ fees and costs. The reasonable costs to which the prevailing party is
entitled shall include costs that are taxable under any applicable statute, rule, or guideline, as well as non-taxable costs, including,
but not limited to, costs of investigation, copying costs, electronic discovery costs, telephone charges, mailing and delivery
charges, information technology support charges, consultant and expert witness fees, travel expenses, court reporter fees, and
mediator fees, regardless of whether such costs are otherwise taxable.

 

    
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		7.	Acknowledgments. Each of the Parties declares that it has read and understands the terms
of this Release Agreement, that it has had the opportunity to be represented by counsel in the negotiation, execution, and delivery
of this Release Agreement, and that it executes this Release Agreement voluntarily. Each of the Parties participated in the drafting
of this Release Agreement. In the event of any ambiguity, the Parties agree that it shall not be construed against either of them.

 

		8.	Warranties. Except as expressly set forth in this Release Agreement, the Parties have not
made and make no other representations, warranties, statements, promises, or agreements to each other.

 

		9.	References. As used in this Release Agreement, the use of the pronoun “it” shall
be deemed to include, where applicable, masculine, feminine, singular or plural, individuals, government entities, partnerships,
or corporations. As used in this Release Agreement, “person” shall mean any natural person, government entity, corporation,
partnership, limited partnership, trust, estate, or other entity, and the term “affiliate” shall mean any partnership,
joint venture, corporation, or other entity in which such person has an interest, or which controls, is controlled by, or is under
common control with such person.

 

		10.	Non-prejudice and Construction of Agreement. This Release Agreement is the product of informed
negotiations that involves compromises of the Parties’ previously stated legal positions. Accordingly, this Release Agreement
does not reflect the Parties’ views as to their rights and obligations with respect to matters or entities outside the scope
of this Release Agreement. This Release Agreement is without prejudice to positions taken by DEO, Palm Coast or the Guarantor with
regard to those not within the scope of this Release Agreement.

 

		11.	Captions and Headings. The captions and headings, to the extent used in this Release Agreement,
are for reference purposes only and shall not be taken into account in construing or interpreting this Release Agreement.

 

		12.	Invalid Provisions. If any provision of this Release Agreement is held to be illegal, invalid,
or unenforceable under present or future laws effective during the term of this Release Agreement, such provision(s) shall be fully
severable and the invalidity, illegality, or unenforceability shall not affect any other provision of this Release Agreement.

 

		13.	Counterparts. This Release Agreement may be executed in counterparts, each of which shall
be deemed an original instrument, but all of which together shall constitute one and the same instrument. A signed copy of this
Release Agreement delivered by facsimile, e-mail or other means of electronic transmission (to which a signed PDF copy is attached)
shall be deemed to have the same legal effect as delivery of an original signed copy of this Release Agreement. Any Party may copy
this completed Release Agreement for electronic storage in a non-editable format, at which time the paper form of this Release
Agreement may be destroyed. Each Party agrees that following the electronic storage of this Release Agreement, any hardcopy printout
of that electronically stored information will constitute an original of this Release Agreement.

 

    
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		14.	Applicable Law and Jurisdiction. The laws of the State of Florida shall govern the construction,
enforcement and interpretation of this Release Agreement, regardless of and without reference to whether any applicable conflicts
of laws principles may point to the application of the laws of another jurisdiction. The Parties hereby agree that the exclusive
personal jurisdiction and venue to resolve any and all disputes between them arising out of or relating to this Release Agreement
shall be in the state courts of the State of Florida in the County of Leon. With respect to any and all disputes between them arising
out of or relating to this Release Agreement, the Parties expressly (a) consent to the exclusive personal jurisdiction and venue
in any state court located in Leon County, Florida and (b) waive any defense of forum non conveniens, lack of personal jurisdiction,
or like defense. IN ANY LEGAL OR EQUITABLE ACTION BETWEEN THE PARTIES ARISING FROM THIS RELEASE AGREEMENT, THE PARTIES HEREBY EXPRESSLY
WAIVE TRIAL BY JURY TO THE FULLEST EXTENT PERMITTED BY LAW.

 

		15.	Entire Agreement and Successors and Assigns. This Release Agreement is a fully integrated
agreement which sets forth the entire agreement and understanding of the Parties concerning the subject matter of this Release
Agreement. This Release Agreement shall be binding upon the successors and assigns of the Parties and may not be waived, rescinded,
canceled, terminated, supplemented, amended, or modified in any manner without the prior written consent of each of DEO, Palm Coast
and the Guarantor.

 

		16.	No Third Party Beneficiaries. This Release Agreement is for the sole benefit of the Parties
and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give any person,
other than the Parties and such permitted successors and assigns (and as provided in the following sentence), any legal or equitable
rights hereunder. Notwithstanding the foregoing, the Parties hereby designate each of their past and current officers, directors,
managers, members, employees, representatives, stockholders, affiliates, parents, subsidiaries, partners, agents, servants, insurers,
sureties, predecessors, successors and assigns, receivers, executors, administrators, and beneficiaries, and any and all entities
in which Palm Coast has had an interest, directly or indirectly, as third-party beneficiaries of Section 3 having the right to
enforce this Release Agreement.

 

		17.	Time is of the essence. The Parties agree and acknowledge that time is of the essence with
regard to payments required hereunder.

 

		18.	No modification unless in writing. No modification of this Release Agreement shall be valid unless in writing and agreed
upon by all Parties.

 

		19.	Disclosure of This Agreement. The Parties agree and acknowledge that DEO may be required
to disclose this Release Agreement pursuant to a request made under chapter 119 of the Florida Statutes. The Parties agree and
acknowledge that Guarantor may disclose this Release Agreement as it deems necessary under applicable law or the rules of any stock
exchange or market on which its securities are traded.

 

    
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		20.	Notices. All notices, requests, consents, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on
the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications
must be sent to the respective Parties at the address set forth below (or to such other address that may be designated by a Party
from time to time in accordance with this paragraph):

 

If to DEO:

Office of the General Counsel

107 E. Madison Street, MSC 110

Tallahassee, Florida 32399-4128

Attention: General Counsel

If to PCD:

11 Commerce Boulevard

Palm Coast, Florida 32164

Attn: President

 

With a required copy to:

AMREP Corporation

620 West Germantown Pike, Suite 175

Plymouth Meeting, Pennsylvania 19462

Attention: President

If to Guarantor:

620 West Germantown Pike, Suite 175

Plymouth Meeting, Pennsylvania 19462

Attention: President

  

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

[SIGNATURE PAGE TO FOLLOW]

 

    
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IN WITNESS WHEREOF,
the Parties have caused this Release Agreement to be duly executed by each of their duly authorized representative(s) on the dates
hereinafter subscribed.

 

	Date: February 22, 2018	PALM COAST DATA LLC 
	 	 	 
	 	By:	/s/ Christopher V. Vitale 
	 	Title: Vice President
	 	Print Name: Christopher V. Vitale
	 	 	 
	 	 	 
	Date: February 22, 2018	AMREP CORPORATION
	 	 	 
	 	By:	/s/ Christopher V. Vitale 
	 	Title: President and Chief Executive Officer
	 	Print Name: Christopher V. Vitale
	 	 	 
	 	 	 
	Date: February 27, 2018	FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY
	 	 	 
	 	By:	/s/ Chris Peary
	 	Title:Chief of Staff
	 	Print Name : Chris Peary

  

    
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