Document:

EXHIBIT 10.4

CITIZENS & NORTHERN CORPORATION

1995 STOCK INCENTIVE PLAN (As Amended)

 

RESTRICTED STOCK AGREEMENT

 

RESTRICTED STOCK AGREEMENT dated as of the 4th day of January, 2012,
by and between Citizens & Northern Corporation (the "Corporation") and «name», an employee
of the Corporation or of a subsidiary (the "Recipient").

 

Pursuant to the Citizens & Northern Corporation 1995 Stock Incentive
Plan (the "Plan"), as amended, the Compensation Committee of the Board of Directors (the "Committee") has determined
that the Recipient is to be granted, on the terms and conditions set forth herein, «Restricted_Shares» Restricted
Shares of the Corporation's common stock and hereby grants such Restricted Shares. It is intended that the Restricted Shares qualify
as an "Incentive Stock Option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").

 

	 	1.	Number of Shares and Price. Restricted Stock shall consist of shares of Stock that will be acquired by and issued to the Recipient at a designated time approved by the board of directors, for no purchase price, and under and subject to such transfer, forfeiture and other restrictions, conditions or terms as shall be determined by the Committee, including but not limited to prohibitions against transfer and substantial risks of forfeiture within the meaning of Section 83 of the Code, 
	 	 	 
	 	2.	Rights of Recipient. Except as otherwise provided in the Plan or the Restricted Stock Agreement, a Recipient of shares of Restricted Stock shall have all the rights as does a holder of Stock, including without limitation the right to vote such shares and receive dividends with respect thereto; however, during the time period of any restrictions, conditions or terms applicable to such Restricted Stock, the shares thereof and the right to vote the same and receive dividends thereon shall not be sold, assigned, transferred, exchanged, pledged, hypothecated, encumbered or otherwise disposed of except as permitted by the Plan or the Restricted Stock Agreement. Cash dividends shall be paid out and shall not participate in Dividend Reinvestment. Stock dividends resulting in whole shares shall be added to the shares held in the Restricted Account and shall be distributed to the Recipient with subsequent distributions of any Award for which they accrued. Partial shares that result from any stock dividend shall be paid to the Recipient in cash at the time of the payment of the stock dividend. If the Restricted Shares expire prior to the satisfaction of performance standards set forth in section 4 or due to forfeiture as set forth in section 5, all shares accrued by virtue of stock dividends shall be forfeited. 
	 	 	 
	 	3.	Holding of Restricted Shares.  Each certificate for shares of Restricted Stock shall be deposited with the Secretary of the Corporation, or the office thereof, and shall bear a legend in substantially the following form and content:
	 	 	 
	 	 	This Certificate and the shares of Stock hereby represented are subject to the provisions of the Corporation’s Stock Incentive Plan and a certain agreement entered into between the owner and the Corporation pursuant to said Plan.  The release of the Certificate and the shares of Stock hereby represented from such provision shall occur only as provided by said Plan and Agreement, a copy of which are on file in the office of the Secretary of the Corporation.
	 	 	 
	 	 	Upon the lapse or satisfaction of the restrictions, conditions and terms applicable to such Restricted Stock, a certificate for the shares of Stock free thereof with such legend shall be issued to the Recipient.
	 	 	 
	 	4.	Release and Lapse of Restricted Shares. One-third of the total shares will be distributed on the anniversary date of this award based on the Recipient’s satisfactory performance of his or her job and the Corporation’s attainment of an earnings-based performance standard. For the first year of this award, the performance standard will be based on achieving 100% or more of the Return on Equity of a defined peer group of bank holding companies, herein defined (adjusting for the difference between the Corporation’s and the peer group’s equity to asset ratios), for the four consecutive calendar quarters ending with the third quarter of each calendar year following the Award Date, until all Restricted Shares awarded herewith are distributed. If all the Restricted Shares awarded by this agreement are not distributed within the ten (10) year period following the date of this Agreement, they shall expire and revert back to the Corporation. No partial shares may be released, thus an amount equal to the next whole share amount will be released subject to the specified performance criteria at each anniversary. The shares released may be in certificate form, or may be directed to be held in a custodial account designated by the Recipient. The peer group consists of banks headquartered in Pennsylvania with total assets of $500 million to $1.3 billion with the addition of Chemung Financial Corporation in Elmira, NY. 

 

    	 

    	 

    

 

 

	 	 	The Committee reserves the right to change the composition of the peer group, as well as the method of evaluating the Corporation’s earnings performance as compared to the peer group, based on mergers or acquisitions involving members of the peer group, changes in size of the Corporation or members of the peer group, or other factors deemed appropriate by the Committee.
	 	 	 
	 	5.	Terms of Forfeiture. If a Recipient’s employment with the Corporation, or a subsidiary, ceases for any reason prior to the lapse of the restrictions, conditions or terms applicable to his or her Restricted Stock, all of the Recipient’s Restricted Stock still subject to unexpired restrictions, conditions or terms shall be forfeited absolutely by the Recipient to the Corporation without payment or delivery of any consideration or other thing of value by the Corporation or its affiliates, and thereupon and thereafter neither the Recipient nor his or her heirs, personal or legal representatives, successors, assigns, beneficiaries, or any claimants under the Recipient’s Last Will or laws of descent and distribution, shall have any rights or claims to or interests in the forfeited Restricted Stock or any certificates representing shares thereof, or claims against the Corporation or its affiliates with respect thereto. Except in the case of disability, employment ceases with the Corporation, or its Subsidiary, on the day the Recipient’s employment is terminated with or without cause, or on their date of death. In the event of disability, the Recipient’s employment is considered terminated on the date for which the Recipient receives the final payment of the Corporation’s, or Subsidiary’s, short-term disability. 
	 	 	 
	 	6.	Non-Transferability of Restricted Stock. The Restricted Stock and this Restricted Stock Agreement shall not be transferable. 
	 	 	 
	 	7.	Change in Control. If any of the change in control events described in Section 11 of the Plan occur, all shares of Restricted Stock shall fully vest and all restrictions on the shares of Restricted Stock shall lapse as follows: In the case of an event specified in clause (a) of the second sentence of the third paragraph of Section 11, the lapse of all restrictions on the shares of Restricted Stock shall occur immediately prior to the consummation of the described transaction and, in the case of an event specified in clause (b) or (c) of said sentence, the full vesting and lapse of restrictions shall occur upon occurrence of the described event.
	 	 	 
	 	8.	Notices. Any notice required or permitted under this Restricted Stock Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Recipient either at his or her address herein above set forth or such other address as he or she may designate in writing to the Corporation.
	 	 	 
	 	9.	Failure to Enforce Not a Waiver. The failure of the Corporation to enforce at any time any provision of this Restricted Stock Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
	 	 	 
	 	10.	Governing Law. This Restricted Stock Agreement shall be governed by and construed according to the laws of the State of Pennsylvania.
	 	 	 
	 	11.	Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Restricted Stock and this Restricted Stock Agreement are subject to all terms and conditions of the Plan.
	 	 	 
	 	12.	Amendments. This Option Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto, provided that no such amendment or modification shall be made which would cause the Restricted Stock to fail to continue to qualify as "incentive restricted stock."

 

IN WITNESS WHEREOF, the parties have executed this Option Agreement
on the day and year first above written.

 

	 	By
	 	 
	 	 
	 	Charles H. Updegraff, Jr., Chairman, President & CEO
	 	 
	 	The undersigned hereby accepts and agrees to all the terms and provisions of the foregoing Restricted Stock Agreement and to all the terms and provisions of the Citizens & Northern Corporation 1995 Stock Incentive Plan herein incorporated by reference.
	 	 
	 	 
	 	Recipient – «name»Exhibit 10.1

 

LOAN AGREEMENT

 

This Loan Agreement (this “Agreement”)
is dated for reference purposes as of February 15, 2012, and is entered into by and between SPT-LAKE ELSINORE HOLDING CO., LLC,
(“Borrower”), and CARDINAL INVESTMENT PROPERTIES-RAMSGATE, L.P., a California limited partnership
(“Lender”), with reference to the following facts:

 

RECITALS

 

A.                 
Borrower is the owner of that certain real property located in the County of Riverside, State of California, and more particularly
described in Exhibit “A” attached hereto (the “Property”).

 

B.                 
Borrower proposes to borrow from Lender the sum of Eight Hundred Thousand and No/100 Dollars ($800,000.00) (the “Loan”).

 

NOW THEREFORE, in consideration
of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.                  
Loan / Use of Proceeds. Borrower hereby agrees to borrow from Lender, and Lender hereby agrees to lend to Borrower,
the sum of Eight Hundred Thousand and No/100 Dollars ($800,000.00) (the “Loan”) in accordance with the
terms and conditions set forth in the Loan Documents [as that term is defined in Section 3(a) below].

 

2.                  
Loan Term/Extensions. The initial term of the Loan shall commence on the date upon which Lender makes the deposit
of loan funds into Escrow as provided in Section 3(b) below (the “Disbursement Date”) and continues
thereafter to the first anniversary of the Disbursement Date (the “Maturity Date”); provided, however,
that Borrower may, at Borrower’s option, extend the Maturity Date as provided in Section 2 of the Note (as that term
is defined below). Borrower authorizes Lender to date the Note as of the Disbursement Date.

 

3.                  
Conditions to Funding Loan. Lender shall be under no obligation to fund the Loan or any portion thereof unless and
until each of the following conditions has been satisfied or waived in writing by Lender, in Lender’s sole discretion.

 

a.                  
Execution of Loan Documents. Each of the following (which, in addition to this Agreement, are collectively referred
to herein as the “Loan Documents”) shall have been fully executed by the parties thereto, as needed,
and delivered to Lender:

 

(1)                
Promissory Note Secured by Trust Deed evidencing the Loan (the “Note”);

 

(2)                
Deed Of Trust With Assignment of Rents (with Rider attached) encumbering the Property and securing repayment
of the Loan (the “Trust Deed”);

 

(3)                
Security Agreement;

 

(4)                
UCC-1 Financing Statement in favor of Lender as “Secured Creditor” (execution by Borrower is not required);
and

 

(5)                
Limited Recourse Guaranty in favor of Lender executed by individual guarantor William A. Shopoff.

    	 

    	 	

    
 

 

b.                  
Close of Escrow. First American Title Insurance Company (“Escrow Holder”) has notified
Lender that, upon the deposit by Lender of that portion of the Loan proceeds equal to Seven Hundred Sixty Thousand and No/100 Dollars
($760,000.00) into Escrow for the benefit of Borrower, Escrow will be in position to close.

 

c.                   
Issuance of Title Insurance. First American Title Insurance Company (the “Title Company”)
has committed to issue to Lender at the closing of Escrow its ALTA Extended Coverage Loan Policy (2006) (the “Title
Policy”) in the face amount of the Loan assuring that the Trust Deed, when recorded, will constitute a first lien
against the Property, subject only to (i) applicable non-delinquent general and special real property taxes, and (ii) to those
certain exceptions to title coverage described as items 19 through 30, in that certain Preliminary Report dated January 18, 2012,
and issued by Title Company as Order No. NHSC-3943026(18) and such endorsements as Lender may require.

 

d.                  
No Default. Borrower shall not be in default under the Loan Documents and no default exists by Borrower.

 

4.                  
Pre-Payment/Minimum Interest. Borrower hereby acknowledges that the Loan may be prepaid in whole or in part without
penalty before the Maturity Date. Borrower also hereby acknowledges that in no event shall the total cumulative interest payable
with respect to the Loan be less than Seventy-Two and No/100 Dollars ($72,000.00) (the “Minimum Interest”),
regardless of when the Loan is repaid.

 

5.                  
Costs. Borrower shall reimburse Lender, directly from Loan funds, for all third-party costs and fees incurred by
Lender in making the Loan, including, but not limited to, Lender’s attorneys fees, title company charges and recording fees;
provided that the maximum amount of such reimbursement for Lender’s attorneys fees shall be Ten Thousand and No/100 Dollars
($10,000.00).

 

6.                  
Authorization of Parties. Each party represents and warrants that (i) this Agreement has been duly and validly authorized,
executed and delivered by such party, (ii) no other action is requisite to the valid and binding execution, delivery and performance
of this Agreement by such party, and (iii) no consents or waivers of or by any third party are necessary to permit the consummation
of the transactions contemplated pursuant to this Agreement by such party.

 

7.                  
Loan Arranged by Broker. The parties acknowledge and agree that the Loan has been jointly arranged by R. Jeffrey
Spindler, Park Place Partners Capital, Inc., a licensed California real estate broker (License No. 00775023) (the “Broker”).

 

8.                  
Access to Records. Lender and Lender’s appointed representatives, upon forty-eight business hours notice, shall
have access at reasonable hours to the books, records and financial statements of Borrower related to the Property.

 

9.                  
Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their
respective legal representatives, successors and assigns.

 

10.               
Governing Law. The validity, interpretation and performance of this Agreement shall be controlled by and construed
under the laws of the State of California.

 

11.               
Service Fee and Costs. Borrower hereby acknowledges that Borrower is obligated to pay a one-time Loan initiation,
management and service charge in the amount of Forty Thousand and No/100 Dollars ($40,000.00) (the “Service Fee”).
The Service Fee shall be deemed earned upon the funding of the Loan, and shall be payable to Lender from Loan proceeds at the initial
Loan funding.

 

12.               
Attorneys’ Fees. Should any dispute arise between the parties hereto or their legal representatives, successors
and assigns concerning any provision of this Agreement or any of the Loan Documents, or the rights and duties of any person in
relation thereto, the party prevailing in such dispute shall be entitled, in addition to such other relief that may be granted,
to a reasonable sum as and for their or his or its attorneys fees and legal costs in connection with such dispute.

 

    	 

    	 	

    
 

 

13.               
Amendment. This Agreement may only be amended by the written consent of all of the parties to this Agreement at the
time of such amendment.

 

14.               
Notices. Any notice to Lender under this Agreement shall be in writing and shall be considered given when delivered
by personal service or three (3) business days after placement in the U.S. mails, certified or registered mail, postage prepaid,
addressed to Lender: c/o Cardinal Development, 375 Bristol Street, Suite 50, Costa Mesa, California 92626, Attention: David
J. Seidner, or such other address as Lender may designate by written notice to Borrower. Any notice to Borrower under this Note
shall be in writing and shall be considered given three (3) business days after placement in the U.S. mails, certified or registered
mail, postage prepaid, addressed to Borrower: c/o Shopoff Advisors, L.P., 2 Park Plaza, Irvine, California 92614, Attention
William A. Shopoff, or such other address as Borrower may designate by written notice to Lender.

 

15.               
Counterparts/Facsimile Signature. This Agreement maybe executed in counterparts, each of which shall be deemed to
be an original of this Agreement, but such counterparts, when taken together, shall constitute but one agreement. If this Agreement
is so executed by one (1) or more parties in counterpart, the pages bearing the signatures of such parties may be transmitted to
the other parties by way of facsimile, which transmission shall be deemed the same as delivered hereunder of original signatures.

 

16.               
Entire Agreement. This Agreement contains the entire agreement between the parties hereto and supersedes any prior
or current written or oral agreement between said parties concerning the subject matter contained herein. There are no representations,
agreements, arrangements or understandings, oral or written, between or among the parties hereto relating to the subject matter
contained in this Agreement which have not been fully expressed herein, other than those set forth in the other Loan documents
executed concurrently herewith..

 

17.               
Further Assurances. Each of the parties hereto hereby agrees to execute such further documents or instruments as
may be necessary or appropriate to carry out the intention of this Agreement.

 

18.               
Unenforceable Provisions. In the event that any provision of this Agreement shall be unenforceable or inoperative
as a matter of law, the remaining provisions shall remain in full force and effect.

 

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

 

LENDER:

 

CARDINAL INVESTMENT PROPERTIES – RAMSGATE, L.P.,
        

a California limited partnership

 

	By:	Cardinal Investment Properties, LLC, a	 
	 	California limited liability company, 	 
	       	General Partner	 
	 	 	 	 
	     	 By: 	 /s/ David J. Seidner	 
	 	 	David J. Seidner, General Manager	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

BORROWER:

 

SPT-LAKE ELSINORE HOLDING CO., LLC,

a Delaware limited liability company

 

	By:	Shopoff Partners, L.P., a Delaware	 
	 	limited partnership, sole member	 
	 	 	 	 	 	 	 
	 	By:	Shopoff General Partner, LLC, a  
	 	 	Delaware limited liability company,
	 	 	general partner
	 	 	 	 	 	 	 
	            	 	By:	Shopoff Properties Trust, Inc., 
	 	 	 	a Maryland corporation, manager
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	By:	/s/ William A. Shopoff                                           
	 	 	 		William A. Shopoff, President and CEO

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