Split Dollar Insurance Proposal

This memorandum explains a proposal regarding the split-dollar insurance arrangements among you, AIF IV Management Inc., an S corporation wholly owned by you (“AIF”), and Norman Brownstein, the trustee of your 1999 Life Insurance Trusts (the “Trustee”) We discussed this proposal with Eileen Alexanderson, Ada Clapp and Tom Turrin at a meeting last week.

Background

In 1999, the Trustee purchased $50 million of insurance on your life (three separate policies), and $100 million of insurance on the joint lives of you and Debra (five separate policies). The Trustee entered into two split-dollar agreements with you and AIF, one for the policies on your life, which are held in the 1999 Life Insurance Trust #1, and one for the policies on your and Debra’s lives, which are held in the 1999 Life Insurance Trust #2. Each split-dollar agreement obligates AIF to pay the full amount of the Planned Periodic Premium (as defined in the policy contract) on each policy. Each agreement also obligates you or the Trustee to make annual payments to AIF of the annual value of the current life insurance protection offered by the policies.

The Trustee has the right to terminate each split-dollar agreement at any time.
AIF does not have any right to terminate either split-dollar agreement.