Exhibit 10.18.1

 

PURCHASE AND SALE AGREEMENT

 

      This Purchase and Sale Agreement (this "Agreement") is made and effective
this 27th day of June, 2008 by and between Eastern Avenue Properties, LLC, a
Vermont limited liability company with an address of 151 Hastings Hill, St.
Johnsbury, VT 05819 ("Purchaser"), and Merchants Bank, a Vermont financial
institution with an address of 275 Kennedy Drive, South Burlington, VT 05403
("Seller").

 

      NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which each party hereto acknowledges to the other, Purchaser and
Seller hereby agree as follows:

 

      1.    Subject Matter. Purchaser agrees to purchase from Seller, and Seller
agrees to sell, transfer and deliver to Purchaser: (a) Approximately 2.94 acres
of land, located at and known as 275 Kennedy Drive, South Burlington, VT, as is
more particularly described on Exhibit A, attached hereto, with all improvements
thereon, including 40,000 +- square foot building currently used as Seller's
Operations Center (collectively the "Land & Improvements"); and (b) those items
of personal property and fixtures which are described on Exhibit B, attached
hereto, as included in the sale (the "Personal Property") (the Land &
Improvements and the Personal Property are referred to herein, collectively, as
the "Property").

 

      2.    Purchase Price. The purchase price for the Property to be paid by
Purchaser to Seller (the "Purchase Price") is FIVE MILLION SEVEN HUNDRED
THOUSAND and 00/100 Dollars ($5,700,000.00), to be allocated as follows:

   

A.

Land:

$    222,338.00

   

B.

Land and Improvements:

$    463,820.00

   

C.

Building:

$ 4,021,422.00

   

C.

Personal Property:

$    992,420.00

   

      3.    Deposit. There is no deposit.

 

      4.    Closing.

   

      A.    The closing hereunder (the "Closing") shall take place on or before
August 31, 2008 at a time and location as shall be mutually agreed upon by
Purchaser and Seller. Time is of the essence and neither party shall be
obligated to extend the date for Closing. At the Closing, (a) the Purchaser
shall pay to the Seller, by cash or wire transfer, the Purchase Price, as may be
adjusted pursuant to Paragraph 6, below, and (b) the Seller shall deliver to the
Purchaser an executed warranty deed and bill of sale for the Property. In
addition, the parties shall execute a Vermont Property Transfer Tax Return,
Vermont Land Gains Withholding and Tax Returns, if applicable, and such other
documents as may be required to complete the transaction contemplated herein.

     

      B.    Notwithstanding the foregoing provision for Closing on or before
August 31, 2008, if Purchaser gives written notice to Seller of its willingness
to close on or before June 30, 2008, such notice to be given not later than ten
business days prior to

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Purchaser's proposed advanced date for Closing, and if the Closing thereafter
occurs on or before June 30, 2008, Seller shall add the following items to the
Personal Property included in the sale: Vault and vault door; and Generator.

 

      5.    Transfer Costs. Purchaser shall be liable for payment of one-third
of the Vermont Property Transfer Tax due on account of the sale of the Land &
Improvements. Seller shall be liable for payment of two-thirds of the Vermont
Property Transfer Tax due on account of the sale of the Land & Improvements.
Seller shall be responsible for any land gains tax due on account of the sale of
the Land & Improvements. Each party shall pay its own legal fees incurred in
connection with this Agreement and the transaction contemplated herein.

 

      6.    Adjustments. [NOT APPLICABLE]

 

      7.    Possession and Occupancy. Possession and occupancy of the Property
shall be given by Seller to Purchaser upon Closing.

 

      8.    Examination of Title. Purchaser shall promptly cause the title to
the Property to be examined. Purchaser shall notify Seller in writing no later
than May 30, 2008, of any encumbrances or defects which cause title to the
Property to be unmarketable under Vermont law. In the event of notification of
such encumbrances or defects, Seller shall have until 30 days from the date of
notification, to cure any such encumbrances or defects in order that title to
the Property shall be marketable. In the event Seller fails or is otherwise
unable to cure any such encumbrances or defects by such date, Purchaser may
terminate this Agreement by giving written notice to Seller, and all rights and
obligations of the parties hereunder shall terminate. At any time prior to the
termination of this Agreement, Purchaser shall have in its sole discretion the
right to elect to accept such title as Seller can deliver to the Property in its
then condition and to pay therefor the Purchase Price, in which case Seller
shall convey such title to the Property.

 

      It is understood and agreed that the title herein required to be furnished
by Seller shall be marketable and the marketability thereof shall be determined
in accordance with the Vermont Marketable Title Act (27 V.S.A. §601 et seq.).

 

      9.    Conditions to Closing.

 

      A.    Leaseback. It shall be a condition of closing that Purchaser, as
lessor, and Seller, as lessee, shall have entered an absolute net Lease in the
form of Exhibit C, attached hereto, providing for a term of ten years, with two
five-year renewal options, with annual rental of $483,000 for years 1 - 10,
$556,600 for years 11 - 15, and $612,260 for years 16 - 20.

      B.    Financing. It shall be a condition of closing that Purchaser's
affiliate, Northeast Kingdom Hotels, Inc. ("NE Hotels"), as borrower, and
Seller, as lender, shall have entered a loan agreement providing for a loan of
between $3,500,000 - $3,700,000, with a fixed annual interest rate of 6.50%, a
term of ten years, and 20-year amortization (the "New Loan"). The New Loan shall
be secured by a shared first mortgage of the Comfort Inn property owned by NE
Hotels and located in St. Johnsbury, VT (the

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"Comfort Inn Property"). The New Loan shall be guaranteed by Murphy Realty
Company, Inc., a Vermont corporation with a place of business in St. Johnsbury,
VT. The New Loan shall not be subject to prepayment; provided, however, in the
event of sale of the Comfort Inn Property, the mortgage for the New Loan may be
transferred to mutually satisfactory alternate property. Seller acknowledges
that, in the event that the transaction contemplated herein does not close, all
prepayment penalties associated with the New Loan shall be waived by Seller.

      In connection with the New Loan, the Seller, as lender, shall amend its
existing $2,900,000 loan to NE Hotels, which is currently secured by the Comfort
Inn Property (the "Amended Loan"). The Amended Loan will be restructured with a
ten-year term and 20-year amortization, an interest rate of Prime minus 1% with
maximum interest rate of 6.60% expiring September 2013 and no change in the
expiration date of the existing interest rate cap, and the existing prepayment
terms will continue in effect. The Amended Loan shall be secured by a shared
first mortgage on the Comfort Inn Property. The Amended Loan will not be
guaranteed by Murphy Realty Company, Inc.

      C.    Environmental Information. It shall be a condition of closing that
Seller will fully disclose to Purchaser environmental information concerning the
Property known to Seller and shall allow Purchaser to perform reasonable,
non-destructive environmental due diligence on the Property. Seller shall
provide environmental indemnifications as set forth on Exhibit D, attached
hereto.

      D.    Cost Segregation. It shall be a condition of closing that Seller
shall cooperate with Purchaser's cost segregation study of the Property.

      10.    Broker. Seller and Purchaser represent and warrant to each other
that they have dealt with no agent, finder, broker or other representative in
any manner which could result in the other party being liable for any fee or
commission in connection with the subject of this Agreement.

      11.    Failure to Close. Seller and Purchaser agree to act in good faith
to close the purchase and sale of the Property on the terms and conditions
provided herein. Notwithstanding the foregoing, either Seller or Purchaser may
terminate this Agreement at any time in the event the purchase or sale of the
Property as provided herein becomes economically disadvantageous, and in the
event of such termination, this Agreement shall be of no further force or effect
and neither party shall have any further rights or obligations hereunder.

      12.    Condemnation. Seller shall promptly notify Purchaser of any notice
which Seller receives of any proposed or contemplated condemnation or eminent
domain proceeding between the date hereof and the Closing. In the event of any
condemnation or proposed condemnation or eminent domain proceeding prior to the
Closing, then Purchaser may either: (a) proceed with the Closing for the
Property, accept title to such portion of the Property as Seller still owns, and
receive an assignment from Seller of all of Seller's claims, remedies and rights
against the taking entity and all sums becoming due as a result thereof; or (b)
terminate this Agreement by giving notice thereof to the Seller, receive a
return of the Deposit and neither Purchaser nor Seller shall

<PAGE>  3

have any further obligation to the other regarding the Property and this
Agreement shall be void and of no further force and effect.

 

      13.    Condition of Property; Risk of Loss/Insurance; Permits. Purchaser
accepts the Property to be conveyed hereunder in an "AS IS," "WHERE IS"
condition as of the date of Closing. Seller agrees to disclose to Purchaser the
existence of any patent or latent defects in the Property, to the extent the
same are known to Seller. Except for any such disclosures, and the environmental
disclosures described in Section 9(c), above, NEITHER SELLER NOR ANY OF ITS
AGENTS OR PERSONS ACTING ON ITS BEHALF MAKES ANY OTHER REPRESENTATIONS OR
WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE PROPERTY, AND SELLER HEREBY
DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY NOT SET FORTH IN THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. During the period between the date of this
Agreement and transfer of title, risk of loss shall be on Seller.

 

      14.    Binding Effect, Assignment. This Agreement shall be binding upon
and inure to the benefit of Seller, Purchaser, and their respective legal
representatives, heirs, successors and assigns. Purchaser and Seller each
represent that the person executing this Agreement on their behalf has the
requisite authority to do so. Neither Purchaser nor Seller may assign its rights
and obligations under this Agreement without the other party's written consent;
provided, however, that Purchaser may assign this Agreement, without Seller's
consent to an entity owned by Peter J. Murphy and/or by members of his immediate
family (i.e. parents, spouse, children).

 

      15.    Notices. Any notice to be given hereunder shall be in writing and
shall be sent postage prepaid by certified U.S. mail, hand delivery, overnight
courier or by telecopier addressed as follows:

 

If to Seller:

With a copy to:

Merchants Bank

Michael G. Furlong, Esquire

Att'n: Geoffrey R. Hesslink

Sheehey Furlong & Behm P.C.

275 Kennedy Drive

30 Main Street, P.O. Box 66

South Burlington, VT 05403

Burlington, VT 05402

If to Purchaser:

With a copy to:

Eastern Avenue Properties, LLC

Peter M. Doremus, Esquire

Att'n: Peter J. Murphy

Doremus Roesler & Kantor

151 Hastings Hill

112 Lake Street, P.O. Box 445

St. Johnsbury, VT 05819

Burlington, VT 05402

or to such other person or address as the party entitled to notice shall have
specified by written notice to the other party given in the foregoing manner.
Any notices required to be given under this Agreement shall be deemed given upon
receipt.

<PAGE>  4

      16.    Entire Agreement; Amendment. This Agreement embodies the entire
agreement and understanding between the Purchaser and the Seller relating to the
subject matter hereof and there are no covenants, promises, agreements,
conditions or understandings, oral or written, except as herein set forth. This
Agreement may not be amended, waived or discharged except by an instrument in
writing executed by the party against whom such amendment, waiver or discharge
is to be enforced. This Agreement shall be governed by the laws of the State of
Vermont.

 

      17.    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

      This Agreement is hereby executed by the parties effective on the date
indicated on the first page of this Agreement.

     

SELLER:

   

Merchants Bank

     

/s/ Michael G. Furlong

 

By:

/s/ Michael R. Tuttle

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Witness

   

Name: Michael R. Tuttle

     

Its Duly Authorized Agent

           

PURCHASER:

   

Eastern Avenue Properties, LLC

       

/s/ Peter M. Doremus

 

By:

/s/ Peter J. Murphy

--------------------------------------------------------------------------------

   

--------------------------------------------------------------------------------

Witness

   

Name: Peter J. Murphy

     

Its Duly Authorized Agent

<PAGE>  5

EXHIBIT A

 

Property Description

 

      Being all and the same lands and premises as were conveyed by Daniel J.
O'Brien and Leo O'Brien to The Merchants Bank, by Warranty Deed dated December
15, 1978 and recorded at Volume 146, Page 308 of the City of South Burlington
Land Records.

<PAGE>  7

EXHIBIT B

 

Personal Property

 

      1.    Included Items. The following items of personal property and
fixtures are expressly included in the sale:

 

(a)

Bank lobby counter and island

(b)

Bank lobby video security system

(c)

Drive-up window and canopy

(d)

Office area carpeting

(e)

Computer fire suppression system

(f)

Surge protectors

 

If the Closing occurs on or before June 30, 2008, the following additional items
of personal property and fixtures shall be included in the sale:

 

(g)

Vault and vault door

(h)

Generator

 

      2.    Excluded Items. The following items of personal property and
fixtures are expressly excluded from the sale:

 

(a)

Safe deposit boxes

(b)

Office area modular partitions

(c)

Telephone system

 

If the Closing occurs after June 30, 2008, the following items of personal
property shall also be excluded from the sale:

 

(d)

Vault and vault door

(e)

Generator

<PAGE>  7

EXHIBIT C

 

Form of Lease

 

See attached.

<PAGE>  8

EXHIBIT D

 

Environmental Indemnifications

 

      Seller unconditionally and irrevocably indemnifies and agrees to defend
and hold harmless Purchaser and its officers, employees, agents, contractors and
those claiming by, through or under Purchaser, from and against all loss, cost
and expense (including attorneys' fees) of whatever nature suffered or incurred
by Purchaser on account of the release or discharge at, on, from or to the
Property, of any hazardous material, including any claims, costs, losses,
liabilities and expenses arising from the violation (or claimed violation) of
any law, rule, regulation or ordinance or the institution of any action by any
party against Seller, Purchaser or the Property based upon nuisance, negligence
or other tort theory alleging liability due to the improper generation, storage,
disposal, removal, transportation or treatment of any hazardous material or the
imposition of a lien on any part of the Property under any law pursuant to which
a lien or liability may be imposed on Purchaser due to the existence of any
hazardous material. Seller unconditionally and irrevocably guarantees the
payment of any fees and expenses incurred by Purchaser in enforcing the
liability of Seller and this indemnification should Purchaser prevail in such
action. If any remedial work is required because of, or in connection with, any
occurrence or event covered by this indemnity, Seller shall either perform or
cause to be performed the remedial work in compliance with the applicable law,
regulation, order or agreement, or shall promptly reimburse Purchaser for the
cost of such remedial work. If Seller elects to perform the remedial work, all
remedial work shall be performed by one or more qualified contractors selected
by Seller, under the supervision of a qualified consulting engineer selected by
Seller. Otherwise, Purchaser shall select the contractor(s) and the consulting
engineer. All costs and expenses of such remedial work shall be paid either
directly, or in the form of reimbursement to Purchaser, by Seller including
without limitation, the charges of such contractor(s) and the consulting
engineer, and Purchaser's reasonable attorneys' fees and costs incurred in
connection with monitoring or review of such remedial work. If Seller shall fail
to timely commence, or cause to be commenced, or fail to diligently prosecute to
completion, such remedial work, Purchaser may cause such remedial work to be
performed, and all costs and expenses thereof, or incurred in connection
therewith, shall be covered by this indemnity. All such costs and expenses shall
be due and payable upon demand therefor by Purchaser.

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