Document:

Exhibit 10.20

 

PURCHASE
AND SALE AGREEMENT

 

BY AND BETWEEN

 

MAC-GRAY SERVICES, INC.

 

(“SELLER”)

 

AND

 

CATAMOUNT MANAGEMENT CORPORATION (“BUYER”)

 

 

Dated as of: April    ,
2005

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE
  1 Purchase and Sale Agreement

  	
   

  
	
  1.1

  	
  Agreement to Purchase
  and Sell

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  2 The Property

  	
   

  
	
  2.1

  	
  Description of the Property

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3 Purchase Price; Deposit; Adjustments

  	
   

  
	
  3.1

  	
  Purchase Price

  	
   

  
	
  3.2

  	
  Deposit

  	
   

  
	
  3.3

  	
  Balance of Purchase Price

  	
   

  
	
  3.4

  	
  Prorations of Taxes

  	
   

  
	
  3.5

  	
  Prorations
  of Contracts and Prepaid Expenses

  	
   

  
	
  3.6

  	
  Utilities

  	
   

  
	
  3.7

  	
  Estimates

  	
   

  
	
  3.8

  	
  Adjustment Payments

  	
   

  
	
  3.9

  	
  Calculation of Prorations

  	
   

  
	
  3.10

  	
  Seller’s Closing Costs

  	
   

  
	
  3.11

  	
  Buyer’s Closing Costs

  	
   

  
	
  3.12

  	
  Closing Statement

  	
   

  
	
  3.13

  	
  Leaseback

  	
   

  
	
  3.14

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4 Representations, Warranties, Covenants and Agreements

  	
   

  
	
  4.1

  	
  Seller’s
  Representations and Warranties

  	
   

  
	
  4.2

  	
  Hazardous Materials

  	
   

  
	
  4.3

  	
  Seller’s Covenants

  	
   

  
	
  4.4

  	
  Buyer’s
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 Access, Inspection, Diligence

  	
   

  
	
  5.1

  	
  Inspections

  	
   

  
	
  5.2

  	
  Property Investigations

  	
   

  
	
  5.3

  	
  Disclosure

  	
   

  
	
  5.4

  	
  Indemnity

  	
   

  
	
  5.5

  	
  Inspection Period

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 As-Is Transaction, Release and
  Indemnity

  	
   

  
	
  6.1

  	
  AS-IS
  Transaction; Buyer Acknowledgments and Agreements

  	
   

  
	
  6.2

  	
  Buyer’s Release of
  Seller

  	
   

  
	
  6.3

  	
  Buyer’s
  Indemnification of Seller

  	
   

  
	
  6.4

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 Title and Survey

  	
   

  
	
  7.1

  	
  Title and Survey Review

  	
   

  

 

 

	
  7.2

  	
  Title
  Objection

  	
   

  
	
  7.3

  	
  Seller’s Cure of
  Title Objections

  	
   

  
	
  7.4

  	
  Required State of Title

  	
   

  
	
  7.5

  	
  Personal Property

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 Conditions to Seller’s and
  Buyer’s Performance

  	
   

  
	
  8.1

  	
  Conditions to
  Seller’s Obligations

  	
   

  
	
  8.2

  	
  Conditions to
  Buyer’s Obligations

  	
   

  
	
  8.3

  	
  Approvals not a Condition to Buyer’s Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  9 Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Escrow Closing

  	
   

  
	
  9.2

  	
  Seller’s Closing
  Deliveries

  	
   

  
	
  9.3

  	
  Buyer’s Closing
  Deliveries

  	
   

  
	
  9.4

  	
  Delivery of Deposit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 Casualty and Condemnation

  	
   

  
	
  10.1

  	
  Damage or
  Destruction/Eminent Domain

  	
   

  
	
  10.2

  	
  Major
  Casualty

  	
   

  
	
  10.3

  	
  Material Condemnation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 Brokerage Commissions

  	
   

  
	
  11.1

  	
  Representations and
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 Default, Termination and
  Remedies

  	
   

  
	
  12.1

  	
  Seller
  Default

  	
   

  
	
  12.2

  	
  Buyer Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 Miscellaneous

  	
   

  
	
  13.1

  	
  Assignment

  	
   

  
	
  13.2

  	
  Notices

  	
   

  
	
  13.3

  	
  Interpretation

  	
   

  
	
  13.4

  	
  Captions

  	
   

  
	
  13.5

  	
  Seller’s
  Warranties Deemed Modified

  	
   

  
	
  13.6

  	
  No Third-Party
  Beneficiaries

  	
   

  
	
  13.7

  	
  Amendments

  	
   

  
	
  13.8

  	
  Integration

  	
   

  
	
  13.9

  	
  Cooperation

  	
   

  
	
  13.10

  	
  Choice of Law

  	
   

  
	
  13.11

  	
  Waiver of Jury Trial

  	
   

  
	
  13.12

  	
  Counterparts

  	
   

  
	
  13.13

  	
  Business Day

  	
   

  
	
  13.14

  	
  Time of the Essence

  	
   

  
	
  13.15

  	
  Use of Proceeds
  to Clear Title

  	
   

  
	
  13.16

  	
  Submission not
  an Offer or Option

  	
   

  
	
  13.17

  	
  Confidentiality

  	
   

  

 

ii

 

	
  ARTICLE 14 IRS Form 1099-S Designation

  	
   

  
	
  14.1

  	
  Designee

  	
   

  
			

 

iii

 

	
  Schedules

  	
   

  
	
  SCHEDULE A

  	
  Description of the Real
  Property

  
	
  SCHEDULE B

  	
  Description of Personal
  Property

  
	
  SCHEDULE C

  	
  Contracts

  
	
  SCHEDULE 3.2

  	
  Form of Deposit Escrow
  Agreement

  
	
  SCHEDULE 3.13

  	
  Terms of Lease

  
	
  SCHEDULE 4.1(b)

  	
  List of Legal
  Proceedings

  
	
  SCHEDULE 7.4(d)

  	
  Seller’s Title Policy

  
	
  SCHEDULE 9.2(a)

  	
  Form of Deed

  
	
  SCHEDULE 9.2(b)

  	
  Form of Bill of Sale

  
	
  SCHEDULE 9.2(c)

  	
  Form of Assignment of
  Contracts

  
	
  SCHEDULE 9.2(d)

  	
  Form of FIRPTA
  Affidavit

  
	
  SCHEDULE 14.1

  	
  Form of IRS Form 1099-S

  

 

iv

 

PURCHASE
AND SALE AGREEMENT

 

This Purchase and Sale Agreement (this “Agreement”) is
entered into as of the    day of April, 2005 by and
Mac-Gray Services, Inc., a Delaware corporation (the “Seller”) having an
address of 22 Water Street, Cambridge, MA 02141 and Catamount Management
Corporation, a Massachusetts corporation, (the “Buyer”) having an address of 90
Everett Avenue, Chelsea, MA 02150.

 

RECITALS

 

Seller is the owner of the Property (as defined in
Section 2.1 below).  Seller desires to
sell the Property to Buyer and Buyer desires to buy the Property from Seller,
all on and subject to the terms and conditions hereinafter set forth.

 

ARTICLE 1

Purchase and Sale Agreement

 

1.1           Agreement to Purchase and Sell.  In
consideration of the mutual undertakings and covenants of the parties set forth
in this Agreement, and for other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, Seller agrees to sell
the Property to Buyer and Buyer agrees to buy the Property from Seller on and
subject to the terms and conditions contained in this Agreement.

 

ARTICLE 2

The Property

 

2.1           Description of the Property.  The
“Property” consists of the following:

 

(a)           The land
located at 22 Water Street, Cambridge, MA, 
and more particularly described in Schedule A attached hereto
(the “Land”);

 

(b)           all
rights, privileges and easements appurtenant to the Land owned by Seller
(collectively referred to as the “Appurtenances”);

 

(c)           all
buildings, improvements and fixtures located on the Land and used in connection
with the operation of the buildings located on the Land (collectively, the “Improvements”)
(which Land, together with the Appurtenances and Improvements, is collectively
referred to as the “Real Property”);

 

(d)           the
tangible personal property, if any, described in Schedule B attached
hereto (the “Personal Property”); and

 

 

(e)           all of
Seller’s interest in the contracts, if any, described in Schedule C
attached hereto (the “Contracts”) to the extent consent of any third party is
not required;

 

excluding, however
the emergency generator at the Property and equipment and plumbing in the
equipment reconditioning area of the building located on the Property.

 

ARTICLE 3

Purchase Price; Deposit;
Adjustments

 

3.1           Purchase Price.  On the Closing
Date, the Buyer agrees to pay the Seller $11,750,000 (the “Purchase Price”),
subject to adjustment and as otherwise provided herein.

 

3.2           Deposit.  Buyer
has heretofore made a deposit in the amount of $50,000.00 (the “Offer Deposit”).  Upon the execution of this Agreement, Buyer
will deposit with Fidelity National Title Insurance Company, as Escrow Agent
(the “Escrow Agent”) the additional sum of Five Hundred Twenty-Five Thousand Dollars
($525,000.00), and the Offer Deposit shall likewise be paid to Escrow Agent
(the said $575,000.00 being hereinafter collectively referred to as the “Deposit”)
to secure Buyer’s obligations under this Agreement.  If Buyer has not elected to terminate this
Agreement at or prior to the expiration of the Inspection Period (as defined
below), the deposit shall be deemed nonrefundable, provided Seller has
performed, or is ready, willing and able to fully perform, hereunder.  The Escrow Agent will maintain the Deposit
and disburse the same pursuant to the terms and conditions of this Agreement
and the Deposit Escrow Agreement attached hereto as Schedule 3.2 (the “Deposit
Escrow Agreement”).  All amounts held
from time to time by the Escrow Agent pursuant to the Deposit Escrow Agreement
are referred to herein as the “Escrowed Amount”.  Notwithstanding any provision in this
Agreement to the contrary, if Buyer fails to timely deliver any portion of the
Deposit as provided herein, Buyer shall be deemed to have elected to terminate
this Agreement and the parties shall have no further rights or obligations
hereunder except for obligations which expressly survive the termination of
this Agreement.

 

3.3           Balance of Purchase Price.  On the
Closing Date (as hereinafter defined) Buyer shall (a) pay to Seller an amount
equal to the Purchase Price less the Escrowed Amount in immediately available
funds by wire transfer, as prorated and adjusted as provided herein, and (b)
direct the Escrow Agent to pay the Escrowed Amount to Seller.

 

3.4           Prorations of Taxes.  All real and
personal property taxes attributable to the year in which the Closing occurs
shall be prorated and adjusted as of the Closing Date as an adjustment at the
Closing (regardless of whether such taxes and special assessments are then due
and payable or delinquent).  If the tax
statements for the fiscal year during which the Closing Date occurs are not
finally determined, then the tax figures for the immediately prior fiscal year
will be used for the purposes of prorating taxes on the Closing Date, with no
further adjustment after the Closing.

 

2

 

3.5           Prorations of Contracts and
Prepaid Expenses.  To the extent Contracts are not terminated
pursuant to Section 4.3(b) below, prepaid or past due amounts under
any Assigned Contracts (as hereinafter defined) will be prorated and adjusted
as of the Closing Date.  Buyer will be
charged for those prepaid expenses allocable to any period after the Closing
Date.

 

3.6           Utilities.  Seller
will cause all meters for electricity, gas, water, sewer or other utility usage
at the Property to be read on or around the Closing Date.  Seller will pay all charges for such utility
charges which have accrued on or prior to the Closing Date.  If the utility companies are unable or refuse
to read the meters on or around the Closing Date, all charges for such utility
charges to the extent unpaid will be prorated and adjusted as of the Closing
Date based on the most recent bills. 
Seller shall provide notice to Buyer five (5) days prior to the Closing
Date setting forth (i) that utility meters will be read as of the Closing Date
or (ii) that utility meters will not be read on the Closing Date along with a
copy of the most recent bill for any utility charges which are to be prorated
and adjusted as of the Closing Date.

 

3.7           Estimates.  In
the event, on the Closing Date, the precise figures necessary for any of the
foregoing adjustments are not capable of determination, then, at Seller’s
option, those adjustments will be made on the basis of good faith estimates of
Seller using currently available information, and final adjustments shall be
made within six (6) months after the Closing Date to the extent precise figures
are determined or become available.

 

3.8           Adjustment Payments.  The net
amount of all adjustments to be made under this Article 3 will be paid on the
Closing Date in immediately available funds. 
Post-closing adjustments, if any, will be made in immediately available
funds.

 

3.9           Calculation of Prorations.  All
apportionments and prorations made hereunder shall be made based on the number
of days of ownership of the Property in the period applicable to the
apportionment, with Buyer entitled to income and responsible for expenses for
the Closing Date.  Prorations of annual
payments will be made based on the number of days of ownership in the
applicable annual period.

 

3.10         Seller’s Closing Costs.  At the
Closing, Seller shall pay and be responsible for the amount due for (i) deed
stamps, conveyance tax or documentary tax imposed in connection with the
consummation of the transaction contemplated hereby; (ii) recording charges for
any instrument which releases or discharges any lien as required by Article 6
hereto; (iii) 50% of the fees charged by Escrow Agent; and (iv) Seller’s
counsel’s fees and expenses.

 

3.11         Buyer’s Closing Costs.  At the
Closing, Buyer shall pay and be responsible for (i) recording charges (other
than as listed in Section 3.10 above); (ii) charges associated with Buyer’s title
insurance, if any, survey and due diligence costs; (iii) 50% of the fees
charged by Escrow Agent; and (iv) Buyer’s counsel’s fees and expenses.

 

3.12         Closing Statement.  Seller will
prepare a draft closing statement or will provide Buyer with sufficient
information to prepare a draft closing statement at least two (2) days prior

 

3

 

to the Closing.  Closing costs
not specifically allocated herein shall be borne by the parties as is customary
in the locality.

 

3.13         Leaseback.  From and after the Closing Date, Buyer
shall lease portions of the Property to Seller on the terms listed on Schedule
3.13, under a lease to be provided by Seller and agreed upon prior to the
expiration of the Inspection Period (the “Lease”).

 

3.14         Survival.  The provisions of Article 3 will survive
the Closing.

 

ARTICLE 4

Representations, Warranties,
Covenants and Agreements

 

4.1           Seller’s
Representations and Warranties.  Seller makes the
representations and warranties to Buyer which are set forth below, as of the
date of this Agreement and as of the Closing Date.

 

(a)           This
Agreement has been duly authorized, executed and delivered by Seller and all
consents required under Seller’s organizational documents or by law have been
obtained.  All documents that are to be
executed by Seller and delivered to Buyer on the Closing Date will be, duly
executed, authorized and delivered by Seller. 
This Agreement and all such documents are, and on the Closing Date will
be, legal, valid and binding obligations of Seller, enforceable in accordance
with their terms and do not, and, at the time of the Closing Date will not,
violate any provisions of any agreement or judicial or administrative order to
which Seller is a party or to which Seller or the Property (or any portion
thereof) is subject.

 

(b)           To the
best of Seller’s knowledge, except as set forth in Schedule 4.1(b)
attached hereto, there are no actions, suits or proceedings (including
arbitration proceedings) pending or to the best of Seller’s knowledge,
threatened against Seller which could have a material adverse effect on the
Property, Seller’s interest therein, or Seller’s ability to perform its
obligations hereunder.

 

(c)           To the
best of Seller’s knowledge, Seller has no current written notice of a
condemnation action against the Property.

 

(d)           Seller is
not a foreign corporation, foreign partnership or foreign estate (as such terms
are defined in Section 1445 of the Internal Revenue Code).  Seller shall provide Buyer with an affidavit
to this effect at Closing.

 

Except as expressly provided in this Section 4.1,
Seller is not making and has not at any time made any representation or
warranty of any kind or nature, either oral or written, directly or indirectly,
expressed, implied, statutory or otherwise, with respect to the Property,
including, without limitation, representations or warranties as to
habitability, merchantability, fitness for a particular purpose, title, zoning,
tax consequences, latent or patent physical or environmental condition, health
or safety matters, utilities, operating history or projections, valuation,
projections, the applicability of any laws, rules or regulations or compliance
therewith.  Based upon Buyer’s
familiarity with the Property, Buyer’s due diligence relating the Property and

 

4

 

Buyer’s experience and knowledge as to the market in which the Property
is situated and as to investment in and operation of real estate in the nature
of the Property and commercial real estate in general, Buyer shall purchase the
Property on the Closing Date in its “AS IS, WHERE IS AND WITH ALL FAULTS”
condition, without any representation or warranty whatsoever.  Buyer fully assumes the risk that adverse
latent or patent physical, structural, environmental, economic or legal
conditions may not have been revealed by Buyer’s investigations.  Seller and Buyer acknowledge that the
Purchase Price to be paid to Seller for the Property has taken into account
that the Property is being sold subject to the foregoing provisions of this
Section 4.1.

 

4.2           Hazardous Materials.  Seller makes
no representations or warranties as to the presence or absence of any Hazardous
Materials in, on, under or about the Property. 
Except solely with respect to Excluded Claims (defined below), (a) Buyer
specifically waives any private right of action provided under CERCLA and/or
any other Environmental Laws to recover or be reimbursed for any liabilities,
costs, fees, or expenses from the Seller, and (b) Buyer agrees to accept
complete responsibility for the allocation of any response costs under CERCLA
and any other Environmental Laws.  Buyer
shall indemnify, protect, defend and hold the Seller harmless from and against
any and all claims, demands, losses, damages, liabilities, causes of action,
liens, costs and expenses, (including, without limitation, attorneys’ fees and
costs to the extent permitted by law) directly or indirectly related to,
arising out of, or in any manner connected with, in whole or in part, the presence
of any Hazardous Materials in, on or about the Property, the release of
Hazardous Materials from the Property, any violation of any Environmental Laws
or other laws, or any other environmental matter or condition, that is related
to the Property and that either (i) arises as a result of events occurring
subsequent to Closing, or as a result of negligence on the part of Buyer or its
affiliates or its or their employees, agents, consultants, or contractors, at
any time, or (ii) is asserted by or on behalf of any unit owner or mortgagee,
resident, visitor or employee at the Property or any other person or entity
having an interest in or access to the Property or any present or future
improvements thereon after the Closing (other than Excluded Claims).  As used herein, the term “Excluded Claims”
means solely (x) those asserted by any owner of property in the vicinity of the
Property based on migration of Hazardous Materials thereto from the Property
prior to the Closing and (y) those asserted by any governmental authority based
on such migration from the Property prior to the Closing or based on any
disposal of Hazardous Materials offsite by Seller prior to the Closing).  The agreements, waiver and indemnity set
forth in this Section 4.2 shall survive the Closing.

 

4.3           Seller’s Covenants.  Seller hereby
covenants and agrees with Buyer that:

 

(a)           At all
times from the execution of this Agreement to the Closing Date, it shall
maintain such casualty insurance on the Improvements as is presently insured.

 

(b)           Seller
agrees to terminate as of the Closing Date, any property management, leasing
brokerage and service contract or agreement relating to the Property unless
Buyer requests otherwise, by written notice to Seller prior to the expiration
of the Inspection Period.  To the extent
the same are assignable by Seller, any service contracts or agreements which
are designated by Buyer as contracts or agreements which should not be
terminated shall be assigned to, and assumed by, Buyer at Closing, which
assignment shall be without recourse to Seller (the “Assigned Contracts”).

 

5

 

4.4           Buyer’s
Representations and Warranties.  Buyer
hereby represents and warrants to Seller as of the date of this Agreement and
as of the Closing Date:  that it is a
knowledgeable about real estate investments and is capable of understanding the
transaction contemplated hereby; that this Agreement has been duly authorized,
executed and delivered by Buyer; and that all consents required under Buyer’s
organizational documents or by law have been obtained.  All documents that are to be executed by
Buyer and delivered to Buyer on the Closing Date have been, or on the Closing
Date will be, duly executed, authorized and delivered by Buyer.  This Agreement and all such documents are,
and on the Closing Date will be, legal, valid and binding obligations of Buyer,
enforceable in accordance with their terms and do not, and, at the time of the
Closing Date will not, violate any provisions of any agreement or judicial or
administrative order to which Buyer is a party or to which Buyer or the
Property (or any portion thereof) is subject.

 

ARTICLE 5

Access,
Inspection, Diligence

 

5.1           Inspections.  Seller
agrees that Buyer and its authorized agents or representatives shall be
entitled to enter upon the Real Property and the Improvements during normal
business hours upon advance written notice to Seller to make such
investigations, studies and tests including, without limitation, surveys and
engineering studies, as Buyer deems necessary or advisable.

 

5.2           Property
Investigations.  All investigations made by Buyer
will be at Buyer’s sole cost and expense and will be performed without causing
any damage to the Property or any interruption in the ongoing business activities
at the Property.  Buyer shall not cause
any adverse impact to the Property and will restore the Property in a timely
manner at Buyer’s sole cost to the condition that existed immediately prior to
the Property investigations.  Seller
understands, and it is agreed, that the investigations will include surveying
and engineering studies and perhaps a Phase I or Phase II environmental
site assessment (all investigations of the Property or any materials regarding
the ownership, management, use or operation of the Property are collectively
called the “Property Investigations”). 
Upon the execution hereof, Seller shall deliver to Buyer, solely for
informational purposes and not for reliance, any existing survey plan(s), title
report(s), title insurance policy(ies), environmental report(s), and or reports
from any prior Property Investigations which are in Seller’s possession or
control.  With respect to these Property
Investigations, Buyer will obtain Seller’s advance approval of the scope of any
proposed activities, particularly as they may involve the investigations of
ground water or subsurface soil conditions, and allow one of Seller’s
representatives to be present during any such activities.  Buyer will promptly provide Seller, at Seller’s
request, solely for informational purposes and not for reliance, with a copy of
any report, draft report or evaluation (“Reports”) which indicates the presence
of hazardous substances on the Property or the violation of any applicable law,
as well as any other Reports prepared in connection with the Property
Investigations.  Except as specifically
provided below, Buyer agrees to keep confidential and not to disclose the
results of any Property Investigations or the contents of any Reports, except
to Buyer’s principals, attorneys, lenders, engineers, consultants, investors
and others, as reasonably necessary in connection with the acquisition and
financing of the Property.

 

6

 

5.3           Disclosure.  In
the event that Buyer determines that Buyer is required by applicable law to
notify a federal, state or local governmental agency or any other party with
respect to the conditions at the Property as a result of any Property
Investigation, Buyer shall immediately notify Seller and Seller shall make such
disclosure as Seller determines appropriate. 
If Seller determines not to notify such public agency or other party
after such notice and Buyer feels that Buyer is still required by law to make
such disclosure and so notify Seller, Seller will hire an independent
consultant reasonably approved by Buyer to make the determination for Seller of
whether such public disclosure is required and such determination will be
binding upon both Buyer and Seller.

 

5.4           Indemnity.  Buyer
assumes all risks associated with the Property Investigations and indemnifies,
defends and holds Seller, its members, officers, directors, shareholders,
principals, agents, representatives, attorneys, and employees harmless against
any claim or demand on account of any loss, damage or injury to any person or
property by reason of any act, omission or negligence by Buyer or Buyer’s
agents or employees in connection with the Property Investigations.  Buyer agrees at all times during the entries
onto the Property that either Buyer or Buyer’s contractors will carry
comprehensive general liability insurance on an occurrence basis (including
contractual liability, contractor’s protective liability, personal injury and
property damage coverage) in a combined single limit of at least $1,000,000,
with a deductible of no more than $50,000, employer’s liability in the amount
of $500,000 (each accident) and the statutory limit with respect to workers
compensation and provide Seller with evidence of such insurance coverage, if
requested, prior to any entry onto the Property.  The provisions of this section 5.4 shall
survive the Closing or any termination of this Agreement.

 

5.5           Inspection
Period.  Buyer shall notify Seller by 5:00 p.m.
Eastern Time on the date which is forty-five (45) after the date hereof (the “Inspection
Period”) of the results of its due diligence. 
In the event that Buyer, in its sole and absolute discretion, is not
satisfied with the results of its due diligence (whether or not based on the
contents of any Reports), then Buyer may elect, by written notice to Seller, on
or before 5:00 p.m. Eastern Time on the expiration of the Inspection Period,
not to proceed with the transaction described herein.  In such event, provided that Buyer provides
Seller with copies of all of its diligence materials prepared by third parties,
the Escrow Agent shall be required to return the Escrowed Amount in accordance
with the Deposit Escrow Agreement and this Agreement shall be null and void
without recourse to either party hereto, except for those obligations which
expressly survive the termination of this Agreement.  In the event Buyer fails to terminate this
Agreement prior to 5:00 p.m. Eastern Time on the last day of the Inspection
Period, Buyer shall be deemed to have waived its rights to terminate this
Agreement in accordance with this Article 5.  Buyer and Seller each acknowledge and agree
that Buyer shall have no additional period after the expiration of the
Inspection Period to conduct further due diligence.

 

7

 

ARTICLE 6

As-Is Transaction, Release and Indemnity

 

6.1           AS-IS
Transaction; Buyer Acknowledgments and Agreements.  Buyer hereby acknowledges and agrees as
follows:

 

(a)           Buyer is
acquiring the Property “AS IS, WHERE IS” AND “WITH ALL FAULTS, LIABILITIES, AND
DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN,” in its present state and
condition as of the Closing Date, with no rights of recourse against Seller (or
any related or affiliated party) for same. 
Buyer acknowledges that Buyer will be given a full and complete
opportunity to conduct its own investigation as to any matter, fact, or issue
which might influence Buyer’s decision to purchase the Property.  During the Inspection Period, Buyer shall
make a thorough inspection and investigation of the Property employing its own
experts for such purpose.  Buyer shall
make, or cause to be made by experts of its own choice, a thorough review and
analysis of the Property.  Buyer
represents and warrants as of the Closing that Buyer has conducted a thorough
inspection of the Property and is not relying on any representation or warranty
of Seller.  Buyer understands and agrees
that Seller makes no warranties regarding, and shall have no liability
whatsoever with respect to, the accuracy, correctness, or suitability of any of
the offering or other materials provided by Seller or its agents.  Buyer further acknowledges that the AS-IS
nature of the transaction and the other terms and conditions described in this
Section have been taken into account in the establishment of the Purchase
Price.

 

(b)           Neither
Seller nor any of Seller’s agents, contractors, consultants, attorneys, or
representatives have made, do not make, and specifically negate and disclaim,
and Buyer is not relying on, any representations, warranties, promises,
covenants, agreements or guaranties of any kind or character whatsoever,
whether express or implied, oral or written, past, present or future, of, as
to, concerning, or with respect to: (i) the value of the Property; (ii) any
income to be derived from the Property; (iii) the suitability of the Property
for any and all activities and uses which Buyer may conduct thereon, including
the possibilities for further development of the Property or construction
thereon; (iv) the habitability, merchantability, marketability, profitability
or fitness for a particular purpose of the Property or any improvements
thereon; (v) the manner, quality, state of repair or lack of repair on the
Property or any improvements thereon; (vi) the nature, quality or condition of
the Property, including, without limitation, with respect to water conditions,
soil, geological or geotechnical condition (including, without limitation, soil
expansiveness, corrosivity, or stability, or seismic, hydrological, geological
and topographical conditions and configurations, including, without limitation,
any opinions or conclusions of any soils engineer(s) retained to perform
geotechnical and/or soils studies or to oversee any soils engineering aspects
of developing the Property); (vii) the compliance of or by the Seller, the
Property, or its operation with any codes, laws, rules, ordinances, regulations
of any applicable governmental authority or body; (viii) the manner or quality
of the construction or materials incorporated into the Property; (ix)
compliance with any environmental protection, pollution or land use laws,
rules, regulations, orders, codes or requirements, including, but not limited
to, the Americans with Disabilities Act of 1990, the Massachusetts Contingency
Plans, the Federal Water Pollution Control Act, the Federal Resource
Conservation and Recovery Act, the U.S. Environmental Protection Agency

 

8

 

regulations at 40 CFR, Part 261, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (CERCLA), the Resource
Conservation and Recovery Act of 1976, the Clean Water Act, the Safe Drinking
Water Act, the Hazardous Materials Transportation Act, the Toxic Substance
Control Act, and regulations promulgated under any of the foregoing; (x) the
presence or absence of radon gas, methane gas, or any hazardous materials at,
on, under, or adjacent to the Property; (xi) the content, completeness or
accuracy of any offering materials or other due diligence materials or
preliminary reports regarding title; (xii) the conformity of any improvements
to any plans or specifications, including, without limitation, any plans and
specifications that may have been or may be provided to Buyer; (xiii) the conformity
of the Property to past, current or future applicable zoning or building
requirements; (xiv) deficiency of any undershoring; (xv) deficiency of any
drainage; (xvi) the fact that all or a portion of the Property may be located
on or near an earthquake fault line or in or near an earthquake or seismic
hazard zone; (xvii) the fact that all or a portion of the Property may be
located in or near a “wildlands” area or a state fire responsibility area
(SFRA); (xviii) the existence of vested land use, zoning or building
entitlements affecting the Property; (xix) water rights or the availability of
or access to water; (xx) the presence or suitability of any utilities or
availability thereof, or (xxi) any other matter relating to the Property or to
the development, construction, operation, or sale of the Property, including,
but not limited to, legal requirements, valuations, feasibility, cost,
governmental permissions or entitlements, claims and obligations, license and
other use rights and claims, the future use and operation of the Property and
marketability and investment return. Neither Seller nor its agents,
contractors, consultants, attorneys, or representatives shall be liable for any
relief, including damages, rescission, reformation, allowance or adjustments
based on the failure of the Property, including, but not limited to, amount of
acreage, square footage, zoning, and environmental condition, to conform to any
specific standard or expectation, or any third party documents or information.

 

(c)           The Property
and the development thereof are subject to numerous governmental requirements
under the jurisdiction of multiple local, state, and federal agencies.  It is Buyer’s sole responsibility to obtain
all necessary and/or appropriate governmental approvals and entitlements for
the further development of the Property. 
Seller makes no representations or warranties of any kind regarding any
governmental approvals or entitlements or the ability to develop the Property
now or in the future.  Buyer acknowledges
and understands that the entitlement and regulatory approval process is
extremely complicated and uncertain, and involves a substantial number of
steps.  Buyer acknowledges that it is a
sophisticated real estate development company and is familiar with such risks.  Buyer shall be solely responsible to obtain,
at its sole cost, all governmental approvals, which may from time to time be
required for the further development of the Property.  Buyer acknowledges and agrees that Seller
shall have no liability, obligation, or responsibility for any costs, fees, or
expenses of any kind whatsoever related to, or associated with the Property
after the Closing.

 

6.2           Buyer’s
Release of Seller.

(a)           AS
A MATERIAL PART OF THE CONSIDERATION TO SELLER FOR THE SALE OF THE PROPERTY,
BUYER, ON BEHALF OF ITSELF, AND ITS SUCCESSORS AND ASSIGNS, HEREBY IRREVOCABLY
WAIVES, AND RELEASES SELLER, ITS MEMBERS, PRINCIPALS, AGENTS, REPRESENTATIVES,
ATTORNEYS AND EMPLOYEES FROM ANY AND ALL CLAIMS, DEMANDS, OBLIGATIONS,

 

9

 

DAMAGES, CAUSES OF
ACTION AND LIABILITY, WHETHER KNOWN OR UNKNOWN, OTHER THAN THOSE FOR BREACH OF
SELLER’S COVENANTS, REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN, THAT ARE
BASED DIRECTLY OR INDIRECTLY ON, ARISE FROM OR IN CONNECTION WITH, OR ARE
RELATED TO: (A) ANY PAST, PRESENT OR FUTURE CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE PROPERTY’S PROXIMITY TO ANY GEOLOGICAL
HAZARD, OR THE PRESENCE OF HAZARDOUS SUBSTANCES AT THE PROPERTY, WHETHER IN
COMMON LAW OR UNDER ANY EXISTING OR HEREINAFTER ENACTED FEDERAL, STATE OR LOCAL
LAW, REGULATION, OR ORDINANCE, INCLUDING, WITHOUT LIMITATION, CERCLA AND RCRA,
AS AMENDED, AND WHETHER OR NOT CAUSED BY THE NEGLIGENCE OF SELLER, (B) ANY AND
ALL STATEMENTS, REPRESENTATIONS, WARRANTIES, DETERMINATIONS, CONCLUSIONS,
ASSESSMENTS, ASSERTIONS OR ANY OTHER INFORMATION CONTAINED IN ANY OF THE
DOCUMENTS DELIVERED TO BUYER IN CONNECTION HEREWITH, OR ANY MISREPRESENTATION
OR FAILURE TO DISCLOSE INFORMATION RELATING TO THE PROPERTY OR THE DOCUMENTS
DELIVERED TO BUYER IN CONNECTION HEREWITH, OR (C) ANY DEFECT, INACCURACY
OR INADEQUACY IN THE CONDITION OF TITLE TO THE PROPERTY, LEGAL DESCRIPTION OF
THE PROPERTY, OR COVENANTS, RESTRICTIONS, ENCUMBRANCES OR ENCROACHMENTS WHICH
AFFECT THE PROPERTY.

 

(b)           BUYER
HEREBY ACKNOWLEDGES AND AGREES THAT (i) BUYER MAY HEREAFTER DISCOVER FACTS
DIFFERENT FROM OR IN ADDITION TO THOSE NOW (OR AS OF THE CLOSING) KNOWN OR
BELIEVED TO BE TRUE REGARDING THE PROPERTY AND/OR THE DOCUMENTS DELIVERED TO
BUYER IN CONNECTION HEREWITH, (ii) BUYER’S AGREEMENT TO RELEASE, ACQUIT AND
DISCHARGE SELLER AND EACH OF THE OTHER SELLER PARTIES AS SET FORTH HEREIN SHALL
REMAIN IN FULL FORCE AND EFFECT, NOTWITHSTANDING THE EXISTENCE OR DISCOVERY OF
ANY SUCH DIFFERENT OR ADDITIONAL FACTS, AND (iii) BUYER KNOWINGLY AND
VOLUNTARILY WAIVES ANY AND ALL RIGHTS, BENEFITS AND PRIVILEGES TO THE FULLEST
EXTENT PERMISSIBLE UNDER ANY FEDERAL, STATE, LOCAL, OR OTHER LAWS WHICH DO OR
WOULD NEGATIVELY AFFECT VALIDITY OR ENFORCEABILITY OF ALL OR PART OF THE
RELEASES SET FORTH IN THIS AGREEMENT.

 

(c)           The
foregoing waiver and release by Buyer hereby acknowledges and agrees that upon
the consummation of the Closing, Seller shall be deemed to have satisfied and
fulfilled all of Seller’s covenants, indemnities, and obligations contained in
this Agreement and any documents executed by Seller for the benefit of Buyer in
connection with the Closing, and Seller shall have no further liability to
Buyer or otherwise with respect to this Agreement, the transfers contemplated
hereby, or any documents delivered pursuant hereto, except to the extent of any
obligation or liability Seller may have under this Agreement for a breach of
Seller’s covenants, representations and warranties as to which Seller’s
liability, if any, shall be limited as provided in Section 4.1 hereof.  Buyer agrees never to commence, aid in any
way, or prosecute against Seller, its members, principals, agents,
representatives, attorneys or employees, any action or other proceeding based
upon any claim covered by this Release.

 

10

 

6.3           Buyer’s Indemnification of Seller.  To the maximum extent
permitted by law, irrespective of the active or passive negligence of Seller,
Buyer agrees to, and hereby does, indemnify and hold Seller harmless, and
agrees to defend Seller, from and against any and all claims, demands, suits,
actions, losses, damages, injuries, judgments, costs and expenses, including
reasonable attorneys’ fees and costs, including, without limitation, future
claims by purchasers of condominium units, homeowners associations, or any
other parties, in any manner arising out of, caused by, or related to (i) Buyer’s
or its agents’ or employees’ access or activities upon the Property, or any portion
thereof, at any time, (ii) any actions or activities related to the marketing
and sale of condominiums and/or other residential units, including, without
limitation, claims related to fraud and/or misrepresentation by Buyer or any
agent, employee, or salesperson of Buyer; (iii) any work or improvements on the
Property performed by Seller or its agents, contractors or subcontractors prior
to the Closing Date, including, without limitation, the construction of any
building or other physical improvements on the Property, (iv) the assignment of
any recourse rights against any third parties, including, without limitation,
any subcontractors, pursuant to the terms of this Agreement, or (v) events
occurring on or related to the Property after the Closing Date.  The foregoing indemnification in this Section
6.3 does not include environmental claims inasmuch as those are addressed and
indemnified against in Section 4.2 above.

 

6.4           Survival.  The provisions of this
Article 6, including without limitation the waiver, release and indemnification
provisions, shall survive the Closing.

 

ARTICLE 7

Title and Survey

 

7.1           Title and Survey Review.  Buyer
shall, during the Inspection Period, review all title and survey matters.  Buyer shall cause to be prepared for its behalf
title insurance commitments, including such affirmative insurance and
endorsements as Buyer may desire.  Buyer
may also cause to be prepared an ALTA/ACSM as-built survey of the Real
Property, certified to Buyer, the title insurance company, and any lender of
Buyer.  Such title commitment and survey
being referred to as “Title Evidence”.

 

7.2           Title Objection.  By
the end of the Inspection Period, Buyer will make its written objections (“Title
Objections”) to the form and/or contents of the Title Evidence as Buyer may
wish along with copies of the Title Evidence. 
Buyer’s failure to make Title Objections with respect to a particular
matter existing of record as of the date of this Agreement within such time
period will constitute a waiver of Title Objections with respect to any such
matter.  Any matter shown on such Title
Evidence and not objected to by Buyer prior to the end of the Inspection Period
shall be a “Permitted Exception” hereunder.

 

7.3           Seller’s
Cure of Title Objections.  Seller agrees to use reasonable
efforts to attempt to cure Title Objections raised by Buyer that will not
require the expenditure of more that $25,000 in the aggregate, and otherwise
shall have the election of whether or not to attempt such cure.  If Seller notifies Buyer in writing that it
elects not to attempt to cure any Title

 

11

 

Objections raised by Buyer, then Buyer may within three (3) business
days of receipt of such notice elect to (i) terminate this Agreement and
receive a refund of the Escrowed Amount in accordance with the Deposit Escrow
Agreement or (ii) proceed to close without any reduction in the Purchase
Price.  Notwithstanding the foregoing,
with respect to voluntary liens securing payment of an ascertainable amount (“Monetary
Liens”), Seller shall remove or cure the same by payment of funds from
Closing.  Seller may elect to extend the
Closing for a period of up to thirty (30) days to permit Seller to cure any
Title Objections which it agrees or elects to attempt to cure (the “Cure Period”).  Seller shall remove any encumbrances or
exceptions to title which are created by, through or under Seller after the
date of the Title Insurance Commitment and which are not consented to by Buyer
under the terms hereof.  If the Title
Objections are not cured prior to Closing, Buyer will have the option as its
sole and exclusive remedies to (i) terminate this Agreement and receive a
refund of the Escrowed Amount in accordance with the Deposit Escrow Agreement
or (ii) proceed to close without any reduction in the Purchase Price.  If Buyer elects the latter, any uncured Title
Objections shall be deemed Permitted Encumbrances.

 

7.4           Required
State of Title.  At the Closing, Seller shall
convey by quitclaim deed to Buyer (or to Buyer’s nominee) title to all of the
Land and the Improvements free and clear of any and all tenancies and other
occupancies, liens, encumbrances, conditions, easements, assessments,
restrictions and other conditions, except for the following:

 

(a)           The lien,
if any, for real estate taxes not yet due and payable;

 

(b)           The
Permitted Exceptions;

 

(c)           Provisions
of existing building and zoning laws; and

 

(d)           Matters
listed as exceptions on Seller’s title policy, a copy of which is attached
hereto as Schedule 7.4(d).

 

7.5           Personal
Property.  At the Closing, Seller shall convey the
Personal Property to Buyer by bill of sale substantially in the form attached
hereto as Schedule 9.2(c).

 

ARTICLE 8

Conditions to Seller’s and Buyer’s Performance

 

8.1           Conditions
to Seller’s Obligations.  The obligations of
Seller to consummate the transaction contemplated by this Agreement are, in
addition to the other terms and conditions of this Agreement, subject to the
following (any one or more of which may be waived in whole or in part by Seller
at its discretion):

 

(a)           Buyer
having performed in all material respects all covenants and obligations
required by this Agreement to be performed by Buyer on or prior to the Closing
Date; and

 

12

 

(b)           Buyer
shall have paid, and Seller shall have received, the Purchase Price, as
adjusted and prorated hereunder.

 

8.2           Conditions to Buyer’s Obligations.  The
obligations of Buyer to consummate the transaction contemplated by this
Agreement are, in addition to the other terms and conditions of this Agreement,
subject to the following (any one or more of which may be waived in whole or in
part by Buyer at its discretion):

 

(a)           The
representations and warranties made by Seller in this Agreement being true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made as
of the Closing Date, and Seller shall deliver a certificate to such effect at
Closing;

 

(b)           Seller having
performed in all material respects all covenants and obligations in all
material respects required by this Agreement to be performed by Seller on or
prior to the Closing Date;

 

8.3           Approvals
not a Condition to Buyer’s Performance.  Subject to Buyer’s right
to terminate this Agreement prior to the expiration of the Inspection Period in
accordance with the terms of Article 5 hereof, Buyer acknowledges and agrees
that its obligation to perform under this Agreement is not contingent upon
Buyer’s ability to obtain any (a) governmental or quasi-governmental
approval of changes or modifications in use or zoning, or (b) modification of
any existing land use restriction, or (c) consents to assignments of any
service contracts, management agreements or other agreements which Buyer
requests, or (d) endorsements to the Owner’s title insurance policy, or
(e) financing.

 

ARTICLE 9

Closing

 

9.1           Escrow
Closing.  Except as otherwise expressly provided
in this Agreement, the consummation of the transaction contemplated in this
Agreement (the “Closing”) shall occur through an escrow closing arrangement at
10:00 a.m. at the offices of Goodwin Procter LLP, Exchange Place, Boston, MA
02109 on the date which is thirty (30) days after the expiration of the
Inspection Period (provided that the Middlesex County Registry of Deeds is open
for business on such day, and if not so open then on the next business day)
(the “Closing Date”).  The Purchase Price
shall be paid to Seller upon final title rundown and recording of the deed and delivery
of the other items listed in Section 9.2 below. 
It is agreed that time is of the essence in this Agreement.

 

9.2           Seller’s Closing Deliveries.  On
the Closing Date Seller shall deliver or cause to be delivered at its expense
each of the following items to Buyer:

 

(a)           A duly
executed and acknowledged quitclaim deed conveying the Real Property and the
Improvements to Buyer with title as provided in Section 7.4, such
deed to be in the form attached hereto as Schedule 9.2(a);

 

13

 

(b)           A duly
executed bill of sale conveying the Personal Property to Buyer in the form
attached hereto as Schedule 9.2(b);

 

(c)           A duly
executed assignment and assumption of the Assigned Contracts (the “Assignment
of Contracts”) together with original counterparts of the Assigned Contracts in
the form attached as Schedule 9.2(c);

 

(d)           A
certificate or certificates of non-foreign status from Seller in the form
attached hereto as Schedule 9.2(d);

 

(e)           Customary
affidavits sufficient for the Title Company to delete any exceptions for
parties in possession and mechanic’s or materialmen’s liens from Buyer’s title
policy;

 

(f)            Evidence
reasonably satisfactory to Buyer and the Title Company of Seller’s authority to
convey the Property pursuant to this Agreement in form and substance reasonably
satisfactory to Buyer and the Title Company;

 

(g)           A
counterpart original of the closing statement setting forth the Purchase Price,
the closing adjustments and the application of the Purchase Price as adjusted;

 

(h)           An
original fully executed counterpart of the Lease; and

 

(i)            Any and
all transfer tax returns, declarations of value or other documents required
under applicable law or necessary for recordation of the deed.

 

9.3           Buyer’s
Closing Deliveries.  On the Closing Date Buyer
shall deliver or cause to be delivered at its expense each of the following to
Seller:

 

(a)           A
counterpart original of the closing statement setting forth the closing
adjustments;

 

(b)           An
original fully executed counterpart of the Lease;

 

(c)           Such other
instruments as Seller may reasonably request to effectuate the transaction
contemplated by this Agreement without additional liability or expense to
Buyer; and

 

(d)           A duly
executed counterpart of the Assignment of Contracts.

 

9.4           Delivery
of Deposit.  On the Closing Date the Escrow Agent
will deliver or cause to be delivered the Escrowed Amount pursuant to the terms
of the Deposit Escrow Agreement.

 

14

 

ARTICLE 10

Casualty and Condemnation

 

10.1         Damage
or Destruction/Eminent Domain.  Buyer is bound to
purchase the Property as required by the terms of this Agreement without regard
to the occurrence or effect of any damage to or destruction of the Property or
condemnation of the Property by right of eminent domain, provided that the
occurrence of any damage or destruction to the Property involves repair costs
equal to or less than $1,000,000 (“Damage Threshold Amount”), and any
condemnation does not materially and adversely affect the use and value of the
Property (“Immaterial Condemnation”).  If
Buyer is so bound to purchase the Property notwithstanding the occurrence of
damage, destruction or condemnation, then upon the Closing, Buyer shall receive
a credit against the Purchase Price for such Property in the amount (net of
collection costs and costs of repair reasonably incurred by the Seller and not
then reimbursed) of any insurance proceeds or condemnation award collected and
retained by the Seller as a result of any such damage, destruction or
condemnation, plus (in the case of damage) the amount of the deductible portion
of the Seller’s insurance policy, and the Seller shall assign to Buyer all
rights to such net insurance proceeds or condemnation awards as shall not have
been collected prior to the Closing.

 

10.2         Major Casualty.  If
any of the Improvements are damaged by fire or any other casualty the cost for
repair of which is reasonably estimated to exceed $1,000,000 and are not
substantially restored to the condition immediately prior to such casualty
before the Closing Date, Buyer shall have the following elections:

 

(a)           to acquire
the Property in its then condition and pay the Purchase Price without regard to
the casualty, in which event Seller shall pay over or assign to Buyer, on
delivery of the deed, (i) all amounts recovered or recoverable by Seller on
account of any insurance as a result of such casualty, less amounts reasonably
expended by Seller for partial restoration; and (ii) an amount of money equal
to Seller’s deductible or

 

(b)           to
terminate this Agreement in which event the Escrow Agent shall return the
Escrowed Amount pursuant to the terms of the Deposit Escrow Agreement, this
Agreement shall terminate and neither Seller nor Buyer shall have any recourse
against the other.

 

10.3         Material
Condemnation.  If any portion of or interest in
the Property shall be taken or is in the process of being taken by exercise of
the power of eminent domain or if any governmental authority notifies Seller
prior to the Closing Date of its intent to take or acquire any portion of or
interest in the Property, and such condemnation would materially and adversely
affect the value of the Property (“Material Condemnation”), Seller shall give
notice promptly to Buyer of such event. 
If such taking would materially, adversely affect the use and value of
the Property, then Buyer shall have the option to terminate this Agreement by
providing notice to Seller to such effect on or before the date which is ten
(10) days from Seller’s notice to Buyer of such taking or on the Closing Date,
whichever occurs first, in which event the Escrow Agent shall return the
Escrowed Amount pursuant to the terms of the Deposit Escrow Agreement, this
Agreement shall terminate, and neither Seller nor Buyer shall have any recourse
against the

 

15

 

other.  If Buyer does not timely
notify Seller of its election to terminate this Agreement, Buyer shall purchase
the Property and pay the Purchase Price, and Seller shall pay over or assign to
Buyer on delivery of the deed all awards recovered or recoverable by Seller on
account of such taking, less any amounts reasonably expended by Seller in
obtaining such award.

 

ARTICLE 11

Brokerage Commissions

 

11.1         Representations and Indemnity.  Seller
and Buyer each mutually represent and warrant to the other that they have not
dealt with, and are not obligated to pay, any fees or commissions to any broker
in connection with the transaction contemplated by this Agreement other than CB
Richard Ellis (the “Seller’s Broker”). 
Seller is responsible for the compensation of the Seller’s Broker
pursuant to a separate agreement.  Seller
hereby agrees to indemnify, defend and hold Buyer harmless from and against all
liabilities, costs, damages and expenses (including reasonable attorneys’ fees)
arising from any claims for brokerage or finder’s fees, commissions or other
similar fees in connection with the transaction covered by this Agreement
insofar as such claims shall be based upon alleged arrangements or agreements
made by Seller or on Seller’s behalf, including, but not limited to the Seller’s
Broker.  Buyer hereby agrees to
indemnify, defend and hold Seller harmless from and against all liabilities,
costs, damages and expenses (including reasonable attorneys’ fees) arising from
any claims for brokerage or finders’ fees, commissions or other similar fees in
connection with the transaction covered by this Agreement insofar as such
claims shall be based upon alleged arrangements or agreements made by Buyer or
on Buyer’s behalf.  The covenants and
agreements contained in this Article shall survive the termination of this
Agreement or the Closing of the transaction contemplated hereunder.

 

ARTICLE 12

Default, Termination and Remedies

 

12.1         Seller
Default.  In the event that Seller breaches its
obligations hereunder, the Buyer may either (i) elect to terminate this
Agreement and receive the Deposit, in which event this Agreement shall be null
and void without further recourse to either party hereto, or (ii) take legal
actions necessary to compel Seller’s specific performance hereunder (it being
acknowledged that damages at law would be an inadequate remedy), and to
consummate the transaction contemplated by this Agreement in accordance with
the provisions of this Agreement.  As a
condition precedent to Buyer exercising any right it may have to bring an
action for specific performance hereunder, Buyer must commence such an action
within thirty (30) days after the occurrence of Seller’s default.  Buyer agrees that its failure to timely
commence such an action for specific performance within such thirty (30) day
period shall be deemed a waiver by it of its right to commence an action for
specific performance as well as a waiver by it of any right it may have to file
or record a notice of lis pendens or
notice of pendency of action or similar notice against any portion of the
Property.  In no event shall Seller be
liable to Buyer for any consequential (including lost profits) or punitive
damages based upon any breach of this Agreement, including, without limitation,
breaches of representation or

 

16

 

warranty.  Buyer further agrees
that recourse for any liability of Seller under this Agreement or any document
or instrument delivered simultaneously or in connection with or pursuant to
this Agreement shall be limited as set forth herein, and (i) solely to the
Property, if Closing has not occurred, and (ii), following the Closing, to the
extent of the Purchase Price allocated and distributed to Seller.  In no event shall Buyer seek satisfaction for
any obligation from any partners, members, managers, shareholders, officers,
directors, employees, agents, legal representatives, successors or assigns of
Seller, nor shall any of the foregoing have any personal liability for any such
obligations of Seller.

 

12.2         Buyer
Default.

 

THE PARTIES HERETO, BEFORE ENTERING INTO THIS AGREEMENT, HAVE BEEN
CONCERNED WITH THE FACT THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY SELLER IN
THE EVENT THAT BUYER SHOULD FAIL TO PURCHASE THE PROPERTY ACCORDING TO THE
TERMS OF THIS AGREEMENT OR THE ESCROW INSTRUCTIONS ENTERED INTO BY THE PARTIES
IN CONNECTION WITH THIS AGREEMENT.  WITH
THE FLUCTUATION IN THE LAND VALUES, THE HIGHLY UNPREDICTABLE STATE OF THE
ECONOMY, THE PERIOD OF TIME BETWEEN THE DATE OF THIS AGREEMENT AND THE CLOSE OF
ESCROW, AND OTHER FACTORS WHICH DIRECTLY OR INDIRECTLY AFFECT THE VALUE AND
MARKETABILITY OF THE PROPERTY, THE PARTIES REALIZE THAT IT WOULD BE EXTREMELY
DIFFICULT AND IMPRACTICABLE, IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF
CERTAINTY PRIOR TO SIGNING THIS AGREEMENT THE AMOUNT OF DAMAGES WHICH WOULD BE
SUFFERED BY SELLER IN THE EVENT OF BUYER’S FAILURE TO PURCHASE THE PROPERTY
UNDER THE TERMS OF THIS AGREEMENT, THE ESCROW INSTRUCTIONS, OR ANY EXHIBITS
HERETO OR THERETO.  THE PARTIES, HAVING
MADE A DILIGENT ENDEAVOR TO ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES WHICH
SELLER WOULD SUFFER IN THE EVENT OF BUYER’S FAILURE TO PURCHASE THE PROPERTY,
HEREBY AGREE THAT THE REASONABLE ESTIMATE OF SAID DAMAGES IS THE SUM EQUAL TO
THE AMOUNT OF THE DEPOSIT.  THEREFORE, IN
THE EVENT THE ESCROW SHALL FAIL TO CLOSE OR IS CANCELED OR TERMINATED FOR ANY
REASON OTHER THAN SELLER’S DEFAULT HEREUNDER, OR THE CANCELLATION OF THIS
AGREEMENT BY BUYER PURSUANT TO THE TERMS OF SECTION 5.5 OF THIS AGREEMENT,
SELLER SHALL BE ENTITLED TO AND MAY RETAIN THE ENTIRE DEPOSIT AS LIQUIDATED
DAMAGES AS SELLER’S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY.  THE AMOUNT OF THE LIQUIDATED DAMAGES HAS BEEN
ESTABLISHED BY THE PARTIES AS THE AMOUNT OF THE MONETARY DAMAGES SELLER WILL
SUFFER BASED SOLELY UPON A FAILURE BY BUYER TO PURCHASE THE PROPERTY AND SELLER
SHALL BE ENTITLED TO RECOVER NO OTHER DAMAGES FROM BUYER BASED SOLELY UPON A
FAILURE BY BUYER TO PURCHASE THE PROPERTY. 
BY INITIALING BELOW, THE PARTIES EXPRESSLY UNDERSTAND AND AGREE TO THE
FOREGOING PROVISIONS RELATING TO LIQUIDATED DAMAGES.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SELLER’S
  INITIALS

  	
   

  	
  BUYER’S
  INITIALS

  
					

 

17

 

ARTICLE 13
Miscellaneous

 

13.1         Assignment.  Buyer
may not assign any of Buyer’s rights or duties hereunder (except to a nominee
controlled by Buyer or the principals of Buyer) without the prior written
consent of Seller, which consent may be withheld by Seller in its sole and
absolute discretion.  The covenants and
agreements contained in this Agreement shall extend to and be obligatory upon
the permitted successors and assigns of the respective parties to this
Agreement.

 

13.2         Notices.  Any
notice required or permitted to be delivered under this Agreement shall be in
writing and shall be deemed given (i) when delivered or refused by hand during
regular business hours, (ii) the next business day if sent by a reputable
national overnight express mail service that provides tracing and proof of
receipt or refusal of items mailed, or (iii) when sent if sent by facsimile
during business hours, addressed to Seller or Buyer, as the case may be, at the
address or addresses or facsimile number set forth below or such other addresses
as the parties may designate in a notice similarly sent.  Any notice given by a party to Escrow Agent
shall be simultaneously given to the other party.  Any notice given by a party to the other
party relating to its entitlement to any portion of the Deposit shall be
simultaneously given to the Escrow Agent. 
Notices to Seller, Buyer and/or Escrow Agent shall be delivered as
follows:

 

If to Seller:

 

Mac-Gray Services, Inc.

22 Water Street

Cambridge, MA 02141

Attn:  Graeme S.R. Brown, Vice President
and General Counsel

Fax:  (617) 492-5386

 

With a copy to:

 

Goodwin Procter LLP

Exchange Place

53 State Street

Boston, Massachusetts 02109

Attn:       Adam
N. Weisenberg, Esq.

Fax:  617-227-8591

 

If to Buyer:

 

Catamount Management Corporation

90 Everett Avenue

Chelsea, MA 02150

Attn:  Chris Kaneb

Fax:                                                              

 

18

 

with a copy to:

 

Marcus Errico Emmer & Brooks, P.C.

45 Braintree Hill Office Park

Braintree, MA 02184

Attn:  V. Douglas Errico, Esq.

Fax:  (781) 843-1529

 

If to the Title Company:

 

Fidelity National Title Insurance Company

133 Federal Street

Boston, MA 02110

Attn:  Kevin T. Creedon, Vice President
and Regional Counsel

Fax:  (617) 350-8826

 

13.3         Interpretation.  Words
of any gender used in this Agreement shall be held and construed to include any
other gender, and words of a singular number shall be held to include the
plural and vice versa, unless the context requires otherwise.

 

13.4         Captions.  The
captions used in connection with the Articles of this Agreement are for
convenience only and shall not be deemed to extend, limit or otherwise define
or construe the meaning of the language of this Agreement.

 

13.5         Seller’s Warranties Deemed Modified.  To
the extent that Buyer acquires information prior to the Closing Date that
Seller’s representations or warranties are inaccurate, untrue or incorrect in
any way, such representations and warranties shall be deemed modified to
reflect Buyer’s knowledge or deemed knowledge, as the case may be.

 

13.6         No
Third-Party Beneficiaries.  Nothing in this
Agreement, express or implied, is intended to confer upon any person, other
than the parties hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.

 

13.7         Amendments.  This
Agreement may be amended only by a written instrument executed by Seller and
Buyer.

 

13.8         Integration.  This
Agreement (including the schedules and exhibits) embodies the entire agreement
between Seller and Buyer with respect to the transactions contemplated in this
Agreement, and there have been and are no covenants, agreements,
representations, warranties or restrictions between Seller and Buyer with
regard thereto other than those set forth or provided for in this Agreement.

 

13.9         Cooperation.  From
and after the date of this Agreement, Seller and Buyer agree to do such things,
perform such acts, and make, execute, acknowledge and deliver such

 

19

 

documents as may be reasonably necessary or proper and usual to
complete the transactions contemplated by this Agreement and to carry out the
purpose of this Agreement in accordance with the terms hereof.

 

13.10       Choice of Law.  This Agreement shall be construed under
and in accordance with the laws of The Commonwealth of Massachusetts.

 

13.11       Waiver of Jury Trial.  EACH PARTY HEREBY WAIVES TRIAL BY JURY
IN ANY PROCEEDINGS BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE PROPERTY OR THE
RELATIONSHIP OF BUYER AND SELLER HEREUNDER.

 

13.12       Counterparts.  This Agreement may be executed in two
(2) or more counterparts, each of which shall be an original but such
counterparts together shall constitute one and the same instrument
notwithstanding that both Buyer and Seller are not signatory to the same
counterpart.

 

13.13       Business Day.  In the event any date hereunder
(including the Closing Date) falls on a Saturday, Sunday or Legal Holiday, the
date applicable shall be the next business day.

 

13.14       Time of the Essence.  Time is of the essence of this
Agreement.

 

13.15       Use of Proceeds to Clear Title.  To enable Seller to make conveyance as
herein provided, Seller may, at the time of Closing, use the Purchase Price or
any portion thereof to clear the title of any or all encumbrances or interests,
provided that provision reasonably satisfactory to the Escrow Agent as title
company is made for prompt recording of all instruments so procured in accordance
with conveyancing practice in the jurisdiction in which the Property is
located.

 

13.16       Submission not an Offer or Option.  The submission of this Agreement or a
summary of some or all of its provisions for examination or negotiation by
Buyer or Seller does not constitute an offer by Seller or Buyer to enter into
an agreement to sell or purchase the Property, and neither party shall be bound
to the other with respect to any such purchase and sale until a definitive
agreement satisfactory to the Buyer and Seller in their sole discretion is
executed and delivered by both Seller and Buyer.

 

13.17       Confidentiality.  Buyer agrees to
maintain in confidence, and not to discuss with or to disclose to any person or
entity who is not a party to this Agreement, the existence of this Agreement,
any term of this Agreement or any aspect of the transactions contemplated
hereby, except as provided in this Section 13.17.  In particular, Buyer shall not discuss the
sale with or approach the City of Cambridge or enter into any agreements or
apply for any zoning relief prior to the Closing Date.  Buyer may discuss with and disclose to its

 

20

 

accountants, attorneys, existing or prospective lenders, partners,
consultants and other professional advisors to the extent such parties
reasonably need to know such information and are bound by a confidentiality
obligation identical in all material respects to the one created by this
Article.  This provision shall survive
termination of this Agreement but shall terminate upon Closing.

 

ARTICLE 14 

IRS Form 1099-S Designation

 

14.1         Designee.  In order to comply with information
reporting requirements of Section 6045(e) of the Internal Revenue Code of 1986,
as amended, and the Treasury Regulations thereunder, the parties agree (i) to
execute an IRS Form 1099-S Designation Agreement in the form attached hereto as
Schedule 14.1 at or prior to the Closing to designate the Title Company
(the “Designee”) as the party who shall be responsible for reporting the
contemplated sale of the Property to the Internal Revenue Service (the “IRS”)
on IRS Form 1099-S; (ii) to provide the Designee with the information necessary
to complete Form 1099-S; (iii) that the Designee shall not be liable for the
actions taken under this Agreement, or for the consequences of those actions,
except as they may be the result of gross negligence or willful misconduct on
the part of the Designee; and (iv) that the Designee shall be indemnified by
the parties for any costs or expenses incurred as a result of the actions taken
hereunder, except as they may be the result of gross negligence or willful
misconduct on the part of the Designee. 
The Designee shall provide all parties to this transaction with copies
of the IRS Forms 1099-S filed with the IRS and with any other documents used to
complete IRS Form 1099-S.

 

[Remainder of Page
Intentionally Left Blank]

 

21

 

IN WITNESS WHEREOF, the
parties have executed this instrument as of the day and year first set forth
above.

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  Mac-Gray
  Services, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  Catamount
  Management Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

22EXHIBIT
10.4

 

TOROTEL, INC

DIRECTORS STOCK APPRECIATION RIGHTS PLAN

 

1.               PURPOSE

 

The purpose of the Torotel, Inc. Directors
Stock Appreciation Rights Plan (the “Plan”) is to aid Torotel, Inc. (the “Company”)
in attracting and retaining directors of outstanding competence, dedication and
loyalty.  Consistent with this objective,
the Plan provides for the grant of Stock Appreciation Rights (“SARs”) to
non-employee directors pursuant to the terms and conditions hereinafter set
forth.  As used herein, the term “Subsidiary”
means any domestic or foreign corporation, at least 50% of the outstanding
voting stock or voting power of which is beneficially owned, directly or
indirectly, by the Company.

 

2.               EFFECTIVE DATE

 

The Plan was approved by the Board of
Directors of the Company (the “Board of Directors”) and became effective on October 1,
2004 (the “Effective Date”).

 

3.               ADMINISTRATION

 

The Plan shall be administered by the
Compensation Committee of the Board of Directors or such other committee
appointed by the Board of Directors (the “Committee”).  The Committee will consist of three or more
directors who may also be eligible to participate in the Plan.

 

4.               ELIGIBILITY

 

SARs under the Plan shall be granted only to
persons who are directors of the Company. 
No SARs under the Plan shall be granted to any person who is an employee
of the Company or a Subsidiary.

 

5.               GRANT OF SARs

 

SARs shall automatically be granted pursuant
to the terms of this Section without further action by the Board of
Directors.  The date on which SARs are
granted hereunder shall be referred to herein as the “Date of Grant.”

 

5.1         On the Effective Date, each person serving as
a director of the Company, who is eligible to participate, shall be granted
20,000 SARs.

 

5.2         On each May 1 following the Effective Date
during the term of the Plan, each person serving as a director of the Company
on such date, who is eligible to participate, shall be granted 10,000 SARs.

 

5.3         Each person who is elected as a director of
the Company, who was not a director of the Company on the Effective Date, and
is eligible to participate, shall be granted 10,000 SARs on the date such
person is elected a director.

 

5.4         All
SARs granted pursuant to the Plan shall have a SAR Grant Price determined
pursuant to Section 7.1 hereof.

 

 

6.               AVAILABLE SARs

 

6.1         The stock subject to the SARs granted under
the Plan shall be the Common Stock, $.01 par value, of the Company (“Common
Stock”).  Each SAR shall be deemed to
equal one share of Common Stock, and except as otherwise required or permitted
by Paragraph 6.2, the aggregate number of SARs which may be granted under the
Plan shall not exceed 500,000.  If a SAR
expires, terminates, is forfeited or is otherwise surrendered, in whole or in
part, the Shares allocable to such SAR shall again become available for SARs
under the Plan.

 

6.2         The aggregate number of SARs pursuant to the
provisions of the Plan shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from any
stock dividend, stock split or similar event and may, in the sole discretion of
the Board of Directors of the Company, be similarly adjusted for any other
capital adjustment (including a reclassification of shares or recapitalization
or reorganization of the Company) or the distribution to holders of shares of
Common Stock of rights, warrants, assets or evidences of indebtedness.

 

7.               TERMS AND
CONDITIONS OF SARs

 

Each SAR granted pursuant to the Plan shall
be evidenced by a written agreement (the “Agreement”) between the Company and
the person to whom the SAR is granted (the “Grantee”) in such form or forms as
the Committee, from time to time shall prescribe, which shall comply with and
be subject to the terms and conditions of this Paragraph 7.  In addition, the Committee may, in its
absolute discretion, include in any such Grant, other terms, conditions and
provisions that are not inconsistent with the express provisions of the Plan.

 

7.1         SAR Grant
Price.  The initial price at
which each SAR may be granted on the Effective Date shall be thirty-five cents
($.35).  Thereafter, the price at which
each SAR is granted under the Plan shall be the average of the closing price
for shares of the Common Stock for the ten consecutive days immediately
preceding the Date of Grant.  The price
at which a SAR is granted is the “SAR Grant Price.”  Notwithstanding the foregoing, if the number
of shares of Common Stock subject to any SAR is adjusted pursuant to Paragraph
6.2 hereof, a corresponding adjustment shall be made to the SAR Grant Price.

 

7.2         Duration of SARs.  Each SAR granted under the Plan shall
expire and all rights pursuant thereto shall cease on the date that shall be
the tenth anniversary of the Date of Grant (the “Expiration Date”).

 

7.3         Vesting of SARs.  Each SAR granted hereunder may be
exercised to the extent that the Grantee is vested in such SAR.  The SARs will vest according to the following
schedule:

 

	
  Number of Years the Grantee has remained

  a director of the Company following

  the Date of Grant

  	
   

  	
  Shares represented

  by a SAR in which

  a Grantee is Vested

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Under one

  	
   

  	
  0

  	
  %

  
	
  At least one
  but less than two

  	
   

  	
  33

  	
  %

  
	
  At least two
  but less than three

  	
   

  	
  67

  	
  %

  
	
  Three or
  more

  	
   

  	
  100

  	
  %

  

 

 

Anything
contained in this Paragraph 7.3 to the contrary notwithstanding, a Grantee shall
become fully (100%) vested in each of his or her SARs under the following
circumstances:

 

(i) upon
termination of the Grantee’s service as a director of the Company for reasons
of death, Disability or Retirement (as such terms are defined in Paragraphs 7.7.4
and 7.7.5);

 

(ii) if
the Committee, in its sole discretion, determines that acceleration of the SAR
vesting schedule would be desirable for the Company; or

 

(iii) if such SARs
vest pursuant to Paragraph 7.4.

 

 

7.4         Merger,
Consolidation, Etc.  If the
Company shall, pursuant to action by its Board of Directors, at any time
propose to merge into, consolidate with, or sell or otherwise transfer all or
substantially all of its assets to another corporation, and provision is not
made pursuant to the terms of such transaction for the assumption by the
surviving, resulting or acquiring corporation of outstanding SARs or for
substitution of new SARs therefore, the Committee shall cause written notice of
the proposed transaction to be given to each Grantee not less than twenty days
prior to the anticipated effective date of the proposed transaction, and his or
her SARs shall become fully (100%) vested and, prior to a date specified in
such notice, which shall be not more than ten days prior to the anticipated effective
date of the proposed transaction, each Grantee shall have the right to exercise
his or her SARs.  Each Grantee, by so
notifying the Company in writing, may in exercising his or her SARs, condition
such exercise upon, and provide that such exercise shall become effective at
the time of, but immediately before, the consummation of the transaction.  If the transaction is consummated, each SAR,
to the extent not previously exercised before the date specified in the
foregoing notice, shall terminate on the effective date of such
consummation.  If the transaction is
abandoned, (i) any SAR not exercised shall continue to be available for
exercise in accordance with other provisions of the Plan; and (ii) to the
extent that any SAR not exercised before such abandonment shall have vested
solely by operation of this Paragraph 7.4, such vesting shall be deemed
annulled, and the vesting schedule set forth in or pursuant to Paragraph
7.3 shall be reinstituted, as of the date of such abandonment.

 

7.5         Exercise of
SARs.  A person entitled to
exercise a SAR may exercise it to the extent vested pursuant to Paragraph 7.3
in whole or in part during a thirty (30) day period beginning on the first
business day following the end of the Company’s fiscal year end occurring after
the Directors termination of service by delivering to the Secretary of the
Company written notice (the “Notice”) specifying the number of SARs being
exercised.  Upon exercise of a SAR by a
Grantee, the Company will pay the Grantee an amount (the “Spread”) equal to the
excess of the Exercise Price over the SAR Grant Price multiplied by the number
of shares represented by the SAR or portion thereof being exercised.  The “Exercise Price” shall be the average of
the closing price of shares of Common Stock for the ten consecutive days
immediately preceding the Notice. 
Payment by the Company upon exercise of a SAR shall be in the manner
provided below.

 

7.5.1                        The
Company shall pay up to $10,000 in cash to the Grantee, subject to any
applicable tax withholding provisions, within ten business days after the
exercise of the SAR.

 

7.5.2                        The
Company shall have the option to make any payments that exceed $10,000, in
quarterly payments over three (3) years with interest payable quarterly at the
Prime Rate of Company’s main Bank.

 

7.6         Non-transferability.  SARs shall not be transferable
other than by will or the laws of descent and distribution and may be
exercised, during the lifetime of the Grantee, only by the Grantee.

 

7.7         Termination
of Service as a Director.  Unless
otherwise determined by the Committee, the following rules shall apply in the
event of Grantee’s termination of service as a director of the Company.

 

7.7.1                        Except as
provided in Paragraph 7.7.4 or 7.7.5, in the event of a Grantee’s termination
of service as a director of the Company either (1) as a result of his removal
as a director for cause; or (2) as a result of resignation of the director, his
or her SAR’s should immediately terminate.

 

7.7.2                        In the
event of the Grantee’s termination of service as a director under circumstances
other than those specified in Paragraph 7.7.1 hereof and for reasons other than
Death, Disability (as defined in Paragraph 7.7.4) or Retirement (as defined in
Paragraph 7.7.5), his or her SARs shall terminate on the date which is 90 days
from the date of such termination of service as a director or on its Expiration
Date, whichever shall first occur; provided,
however, that if the Grantee is subject to the provisions of Section 16(a)
of the Exchange Act on the date of termination of service as a director, such
SARs shall terminate on the date which is the end of the first Window Period
following the later of 90 days from the date of such termination of service as
a director, or six months and ten days after the date of Grant of such SARs, or
on its Expiration Date, whichever shall first occur.

 

 

7.7.3                        In the
event of the death of a Grantee while he or she is serving as a director of the
Company, his or her SAR shall terminate on the first anniversary of the Grantee’s
Death or on its Expiration Date, whichever shall first occur.

 

7.7.4                        In the
event of the Grantee’s termination of service as a director due to mental or
physical infirmity (“Disability”), his or her SAR shall terminate on first
anniversary of such Disability, or on its Expiration Date, whichever shall
first occur.

 

7.7.5                        In the
event that the Grantee’s service as a director terminates after five or more
years of service as a director (“Retirement”), his or her SAR shall terminate
on the second anniversary of the date of such Retirement or on its Expiration
Date, whichever shall first occur.

 

7.7.6                        Anything
contained in this Paragraph 7.7 to the contrary notwithstanding, a SAR may only
be exercised following the Grantee’s termination of service as a director for
reasons other than Death, Disability or Retirement if, and to the extent that,
such SAR was exercisable immediately prior to such termination service as a
director.

 

7.8         No Rights
as Stockholder or to Continue as a Director. 
No Grantee shall have any rights as a stockholder, and
neither the Plan nor any SAR granted under the Plan shall confer upon a Grantee
any right to continue to serve as a director.

 

8.               TERM OF THE PLAN

 

Unless the Plan has been sooner terminated
pursuant to Paragraph 9 hereof, the Plan shall terminate on, and no SARs shall
be granted after the tenth anniversary of the Effective Date.  The provisions of the Plan, however, shall
continue thereafter to govern all SARs theretofore granted, until the exercise,
expiration or cancellation of the SARs.

 

9.               AMENDMENT AND
TERMINATION OF PLAN

 

The Board of Directors at any time may
terminate or suspend the Plan or amend it from time to time in such respects,
as it deems desirable.  Provided further
that, subject to the provisions of Paragraph 8 hereof, no termination of or
amendment to the Plan shall adversely affect the rights of any participant
without the consent of such participant, as the case may be.  In addition, the provisions of the Plan shall
not be amended more than once every six months, other than to comport with
changes to the Internal Revenue Code of 1986, as amended, the Employee
Retirement Income Security Act of 1974, as amended, or the rules there under.

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