Document:

Exhibit
10.5

 

FIRST AMENDMENT TO LEASE
AGREEMENT

 

THIS FIRST AMENDMENT TO LEASE
AGREEMENT (this “Amendment”) is made and entered into as of
March 17, 2008 by and among HPT PSC
Properties Trust, a Maryland real estate investment trust, and HPT PSC Properties LLC, a Maryland limited
liability company, as landlord (collectively, “Landlord”), and Petro Stopping Centers, L.P., a Delaware
limited partnership, as tenant (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS,
pursuant to the terms of that certain Lease Agreement, dated as of May 30,
2007 (the “Lease”), Landlord leases to Tenant, and Tenant leases from Landlord,
the Leased Property (this and other capitalized terms used but not otherwise
defined herein having the meanings given such terms in the Lease), all as more
particularly described in the Lease;

 

WHEREAS,
contemporaneously herewith, Landlord has acquired the fee interest in that
portion of the Leased Property (the “Original Sparks Property”) located at 1950
East Greg Street, Sparks, Nevada and certain additional property (the “Adjacent
Property”, and together with the Original Sparks Property, collectively, the
“Sparks Property”), and Landlord and Tenant desire to include the Adjacent
Property as part of the Leased Property;

 

WHEREAS,
contemporaneously herewith, Tenant has entered into a sublease (the “Sublease”)
with Cashell Enterprises, Inc., a Nevada corporation (“Subtenant”),
pursuant to which Tenant subleases to Subtenant and Subtenant subleases from
Tenant the portion of the Sparks Property as more particularly described
therein;

 

WHEREAS, contemporaneously herewith and
pursuant to Section 4.4 of the Lease, Tenant has assigned to Landlord
Tenant’s leasehold interest in property adjacent to the West Memphis, Arkansas
Property and the York, Nebraska Property; and

 

WHEREAS, Landlord and Tenant wish to amend
the Lease, subject to the terms and conditions of this Amendment;

 

NOW, THEREFORE,
in consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

 

1.             Exhibits.  Effective as of the date hereof,
Exhibits A-5, A-17 and A-19 of the Lease are hereby deleted in their
entirety and replaced with Exhibits A-5, A-17 and A-19 attached hereto and made
a part hereof.

 

2.             Definition
of Minimum Rent.  Effective as of the
date hereof, the definition for the term “Minimum Rent” set forth in
Section 1.67 of the Lease is hereby deleted in its entirety and replaced
with the following:

 

“Minimum
Rent”  shall mean the
sum of Sixty-Six Million One Hundred Seventy-Six Thousand Five Hundred and
Twenty-Six Dollars ($66,176,526) per annum; subject, in each case, to
adjustment as provided in Section 3.1.1(b).

 

3.             Ground
Leases.  Effective as of the date hereof,
Section 4.4 of the Lease is hereby amended by deleting the last sentence
thereof in its entirety.

 

4.             Sublease
Allowance.  If, pursuant to
Section 5.1.1(b) of the Sublease, Tenant is required to provide
Subtenant with all or any portion of the Allowance (as defined in the
Sublease), Tenant may, at its election, advance such funds or give Landlord
Notice thereof. Such Notice shall set forth, in reasonable detail, such Capital
Addition to be funded by the Allowance and Tenant shall provide Landlord with
appropriate invoices and such other documentation and information as Landlord
shall reasonably request each time Tenant requests a disbursement of the
Allowance. Provided that no Event of Default shall have occurred and be continuing
and Tenant shall otherwise be in compliance with the applicable provisions of
Article 6 of the Lease, Landlord shall, within ten (10) Business Days
after such Notice, disburse such required funds to Tenant (or, if Tenant shall
so elect, directly to Subtenant) and, upon such disbursement, the Minimum Rent
shall be adjusted as provided in Section 3.1.1(b).

 

5.             Termination
of Sublease.  Tenant acknowledges that,
regardless of cause, any termination of the Sublease pursuant to
Section 19.4 thereof shall not affect the parties’ obligations under the
Lease.

 

6.             Ratification.  As amended hereby, the Lease is hereby
ratified and confirmed.

 

2

 

IN WITNESS WHEREOF,
Landlord and Tenant have caused this Amendment to be duly executed, as a sealed
instrument, as of the date first set forth above.

 

	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HPT PSC
  PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/John G.
  Murray

  
	
   

  	
   

  	
   

  	
  John G. Murray

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HPT PSC
  PROPERTIES LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/John G.
  Murray

  
	
   

  	
   

  	
   

  	
  John G. Murray

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PETRO
  STOPPING CENTERS, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/Thomas M.
  O’Brien

  
	
   

  	
   

  	
   

  	
  Thomas M.
  O’Brien

  
	
   

  	
   

  	
   

  	
  President

  

 

3

 

Exhibit A-5

 

[See
attached legal description for West Memphis, Arkansas]

 

 

	
   

  	
   

  	
  W. Memphis, AR (#11)

  
	
   

  	
   

  	
  I-40 & I-55 at Club Road

  
	
   

  	
   

  	
  W. Memphis, AR

  

 

Exhibit A-5

 

Legal Description - Fee

 

Real
property lying and being situated in the County of Crittenden, State of
Arkansas, and more particularly described as follows:

 

TRACT
I:  A tract of land being a part of Lots
1, 2, 3 and 4 of the Petro Subdivision to the City of West Memphis, Arkansas,
as shown by Plat of record in Plat Book 3 Page 216 in the office of the
Circuit Court Clerk and Ex-Officio Recorder, and lying in the Northeast Quarter
of Section 9, Township 5 North, Range 9 East, Crittenden County, Arkansas,
being more particularly described as follows: Beginning at a point on the East
line of the Northeast Quarter of said Section 9 that is 210.0 feet North
of the Southeast corner of said Northeast Quarter of Section 9; thence
South 89°56’30” West a distance of 40.5 feet; thence North 00°03’30” West a
distance of 100.0 feet; thence South 89°56’30” West a distance of 100.00 feet;
thence South 00°03’30” East a distance of 100.00 feet; thence South 89°56’30”
West a distance of 159.5 feet; thence South 00°04’55” West a distance of 175.0
feet; thence South 89°56’30” West a distance of 1017.84 feet; thence North
00°15’23” East a distance of 708.23 feet; thence North 74°07’38” East a distance
of 224.64 feet; thence South 87°03’30” East a distance of 695.84 feet; thence
North 85°58’04” East a distance of 400.0 feet; thence North 01°53’07” East a
distance of 182.90 feet to a point on the East line of the Northeast Quarter of
said Section 9; thence South 00°04’55” West a distance of 768.83 feet to
the point of beginning. LESS AND EXcepting that portion of the above-described
tract which was conveyed by Warranty Deed to the Arkansas State Highway
Commission by deed of record in Book 319 Page 184 in the office of the
Circuit Court Clerk of Crittenden county, Arkansas. Less and Except that part
conveyed in Deed of record in Book 802 at page 809.

 

TRACT
II:  A tract of land being a part of Lots
4 and 5 of the Petro Subdivision in the City of West Memphis, Arkansas, as
shown by plat of record in Plat Book 3 Page 216 in the office of the
Circuit Court Clerk and Ex-Officio Recorder and lying in the Northeast Quarter
of Section 9, Township 6 North, Range 9 East, Crittenden County, Arkansas,
being more particularly described as follows: Commencing at the Southeast
corner of the Northeast Quarter of said Section 9; thence North 0°04’55”
East along the East line of said Northeast Quarter a distance of 35.00 feet to
the point of beginning, at the Southeast corner of Lot 5 of said Petro
Subdivision; thence continuing North 0°04’55” East a distance of 175.00 feet;
thence South 89°56’30” West a distance of 40.50 feet; thence North 0°03’30”
West a distance of 100.00 feet; thence South 89°56’30” West a distance of 100.0
feet; thence South 0°03’30” East a distance of 100.0 feet; thence South 89°56’30”
West a distance of 159.50 feet; thence South 0°04’55” West a distance of 175.00
feet; thence North 89°56’30” East a distance of 300.00 feet to the point of
beginning.

 

NOTE:  Tract I herein being the same property
conveyed by Deed of record in Book 792 Page 121 in Crittenden County,
Arkansas, in favor of the Insured: Tract II herein being the same property
conveyed by Deed of record in Book 792 Page 218 in Crittenden County,
Arkansas, in favor of the Insured.

 

This commitment is invalid
unless the Insuring Provisions and Schedules A and B are attached.

 

1

 

TRACT III:  A
tract of land lying in the East half of the SE 1⁄4 of Section 9, T-6-N,
R-9-E, City of West Memphis, Crittenden County, Arkansas, and being more
particularly described as follows:

 

Beginning at a point on the East line of the SE 1⁄4 of
said Section 9 that is S 00° 16’ 24” E and 35.0 feet from the Northeast
corner of the SE 1⁄4 of Section 9, point also being on the South
right-of-way line of Petro Road, thence S 89° 56’ 30” W along the South
right-of-way line of Petro Road a distance of 1054.53 feet to a point that is
on the East right-of-way line of Rival Road, thence along the East right-of-way
line of Rival Road along a curve that breaks to the left with a radius of 40.0
feet an arc length of 52.83 feet to a point, thence S 0° 03’ 30” E a distance
of 165.0 feet to a point, thence along a curve to the left with a radius of
120.21 feet an arc length of 143.21 feet to a point, thence S 67° 23’ 51” E a
distance of 104.32 feet to a point, thence along a curve to the right with a
radius of 180.50 feet an arc length of 213.72 feet to a point, thence S 04° 09’
37” E a distance of 390.01 feet, to the N.W. corner of Lubricants Property,
thence S 65° 36’ 51” E a distance of 147.10 feet, thence S 68° 09’ 26” E a
distance of 168.81 feet, thence S 0° 05’ 34” W a distance of 496.35 feet to its
Intersection with the North right-of-way line of I-55, thence along said
right-of-way line S 68° 51’ 10” E a distance of 468.03 feet to a point on the
East line of the SE 1⁄4 of Section 9, thence N 0° 05’ 43” W a distance of
945.82 feet, thence N 0° 16’ 24” W a distance of 782.58 feet to the point of
beginning.

 

	
  TRACT
  IV:

  	
   

  	
  A
  Tract lying in the SE 1⁄4 of Section 9, T-6-N R-9-E, being all of Lots 2
  and 3 of Rival Subdivision, to the City of West Memphis, as shown by plat
  recorded in Plat Book 3, Page 321, in the office of the Circuit Court
  Clerk & Ex-Officio Recorder of Crittenden County, Arkansas, and
  being more particularly described as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Beginning
  at the Southwest corner of Lot 1 of Rival Subdivision as shown by plat
  recorded in Plat Book 3, Page 321, in the office of the Circuit Court
  Clerk and Ex-Officio Recorder of Crittenden County, Arkansas; thence N 89°
  56’ 30” E along the South line of said Lot 1 a distance of 385.12 feet to a
  point on the West right-of-way line of Rival Road; thence along said
  right-of-way line along a curve that breaks to the left with a radius of
  180.21 feet an arc length of 150.53 feet; thence S 67° 21’ 51” E a distance
  of 104.32 feet; thence along a curve that breaks to the right with a radius
  of 120.50 feet an arc length of 141.34 feet; thence S 00° 09’ 37” E a
  distance of 740.62 feet; thence S 24° 51’ 24” W a distance of 33.11 feet;
  thence S 75° 05’ 43” W a distance of 39.49 feet to a point on the North
  right-of-way line of Interstate 55; thence N 57° 59’ 16” W along I-55
  right-of-way a distance of 141.56 feet; thence N 44° 33’ 24” W a distance of
  213.60 feet; thence N 28° 15’ 37” W a distance of 250.0 feet; thence N 18°
  45’ 02” W a distance of 580.0 feet; thence N 37° 24’ 34” W a distance of
  51.56 feet to the point of beginning.

  

 

Note:
Being the same property conveyed to the Insured by Deed or record in Book 792 Page 223.

 

2

 

	
   

  	
   

  	
  W. Memphis, AR (#26)

  
	
   

  	
   

  	
  I-40 & I-55 at Club Road

  
	
   

  	
   

  	
  W. Memphis, AR

  

 

Exhibit A

 

Legal Description - Leasehold

 

TRACT
III: Leasehold Estate created by the lease executed by C. H. Williamson, Jr.,
and Patricia M. Williamson, Lessor, and Cardwell-Russell, a Texas general
partnership composed of two partners namely J. A. Cardwell and G. R. Russell,
Lessee, dated April 10, 1985, not filed of record in Crittenden County,
Arkansas, the memorandum of which has been placed of record in Book 667 Page 159,
and re-recorded in Book 668 Page 119 in Crittenden County, Arkansas; and
subsequent assignments thereof by Lessee in instrument of record in Book 759 Page 105,
by Successor Lessee to the Insured by instrument of record in Book 792 Page 129,
in Crittenden County, Arkansas. Demising and leasing for a primary term of 10
years beginning April 30, 1985, with option to extend for three 10-year
terms, finalling ending April 30, 2025, the following tract to-wit: A part
of Lots 1, 2 and 3 of the Petro Subdivision in the City of West Memphis,
Arkansas, as shown by plat of record in Plat Book 3 Page 216, lying in the
Northeast Quarter of Section 9, Township 6 North, Range 9 East, and being
more particularly described as follows: 
Beginning at the Southeast corner of the Northeast Quarter of said Section 9;
thence North 00°04’55” East along the East line of said Northeast Quarter a
distance of 35.0 feet to the Southeast corner of Lot 5 of said Petro
Subdivision; thence South 89°56’30” West a distance of 1317.84 feet to the
point of beginning; thence, continue South 89°56’30” West a distance of 253.49
feet; thence along a curve that breaks to the right with a radius of 374.77
feet an arc length of 132.77 feet to a point on the East right of way line of
Club Road; thence North 24°54’04” East a distance of 669.25 feet; thence North
52°31’29” East a distance of 114.89 feet; thence North 74°07’38” East a
distance of 12.82 feet; thence South 00°15’23” West a distance of 708.23 feet
to the point of beginning.

 

(Tract
III being the same property described in Exhibit A to Assignment of Lessee’s
Interest in Lease, in favor of the Insured, of record in Book 792 Page 129)

 

3

 

Exhibit A-17

 

[See
attached legal description for York, Nebraska]

 

 

	
   

  	
  York, NE (#62)

  
	
   

  	
  4700 S. Lincoln Avenue

  
	
   

  	
  York, NE 68467

  

 

Exhibit A-17

 

Legal
Description - Fee

 

PARCEL 1: Lot 2, Walker
Subdivision Replat 1, in the City of
York, York County, Nebraska, and Irregular Tract #13, EXCEPT that part platted
as Walker Subdivision Replat 1; in the Southeast Quarter of Section 24,
Township 10 North, Range 3 West of the 6th P.M., York County, Nebraska,
and Lot 6, Countryside View Subdivision in Section 24, Township 10 North,
Range 3 West of the 6th P.M., York County, Nebraska, more particularly
described as follows:

 

Beginning at the Northwest Corner of the Southwest Quarter of the
Southeast Quarter of said Section 24, said Corner also being the Southwest
corner of said I.T. #13, and assuming the West line of said Lot 2 to have a
bearing of N 00°11’14” E; thence N 00°04’06” W, and on the West line of said I.T. #13,
978.73 feet to a 3⁄4” I.B., said I.B. being the Northwest corner of said I.T.,
#13; thence S 89°47’34” E. and on the North line of said I.T., #13, 1062.44
feet to a 1” I.P., said I.P. being the Northwest corner of said Lot 2; thence S
89°47’40” E, and on the North line of said Lot 2,159.82 feet to a 3⁄4” I.B.;
thence S 87°32’24” E, and on the North line of said Lot 2,122.60 feet to a 3/4” I.B., said I.B. being a point of curvature; thence on a curve to the right,
and on the North line of said Lot 2, said curve having a radius of 718.51 feet,
a chord bearing of S 73°39’42” E, and an arc distance of 346.87 feet to a 3⁄4” I.B.;
thence S 59 ° 49’03” E, and on the North line of said Lot 2, 518.29 feet to a 5/8”
rebar, said rebar being the Northeast corner of said Lot 2; thence S 00°13’31”
W, and on the East line of said Lot 2, 613.65 feet; thence S 89°57’46” E, and
on the Easterly line of said Lot 2, 63.64 feet; thence S 00°08’54” W, and on
the East line of said Lot 2, 724.29 feet to a 5/8” rebar, said rebar being the
Southeast corner of said Lot 2; thence N 89°43’27” W, and on the South line of
said Lot 2,167.19 feet to a 3⁄4”  I.P.
on the East R.O.W. line of Graham Street; thence N 00°11’21” E, and on the East
R.O.W. line of said Graham Street, 166.17 feet to a 3/4” rebar w/cap; thence N 89°42’01” W, and on the South line of said Lot 2,
59.97 feet to a 3⁄4”  rebar w/cap,
said rebar being the Northeast corner of said Lot 6; thence S 00°09’54” W, and
on the East line of said Lot 6, 165.91 feet to a 3⁄4” I.P., said I.P. being the
Southeast corner of said Lot 6; thence N 89°43’32” W, and on the South line of
said Lot 6,264.09 feet to a 3⁄4” rebar
w/cap, said rebar being the Southwest corner of said Lot 6; thence N 00°12’42”
E, and on the West line of said Lot 6, 166.01 feet to a.3⁄4”  I.P., said Pipe being the
Northwest corner of Lot 6, and a point on the South line of said Lot 2; thence
N 89°42’01” W, and on the South line of said Lot 2, 423.83 feet to a 3⁄4” I.B., said I.B,  being the
Southwest corner of said Lot 2; thence N 00°11’14” E, and on the West line of
said Lot 2, 554.07 feet to a 3⁄4”  rebar w/cap on the South line of I.T.
#13; thence N 89°56’46” W, and on the South line of said I.T. #13,1267.96 feet
to the point of beginning.

 

1

 

	
   

  	
  York,
  NE (#62)

  
	
   

  	
  4700
  S. Lincoln Avenue

  
	
   

  	
  York,
  NE 68467

  

 

Exhibit A-17

 

Legal
Description - Leasehold

 

PARCEL        Leasehold Description:

 

Lot 1, Walker Subdivision to
the City of York, York County, Nebraska, more particularly described as
follows:

 

Beginning at the Southeast
Corner of said Lot 1, and assuming the West line of Lot 2, Walker Subdivision
Replat 1 to have a bearing of N 00°11’14” E; thence N 89°43’27” W, and on the
South line of said Lot 1, 267.70 feet to a 5/8” rebar, said rebar being the
Southwest corner of said Lot 1; thence N 00°13’31” E, and on the West line of
said Lot 1, 724.29 feet; thence N 89°57’46”
W, and on the Westerly line of said Lot 1, 63.64 feet; thence N 00°13’31”
E, and on the West line of said Lot 1, 613.65 feet to a 5/8” rebar, said rebar
being the Northwest corner of said Lot 1; thence S 59°46’05” E, and on the
North line of said Lot 1, 273.71 feet to a 3/4” I.B.; thence S 32°20’55” E, and on the North line of said
Lot 1, 218.83 feet to a 1” I.P.; thence S 00°14’24” W, and on the East line of
said Lot 1, 291.60 feet to a 1” I.P.’ thence N 89°37’2 l” E, and on the
Easterly line of said Lot 1, 24.90 feet to a 5/8” rebar; thence S 00°23’01” E,
and on the East line of said Lot 1, 225.87 feet to a 1” I.P.; thence N 89°56’03”
W, and on the Easterly line of said Lot 1,120.20 feet to a 1” I.P.; thence S
00°04’02” W, and on the East line of said Lot 1, 139.73 feet to a 1/4’ I.B.;
thence S 34°54’41” E, and on the East line of said Lot 1, 121.32 feet to a 1” I.P.;
thence S 00°10’09” W, and on the East line of said Lot 1, 1260.25 feet to the
point of beginning.

 

PARCEL        Easement Description

 

Easement rights pursuant to
that certain Easement dated 12/30/1996, filed 1/23/1997, recorded in Book 37 at
Page 593 of York County Misc. records for ingress and egress over and
across Lot 1, Walker Subdivision, for the benefit of Lot 2, Walker Subdivision,
Replat 1.

 

2

 

Exhibit A-19

 

[See
attached legal description for Sparks, Nevada]

 

 

	
   

  	
  Sparks,
  NV (#38)

  
	
   

  	
  1950
  East Greg Street

  
	
   

  	
  Sparks,
  NV 89431

  

 

Exhibit A-19

 

Legal
Description

 

All that certain real property
situated in the County of Clark, State of Nevada, described as follows:

 

PARCEL I:

 

A parcel of land, being
Parcel 1 of Record of Survey Map No. 2045, File No. 1301103, and
situate within a portion of Section 11, Township 19 North, Range 20 East,
M.D.B.&M., Spark, Washoe County, Nevada, and being more particularly
described as follows:

 

Beginning at the Northeast
corner of Parcel 4 as shown on Parcel Map Number 2070, File Number 1126569 of
the Official Records of Washoe County, Nevada, from which the Southwest corner
of said Section 11 bears South 57°24’19” West a distance of 3101.74 feet;

Thence North 84°01’29” West,
along the Northerly line of said Parcel 4, a distance of 987.00 feet;

Thence North 76°51’08” West,
along the Northerly line of said Parcel 4, a distance of 87.03 feet;

Thence North 74°50’24” West,
along the Northerly line of said Parcel 4, a distance of 162.29 feet;

Thence South 15°09’36” West
a distance of 218.64 feet;

Thence North 86°47’05” West
a distance of 16.78 feet;

Thence South 03°48’41” West
a distance of 274.41 feet;

Thence South 86°43’17” East
a distance of 18.62 feet;

Thence South 03°16’43” West
a distance of 188.61 feet;

Thence South 22°30’30” East,
a distance of 25.64 feet to the Northeast corner of Parcel 1 of said Parcel Map;

Thence South 22°30’30” East,
a distance of 244.75 feet to the Southeast corner of said Parcel 1;

Thence along the Northerly
line of East Greg Street from a tangent which bears North 83°17’01” East, along
a circular curve to the right with a radius of 840.00 feet and a central angle
of 07°07’01”, an arc length of 104.34 feet; Thence South 89°35’ 58” East, along
the Northerly line of East Greg Street, a distance of 1094.49 feet to the
Southeast corner of said Parcel 4;

Thence North 00°24’02” East
a distance of 760.00 feet to the Point of Beginning.

 

1

 

PARCEL II:

 

Parcel 1 of Parcel Map No.
2412, for Robert L. Helms, according to the map thereof filed in the office of
the County Recorder of Washoe County, State of Nevada, on January 19, 1990
under File No 1375199, Official Records.

 

PARCEL III:

 

Parcel A of Parcel Map
No. 4620, according to the map thereof, filed in the office of the County
Recorder of Washoe County, September 6, 2006, as Document No. 3435326,
Official Records.

 

EXCEPTING THEREFROM all that
portion of said land lying West of the Easterly right of way line of Sparks
Boulevard, as said Sparks Boulevard was conveyed to the City of Sparks, by Deed
recorded December 26, 1986 in Book 2466, Page 910, as Document
No. 1127103, Official Records.

 

Note: (NRS 111.312): The
above metes and bounds description appeared previously in that certain
instrument, recorded in the Office of the County Recorder of Washoe County,
Nevada on August 25, 1992 as Document No. 1599709, of Official
Records.

 

2Exhibit 10.8

 

THE MANITOWOC COMPANY, INC.

INCENTIVE STOCK OPTION AGREEMENT WITH VESTING PROVISIONS

 

THIS
INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”), dated the        
day of (date), is granted by THE MANITOWOC
COMPANY, INC. (the “Company”) to        
(name) (the “Optionee”) pursuant to the
Company’s 2003 Incentive Stock and Awards Plan (the “Plan”).

 

WHEREAS,
the Company believes it to be in the best interests of the Company, its
subsidiaries and its shareholders for its officers and other key employees,
consultants, or advisors to obtain or increase their stock ownership interest
in the Company so that they will have a greater incentive to work for and
manage the Company’s affairs in such a way that its shares may become more
valuable; and

 

WHEREAS,
the Optionee is employed by the Company or one of its subsidiaries as an
officer or other key employee and has been selected by the Committee to receive
an option;

 

NOW,
THEREFORE, in consideration of the premises and of the services to be performed
by the Optionee, the Company and the Optionee hereby agree as follows:

 

1.             OPTION GRANT

 

Subject
to the terms of this Agreement and the Plan, the Company grants to the Optionee
an option to purchase a total of (#       ) (number)shares of Common Stock of the Company at a price of        (price) per share (100% of the Fair Market
Value of the shares on the date of grant).  This option is intended to qualify as an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended.

 

2.             TIME OF
EXERCISE

 

Subject
to the termination provisions of paragraph 3, provided that the Optionee is an
employee of the Company or any of its subsidiaries on the exercise date, the
Optionee may exercise the option and purchase the underlying shares in
accordance with the following schedule [select the appropriate
Alternative below]:

 

o  Alternative 1:

 

	
  Years
  after

  	
   

  	
  Cumulative Percentage of

  
	
  Grant
  Date

  	
   

  	
  Grant Which May be Exercised

  
	
   

  	
   

  	
   

  
	
  Less
  than 1

  	
   

  	
  Zero
  percent (0%)

  
	
   

  	
   

  	
   

  
	
  1 but
  less than 2

  	
   

  	
  Twenty-five
  percent (25%)

  
	
   

  	
   

  	
   

  
	
  2 but
  less than 3

  	
   

  	
  Fifty
  percent (50%)

  
	
   

  	
   

  	
   

  
	
  3 but
  less than 4

  	
   

  	
  Seventy-five
  percent (75%)

  
	
   

  	
   

  	
   

  
	
  4 or
  more

  	
   

  	
  One
  hundred percent (100%)

  

 

 

o  Alternative 2:

 

This option shall become exercisable in accordance with the schedule
established by the Committee at the time of grant and set forth below:

 

[Schedule to be inserted by
Committee at time of grant.]

 

If
the Optionee terminates employment from the Company and its subsidiaries for
any reason other than death, Disability, or Retirement, only those option
shares for which the right to purchase has accrued as of the date of such
termination may be purchased after such termination (subject to the provisions
of paragraph 3).  If the Optionee terminates
employment from the Company and its subsidiaries due to death, Disability, or
Retirement, then all of the Optionee’s option shares may be purchased after
such termination (subject to the provisions of paragraph 3).  The Committee, in its sole discretion, may
accelerate the right to purchase all or any portion of an Optionee’s option
shares under such terms as the Committee deems appropriate upon termination of
employment for any reason other than for Cause. 
If the Optionee takes an unpaid leave of absence, then the Committee may
defer the dates on which the Optionee may first purchase the option shares to
take into account such leave of absence.

 

3.             TERMINATION OF
OPTION

 

The
Optionee may not exercise this option after, and this option will terminate
without notice to the Optionee on, the earlier of:

 

a.             Six (6) months after
the date of the Optionee’s termination of employment from the Company and its
subsidiaries for any reason other than for Cause or due to Disability, death or
Retirement; the Committee may, in its discretion, extend this period an
additional (6) months; provided, however, that
if exercise occurs after the date that is three (3) months after the date
of the Optionee’s termination of employment from the Company and its
subsidiaries, this option shall be considered a non-qualified stock option;

 

b.             The date the Company or one
of its subsidiaries terminates Optionee’s employment for Cause;

 

c.             Twelve (12) months after the
date of the Optionee’s termination of employment from the Company and its
subsidiaries by reason of death or Disability;

 

d.             Ten (10) years after
the Optionee terminates employment from the Company and its subsidiaries on
account of Retirement; provided, however, that
if exercise occurs after the date that is three (3) months after the date
of the Optionee’s termination of employment from the Company and its
subsidiaries, this option shall be considered a non-qualified stock option; or

 

e.             Ten (10) years from the
date of this Agreement.

 

2

 

For
purposes of this paragraph 3, termination shall occur at 11:59 P.M.
(Central Time) on the applicable date described above, except that if the
Optionee is terminated for Cause, termination shall occur immediately at the
time of such termination.

 

4.             EXERCISE
PROCEDURES

 

a.             The Optionee may exercise
this option in whole or in part only with respect to any shares for which the
right to exercise shall have accrued pursuant to paragraph 2 and only so long
as paragraph 3 does not prohibit such exercise.

 

b.             This option may be exercised
by delivering a written notice of option exercise to the Company’s Human
Resources Department at Manitowoc, Wisconsin, accompanied by payment of the
purchase price and such additional amount (if any) determined by the Human
Resources Department as necessary to satisfy the Company’s tax withholding
obligations, and such other documents or representations as the Company may
reasonably request to comply with securities, tax or other laws then applicable
to the exercise of the option.  Delivery
may be made in person, by nationally-recognized delivery service that
guarantees overnight delivery, or by facsimile. A notice of option exercise
that is received by the Human Resources Department after 11:59 P.M.
(Central Time) on the date of termination (as provided in paragraph 3) shall be
null and void.

 

c.             No Option Shares shall be
issued until full payment of the purchase price therefor has been made.  The Optionee may pay the purchase price in
one or more of the following forms:

 

i.              a check payable to the order
of the Company for the purchase price of the shares being purchased; or

 

ii.             delivery of shares of Common
Stock (including by attestation) that the Optionee has owned for at least six (6) months
and that have a Fair Market Value (determined on the date of delivery) equal to
the purchase price of the shares being purchased; or

 

iii.            delivery (including by
facsimile) to the Human Resources Department of the Company at Manitowoc,
Wisconsin, of an executed irrevocable option exercise form together with irrevocable
instructions, in a form acceptable to the Company, to a broker-dealer to sell
or margin a sufficient portion of the shares of Common Stock issuable upon
exercise of this option and deliver the sale or margin loan proceeds directly
to the Company to pay for the exercise price.

 

d.             The Optionee may satisfy any
tax withholding obligation of the Company arising from the exercise of this
option, in whole or in part, by paying such tax obligation in cash or by check
made payable to the Company, or by electing to have the Company withhold shares
of Common Stock having a Fair Market Value on the date of exercise equal to the
amount required to be withheld, subject to such rules as the Committee may
adopt.  In any event, the Company
reserves the right to withhold from any compensation otherwise payable to the
Optionee such amount as the Company determines is necessary 

 

3

 

to satisfy the Company’s tax withholding obligations
arising from the exercise of this option.

 

5.             DEFINITIONS

 

a.             “Cause” means termination of employment as a result of (i) the
failure of the Optionee to perform or observe any of the material terms or
provisions of any written employment agreement between the Optionee and the
Company or its subsidiaries or, if no written agreement exists, the gross
dereliction of the Optionee’s duties with respect to the Company; (ii) the
failure of the Optionee to comply fully with the lawful directives of the Board
of Directors of the Company or its subsidiaries, as applicable, or the officers
or supervisory employees to whom the Optionee is reporting; (iii) the
Optionee’s dishonesty, misconduct, misappropriation of funds, or disloyalty or
disparagement of the Company, any of its subsidiaries, or its management or
employees; (iv) or (v) other proper cause determined in good faith by
the Committee.  Notwithstanding the
foregoing, if the Optionee is subject to a written agreement with the Company
or its subsidiaries that contains a definition of “Cause” that is different
than the definition provided herein, the definition of “Cause” in such other
agreement shall apply in lieu of the definition provided herein.

 

b.             “Disability” means
permanently and totally disabled within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended.

 

c.             “Retirement” means
termination of employment from the Company and its subsidiaries on or after
reaching the earlier of age sixty (60) or the first of the month following the
date on which the Participant’s attained age plus years of service with the
Company and its subsidiaries equal eighty (80).

 

6.             OPTIONS AS
COLLATERAL

 

The
Optionee may not assign or mortgage this option, or pledge this option as any
type of security or collateral.  Any
attempted assignment, mortgage or pledge of this option in violation of this
paragraph 6 will be null and void and have no legal effect.

 

7.             TRANSFERABILITY;
DEATH

 

a.             Except as provided in
paragraph 7(c), the Optionee may not transfer this option other than by will or
the laws of descent and distribution and only the Optionee may exercise this
option during his or her lifetime. 
However, if the Committee determines that the Optionee is unable to
exercise this option as a result of incapacity or Disability, then the
Committee may permit the Optionee’s guardian or an individual who has obtained
an appropriate power of attorney to exercise this option on behalf of the
Optionee.  In such an event, neither the
Committee nor the Company will be liable for any losses resulting from such exercise
or from the disposition of shares acquired upon such exercise.

 

b.             If the Optionee dies while
this option is outstanding, then the Optionee’s estate or the person to whom
this option passes by will or the laws of descent and 

 

4

 

distribution may exercise this option in the manner
described in paragraph 4, but only within the period described in paragraph 3.

 

c.             Following any transfer
(whether voluntarily or pursuant to will or the law of descent and distribution)
under this paragraph 7, this option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to such transfer,
provided that for purposes of this Agreement, the term “Optionee” as used in
paragraphs 6, 8, 9, 10, 11 and 12 shall be deemed to refer to the transferee.
The Company disclaims any obligation to provide notice to any person who has
the right to exercise this option of circumstances triggering termination of
this option.

 

8.             REGISTRATION;
TRANSFER RESTRICTIONS

 

If
the Company is advised by its counsel that shares deliverable upon exercise of
this option are required to be registered under the Securities Act of 1933 (“Act”)
or any applicable state or foreign securities laws, or that delivery of the
shares must be accompanied or preceded by a prospectus meeting the requirements
of that Act or such state or foreign securities laws, then the Company will use
its best efforts to effect the registration or provide the prospectus within a
reasonable time following the Company’s receipt of written notice of option
exercise relating to this option, but delivery of shares by the Company may be
deferred until the registration is effected or the prospectus is
available.  The Optionee shall have no
interest in shares covered by this option until certificates for the shares are
issued.  Upon and after such issuance,
the Shares may not be sold or offered for sale except pursuant to an effective
registration statement under the Act or in a transaction, which in the opinion
of counsel for the Company, is exempt from the registration provisions of the
Act.

 

9.             ADJUSTMENTS AND
CHANGE OF CONTROL

 

The
number and type of shares subject to this option and the option price may be
adjusted, or this option may be assumed, cancelled or otherwise changed, in the
event of certain transactions, as provided in Section 11 of the Plan.  Upon a change of control, as defined in the
Plan, the Optionee shall have the rights specified in Section 11 of the
Plan.

 

10.           AMENDMENT OR MODIFICATION

 

Except
as provided in paragraph 9, no term or provision of this Agreement may be
modified or amended except as provided in Section 9 of the Plan.

 

11.           LIMITED INTEREST

 

a.             The Optionee shall have no
rights as a shareholder as a result of the grant of the option until this
option is exercised, the exercise price and applicable withholding taxes are
paid, and the shares are issued thereunder.

 

b.             The grant of this option
shall not confer on the Optionee any right to continue as an employee, nor
interfere in any way with the right of the Company to terminate the Optionee at
any time.

 

5

 

c.             The grant of this option
shall not affect in any way the right or power of the Company or any of its
subsidiaries to make or authorize any or all adjustments, recapitalizations,
reorganizations, or other changes in the Company’s or any subsidiary’s capital
structure or its business, or any merger, consolidation or business combination
of the Company or any subsidiary, or any issuance or modification of any term,
condition, or covenant of any bond, debenture, debt, preferred stock or other
instrument ahead of or affecting the Common Stock or the rights of the holders
of Common Stock, or the dissolution or liquidation of the Company or any
subsidiary, or any sale or transfer of all or any part of its assets or
business or any other Company or subsidiary act or proceeding, whether of a
similar character or otherwise.

 

12.           LIMITATIONS ON INCENTIVE STOCK OPTIONS

 

To
the extent that the aggregate Fair Market Value of the Common Stock subject to
this option, plus any shares of Common Stock subject to incentive stock options
previously granted to the Optionee by the Company or any subsidiary, that are
exercisable for the first time by the Optionee during a single calendar year
exceeds one hundred thousand dollars ($100,000), this option shall be
considered to be a non-qualified stock option to the extent of any excess.

 

13.           GOVERNING LAW

 

This
Agreement shall be governed by the internal laws of the state of Wisconsin as
to all matters, including but not limited to matters of validity, construction,
effect, performance and remedies.  Any
legal action or proceeding with respect to the Plan or this option may only be
brought and determined in a court sitting in the County of Manitowoc, or the
Federal District Court for the Eastern District of Wisconsin sitting in the
County of Milwaukee, in the State of Wisconsin. 
The Company may require that the action or proceeding be determined in a
bench trial.

 

ALL
PARTIES ACKNOWLEDGE THAT THIS OPTION IS GRANTED UNDER AND PURSUANT TO THE PLAN,
WHICH SHALL GOVERN ALL RIGHTS, INTERESTS, OBLIGATIONS, AND UNDERTAKINGS OF
BOTH THE COMPANY AND THE OPTIONEE.  IN
THE EVENT OF ANY INCONSISTENCY BETWEEN THE PROVISIONS OF THE PLAN AND THE
PROVISIONS OF THIS AGREEMENT, THE PROVISIONS OF THE PLAN SHALL CONTROL.  ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED
IN THIS OPTION SHALL HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN THE PLAN.

 

14.           SEVERABILITY

 

If
any provision of this Agreement is or becomes or is deemed to be invalid,
illegal or unenforceable, or would disqualify this option under any law the
Committee deems applicable, then such provision will be construed or deemed
amended to conform to the applicable law, or if the Committee determines that
the provision cannot be construed or deemed amended without materially altering
the intent of this Agreement, then the provision will be stricken and the
remainder of this Agreement will remain in full force and effect.

 

6

 

15.           COUNTERPARTS

 

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

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Optionee has executed this Agreement, all as of
the day and date first above written.

 

	
   

  	
  THE
  MANITOWOC COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Optionee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security Number

  

 

7

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