Document:

exv10w23

 

Exhibit
10.23

SEVERANCE AGREEMENT

     THIS
SEVERANCE AGREEMENT (this “Agreement”), dated as of
November 28, 2005, is made and
entered by and between Novell, Inc., a Delaware corporation (the “Company”), and Jeffrey M. Jaffe
(the “Executive”).

WITNESSETH:

     WHEREAS, the Executive is a senior executive of the Company and is expected to make major
contributions to the short- and long-term profitability, growth and financial strength of the
Company;

     WHEREAS, the Board has determined that appropriate arrangements should be taken to encourage
the continued attention and dedication of Executive to his assigned duties without distraction;

     WHEREAS, in consideration of the Executive’s employment with the Company, the Company desires
to provide Executive with certain compensation and benefits set forth in this Agreement in order to
ameliorate the financial and career impact on Executive in the event the Executive’s employment
with the Company is terminated for a reason related to, or unrelated to, a Change in Control (as
defined below) of the Company;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth and intending to be legally bound hereby, the Company and the Executive agree
as follows:

1. Certain Defined Terms. In addition to terms defined elsewhere herein, the following
terms have the following meanings when used in this Agreement with initial capital letters:

     (a) “Base Pay” means the greater of (i) Executive’s annual base salary rate, exclusive of
bonuses, commissions and other Incentive Pay, as in effect immediately preceding Executive’s
Termination Date, or (ii) Executive’s highest annual base salary rate, exclusive of bonuses,
commissions and other Incentive Pay, as in effect in any of the three (3) full calendar years
preceding Executive’s Termination Date.

     (b) “Board” means the Board of Directors of the Company.

     (c) “Cause”:

          (i) For purposes of Involuntary Termination Prior to a Change in Control, means a
determination by the Company’s Chief Executive Officer or Senior Vice President-People, in either
case with legal advice and consultation of the

 

 

Company’s
Senior Vice President — General Counsel, acting in his authority as the Company’s
general counsel, that Executive has committed any of the following acts:

               (A) continued violations of the Executive’s obligations which are demonstrably willful or
deliberate on the Executive’s part after there has been delivered to the Executive a written demand
for performance from the Company which describes the basis for the Company’s belief that the
Executive has willfully or deliberately violated his obligations to the Company;

               (B) engaging in willful misconduct which is injurious to the Company or any Subsidiary;

               (C) committing a felony, an act of fraud against or the misappropriation of property belonging
to the Company or any Subsidiary;

               (D) breaching, in any material respect, terms of any confidentiality or proprietary
information agreement between the Executive and the Company; or

               (E) committing a material violation of the Company’s Code of Business Ethics or Employee
Conduct and Standards Policy, as either or both are in effect from time to time by the Company.

          (ii) For purposes of Involuntary Termination Associated With a Change in Control, means a
determination by the Board that Executive has committed any of the following acts:

               (A) the Executive has been convicted of a criminal violation involving fraud, embezzlement or
theft in connection with his duties or in the course of her employment with the Company or any
Subsidiary; or

               (B) the Executive has committed intentional wrongful disclosure of secret processes or
confidential information of the Company or any Subsidiary; and any such act has been demonstrably
and materially harmful to the Company. For purposes of this subparagraph (B), no act on the part
of the Executive will be deemed “intentional” if it was due primarily to an error in judgment or
negligence, but will be deemed “intentional” if done by the Executive not in good faith and without
reasonable belief that the Executive’s action was in the best interest of the Company.

Notwithstanding the foregoing, the Executive will not be deemed to have been terminated for
“Cause” under this subsection (ii) unless and until there has been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the
members of the Board then in office at a meeting of the Board, finding that, in the good faith
opinion of the Board, the Executive has committed an act constituting “Cause,” as herein defined,
and specifying the particulars thereof in detail. Prior to any such determination, Executive shall
be provided with reasonable notice of such pending determination and Executive, together with his
counsel (if the Executive chooses to have counsel present at such meeting), shall be provided with
the opportunity

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 to be heard before the Board makes any such determination. Nothing herein will limit the
right of the Executive or his beneficiaries to contest the validity or propriety of any such
determination.

     (d) “Change in Control” means the occurrence of any of the following events:

          (i) the acquisition by any individual, entity or group (within the meaning of section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then
outstanding Voting Stock of the Company; provided, however, that for purposes of this Section
1(d)(i), the following acquisitions will not constitute a Change in Control: (A) any issuance of
Voting Stock of the Company directly from the Company that is approved by the Incumbent Board (as
defined in Section 1(d)(ii), below), (B) any acquisition by the Company of Voting Stock of the
Company, (C) any acquisition of Voting Stock of the Company by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary, or (D) any acquisition of
Voting Stock of the Company by any Person pursuant to a Business Combination that complies with
clauses (A), (B) and (C) of Section 1(d)(iii), below; and provided, further, that a Change in
Control will not occur if any Person becomes the beneficial owner of 25% or more of the combined
voting power of the Voting Stock of the Company solely as a result of an issuance of Voting Stock
described in clause (A) of this Section 1(d)(i) or an acquisition of Voting Stock described in
clause (B) of this Section 1(d)(i) unless and until such Person thereafter acquires beneficial
ownership of Voting Stock of the Company that causes the aggregate percent of the combined voting
power of the Voting Stock of the Company then owned beneficially by such Person to exceed the
percent of the combined voting power of Voting Stock of the Company owned beneficially by such
Person immediately after such issuance or acquisition described in clause (A) or (B) of this
Section 1(d)(i);

          (ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board,” as
modified by this Section 1(d)(ii)), cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a Director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, was approved by a vote of
at least two-thirds of the Directors then comprising the Incumbent Board (either by a specific vote
or by approval of the proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination) will be deemed to have then been a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest (within the meaning of Rule
14a-11 of the Exchange Act) with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

          (iii) consummation of a reorganization, merger or consolidation, a sale or other disposition
of all or substantially all of the assets of the Company, or other transaction (each, a “Business
Combination”), unless, in each case, immediately following such Business Combination, (A) all or
substantially all of the individuals and

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entities who were the beneficial owners of Voting Stock of the Company immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50% of the combined
voting power of the then outstanding shares of Voting Stock of the entity resulting from such
Business Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries), (B) no Person (other than the Company; such entity resulting
from such Business Combination; any employee benefit plan (or related trust) sponsored or
maintained by the Company, any Subsidiary or such entity resulting from such Business Combination;
or any Person who immediately prior to such Business Combination beneficially owned directly or
indirectly 25% or more of the combined voting power of the voting stock of the Company and whose
ownership of such Voting Stock did not result in a Change in Control under Section 1(d)(i))
beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C)
at least a majority of the members of the Board of Directors of the entity resulting from such
Business Combination were members of the Incumbent Board at the time of the execution of the
initial agreement or of the action of the Board providing for such Business Combination; or

          (iv) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C)
of Section 1(d)(iii).

     (e) “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.

     (f) “Code” means the Internal Revenue Code of 1986, as amended.

     (g) “Constructive Termination Associated With a Change in Control” means the termination of
the Executive’s employment with the Company by Executive as a result of the occurrence of one of
the following events as a result of a Change in Control:

          (i) without the Executive’s express written consent, the failure to elect or reelect or
otherwise to maintain the Executive in the office or the position, or an equivalent office or
position, of or with the Company and/or a Subsidiary (or any successor thereto by operation of law
of or otherwise), as the case may be, which the Executive held immediately prior to a Change in
Control, or the removal of the Executive as a Director of the Company and/or a Subsidiary (or any
successor thereto) if the Executive has been a Director of the Company and/or a Subsidiary
immediately prior to the Change in Control;

          (ii) without the Executive’s express written consent, the failure of the Company to remedy any
of the following within ten (10) business days after receipt by the Company of written notice
thereof from the Executive: (A) an adverse change in the nature or scope of the authorities,
powers, functions, responsibilities or duties attached to the position with the Company and any
Subsidiary which the Executive held immediately prior to the Change in Control, (B) a reduction in
the aggregate of the Executive’s Base

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Pay and Incentive Pay, or (C) the termination or denial of the Executive’s rights to Employee
Benefits or a reduction in the scope or value thereof;

          (iii) without the Executive’s express written consent, a determination by the Executive (which
determination will be conclusive and binding upon the parties hereto provided it has been made in
good faith and in all events will be presumed to have been made in good faith unless otherwise
shown by the Company by clear and convincing evidence) that a change in circumstances has occurred
following a Change in Control, including, without limitation, a change in the scope of the business
or other activities for which the Executive was responsible immediately prior to the Change in
Control, which has rendered the Executive unable to carry out, has hindered the Executive’s
performance of, or has caused the Executive to suffer a reduction in, any of the authorities,
powers, functions, responsibilities or duties attached to the position held by the Executive
immediately prior to the Change in Control, which situation is not remedied within ten (10)
business days after written notice to the Company from the Executive of such determination;

          (iv) without the Executive’s express written consent, the liquidation, dissolution, merger,
consolidation or reorganization of the Company or transfer of all or substantially all of its
business and/or assets, unless the successor or successors (by liquidation, merger, consolidation,
reorganization, transfer or otherwise) to which all or substantially all of its business and/or
assets have been transferred (by operation of law or otherwise) assumes all duties and obligations
of the Company under this Agreement pursuant to Section 15(a);

          (v) without the Executive’s express written consent, a requirement by the Company that the
Executive have his principal location of work changed to any location that is in excess of
thirty-five (35) miles from the location thereof immediately prior to the Change in Control, or
that the Executive travel away from his office in the course of discharging his responsibilities or
duties hereunder at least 20% more (in terms of aggregate days in any calendar year or in any
calendar quarter when annualized for purposes of comparison to any prior year) than was required of
the Executive in any of the three (3) full years immediately prior to the Change in Control; or

          (vi) without limiting the generality or effect of the foregoing, without the Executive’s
express written consent, any material breach of this Agreement by the Company or any successor
thereto which is not remedied by the Company within ten (10) business days after receipt by the
Company of written notice from the Executive of such breach.

In no event shall the termination of Executive’s employment with the Company on account of the
Executive’s death or Disability or because the Executive engaged in conduct constituting Cause be
deemed to be a Constructive Termination Associated With a Change in Control.

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     (h) “Constructive Termination Prior to a Change in Control” means the termination of
Executive’s employment with the Company by the Executive as a result of:

          (i) without the Executive’s express written consent, a comprehensive and substantial reduction
in all or most of the Executive’s primary duties, authority and responsibilities compared to the
Executive’s duties, authority and responsibilities immediately prior to such reduction;

          (ii) without the Executive’s express written consent, a significant reduction in the
Executive’s Base Pay compared to the Executive’s Base Pay in effect immediately prior to such
reduction; provided, however, that a reduction in the Executive’s Base Pay of less than twenty
percent (20%) or a reduction in the Executive’s Base Pay that is part of an overall reduction in
compensation also applied to other senior executives of the Company as a result of decreased
business performance by the Company or one of its business units, shall not constitute a
Constructive Termination Prior to a Change in Control; or

          (iii) without the Executive’s express written consent, the failure of the Company to obtain
the assumption of this Agreement by any successors.

In no event shall the termination of Executive’s employment with the Company on account of the
Executive’s death or Disability or because the Executive engaged in conduct constituting Cause be
deemed to be a Constructive Termination Prior to a Change in Control.

     (i) “Disability” means the Executive becomes permanently disabled within the meaning of, and
begins actually to receive disability benefits pursuant to, the long-term disability plan in effect
for, or applicable to, the Executive.

     (j) “Employee Benefits” means the perquisites, benefits and service credit for benefits as
provided under any and all employee retirement income and welfare benefit policies, plans, programs
or arrangements in which the Executive is entitled to participate, including, without limitation,
any stock option, performance share, performance unit, stock purchase, stock appreciation, savings,
pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred
compensation, incentive compensation, group or other life, health, medical/hospital or other
insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary),
disability, salary continuation, expense reimbursement and other employee benefit policies, plans,
programs or arrangements that may now exist or any equivalent successor policies, plans, programs
or arrangements that may be adopted hereafter by the Company or a Subsidiary, providing
perquisites, benefits and service credit for benefits at least as great in the aggregate as are
payable thereunder.

     (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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     (l) “Incentive Pay” means the greater of: (i) Executive’s maximum Target Bonus for which
Executive was eligible during the period that includes the Termination Date, or (ii) the highest
aggregate bonus or incentive payment paid to Executive during any of the three (3) full calendar
years prior to his Termination Date. For purposes of this definition, “Target Bonus” means the
annual bonus, incentive, commission or other sales incentive compensation, or comparable incentive
payment opportunity which, in the sole discretion of the Company, is deemed to constitute a Target
Bonus, in addition to Base Pay, for which Executive was eligible to receive, but did not receive
prior to his Termination Date, in regard to services rendered in the year covered by Executive’s
Termination Date and is to be made pursuant to any bonus, incentive, profit-sharing, performance,
discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not
funded) of the Company or a Subsidiary, or any successor thereto. For purposes of this definition,
“Incentive Pay” does not include any stock option, stock appreciation, stock purchase, restricted
stock or similar plan, program, arrangement or grant, one time bonus or payment (including, but not
limited to, any sign-on bonus), any amounts contributed by the Company for the benefit of Executive
to any qualified or nonqualified deferred compensation plan, whether or not provided under an
arrangement described in the prior sentence, or any amounts designated by the parties as amounts
other than Incentive Pay.

     (m) “Involuntary Termination Associated With a Change in Control” means the termination of
Executive’s employment related to a Change in Control: (i) by the Company for any reason other than
Cause, the Executive’s death or the Executive’s Disability, or (ii) on account of a Constructive
Termination Associated with a Change in Control.

     (n) “Involuntary Termination Prior to a Change in Control” means the termination of
Executive’s employment unrelated to a Change in Control: (i) by the Company for any reason other
than Cause, the Executive’s death or the Executive’s Disability, or (ii) on account of a
Constructive Termination Prior to a Change in Control.

     (o) “Key Employee” shall mean any employee or former employee of the Company who is considered
a key employee under section 409A(2)(B)(i) of the Code, having an identification date for purposes
of section 409A of December 31, or any other party deemed a key Employee under applicable
regulations issued pursuant to sections 409A.

     (p) “Restricted Business” means,

          (i) if the Executive is entitled to severance benefits under this Agreement on account of an
Involuntary Termination Prior to a Change in Control, (A) the design, development, manufacture,
marketing or support of local or wide area network products, computer operating systems,
applications products, software products or services that enable organizations to more effectively
conduct business using the Web, or any other software products of the type designed, developed,
manufactured, sold or supported by the Company or as proposed to be designed, developed,
manufactured, sold or supported by the Company pursuant to a development project that is actually
being

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pursued during the term of this Agreement; (B) any business that performs technology and
consulting services that help businesses develop and accelerate their transition to Internet-based
e-business solutions and processes, or management services that assist businesses in improving
their operating processes; or (C) any business that competes directly or indirectly with the
hardware, software or consulting businesses of the Company.

          (ii) if the Executive is entitled to severance benefits under this Agreement on account of an
Involuntary Termination Associated With a Change in Control, any business function with a direct
competitor of the Company that is substantially similar to the business function performed by the
Executive with the Company immediately prior to his Termination Date.

     (q) “Restricted Territory” means the counties, towns, cities or states of any country in which
the Company operates or does business.

     (r) “Severance Period” means the twelve (12) month period after the Executive’s Termination
Date.

     (s) “Subsidiary” means any Company controlled affiliate.

     (t) “Termination Date” means the last day of Executive’s employment with the Company.

     (u) “Termination of Employment” means, except as provided in the following sentence, the
termination of Executive’s active employment relationship with the Company on account of an
Involuntary Termination Prior to a Change in Control or an Involuntary Termination Associated With
a Change in Control. For purposes of the non-solicitation provision of Section 11 of the
Agreement, the term “Termination of Employment” shall mean the termination of Executive’s
employment relationship with the Company for any reason, including, but not limited to, the
Executive’s Involuntary Termination Prior to a Change in Control, Involuntary Termination
Associated With a Change in Control, voluntary termination, termination on account of Disability,
or termination by the Company for Cause.

     (v) “Voting Stock” means securities entitled to vote generally in the election of directors.

2. Termination Prior to a Change in Control. 

     (a) Involuntary Termination Prior to a Change in Control. In the event Executive’s
employment is terminated on account of an Involuntary Termination Prior to a Change in Control,
Executive shall be entitled to the benefits provided in subsection (b) of this Section 2.

     (b) Compensation and Benefits Upon Involuntary Termination Prior to a Change in
Control. Subject to the provisions of Section 5 hereof, in the event a

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termination described in subsection (a) of this Section 2 occurs, the Company shall pay and
provide to the Executive after his Termination Date:

          (i) 150% of his Base Pay, payable in equal installments over the Severance Period, consistent
with the Company’s past payroll practices, commencing with the first payroll period that occurs
after the period during which Executive’s right to revoke his acceptance to the terms of the
Release has expired. Notwithstanding the foregoing, the Company may determine, in its sole
discretion and at any time, to provide that the amounts payable under this subsection (i) shall be
paid to Executive in a lump sum, as opposed to installments over the Severance Period; provided,
however, that such discretion shall not be exercised in a manner which will cause adverse income
tax results to Executive.

          (ii) Executive shall receive his pro rated Incentive Pay for the year in which his Termination
of Employment occurs. The pro rated Incentive Pay shall be based on the Executive’s Incentive Pay
for the year in which Executive’s Termination Date occurs, multiplied by a fraction, the numerator
of which is the number of days during which Executive was employed by the Company in the year of
his termination and the denominator of which is 365. Such pro rated Incentive Pay shall be paid to
Executive in equal installments over the Severance Period, consistent with the Company’s past
payroll practices, commencing with the first payroll period that occurs after the period during
which Executive’s right to revoke his acceptance to the terms of the Release has expired.
Notwithstanding the foregoing, the Company may determine, in its sole discretion and at any time,
to provide that the amounts payable under this subsection (ii) shall be paid to Executive in a lump
sum, as opposed to installments over the Severance Period.

          (iii) For the Severance Period commencing the month immediately following the month in which
his Termination Date occurs, Executive shall continue to receive the medical and dental coverage in
effect on his Termination Date (or generally comparable coverage) for himself and, where
applicable, his spouse and dependents, as the same may be changed from time to time for employees
generally, as if Executive had continued in employment during such period; provided, however, that
in the event that such continuation coverage violates applicable law or results in a material
adverse tax effect to the Company or the Executive, the Company shall pay Executive cash in lieu of
such coverage in an amount equal to Executive’s after-tax cost of continuing comparable coverage,
where such coverage may not be continued by the Company (or where such continuation would adversely
affect the tax status of the plan pursuant to which the coverage is provided). If the Executive
does not receive the cash payment described in the preceding sentence, the Company shall take all
commercially reasonable efforts to provide that the COBRA health care continuation coverage period
under section 4980B of the Code, shall commence immediately after the foregoing twelve (12) month
benefit period, with such continuation coverage continuing until the earlier of (i) the end of the
applicable COBRA health care continuation coverage period or (ii) the date on which Executive is
covered by the medical and dental coverage of his successor employer, if any.

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          (iv) With respect to any Company stock options held by the Executive as of the date of such
Involuntary Termination Prior to a Change in Control, the Company shall accelerate the vesting of
that portion of the Executive’s stock options, if any, which would have vested and become
exercisable within the one (1) year period after the Executive’s Termination Date, such options,
plus any other options that previously became exercisable and have not expired or been exercised,
to remain exercisable, notwithstanding anything in any other agreement governing such options, for
the longer of (A) a period of six (6) months after the Executive’s Termination Date, or (B) the
period set forth in the award agreement covering the option (the “Option Expiration Date”);
provided, however, that in no event will the option be exercisable beyond its original term or, if
not addressed in the grant agreement, then not later than the latest date that will avoid adverse
tax consequences to the Executive (if such date is earlier than the Option Expiration Date).

          (v) With respect to any shares of Company common stock held by the Executive that are, at the
time of such Involuntary Termination Prior to a Change in Control, subject to the Company’s
repurchase right upon termination of the Executive’s employment (“Restricted Stock”), the Company
shall waive such repurchase right as to the number of shares of Restricted Stock that would have
vested within the one (1) year period after the Executive’s Termination Date.

          (vi) To cover the cost of outplacement assistance services for Executive that are actually
provided by an outplacement agency selected by Executive, for which the Company provides prior
approval, with such approval not to be unreasonably withheld, in an amount not to exceed twenty
percent (20%) of the Executive’s Base Pay.

          (vii) Executive shall receive any amounts earned, accrued or owing but not yet paid to
Executive as of his Termination Date, payable in a lump sum, and any benefits accrued or earned in
accordance with the terms of any applicable benefit plans and programs of the Company.

3. Termination Associated With a Change in Control.

     (a) Involuntary Termination Associated With a Change in Control. In the event
Executive’s employment is terminated after, or in connection with, a Change in Control, on account
of (i) an Involuntary Termination Associated With a Change in Control within the two year period
after the Change in Control, or (ii) an Involuntary Termination Associated With a Change in Control
that occurs (A) not more than six (6) months prior to the date on which a Change in Control occurs
or (B) following the commencement of any discussion with a third person that ultimately results in
a Change in Control, Executive shall be entitled to the benefits provided in subsection (b) of this
Section 3. If Executive is entitled to benefits described in this Section 3 by reason of clause
(a)(ii) above, Executive shall receive the compensation and benefits described in Section 2(b)
above after his Termination of Employment, in accordance with the provisions of Section 2(b),
regardless of whether the Change in Control actually occurs, and Executive shall receive the
additional compensation and benefits described in Section

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3(b) below only if the Change in Control is consummated and shall receive such additional
amounts after the consummation of the Change in Control, in accordance with the provisions of
Section 3(b) below. For purposes of subsection 3(a)(ii)(B) above, to be eligible to receive
amounts described in Section 3(b) below, the Change in Control must be consummated within the
twelve (12) month period following Executive’s Termination Date, except in circumstances pursuant
to which the consummation of the Change in Control is delayed, through no failure of the Company or
the third person, by a governmental or regulatory authority or agency with jurisdiction over the
matter, or as a result of other similar circumstances. In such a circumstance, the remaining of
the twelve (12) month period shall be tolled and shall recommence upon termination of the delaying
event.

     (b) Compensation and Benefits Upon Involuntary Termination Associated With a Change in
Control. Subject to the provisions of Section 5 hereof, in the event a termination described
in subsection (a) of this Section 3 occurs, the Company shall pay and provide to the Executive
after his Termination Date:

          (i) Lump sum payment equal to (A) 2 times Base Pay, plus (B) 2 times Incentive Pay. Payment
shall be made in accordance with the Company’s normal payroll practices but not later than the
thirtieth day after Executive’s Termination Date (or the end of the revocation period for the
Release, if later); provided, however, that if Executive is deemed by the Company to be a Key
Employee as of the Termination Date, such payment shall occur on the earlier of the following: (x)
six months following Executive’s Termination Date; or (y) the date on which the Company determines
payment may be made without causing adverse tax consequences to Executive.

          (ii) Executive shall receive his pro rated Incentive Pay for the year in which his Termination
of Employment occurs. The pro rated Incentive Pay shall be based on the Executive’s Incentive Pay
for the year in which Executive’s Termination Date occurs, multiplied by a fraction, the numerator
of which is the number of days during which Executive was employed by the Company in the year of
his termination and the denominator of which is 365. Such pro rated Incentive Pay shall be paid to
Executive in a lump sum in accordance with the Company’s normal payroll practices but not later
than the thirtieth day after Executive’s Termination Date (or the end of the revocation period for
the Release, if later).

          (iii) For the Severance Period commencing the month immediately following the month in which
his Termination Date occurs, Executive shall continue to receive the medical and dental coverage in
effect on his Termination Date (or generally comparable coverage) for himself and, where
applicable, his spouse and dependents, as the same may be changed from time to time for employees
generally, as if Executive had continued in employment during such period; provided, however, that
in the event that such continuation coverage violates applicable law or results in a material
adverse tax effect to the Company or the Executive, the Company shall pay Executive cash in lieu of
such coverage in an amount equal to Executive’s after-tax cost of continuing comparable coverage,
where such coverage may not be continued by the Company (or where such continuation would adversely
affect the tax status of the plan pursuant to which the

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coverage is provided). If the Executive does not receive the cash payment described in the
preceding sentence, the Company shall take all commercially reasonable efforts to provide that the
COBRA health care continuation coverage period under section 4980B of the Code, shall commence
immediately after the foregoing twenty-four (24) month benefit period, with such continuation
coverage continuing until the earlier of (i) the end of the applicable COBRA health care
continuation coverage period or (ii) the date on which Executive is covered by the medical and
dental coverage of his successor employer, if any.

          (iv) Lump sum payment equal to the total amount that Executive would have received under the
Company’s 401(k) plan as a Company match if Executive was eligible to participate in the Company’s
401(k) plan for the twenty-four (24) month period after his Termination Date and he contributed the
maximum amount to the plan for the match. Payment shall be made in accordance with the Company’s
normal payroll practices but not later than the thirtieth day after Executive’s Termination Date
(or the end of the revocation period for the Release, if later).

          (v) Lump sum payment equal to the total premiums that the Company would have paid under
Executive’s split-dollar life insurance policy, if any, that is in effect immediately prior to his
Termination Date, if Executive was employed by the Company for the twenty-four (24) month period
following Executive’s Termination Date; provided, however, that if the remaining length of the term
of the split-dollar arrangement pursuant to which the Company must make premium payments is less
than the foregoing twenty-four (24) month period, Executive shall only receive a lump sum payment
equal to the remaining Company premiums for the term of the arrangement. Payment shall be made in
accordance with the Company’s normal payroll practices but not later than the thirtieth day after
Executive’s Termination Date (or the end of the revocation period for the Release, if later).
Notwithstanding the foregoing, no payment shall be made to Executive pursuant to this subsection
(v) if on the Executive’s Termination Date, either Executive does not have a split-dollar life
insurance policy with the Company or the Company has no obligations to make premium contributions
to Executive’s split-dollar life insurance policy.

          (vi) Lump sum payment equal to twenty percent (20%) of the Executive’s Base Pay in order to
cover the cost of outplacement assistance services for Executive. Payment shall be made in
accordance with the Company’s normal payroll practices but not later than the thirtieth day after
Executive’s Termination Date (or the end of the revocation period for the Release, if later).

          (vii) Executive shall receive any amounts earned, accrued or owing but not yet paid to
Executive as of his Termination Date, payable in a lump sum, and any benefits accrued or earned in
accordance with the terms of any applicable benefit plans and programs of the Company.

     (c) Notwithstanding any provision to the contrary in any applicable plan, program or
agreement, upon the occurrence of a Change in Control, all stock options, Restricted Stock and
other equity rights held by the Executive will become fully vested

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and/or exercisable, as the case may be, on the date on which the Change in Control occurs, and
all stock options held by the Executive shall remain exercisable, notwithstanding anything in any
other agreement governing such options, for the longer of (i) a period of twenty-four (24) months
after the Executive’s Termination Date, or (ii) the period set forth in the award agreement
covering the option (the “Option Expiration Date”); provided, however, that in no event will the
option be exercisable beyond its original term or, if not addressed in the grant agreement, then
not later than the latest date that will avoid adverse tax consequences to the Executive (if such
date is earlier than the Option Expiration Date).

4. Termination of Employment on Account of Disability, Cause or Death. Notwithstanding
anything in this Agreement to the contrary, if Executive’s employment terminates on account of
Disability, Executive shall be entitled to receive disability benefits under any disability program
maintained by the Company that covers Executive, and Executive shall not be considered to have
terminated employment under this Agreement and shall not receive benefits pursuant to Sections 2
and 3 hereof. If Executive’s employment terminates on account of Cause or because of his death,
Executive shall not be considered to have terminated employment under this Agreement and shall not
receive benefits pursuant to Sections 2 and 3 hereof.

5. Release. Notwithstanding the foregoing, no such payments shall be made or benefits
provided unless Executive executes, and does not revoke, the Company’s standard written release,
substantially in the form as attached hereto as Annex A, (the “Release”), of any and all claims
against the Company and all related parties with respect to all matters arising out of Executive’s
employment by the Company (other than entitlements under the terms of this Agreement or under any
other plans or programs of the Company in which Executive participated and under which Executive
has accrued or become entitled to a benefit) or a termination thereof.

6. Enforcement. Without limiting the rights of the Executive at law or in equity, if the
Company fails to make any payment or provide any benefit required to be made or provided hereunder
on a timely basis, the Company will pay interest on the amount or value thereof at an annualized
rate of interest equal to the so-called composite “prime rate” as quoted from time to time during
the relevant period in the Eastern Edition of The Wall Street Journal. Such interest will
be payable as it accrues on demand. Any change in such prime rate will be effective on and as of
the date of such change.

7. Certain Additional Payments by the Company.

     (a) The provisions of this Section 7 shall apply notwithstanding anything in this Agreement to
the contrary. Subject to subsection (b) below, in the event that it shall be determined that any
payment, benefit provided or distribution by the Company to or for the benefit of Executive,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of
section 280G of the Code, the Company shall pay Executive an additional amount (the “Gross-Up
Payment”) such that the net amount retained by Executive after deduction of any excise tax imposed
under

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section 4999 of the Code, and any federal, state and local income tax, employment tax, excise
tax and other tax imposed upon the Gross-Up Payment, shall be equal to the Payment. The right to
each payment of such amount shall vest as of the day on which the payment determination is made,
and each such payment shall be made on the thirtieth day following the vesting date.

     (b) Notwithstanding subsection (a), and notwithstanding any other provisions of this Agreement
to the contrary, if the net after-tax benefit to Executive of receiving the Gross-Up Payment does
not exceed the Safe Harbor Amount (as defined below) by more than 10% (as compared to the net-after
tax benefit to Executive resulting from elimination of the Gross-Up Payment and reduction of the
Payments to the Safe Harbor Amount), then (i) the Company shall not pay Executive the Gross-Up
Payment and (ii) the provisions of subsection (c) below shall apply. The term “Safe Harbor Amount”
means the maximum dollar amount of parachute payments that may be paid under section 280G of the
Code without imposition of an excise tax under section 4999 of the Code.

     (c) The provisions of this subsection (c) shall apply only if the Company is not required to
pay Executive a Gross-Up Payment as a result of subsection (b) above. If the Company is not
required to pay Executive a Gross-Up Payment as a result of the provisions of subsection (b), the
Company will apply a limitation on the Payment amount as set forth in subsection (i) below (a
“Parachute Cap”) if the application of the Parachute Cap is beneficial to Executive, according to
the following provisions:

          (i) If subsection (ii) does not apply, the aggregate present value of the Payments under
Section 3 of this Agreement (“Agreement Payments”) shall be reduced (but not below zero) to the
Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value which maximizes
the aggregate present value of Agreement Payments without causing any Payment to be subject to the
limitation of deduction under section 280G of the Code. For purposes of this Section 7, “present
value” shall be determined in accordance with section 280G(d)(4) of the Code.

          (ii) It is the intention of the parties that the Parachute Cap apply only if application of
the Parachute Cap is beneficial to Executive. Therefore, if the net amount that would be retained
by Executive under this Agreement without the Parachute Cap, after payment of any excise tax under
section 4999 of the Code, exceeds the net amount that would be retained by Executive with the
Parachute Cap, then the Company shall not apply the Parachute Cap to Executive’s payments. In that
event, neither the Parachute Cap nor the Gross-Up Payment will apply to Executive.

     (d) All determinations to be made under this Section 7 shall be made by the nationally
recognized independent public accounting firm used by the Company immediately prior to the Change
in Control (“Accounting Firm”), which Accounting Firm shall provide its determinations and any
supporting calculations to the Company and Executive within ten days of Executive’s termination
date. If any Gross-Up Payment is required to be made, the Company shall make the Gross-Up Payment
within ten days after receiving the Accounting Firm’s calculations. Any such determination by the
Accounting Firm shall be binding upon the Company and Executive.

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     (e) All of the fees and expenses of the Accounting Firm in performing the determinations
referred to in this Section 7 shall be borne solely by the Company.

8. No Mitigation Obligation. The Company hereby acknowledges that it will be difficult and
may be impossible for the Executive to find reasonably comparable employment following the
Termination Date. Accordingly, the payment of the severance compensation by the Company to the
Executive in accordance with the terms of this Agreement is hereby acknowledged by the Company to
be reasonable, and the Executive will not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor will any profits,
income, earnings or other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Executive hereunder or otherwise.

9. Legal Fees and Expenses. In the event of a Change in Control, it is the intent of the
Company that the Executive not be required to incur legal fees and the related expenses associated
with the interpretation, enforcement or defense of the Executive’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would detract from the benefits
intended to be extended to the Executive hereunder. Accordingly, if a Change in Control occurs and
it should appear to the Executive that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes or threatens to
take any action to declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, the Executive the benefits
provided or intended to be provided to the Executive under Section 3(b) of the Agreement, the
Company irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s
choice, at the expense of the Company as hereafter provided, to advise and represent the Executive
in connection with any such interpretation, enforcement or defense, including without limitation
the initiation or defense of any litigation or other legal action, whether by or against the
Company or any Director, officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to the Executive’s entering into an
attorney-client relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship will exist between the Executive and such counsel.
Without respect to whether the Executive prevails, in whole or in part, in connection with any of
the foregoing, the Company will pay and be solely financially responsible for any and all
attorneys’ and related fees and expenses incurred by the Executive in connection with any of the
foregoing; provided that, in regard to such matters, the Executive has not acted frivolously, in
bad faith or with no colorable claim of success. Such expenses will be paid by the Company on the
thirtieth day following its receipt of adequate substantiation to support payment of the expense
amount.

10. Confidentiality. The Executive hereby covenants and agrees that he will not disclose
to any person not employed by the Company, or use in connection with engaging in competition with
the Company, any confidential or proprietary information (as defined below) of the Company. For
purposes of this Agreement, the term “confidential or proprietary information” will include all
information of any nature and in any form that is

-15-

 

owned by the Company and that is not publicly available (other than by the Executive’s breach of
this Section 10) or generally known to persons engaged in businesses similar or related to those of
the Company. Confidential or proprietary information will include, without limitation, the
Company’s financial matters, customers, employees, industry contracts, strategic business plans,
product development (or other proprietary product data), marketing plans, consulting solutions and
processes, and all other secrets and all other information of a confidential or proprietary nature
which is protected by the Uniform Trade Secrets Act. For purposes of the preceding two sentences,
the term “Company” will also include any Subsidiary (collectively, the “Restricted Group”). The
foregoing obligations imposed by this Section 10 will not apply (i) in the course of the business
of and for the benefit of the Company, (ii) if such confidential or proprietary information has
become, through no fault of the Executive, generally known to the public, or (iii) if the Executive
is required by law to make disclosure (after giving the Company notice and an opportunity to
contest such requirement).

11. Covenants Not to Compete and Not to Solicit. In the event of Executive’s Termination
of Employment, the Company’s obligations to provide severance pay as provided in Sections 2 and 3
shall be expressly conditioned upon the Executive’s covenants not to compete and not to solicit as
provided herein. In the event the Executive breaches his obligations to the Company as provided
herein, the Company’s obligations to make severance payments to Executive pursuant to Sections 2
and 3 shall cease, without prejudice to any other remedies that may be available to the Company.

     (a) Covenant Not to Compete.

          (i) If Executive is receiving compensation and benefits under Section 2(b) above, then for a
period of nine (9) months following Executive’s Termination Date, the Executive shall not directly
or indirectly, engage in (whether as employee, consultant, proprietor, partner, director or
otherwise), or have any ownership interest in, or participate in a financing, operation, management
or control of, any person, firm, corporation or business that is a Restricted Business in a
Restricted Territory without the prior written consent of the Board. For this purpose, ownership
of no more than 5% of the outstanding Voting Stock of a publicly traded corporation shall not
constitute a violation of this provision.

          (ii) If Executive is receiving compensation and benefits under Section 3(b) above (or
subsequently becomes entitled to severance under Section 3(b) above because of a termination
described in Section 3(a)(ii)), then for a period of one (1) year following Executive’s Termination
Date, the Executive shall not directly or indirectly, engage in (whether as employee, consultant,
proprietor, partner, director or otherwise), or have any ownership interest in, or participate in a
financing, operation, management or control of, any person, firm, corporation or business that is a
Restricted Business in a Restricted Territory without the prior written consent of the Board. For
this purpose, ownership of no more than 5% of the outstanding Voting Stock of a publicly traded
corporation shall not constitute a violation of this provision.

-16-

 

     (b) Covenant Not to Solicit. The Executive shall not, for a period of two (2) years
after the Executive’s Termination Date for any reason: (i) solicit, encourage or take any other
action which is intended to induce any other employee of the Company to terminate his employment
with the Company; or (ii) interfere in any manner with the contractual or employment relationship
between the Company and any such employee of the Company. The foregoing shall not prohibit
Executive or any entity with which Executive may be affiliated from hiring a former employee of the
Company, provided that such hiring results exclusively from such former employee’s affirmative
response to a general recruitment effort.

     (c) Interpretation. The covenants contained herein are intended to be construed as a
series of separate covenants, one for each county, town, city and state or other political
subdivision of a Restricted Territory. Except for geographic coverage, each such separate covenant
shall be deemed identical in terms to the covenant contained in the preceding subsections. If, in
any judicial proceeding, the court shall refuse to enforce any of the separate covenants (or any
part thereof) deemed included in such subsections, then such unenforceable covenant (or such part)
shall be deemed to be eliminated from this Agreement for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced.

     (d) Reasonableness. In the event that the provisions of this Section 11 shall ever be
deemed to exceed the time, scope or geographic limitations permitted by applicable laws, then such
provisions shall be reformed to the maximum time, scope or geographic limitations, as the case may
be, permitted by applicable laws.

12. Employment Rights. Nothing expressed or implied in this Agreement will create any
right or duty on the part of the Company or the Executive to have the Executive remain in the
employment of the Company or any Subsidiary prior to or following any Change in Control.

13. Certain Tax Matters.

     (a) Withholding. The Company may withhold from any amounts payable under this
Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant
to any applicable law, regulation or ruling.

     (b) Effect of Section 409A of the Code. The parties intend that the provisions of
this Agreement will operate in a manner that will avoid adverse federal income tax consequences
under Section 409A of the Code. Executive hereby acknowledges and agrees that the Company may take
any actions deemed necessary in its sole discretion to avoid adverse federal income tax
consequences under section 409A of the Code and that such action may be taken without the consent
of Executive.

     (c) Time of Payment. If a payment is not made by the designated payment date under
this Agreement, the payment will be made in any event by the later of (i) the end of the calendar
year in which the designated payment date occurs or (ii) the 15th day

-17-

 

of the third calendar month following the designated payment date, or such other date as may
be permitted by section 409A of the Code and the regulations thereunder.

14. Term of Agreement. This Agreement shall continue in full force and effect for the
duration of Executive’s employment with the Company; provided, however, that after the termination
of Executive’s employment during the term of this Agreement, this Agreement shall remain in effect
until all of the obligations of the parties hereunder are satisfied or have expired.

15. Successors and Binding Agreement.

     (a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company, by agreement in form and substance reasonably satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place. This Agreement
will be binding upon and inure to the benefit of the Company and any successor to the Company,
including without limitation any persons acquiring directly or indirectly all or substantially all
of the business or assets of the Company whether by purchase, merger, consolidation, reorganization
or otherwise (and such successor will thereafter be deemed the “Company” for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by the Company.

     (b) This Agreement will inure to the benefit of and be enforceable by the Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees and legatees.
This Agreement will supersede the provisions of any employment or other agreement between the
Executive and the Company that relate to any matter that is also the subject of this Agreement, and
such provisions in such other agreements will be null and void.

     (c) This Agreement is personal in nature and neither of the parties hereto will, without the
consent of the other, assign, transfer or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 15(a) and 15(b). Without limiting the
generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not
be assignable, transferable or delegable, whether by pledge, creation of a security interest, or
otherwise, other than by a transfer by the Executive’s will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary to this Section
15(c), the Company will have no liability to pay any amount so attempted to be assigned,
transferred or delegated.

16. Notices. For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be given hereunder
will be in writing and will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed by the recipient), or five
(5) business days after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or

-18-

 

three (3) business days after having been sent by a nationally recognized courier service for
overnight/next-day delivery, such as FedEx, UPS, or the United States Postal Service, addressed to
the Company (to the attention of the Secretary of the Company) at its principal executive office
and to the Executive at his principal residence, or to such other address as any party may have
furnished to the other in writing and in accordance herewith, except that notices of changes of
address will be effective only upon receipt.

17. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the
Commonwealth of Massachusetts, without giving effect to the principles of conflict of laws of such
Commonwealth.

18. Validity. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it
enforceable, valid or legal.

19. Miscellaneous.

     (a) Except as provided in subparagraph (b) below, no provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party hereto at any time of
any breach by the other party hereto or compliance with any condition or provision of this
Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this Agreement. References to
Sections are to references to Sections of this Agreement. Any reference in this Agreement to a
provision of a statute, rule or regulation will also include any successor provision thereto.
Whenever used herein, the masculine includes the feminine.

     (b) Notwithstanding any contrary provision of this Agreement, the Company may modify benefits
otherwise payable or to be provided under this Agreement without obtaining the Executive’s consent
to such modification to the extent that the Company determines in its sole discretion that such
modification is necessary or appropriate in order to effect compliance with applicable law or
regulatory requirements. In particular, the Executive acknowledges and agrees that the provisions
of Section 409A of the Code may require delay in payment or provision of benefits otherwise due
under the terms of this Agreement until a date that is at least six (6) months following the date
of the Executive’s separation from service with the Company, and may limit the permissible forms or
timing of severance benefits that may be provided under this Agreement.

20. Survival. Notwithstanding any provision of this Agreement to the contrary, the
parties’ respective rights and obligations under Sections 2, 3, 7, 9, 10, and 11 will survive

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any termination or expiration of this Agreement or the termination of the Executive’s employment
for any reason whatsoever.

21. 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
agreement.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
as of the date first above written.

	 	 	 	 	 
	NOVELL, INC.
	 	 	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	/s/ Jack L. Messman
	 	 	 	 
	 

Name: Jack L. Messman

	 	 	 	 
	Title: Chairman and Chief Executive Officer
	 	 	 	 
	 
	 	 	 	 
	EXECUTIVE
	 	 	 	 
	/s/
Jeffrey M. Jaffe
	 	 	 	 
	 

	 	 	 	 

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Annex A 

SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE

     THIS SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made as of
this
                    
 day of                     ,                     , by and between Novell, Inc. (the “Company”) and                     
(“Executive”).

     WHEREAS, Executive formerly was employed by the Company as                     ;

     WHEREAS, Executive and Company entered into the Severance Agreement, dated                                          , 200_,
(the “Severance Agreement”) which provides for certain benefits in the event that Executive’s
employment is terminated on account of a reason set forth in the Severance Agreement;

     WHEREAS, Executive and the Company mutually desire to terminate Executive’s employment on an
amicable basis, such termination to be effective
                    
                    ,                       (“Date of Resignation”); and

     WHEREAS, in connection with the termination of Executive’s employment, the parties have agreed
to a separation package and the resolution of any and all disputes between them.

     NOW, THEREFORE, IT IS HEREBY AGREED by and between Executive and the Company as follows:

     1. (a) Executive, for and in consideration of the commitments of the Company as set forth in
paragraph 6 of this Agreement, and intending to be legally bound, does hereby REMISE, RELEASE AND
FOREVER DISCHARGE the Company, its affiliates, subsidiaries and parents, and its officers,
directors, employees, and agents, and its and their respective successors and assigns, heirs,
executors, and administrators (collectively, “Releasees”) from all causes of action, suits, debts,
claims and demands whatsoever in law or in equity, which Executive ever had, now has, or hereafter
may have, whether known or unknown, or which Executive’s heirs, executors, or administrators may
have, by reason of any matter, cause or thing whatsoever, from the beginning of Executive’s
employment to the date of this Agreement, and particularly, but without limitation of the foregoing
general terms, any claims arising from or relating in any way to Executive’s employment
relationship with the Company, the terms and conditions of that employment relationship, and the
termination of that employment relationship, including, but not limited to, any claims arising
under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII
of The Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave
Act of 1993, the Employee Retirement Income Security Act of 1974, [State Fair Employment Practice
Law], and any other claims under any federal, state or local common law, statutory, or regulatory
provision, now or hereafter recognized, and

A-1

 

any claims for attorneys’ fees and costs. This Agreement is effective without regard to the
legal nature of the claims raised and without regard to whether any such claims are based upon
tort, equity, implied or express contract or discrimination of any sort.

          (b) To the fullest extent permitted by law, and subject to the provisions of paragraph 11
below, Executive represents and affirms that (i) [other than                     ,] Executive has not filed or
caused to be filed on Executive’s behalf any claim for relief against the Company or any Releasee
and, to the best of Executive’s knowledge and belief, no outstanding claims for relief have been
filed or asserted against the Company or any Releasee on Executive’s behalf; (ii) [other than
                    ,] Executive has not reported any improper, unethical or illegal conduct or activities to
any supervisor, manager, department head, human resources representative, agent or other
representative of the Company, to any member of the Company’s legal or compliance departments, or
to the ethics hotline, and has no knowledge of any such improper, unethical or illegal conduct or
activities; and (iii) Executive will not file, commence, prosecute or participate in any judicial
or arbitral action or proceeding against the Company or any Releasee based upon or arising out of
any act, omission, transaction, occurrence, contract, claim or event existing or occurring on or
before the date of this Agreement.

     2. [The Company, for and in consideration of the commitments of the Executive as set forth in
this Agreement, and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER
DISCHARGE the Executive from all claims, demands or causes of action arising out of facts or
occurrences prior to the date of this Agreement, but only to the extent the Company knows or
reasonably should know of such facts or occurrence and only to the extent such claim, demand or
cause of action relates to a violation of applicable law or the performance of Executive’s duties
with the Company; provided, however, that this release of claims shall not in any case be effective
with respect to any claim by the Company alleging a breach of the Executive’s obligations under
this Agreement.]

[Note: Paragraph 2 only applies if Executive is receiving severance benefits on account of an
Involuntary Termination Associated With a Change in Control.]

     3. In consideration of the Company’s agreements as set forth in paragraph 6 herein, Executive
agrees to be comply with the limitations described in Sections 10 and 11 of the Severance
Agreement.

     4. Executive further agrees and recognizes that Executive has permanently and irrevocably
severed Executive’s employment relationship with the Company, that Executive shall not seek
employment with the Company or any affiliated entity at any time in the future, and that the
Company has no obligation to employ him in the future.

     5. Executive further agrees that Executive will not disparage or subvert the Company, or make
any statement reflecting negatively on the Company, its affiliated corporations or entities, or any
of their officers, directors, employees, agents or representatives, including, but not limited to,
any matters relating to the operation or

A-2

 

management of the Company, Executive’s employment and the termination of Executive’s
employment, irrespective of the truthfulness or falsity of such statement.

     6. In consideration for Executive’s agreement as set forth herein, the Company agrees:

[Note: The following severance benefits would apply if the Executive has an Involuntary
Termination Prior to a Change in Control.]

          (i) [to pay Executive 150% of Executive’s Base Pay (as defined in the Severance Agreement)
[for the Severance Period (as defined in the Severance Agreement), payable in equal installments,
consistent with the Company’s past payroll practices, commencing with the first payroll period that
occurs after the period during which Executive’s right to revoke Executive’s acceptance to the
terms of this Agreement have expired.] or [, payable in a lump sum, within thirty (30) days
after Executive’s Date of Resignation (or the end of the revocation period set forth in this
Agreement, if later).]

          (ii) to pay Executive Executive’s pro rated Incentive Pay (as defined in the Severance
Agreement) for the year in which Executive’s Date of Resignation occurs. Such pro rated Incentive
Pay shall be paid to Executive [for the Severance Period payable in equal installments, consistent
with the Company’s past payroll practices, commencing with the first payroll period that occurs
after the period during which Executive’s right to revoke Executive’s acceptance to the terms of
the Release has expired.] or [paid in a lump sum, within thirty (30) days after Executive’s
Date of Resignation (or the end of the revocation period set forth in this Agreement, if later).]

          (iii) [for a period of twelve (12) months following Executive’s Date of Resignation, Executive
shall continue to receive the medical and dental coverage in effect on Executive’s Date of
Resignation (or generally comparable coverage) for Executive and, where applicable, Executive’s
spouse and dependents, as the same may be changed from time to time for employees generally, as if
Executive had continued in employment during such period.] or [pay Executive cash in a lump
sum payment equal to Executive’s after-tax cost of continuing comparable medical and dental
coverage for the twelve (12) month period following Executive’s Date of Resignation]. [The Company
shall take all commercially reasonable efforts to provide that the COBRA health care continuation
coverage period under section 4980B of the Code, shall commence immediately after the foregoing
twelve (12) month benefit period, with such continuation coverage continuing until the earlier of
(i) the end of the applicable COBRA health care continuation coverage period or (ii) the date on
which Executive is covered by the medical and dental coverage of Executive’s successor employer, if
any.]

          (iv) with respect to any Company stock options held by the Executive as of Executive’s Date of
Resignation, the portion of Executive’s stock options, if any, which would have vested and become
exercisable within the one (1) year period after the Executive’s Date of Resignation shall become
vested and

A-3

 

exercisable as of Executive’s Date of Resignation, such options, plus any other options that
previously became exercisable and have not expired or been exercised, to remain exercisable,
notwithstanding anything in any other agreement governing such options, for the longer of (A) a
period of six (6) months after the Executive’s Date of Resignation, or (B) the period set forth in
the award agreement covering the option, subject in either case only to the original term of the
option. Any stock options held by Executive that are not exercisable as of the Executive’s Date of
Resignation shall terminate as of the Executive’s Date of Resignation.

          (v) with respect to any shares of Company common stock that are held by the Executive that
are, at the time of Executive’s Date of Resignation, subject to the Company’s repurchase right upon
termination of the Executive’s employment (“Restricted Stock”), to waive such repurchase right as
to the number of shares of Restricted Stock that would have become no longer subject to the
Company’s repurchase right within the one (1) year period after the Executive’s Date of
Resignation.

          (vi) pay the cost of outplacement assistance services for Executive that are actually provided
by an outplacement agency selected by Executive, which the Company provides prior approval, with
such approval not to be unreasonably withheld, in an amount not to exceed twenty percent (20%) of
the Executive’s Base Pay.

          (vii) Executive shall receive any amounts earned, accrued or owing but not yet paid to
Executive as of Executive’s Date of Resignation, payable in a lump sum, and any benefits accrued or
earned in accordance with the terms of any applicable benefit plans and programs of the Company.

Except as set forth in this Agreement, it is expressly agreed and understood that Releasees do
not have, and will not have, any obligations to provide Executive at any time in the future with
any payments, benefits or considerations other than those recited in this paragraph, or those
required by law, other than under the terms of any benefit plans which provide benefits or payments
to former employees according to their terms.]

[Note: The following severance benefits would apply if the Executive has an Involuntary
Termination Associated With a Change in Control.]

          (i) [to pay to Executive a lump sum payment equal to (A) 2 times Base Pay (as defined in the
Severance Agreement), plus (B) 2 times Incentive Pay (as defined in the Severance Agreement).
Payment shall be made within thirty (30) days after the effective date of Executive’s Date of
Resignation (or the end of the revocation period set forth in this Agreement, if later).

          (ii) to pay Executive Executive’s pro rated Incentive Pay (as defined in the Severance
Agreement) for the year in which Executive’s Date of

A-4

 

Resignation occurs. Such pro rated Incentive Pay shall be paid to Executive in a lump sum
within thirty (30) days after the effective date of the termination (or the end of the revocation
period set forth in this Agreement, if later).

          (iii) [for a period of twenty-four (24) months following Executive’s Date of Resignation,
Executive shall continue to receive the medical and dental coverage in effect on Executive’s Date
of Resignation (or generally comparable coverage) for Executive and, where applicable, Executive’s
spouse and dependents, as the same may be changed from time to time for employees generally, as if
Executive had continued in employment during such period] or [pay Executive cash in a lump
sum payment equal to Executive’s after-tax cost of continuing comparable medical and dental
coverage for the twenty-four (24) month period following Executive’s Date of Resignation.] [The
Company shall take all commercially reasonable efforts to provide that the COBRA health care
continuation coverage period under section 4980B of the Code, shall commence immediately after the
foregoing twenty-four (24) month benefit period, with such continuation coverage continuing until
the earlier of (i) the end of the applicable COBRA health care continuation coverage period or (ii)
the date on which Executive is covered by the medical and dental coverage of Executive’s successor
employer, if any.]

          (iv) to pay to Executive a lump sum payment equal to the total amount that Executive would
have received under the Company’s 401(k) plan as a Company match if Executive was eligible to
participate in the Company’s 401(k) plan for the twenty-four (24) month period after Executive’s
Date of Resignation and Executive contributed the maximum amount to the plan for the match.
Payment shall be made within thirty (30) days after the Executive’s Date of Resignation (or the end
of the revocation period set forth in this Agreement, if later).

          (v) [to pay to Executive a lump sum payment equal to the total premiums that the Company would
have paid under Executive’s split-dollar life insurance policy, if any, that is in effect
immediately prior to Executive’s Date of Resignation, if Executive was employed by the Company for
the twenty-four (24) month period following Executive’s Date of Resignation. Payment shall be made
within thirty (30) days after the effective date of Executive’s Date of Resignation (or the end of
the revocation period set forth in this Agreement, if later)]. [Note: The foregoing only applies
if Executive has a split-dollar arrangement with the Company and the Company is required to make
premium contributions on Executive’s Date of Resignation. The total months covered by the premiums
will be reduced if the term of the policy is shorter than that provided for Executive.]

          (vi) to pay to Executive a lump sum payment equal to twenty percent (20%) of the Executive’s
Base Pay in order to cover the cost of outplacement assistance services for Executive. Payment
shall be made within thirty (30) days after the effective date of Executive’s Date of Resignation
(or the end of the revocation period set forth in this Agreement, if later).

A-5

 

          (vii) Executive shall receive any amounts earned, accrued or owing but not yet paid to
Executive as of Executive’s Date of Resignation, payable in a lump sum, and any benefits accrued or
earned in accordance with the terms of any applicable benefit plans and programs of the Company.

Except as set forth in this Agreement, it is expressly agreed and understood that Releasees do
not have, and will not have, any obligations to provide Executive at any time in the future with
any payments, benefits or considerations other than those recited in this paragraph, or those
required by law, other than under the terms of any benefit plans which provide benefits or payments
to former employees according to their terms.]

     7. Executive understands and agrees that the payments, benefits and agreements provided in
this Agreement are being provided to him in consideration for Executive’s acceptance and execution
of, and in reliance upon Executive’s representations in, this Agreement. Executive acknowledges
that if Executive had not executed this Agreement containing a release of all claims against the
Company, Executive would only have been entitled to the payments provided in the Company’s standard
severance pay plan for employees.

     8. Executive acknowledges and agrees that the Company previously has satisfied any and all
obligations owed to him under any employment agreement or offer letter Executive has with the
Company and, further, that this Agreement supersedes any employment agreement or offer letter
Executive has with the Company, and any and all prior agreements or understandings, whether written
or oral, between the parties shall remain in full force and effect to the extent not inconsistent
with this Agreement, and further, that, except as set forth expressly herein, no promises or
representations have been made to him in connection with the termination of Executive’s employment
agreement, if any, or offer letter, if any, with the Company, or the terms of this Agreement.

     9. Executive agrees not to disclose the terms of this Agreement to anyone, except Executive’s
spouse, attorney and, as necessary, tax/financial advisor. Likewise, the Company agrees that the
terms of this Agreement will not be disclosed except as may be necessary to obtain approval or
authorization to fulfill its obligations hereunder or as required by law. It is expressly
understood that any violation of the confidentiality obligation imposed hereunder constitutes a
material breach of this Agreement.

     10. Executive represents that Executive does not presently have in Executive’s possession any
records and business documents, whether on computer or hard copy, and other materials (including
but not limited to computer disks and tapes, computer programs and software, office keys,
correspondence, files, customer lists, technical information, customer information, pricing
information, business strategies and plans, sales records and all copies thereof) (collectively,
the “Corporate Records”) provided by the Company and/or its predecessors, subsidiaries or
affiliates or obtained as a result of Executive’s prior employment with the Company and/or its
predecessors, subsidiaries or affiliates, or created by Executive while employed by or rendering
services to the

A-6

 

Company and/or its predecessors, subsidiaries or affiliates. Executive acknowledges that all
such Corporate Records are the property of the Company. In addition, Executive shall promptly
return in good condition any and all Company owned equipment or property, including, but not
limited to, automobiles, personal data assistants, facsimile machines, copy machines, pagers,
credit cards, cellular telephone equipment, business cards, laptops and computers. As of the Date
of Resignation, the Company will make arrangements to remove, terminate or transfer any and all
business communication lines including network access, cellular phone, fax line and other business
numbers.

     11. Nothing in this Agreement shall prohibit or restrict Executive from: (i) making any
disclosure of information required by law; (ii) providing information to, or testifying or
otherwise assisting in any investigation or proceeding brought by, any federal regulatory or law
enforcement agency or legislative body, any self-regulatory organization, or the Company’s
[designated legal, compliance or human resources officers]; or (iii) filing, testifying,
participating in or otherwise assisting in a proceeding relating to an alleged violation of any
federal, state or municipal law relating to fraud, or any rule or regulation of the Securities and
Exchange Commission or any self-regulatory organization.

     12. The parties agree and acknowledge that the agreement by the Company described herein, and
the settlement and termination of any asserted or unasserted claims against the Releasees, are not
and shall not be construed to be an admission of any violation of any federal, state or local
statute or regulation, or of any duty owed by any of the Releasees to Executive.

     13. Executive agrees and recognizes that should Executive breach any of the obligations or
covenants set forth in this Agreement, the Company will have no further obligation to provide
Executive with the consideration set forth herein, and will have the right to seek repayment of all
consideration paid up to the time of any such breach. Further, Executive acknowledges in the event
of a breach of this Agreement, Releasees may seek any and all appropriate relief for any such
breach, including equitable relief and/or money damages, attorney’s fees and costs.

     14. Executive further agrees that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages, as well as to an equitable
accounting of all earnings, profits and other benefits arising from any violations of this
Agreement, which rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled.

     15. This Agreement and the obligations of the parties hereunder shall be construed,
interpreted and enforced in accordance with the laws of the Commonwealth of Massachusetts.

     16. Executive certifies and acknowledges as follows:

A-7

 

          (a) That Executive has read the terms of this Agreement, and that Executive understands its
terms and effects, including the fact that Executive has agreed to RELEASE AND FOREVER DISCHARGE
the Company and each and everyone of its affiliated entities from any legal action arising out of
Executive’s employment relationship with the Company and the termination of that employment
relationship;

          (b) That Executive has signed this Agreement voluntarily and knowingly in exchange for the
consideration described herein, which Executive acknowledges is adequate and satisfactory to him
and which Executive acknowledges is in addition to any other benefits to which Executive is
otherwise entitled;

          (c) That Executive has been and is hereby advised in writing to consult with an attorney prior
to signing this Agreement;

          (d) That Executive does not waive rights or claims that may arise after the date this
Agreement is executed;

          (e) That the Company has provided him with a period of [twenty-one (21)] or
[forty-five (45)] days within which to consider this Agreement, and that Executive has signed on
the date indicated below after concluding that this Separation of Employment Agreement and General
Release is satisfactory to him; and

          (f) Executive acknowledges that this Agreement may be revoked by him within seven (7) days
after execution, and it shall not become effective until the expiration of such seven (7) day
revocation period. In the event of a timely revocation by Executive, this Agreement will be deemed
null and void and the Company will have no obligations hereunder.

[SIGNATURE PAGE FOLLOWS]

A-8

 

     Intending to be legally bound hereby, Executive and the Company executed the foregoing
Separation of Employment Agreement and General Release this
                    
day of                     ,                     .

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Witness:
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	[Executive]	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	NOVELL, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Witness:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 	 	 

A-9<PAGE>
EXHIBIT 10.1

                     REAL ESTATE PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                              GSI GROUP CORPORATION

                                   (AS SELLER)

                                       AND

                              SAGE AGGREGATION, LLC

                                 (AS PURCHASER)

                     CONCERNING CERTAIN PROPERTY LOCATED AT

                 8401 JEFFERSON HIGHWAY, MAPLE GROVE, MINNESOTA

                                        2

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
                             Schedules and Exhibits

Schedule 1.1   -   Defined Terms
Schedule 3.1   -   Deposit Escrow Provisions
Schedule 5.1   -   Seller Deliveries
Exhibit A      -   Land
Exhibit B      -   Form of Tenant Estoppel
Exhibit C      -   Lease Related Disclosures
Exhibit D      -   Exceptions to Seller Representations
Exhibit E      -   Form of Deed
Exhibit F      -   (Reserved)
Exhibit G      -   Form of Assignment and Assumption
Exhibit H      -   Form of Updated Representation Certificate
</TABLE>

<PAGE>

                     REAL ESTATE PURCHASE AND SALE AGREEMENT

     THIS REAL ESTATE PURCHASE AND SALE AGREEMENT (this "Agreement") is entered
into as of the Effective Date (defined below) by and between GSI Group
Corporation, a Michigan Corporation (the "Seller"), and SAgE Aggregation, LLC, a
Delaware limited liability company (the "Purchaser"), and is joined in by the
Title Company (defined below) in accordance with Schedule 3.1.

     In consideration of the mutual promises hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

     SECTION 1.1 DEFINITIONS. For purposes of this Agreement, capitalized terms
not otherwise defined herein have the meaning set forth in Schedule 1.1.

                                    ARTICLE 2

                     AGREEMENT; PURCHASE PRICE; CLOSING DATE

     SECTION 2.1. AGREEMENT TO SELL AND PURCHASE. Subject to the terms and
provisions hereof, Seller agrees to sell the Property to Purchaser, and
Purchaser agrees to purchase the Property from Seller. The Property is located
at 8401 Jefferson Highway, Maple Grove, Minnesota.

     SECTION 2.2. PURCHASE PRICE. The Purchase Price for the Property shall be
Six Million Two Hundred Fifty Thousand Dollars ($6,250,000). Subject to the
adjustments and apportionments as hereinafter set forth, the Purchase Price
shall be paid on the Closing Date by wire transfer of immediately available
federal funds.

     SECTION 2.3. CLOSING DATE. The transaction contemplated hereby shall close
on the Closing Date, subject to extension as provided herein.

                                    ARTICLE 3

                                     DEPOSIT

     SECTION 3.1. DEPOSIT. No later than the third Business Day following the
Effective Date, Purchaser shall deposit Fifty Thousand Dollars ($50,000) with
the Title Company. No later than the third Business Day immediately following
the end of the Study Period, unless this Agreement terminates in accordance with
Section 5.2 below, Purchaser shall deposit an additional Fifty Thousand Dollars
($50,000) with the Title Company. All deposits made pursuant to this Section
3.1, together with all interest and earnings thereon, are referred to
collectively in this Agreement as the "Deposit." The Deposit shall be held in a
segregated account in accordance with the provisions of Schedule 3.1 hereto. The
Deposit shall be applied to the Purchase Price if the Closing occurs. If the
Closing does not occur or if this Agreement otherwise terminates, the Deposit
shall be disbursed as provided herein. Notwithstanding anything in this
Agreement to the contrary, One Hundred and No/100 Dollars ($100.00) of the
Deposit is delivered to the Title Company as "Independent Contract
Consideration", and the Deposit is reduced by

                                        1

<PAGE>

the amount of the Independent Contract Consideration so delivered to Seller,
which amount has been bargained for and agreed to as consideration for Seller's
execution and delivery of this Agreement.

                                    ARTICLE 4

                                TITLE AND SURVEY

     SECTION 4.1. TITLE AND SURVEY. Promptly upon execution of this Agreement,
(a) Seller shall provide, or cause to be provided, Purchaser with a copy of the
most recent owner's title insurance policy or title commitment issued in
connection with the Real Property; and (b) Purchaser shall order a title
commitment or pro forma title policy (the "Title Commitment") and ALTA survey of
the Real Property (the "Survey"). Purchaser shall have until the Study Period
Notice Deadline to give Seller a written notice that sets forth any objections
that Purchaser has to title or survey matters affecting the Property and
disclosed on the Title Commitment or the Survey (the "Purchaser Title
Objections"). Seller shall use reasonable efforts to cure the Purchaser Title
Objections before the Closing Date. If, despite such reasonable efforts, Seller
is unable to cure the Purchaser Title Objections by the Closing Date, Purchaser
shall have the option (in its sole discretion) of either (y) accepting the title
as it then is or (z) terminating this Agreement, in which event the Deposit
shall immediately be returned to Purchaser, this Agreement shall terminate and
Purchaser and Seller shall have no further obligations or liabilities hereunder
other than Purchaser's obligations under Section 5.1(b)(iv), Section 5.2 and
Section 5.3. Notwithstanding anything in this Agreement to the contrary, all
Voluntary Liens will be satisfied by Seller on or prior to the Closing Date or,
if not so satisfied, shall be satisfied at Closing out of the proceeds otherwise
payable to Seller, and Purchaser shall have no obligation to give Seller any
notice of objection with respect to any Voluntary Liens.

                                    ARTICLE 5

                              INSPECTION AND AUDIT

     SECTION 5.1. DUE DILIGENCE MATERIALS; ACCESS.

     (a) No later than three (3) Business Days after the Effective Date, Seller
shall provide to Purchaser complete copies of the documents and materials listed
on Schedule 5.1, to the extent that such documents are in Seller's possession or
are reasonably available to Seller.

     (b) During the term of this Agreement, Purchaser, personally or through its
authorized agents or representatives, shall be entitled to interview the Tenant
and, upon no less than two (2) Business Days' advance notice to Seller, to enter
upon the Property during normal business hours, and shall have the right to make
such investigations, including appraisals, engineering studies, soil tests,
environmental studies, inquiry of governmental officials, and underwriting
analyses, as Purchaser deems necessary or advisable, subject to the following
limitations: (i) Purchaser shall give Seller written or telephonic notice not
less than two (2) Business Days before conducting any inspections on the
Property, and a representative of Seller and Tenant shall have the right to be
present when Purchaser or its representatives conducts its or their
investigations on the Property; (ii) neither Purchaser nor its representatives
shall materially interfere with the construction, use, occupancy or enjoyment of
the Property by the Seller or Tenant; (iii) neither Purchaser nor its agents
shall damage the Property or any portion thereof, except for any immaterial
damage caused by environmental or geotechnical tests, all of which shall
promptly be repaired by Purchaser; and (iv) Purchaser shall indemnify, hold
harmless and defend the Seller against all costs (including reasonable
attorneys' fees) and damage to the Property caused by the activities of
Purchaser or its agents under this paragraph, provided; however, that such
indemnity shall not include any costs or damages caused by (x) the acts of the
Seller or its agents or representatives (to the extent caused by the

                                        2

<PAGE>

acts of Seller or its agents or representatives), (y) any claims of diminution
in the value of the Property as a consequence of the results revealed by such
tests and inspections (except in the event of a breach by Purchaser of its
obligations under Section 5.3) or (z) any pre-existing condition of the Property
(except to the extent such condition is made worse by Purchaser). The foregoing
indemnification obligation shall survive the Closing or termination of this
Agreement for a period of six (6) months.

     SECTION 5.2. STUDY PERIOD. Purchaser shall have the period ending at 6:00
p.m. (local time in Boston, Massachusetts) on December 13, 2005 (the "Study
Period"), to physically inspect the Property, review economic data and market
conditions, underwrite the Tenant and review the Lease, conduct appraisals, make
inquiry of governmental officials, perform examinations of the physical
condition of the Improvements, examine the Real Property for the presence of
Hazardous Materials, and to otherwise conduct such due diligence and
underwriting as Purchaser, in its sole and absolute discretion, deems
appropriate in accordance with Section 5.1(b) above. This Agreement shall
terminate unless, before 6:00 p.m. on the first business day following the end
of the Study Period (the "Study Period Notice Deadline"), Purchaser gives Seller
written notice (the "Study Period Notice") that Purchaser, in its absolute and
unreviewable discretion, elects to proceed with the purchase of the Property
subject to and in accordance with the terms of this Agreement. In addition, at
any time before the Study Period Notice Deadline, Purchaser may, in its absolute
and unreviewable discretion, terminate this Agreement by giving written notice
thereof to Seller (the "Termination Notice"). In the event that either: (a)
Purchaser gives a Termination Notice before the Study Period Notice Deadline, or
(b) Purchaser does not give a Termination Notice but fails to give the Study
Period Notice before the Study Period Notice Deadline, this Agreement shall
automatically terminate, the Deposit promptly shall be returned to Purchaser,
and Seller and Purchaser shall have no further obligations or liabilities to
each other hereunder other than Purchaser's obligations under Section
5.1(b)(iv), this Section 5.2 and Section 5.3. In the event of a termination of
this Agreement for any reason, Purchaser shall deliver to Seller originals or
copies of all materials and documents in Purchaser's possession relating to the
Property and obtained by Purchaser during its investigation of the Property.

     SECTION 5.3. CONFIDENTIALITY. Purchaser shall use the Confidential
Information only for purposes of evaluating the Property in connection with its
potential purchase thereof in accordance with the terms of this Agreement (and,
if the Closing occurs, in connection with its ownership of the Property).
Notwithstanding the foregoing, Purchaser may disclose the Confidential
Information: (a) to its owners, legal counsel, accountants, lenders, potential
investors, regulatory authorities, or otherwise required by law, and other third
parties having a reason to review the Confidential Information in connection
with Purchaser's purchase of the Property; provided the Confidential Information
is kept confidential by such parties, (b) in connection with any legal
proceeding brought by Purchaser to enforce its rights under this Agreement; and
(c) to the extent that such disclosure is required by law or court order or by
discovery rules in any legal proceeding, provided that Purchaser first shall
provide written notice thereof to Seller. If this Agreement is terminated before
the Closing, Purchaser promptly shall return the Confidential Information to
Seller and shall not retain copies thereof. Except as otherwise provided in
Subsection (b) of this Section 5.3, the provisions of which shall apply to both
Seller and Purchaser for purposes of this sentence, neither Seller nor Purchaser
shall disclose this Agreement or make any public announcements concerning the
sale of the Property pursuant to this Agreement without first obtaining the
prior written consent of the other. In addition, and notwithstanding the
foregoing restrictions, Seller and Purchaser authorize each other and their
respective representatives to disclose, as necessary for the financing of the
purchase contemplated by this Agreement, the tax treatment and tax structure of
the transaction contemplated hereby and all related materials, including tax
analyses or opinions, relating to such tax treatment and tax structure. The
provisions of this paragraph shall survive the Closing or termination of this
Agreement.

                                        3

<PAGE>

     SECTION 5.4. TERMINATION OF CONTRACTS. No Contracts will be assigned to
Purchaser at Closing pursuant to this Agreement. Seller shall be responsible for
the termination of all Contracts prior to the Closing Date, and Purchaser shall
not have any liability under any of the Contracts. The provisions of this
Section 5.4 shall survive the Closing.

     SECTION 5.5. COOPERATION. During the term of this Agreement, the Seller
shall direct its property manager, agents and employees to cooperate with the
reasonable requests of the Purchaser to obtain information concerning the
Property pursuant to the provisions of Section 5.1 and Section 5.3 above.

     SECTION 5.6. NO ASSUMPTION OF EMPLOYEE CLAIMS. Purchaser and Seller agree
that Purchaser has not assumed and shall not assume any obligations to (or
regarding the employment of), any individuals previously or currently employed
by Seller in the management, ownership or operation of the Property. Purchaser
shall not assume, shall not take subject to and shall not be liable for, any
liabilities or obligations of any kind or nature, whether absolute, contingent,
accrued, known or unknown, to former or current employees of Seller (i) which
arise or accrue prior to the Closing including, without limitation, any
liabilities or obligations of Seller in connection with any employee benefit
plans or collective bargaining agreements, employment agreements or other
similar arrangement, any liabilities or obligations with respect to employment
arising under any federal, state or municipal statute or common law, or any
liabilities or obligations in respect of retiree health benefits, and (ii) with
respect to severance payments or other termination payments owing by Seller to
any of Seller's former or current employees (collectively, "Employee Claims").
Prior to the Closing Date Seller's employees shall vacate the Property. No
portion of any liability respecting the Employee Claims listed in clause (ii)
immediately above shall be passed through or charged to the Tenant by Seller.
The provisions of this paragraph shall survive the Closing.

                                    ARTICLE 6

              CONDITIONS PRECEDENT, CASUALTY DAMAGE OR CONDEMNATION

     SECTION 6.1. CONDITIONS PRECEDENT FAVORING PURCHASER. In addition to the
conditions precedent in favor of Purchaser set forth elsewhere in this
Agreement, Purchaser's obligations under this Agreement are subject to the
timely fulfillment of the conditions set forth in this Section 6.1 on or before
the Closing Date, or such earlier date as is set forth below. Each condition may
be waived in whole or in part only by written notice of such waiver from
Purchaser to Seller. Purchaser, by consummation of the Closing pursuant to this
Agreement, shall have waived the conditions precedent set forth in this Section
6.1 (provided, however, that any such waiver shall not in any way modify or
affect any other provision, condition, obligation, representation, warranty or
covenant set forth elsewhere in this Agreement).

          (a) Seller shall have performed and complied in all material respects
with all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Closing;

          (b) On the Closing Date, the Seller Representations shall be true,
complete and accurate, except for changes occurring in the normal course of
business or pursuant to the express provisions of the Lease;

          (c) Purchaser shall have received an estoppel certificate from the
Tenant dated no earlier than thirty (30) days prior to the Closing Date
reflecting the terms of the Lease and otherwise substantially in the form
attached hereto as Exhibit B. This condition shall not be satisfied if the
Tenant estoppel certificate discloses: (i) any default by landlord or Tenant;
(ii) any amendment, modification or supplement to the Lease that was not
provided to Purchaser before the commencement of the Restricted Period or
consented to in writing by the Purchaser; or (iii) any other information that is
inconsistent in

                                        4

<PAGE>

any material respect with the Lease or related Lease information as provided to
Purchaser before the commencement of the Restricted Period. Seller shall use
good faith, commercially reasonable efforts to obtain such estoppel certificate
from the Tenant, and shall deliver a copy of such estoppel to Purchaser promptly
upon receipt thereof by Seller. Seller shall allow Purchaser to review the
estoppel certificate before presenting it to the Tenant in the event that the
form of estoppel certificate differs from the form attached as Exhibit B;

          (d) Purchaser shall have received a subordination, non-disturbance and
attornment agreement ("SNDA"), subordinating the Lease to the loan of
Purchaser's mortgage lender, in a form that is recordable in the land records of
the Property and is reasonably acceptable to the Purchaser and such lender.
Seller shall use good faith, commercially reasonable efforts to obtain such
SNDA, and shall deliver the original of such SNDA in recordable form promptly
upon receipt thereof by Seller;

          (e) On the Closing Date, title to the Property shall be conveyed to
Purchaser subject only to the Permitted Exceptions and the Title Company shall
issue to Purchaser an owner's title insurance policy without standard exceptions
(on the current ALTA Form B), so long as the Purchaser causes a copy of the
Survey to be provided to the Title Company, in the amount of the Purchase Price,
together with the Required Endorsements upon payment by Purchaser for the
Required Endorsements, insuring good and marketable fee simple title to the Real
Property in Purchaser, subject only to the Permitted Exceptions and the standard
printed exceptions, except that: (i) the exceptions for mechanic's liens or
construction liens, and unrecorded easements shall be deleted; (ii) the survey
exception shall be limited to Permitted Exceptions; (iii) the exception relating
to ad valorem taxes shall relate only to taxes and assessments that are due and
payable after the Closing Date; and (iv) the parties-in-possession exception
shall be deleted except as to the Tenant, as tenant only, as provided for in the
Lease;

          (f) On the Closing Date, (i) the Property shall be in the same
condition that it is in now, reasonable wear and tear excepted, and free from
tenants and occupants, except for the Tenant pursuant to the Lease and except
for construction, alteration and modifications to the Property as and to the
extent permitted by the Lease; (ii) there shall be no judicial or administrative
or condemnation proceeding pending or threatened concerning the Property that
was not disclosed in writing to Purchaser before the commencement of the
Restricted Period; (iii) the Property and the use and operation thereof by
Seller and Tenant shall comply in all material respects with all Legal
Requirements; (iv) the Lease shall be in full force and effect and free from
default, except for any default that was disclosed in writing to Purchaser
before the end of the Study Period; (v) there shall be no bankruptcy proceeding
pending or threatened in writing with respect to the Tenant; and (vi) the
Property shall be free and clear of: (y) any management or leasing agreements
and any other Contracts under which Purchaser has any obligations; and (z) any
collective bargaining or employment agreements under which Purchaser has any
obligations;

          (g) (Reserved);

          (h) There shall be no Reciprocal Access Agreements encumbering the
Property (or, if there are Reciprocal Access Agreements encumbering the
Property, Purchaser shall have received an estoppel certificate dated no earlier
than thirty (30) days prior to the Closing Date, in form and substance
reasonably acceptable to Purchaser, from all parties to any Reciprocal Access
Agreements); and

          (i) Seller shall use commercially reasonable efforts to obtain and
provide to Purchaser a final, non-appealable certificate of occupancy for all of
the Improvements and any certificates or approvals necessary to permit the use
of any parking facilities at the Property (collectively, the "Certificate of
Occupancy").

                                        5

<PAGE>

     SECTION 6.2. CONDITIONS PRECEDENT FAVORING SELLER. In addition to the
conditions precedent in favor of Seller set forth elsewhere in this Agreement,
Seller's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 6.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or part only by written notice of such waiver from Seller to
Purchaser.

          (a) Purchaser shall have performed and complied in all material
respects with all of the terms of this Agreement to be performed and complied
with by Purchaser prior to or at the Closing; and

          (b) On the Closing Date, the representations of Purchaser set forth in
Section 7.2 shall be true, accurate and complete.

     SECTION 6.3. RISK OF LOSS. Unless and until the Closing is completed, the
risk of loss to the Property from casualty or condemnation shall be borne by
Seller. If all or a portion of the Property is damaged or destroyed by fire or
other casualty prior to Closing such that: (1) Purchaser's reasonable estimate
of the cost to repair the same exceeds $200,000; (2) the Tenant has the right to
terminate the Lease or abate or offset rent under the Lease on account of such
casualty; or (3) access to or egress from the Property is materially impaired
(any such fire or other casualty, a "Material Casualty"), Purchaser may, at
Purchaser's sole option, elect to either:

     (a) terminate this Agreement and receive back the Deposit, subject to
Purchaser's obligations under Section 5.1(b)(iv), Section 5.2 and Section 5.3;
or

     (b) purchase the Property subject to and in accordance with the terms of
this Agreement.

     In the event of a fire or other casualty that is not a Material Casualty,
and in connection with any Material Casualty as to which Purchaser elects to
proceed pursuant to Section 6.3(b), (A) Purchaser shall purchase the Property in
accordance with the terms hereof without reduction in the Purchase Price (except
for any applicable deductible that will reduce the insurance proceeds assigned
to Purchaser at Closing) and (B) Seller shall assign to Purchaser at Closing all
insurance proceeds paid or payable to Seller on account of such damage,
including any business interruption insurance (and the amount of any deductible
shall be credited against the Purchase Price). Purchaser shall be deemed to have
elected to terminate this Agreement under Section 6.3(a) unless, within ten (10)
Business Days from reasonably detailed written notice to Purchaser of such
casualty, Purchaser provides Seller with written notice that Purchaser elects to
proceed pursuant to Section 6.3(b). If the Closing Date would otherwise occur
sooner, it shall automatically be extended to the date that is fifteen (15)
Business Days after written notice to Purchaser of the Material Casualty. If any
insurance proceeds paid or payable on account of a fire or other casualty are to
be assigned to Purchaser in accordance with the provisions of this Agreement,
Seller shall cooperate as reasonably requested by Purchaser to effectuate such
assignment (including, if necessary, prosecuting claims in Purchaser's name or
for Purchaser's benefit), and Seller's obligation to so cooperate shall survive
the Closing. Notwithstanding anything to the contrary in this Section 6.3, if
Seller fails to maintain full replacement cost insurance as required herein, and
if there is a fire or other casualty that is not a Material Casualty, or if
there is a Material Casualty as to which Purchaser elects to proceed under
Section 6.3(b), Purchaser shall have the right, in lieu of an assignment of
insurance proceeds, to receive a credit against the Purchase Price in an amount
equal to the cost to repair the damage caused by such fire or other casualty as
estimated by a third party consultant selected by Purchaser and the amount of
any lost rents that would have been covered by insurance if Purchaser had
maintained the rental insurance required above.

                                        6

<PAGE>

     SECTION 6.4. CONDEMNATION. If, at any time before completion of the
Closing, a taking or condemnation (or proceeding in lieu thereof) is commenced
or threatened in writing: (i) of all or substantially all of the Property; or
(ii) of less than all or substantially all of the Property that: (1) results in
the Tenant having the right to terminate its Lease or abate or offset rent under
the Lease; (2) causes the Property to fail to comply with Legal Requirements or
any applicable Reciprocal Easement Agreements; (3) materially impairs access to
or egress from the Property; (4) causes the loss of any parking that benefits
the Property; or (5) otherwise, in Purchaser's reasonable business judgment,
results in a loss of value in excess of $200,000 (any of the foregoing, a
"Material Taking"), Purchaser may, at Purchaser's sole option, elect either to:

          (a) terminate this Agreement and receive back the Deposit subject to
Purchaser's obligations under Section 5.1(b)(iv), Section 5.2 and Section 5.3;
or

          (b) purchase the Property subject to and in accordance with this
Agreement.

     In the event of condemnation or taking that does not constitute a Material
Taking, or if there is a Material Taking but Purchaser elects to proceed under
Section 6.4(b), (1) Purchaser shall purchase the Property in accordance with the
terms hereof (without reduction in the Purchase Price), (2) Seller shall assign
to Purchaser at Closing all condemnation proceeds and rental interruption
insurance paid or payable as a result of such condemnation, (3) Purchaser shall
have the right to be present with Seller at any hearings or negotiations with
respect thereto, and (4) Seller shall not settle or compromise any such matter
without Purchaser's prior written consent. Purchaser shall be deemed to have
elected to terminate this Agreement under Section 6.4(a) unless, within ten (10)
Business Days from written notice to Purchaser of the condemnation, Purchaser
provides Seller with written notice that Purchaser elects to proceed pursuant to
Section 6.4(b). If the Closing Date would otherwise occur sooner, it shall
automatically be extended to the date that is fifteen (15) Business Days after
written notice to Purchaser of the Material Taking.

     SECTION 6.5. LEASING AND OTHER ACTIVITIES PRIOR TO CLOSING.

          (a) During the term of this Agreement, Seller shall not enter into any
Lease Transaction without Purchaser's prior written consent, which consent may
be given or withheld in Purchaser's sole discretion.

          (b) During the Restricted Period, Seller shall not enter into any new
Contracts or material modifications, renewals or terminations of any existing
Contracts that would impose any obligations on Purchaser or on the Property
after Closing, without the written consent of Purchaser, which consent may be
granted or denied in Purchaser's sole discretion. In its request for Purchaser's
approval under this Section 6.5(b), Seller shall include the following notice:
"NOTE: FAILURE TO RESPOND WITHIN THE TIME PERIOD SET FORTH IN SECTION 6.5(b)
WILL RESULT IN A DEEMED APPROVAL". If Seller so requests Purchaser's approval
and Purchaser does not notify Seller in writing of its consent or disapproval
within ten (10) Business Days after notice thereof from Seller, Purchaser shall
be deemed to have consented to such requested action. Without limiting the
foregoing approval rights, Seller shall provide Purchaser with prompt notice of
any new Contracts or material modifications, renewals or terminations of any
such contracts, together with complete copies of the documents relating thereto,
in the event that any of the same would impose any obligations on Purchaser or
the Property after Closing.

          (c) During the Restricted Period, Seller shall not, without
Purchaser's prior written approval, (i) make any material alterations or
additions to the Property, except as may be required by law or contemplated by
the Lease or as may reasonably be required for the prudent repair and
maintenance of

                                        7

<PAGE>

the Property, (ii) change or attempt to change (or consent to any change in) the
zoning or other Legal Requirements applicable to the Property, except and to the
extent contemplated by the Lease or (iii) cancel, amend or modify in any
material respect any Permit, except and to the extent contemplated by the Lease.

          (d) At all times prior to Closing and during the term of this
Agreement, Seller shall: (i) maintain the Property in good condition and repair,
subject to Tenant's rights under the Lease; (ii) use commercially reasonable
efforts to maintain its relations with the Tenant and otherwise conduct business
with respect to the Property in a commercially reasonable manner; (iii) perform
its obligations under the Lease, the Contracts and the Permitted Exceptions
(and, as applicable, use commercially reasonable efforts to enforce the
obligations of Tenant under the Lease); (iv) insure, or cause to be insured, the
Improvements at 100% of replacement cost, and maintain liability and other
insurance in accordance with generally prevailing industry standards, except to
the extent that such insurance obligations are Tenant's responsibility under the
Lease; (v) not sell or further encumber the Property or any direct or indirect
interest therein or enter into any agreement relating thereto, and (vi) promptly
give Purchaser a reasonably detailed written notice of any of the following
during the term of this Agreement: (1) any fire, flood or other material adverse
change with respect to the Property of which Seller obtains actual knowledge;
(2) any actual or proposed condemnation (or proceeding in lieu thereof) of which
Seller obtains actual knowledge; (3) any written notice received by Seller
during the term of this Agreement claiming that the Property or the use and
operation thereof fails to comply with any Legal Requirements; (4) any written
notice given or received by Seller claiming that Seller or the Tenant is default
under any Lease; and (5) any written notice received by Seller concerning any
pending or threatened litigation or administrative proceeding affecting the
Property. If Seller becomes aware during the term of this Agreement of any
matters that render any of its representations or warranties untrue, Seller
shall promptly disclose such matters to Purchaser in writing.

                                    ARTICLE 7

               AS-IS SALE; LIMITED REPRESENTATIONS AND WARRANTIES

     SECTION 7.1. AS-IS SALE.

          (a) Purchaser acknowledges that it is an experienced and sophisticated
purchaser of commercial real estate projects such as the Property and that,
prior to the Closing, it will have a full and complete opportunity to conduct
such investigations, examinations, inspections and analysis of the Property and
market conditions as Purchaser, in its absolute discretion, may deem
appropriate. Purchaser further acknowledges that, except for Seller
Representations, Purchaser has not relied upon any statements, representations
or warranties by Seller or any agent of Seller.

          (b) Except for the Seller Representations, Purchaser agrees that the
Property shall be sold and that Purchaser shall accept possession of the
Property on the Closing Date strictly on an "as is, where is, with all faults"
basis, and that, except for the Seller Representations, such sale shall be
without representation or warranty of any kind by Seller, express or implied,
and at the Closing Purchaser shall be assuming all liabilities or obligations
pertaining to the Property, except as expressly provided under this Agreement or
any document delivered at the Closing.

     SECTION 7.2. PURCHASER REPRESENTATIONS. Purchaser hereby represents and
warrants to Seller as follows:

                                        8

<PAGE>

          (a) Purchaser is a limited liability company, duly formed, validly
existing and in good standing under the laws of the State of Delaware. This
Agreement constitutes the valid and legally binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms.

          (b) There are no actions, suits or proceedings pending or, to the
knowledge of Purchaser, threatened, against or affecting Purchaser which, if
determined adversely to Purchaser, would adversely affect its ability to perform
its obligations hereunder. Purchaser has not (a) made a general assignment for
the benefit of creditors, (b) filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition of Purchaser's creditors, (c)
suffered the appointment of a receiver to take possession of all, or
substantially all, of Purchaser's assets, (d) suffered the attachment or other
judicial seizure of all, or substantially all, of Purchaser's assets, (e)
admitted in writing it inability to pay its debts as they come due or (f) made
an offer of settlement, extension or composition to its creditors generally.
Purchaser has full right, power and authority and is duly authorized to enter
into this Agreement, to perform each of the covenants on its part to be
performed hereunder and to execute and deliver, and to perform its obligations
under all documents required to be executed and delivered by it pursuant to this
Agreement.

          (c) Neither the execution, delivery or performance of this Agreement
nor compliance herewith (i) conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under (1) the
organizational documents of Purchaser, (2) to the best of Purchaser's knowledge,
any law or any order, writ, injunction or decree of any court or governmental
authority, or (3) any agreement or instrument to which Purchaser is a party or
by which it is bound or (ii) results in the creation or imposition of any lien,
charge or encumbrance upon its property pursuant to any such agreement or
instrument.

          (d) No authorization, consent, or approval of any governmental
authority (including courts) is required for the execution and delivery by
Purchaser of this Agreement or the performance of its obligations hereunder.

          (e) Purchaser acknowledges and agrees that the Property is subject to
the terms of the Lease and Tenant's right to possession and occupancy of the
Property as described in Section 8.6 below.

     SECTION 7.3. SELLER'S REPRESENTATIONS. Seller warrants and represents to
Purchaser as follows:

          (a) REPRESENTATIONS CONCERNING SELLER.

          (i) Seller is a corporation, duly formed, validly existing and in good
standing under the laws of the State of Michigan. This Agreement constitutes the
valid and legally binding obligation of Seller, enforceable against Seller in
accordance with its terms;

          (ii) There are no actions, suits or proceedings pending or, to the
knowledge of Seller, threatened, against or affecting Seller which, if
determined adversely to Seller, would adversely affect its ability to perform
its obligations hereunder. Seller has not (a) made a general assignment for the
benefit of creditors, (b) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition of Seller's creditors, (c) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller's assets, (d) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (e) admitted in writing it inability
to pay its debts as they come due or (f) made an offer of settlement, extension
or composition to its creditors generally. Seller has full right, power and
authority and is duly authorized to enter into this Agreement, to perform each
of the covenants on its part to be

                                        9

<PAGE>

performed hereunder and to execute and deliver, and to perform its obligations
under all documents required to be executed and delivered by it pursuant to this
Agreement;

          (iii) Neither the execution, delivery or performance of this Agreement
nor compliance herewith (a) conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under (1) the
organizational documents of Seller, (2) to the best of Seller's knowledge, any
law or any order, writ, injunction or decree of any court or governmental
authority, or (3) any agreement or instrument to which Seller is a party or by
which it is bound or (b) results in the creation or imposition of any lien,
charge or encumbrance upon the Property pursuant to any such agreement or
instrument;

          (iv) No authorization, consent, or approval of any governmental
authority (including courts) is required for the execution and delivery by
Seller of this Agreement or the performance of its obligations hereunder;

          (v) Seller is not a "foreign person" or "disregarded" entity" as
defined in Section 1445 of the Code; Seller's taxpayer identification number is
38-1859358;

          (b) REPRESENTATIONS CONCERNING THE PROPERTY.

          (i) The Lease:

               (A) Seller has delivered to purchaser a true, correct and
complete copy of the lease;

               (B) The lease is in full force and effect, has not been amended,
modified or supplemented, and constitutes the entire Agreement between the
Seller and the Tenant concerning the property;

               (C) There is no default by the Seller or Tenant under the Lease
or, to the best of Seller's knowledge, any condition or event that, with the
passage of time or giving of notice, or both, would constitute such a default.
The Tenant is not currently entitled to any reduction in or refund of, and has
no counterclaim or offset against, and is not otherwise disputing, any rents or
other charges paid, payable or to become payable by the Tenant under the Lease
or any of the Tenant's other obligations under the Lease. There are no options
or rights to renew, extend or terminate the Lease, except as expressly set forth
in the Lease. The Tenant has not notified Seller its intent to terminate or
attempt to renegotiate its Lease prior to expiration of the term of such Lease.
To the knowledge of the Seller, the Tenant has not entered into any assignment
or sublease with respect to the Lease;

               (D) Except as disclosed on Exhibit C, Tenant has not provided any
security deposit in connection with the Lease;

               (E) There are no free rent, operating expense abatements,
incomplete tenant improvements, rebates, allowances, or other unexpired
concessions or landlord obligations except as expressly set forth in the Lease;

                                       10

<PAGE>

               (F) To Seller's actual knowledge, other than the Lease, there are
no other leases, licenses or other occupancy agreements affecting all or any
portion of the Property, except as set forth in the Title Commitment and there
are no tenants or other occupants of all or any part of the Property other than
the Tenant under the Lease;

               (G) At the Closing, the landlord's interest in the Lease will be
assigned to Purchaser;

               (H) To the actual knowledge of the Seller, the Tenant is not the
subject of any bankruptcy, reorganization, insolvency or similar proceedings;

               (I) (a) The execution date of the Lease was May 2, 2005 the rent
commencement date of the Lease was May 2, 2005 and the expiration date of the
initial term of the Lease is April 30, 2008 (b) There are no options remaining
unexercised on the part of the Tenant to renew the Lease except as expressly set
forth in the Lease; and (c) Monthly basic rent is payable as and when set forth
in the Lease;

               (J) (a) Landlord has not received any notice from Tenant of any
defects in the Property or any related improvements or facilities; (b) Tenant
has not delivered any notice alleging any defect or deficiency in the work
relating to the Property or any related improvements or facilities; and (c)
Landlord has satisfied, or shall satisfy before the Closing Date, any and all
commitments made to induce Tenant to enter in to the Lease;

          (ii) Lease Brokerage. There are no lease brokerage agreements, leasing
commission agreements or other agreements providing for payments of any amounts
for leasing activities or procuring tenants with respect to the Property,
whether now or in the future. No brokerage or similar fee shall be due or unpaid
by the Seller with respect to the Lease or the Property. No brokerage or similar
fee shall be due or payable by the Purchaser on account of the exercise of any
renewal, extension or expansion options arising under the Lease;

          (iii) Contracts. No contracts will be assigned to Purchaser in
connection with Purchaser's acquisition of the Property pursuant to this
Agreement, and Purchaser shall have no obligations under any Contracts;

          (iv) Warranties, Permits and Related Matters.

               (A) Seller will use commercially reasonable efforts to locate any
warranties with respect to the Improvements on or before the Closing Date (the
"Warranty"). A true and correct copy of any such existing Warranty will be
delivered to Purchaser and shall be duly assigned to Purchaser at Closing at
Seller's sole expense;

               (B) To the best of Seller's actual knowledge, the Property is in
compliance in all material respects with all Legal Requirements, and the Seller
has no actual knowledge of any claim of violation of any Legal Requirement;

               (C) To the best of Seller's knowledge, Seller has obtained all
licenses, permits, variances, approvals, and authorizations required from all
governmental authorities having jurisdiction over the Property or from private
parties for the intended development, construction, use, operation and occupancy
of the Property and to insure vehicular and pedestrian ingress to and egress
from the Property (collectively, the "Permits"). To the best of Seller's
knowledge, all appeal periods with respect to any existing Permits have expired
and no appeals have been filed;

                                       11

<PAGE>

               (D) Seller has not received any written notice from any insurance
company, insurance rating organization or Board of Fire Underwriters requiring
any alterations, improvements or changes at the Property, or any portion
thereof;

               (E) To the best of Seller's actual knowledge and excluding any
obligation or agreement of Tenant, other than real estate taxes and assessments,
Seller has no obligations to any governmental authority, adjacent property owner
or other Person for the payment (or for any donations in lieu of payment) or
performance of any infrastructure, capital improvements or other work in
connection with the development or ownership of the Property;

          (v) Litigation and Other Proceedings.

               (A) No condemnation or eminent domain proceedings are pending or,
to Seller's knowledge, threatened against the Property or any part thereof, and
the Seller has not made any commitments to or received any written notice of the
desire of any public authority or other entity to take or use the Property or
any part thereof whether temporarily or permanently, for easements,
rights-of-way, or other public or quasi-public purposes;

               (B) There are no pending, or to Seller's knowledge, threatened,
judicial or administrative proceedings or investigations affecting or relating
to the development, construction, use, operation or ownership of the Property;

          (vi) Taxes. The Seller has delivered true and correct copies of tax
bills issued by any applicable state or local governmental taxing authorities
issued to the Seller with respect to the Property for the most recent past and
current tax years, and any new assessment received with respect to a current or
future tax year. The Real Property's tax parcel ID number is 24-119-22 11 0013
and the Real Property is entirely located within such tax parcel ID number (and
no property other than the Real Property is located therein). Seller is not
aware of any special assessments pertaining to the Property;

          (vii) (Reserved);

          (viii) Hazardous Materials. To the actual knowledge of Seller: (i)
there is no violation of nor any existing investigation by any governmental
authority under any Environmental Law with respect to the Property, (ii) any
handling, storage, treatment or use of Hazardous Materials that has occurred at
the Property has been in compliance with all applicable Environmental Laws, and
(iii) there are no underground storage tanks located at, on or under the
Property;

          (ix) No Preemptive Rights. The Seller has not granted any option or
right of first refusal or first opportunity to any party to acquire any interest
in any of the Property;

          (x) Reports and Other Information.

               (A) Seller will deliver or make available to Purchaser (without
representation or warranty, express or implied, as to the completeness or
accuracy thereof) true and complete copies of the Reports (as such term is
defined in Schedule 5.1);

               (B) The plans and specifications for the Improvements, Lease,
Permits, Warranties, operating statements, income and expense reports, and all
other agreements, books and records relating to the Property will be delivered
or made available by Seller to Purchaser in connection with this Agreement;

                                       12

<PAGE>

               (C) To the Seller's actual knowledge, the Seller has not failed
to deliver to Purchaser a copy of any written report or document in Seller's
possession or control that materially affects the development, ownership,
leasing, value or use of the Property;

          (xi) Seller Representative. For the purposes of this Agreement the
"Designated Seller Representatives" are Tammy Ghanem, the Senior Corporate
Counsel of Seller and Thomas Swain the Vice President of Finance of Seller, who
have occupied such positions for, respectively, four (4) years and five years,
and have been actively involved in, and are familiar with, the ownership,
development, construction, leasing and operation of the Property (subject to
Section 7.4 below). _______________ shall be considered a Designated Seller
Representative only with respect to the matters in Sections 7.3(b)(i)(C) and
(J), Sections 7.3(b)(iv)(B), (C) and (D), Section 7.3(b)(viii) and Section
7.3(b)(x).

     SECTION 7.4. SELLER'S KNOWLEDGE. The only representations made by Seller
are those contained in this Agreement and no oral or written representations
outside of this Agreement are to be relied on. Whenever a representation is
qualified by the phrase "to the best of Seller's knowledge", or by words of
similar import, the accuracy of such representation shall be based solely on the
actual (as opposed to constructive or imputed) knowledge of the Designated
Seller Representatives. The knowledge of the Designated Seller Representatives
shall be without investigation or inquiry other than:

     (a) as to ____________________, a reasonable review of the files regarding
the Property in Seller's possession or control (to the extent such files are
located at the Property or were recently removed from the Property in connection
with Seller's relocation from the Property), and

     (b) as to Tammy Ghanem, a reasonable review of Seller's files and
reasonable inquiries of Seller's agents (including property managers and leasing
agents), officers and employees who are familiar with the development, ownership
and leasing of the Property.

                                    ARTICLE 8

                                     CLOSING

     SECTION 8.1. CLOSING DATE. The Closing shall take place at 1:00 p.m. on the
Closing Date. Unless the parties otherwise agree in writing, the Closing shall
be conducted through a customary escrow arrangement with the Title Company and,
on or before the Closing Date, the Seller shall deliver to the Title Company or
Purchaser the documents listed in Section 8.2 and the Purchaser shall deliver to
the Title Company the documents and funds described in Section 8.3.

     SECTION 8.2. SELLER'S DELIVERIES. At the Closing, Seller shall deliver or
cause to be delivered to Purchaser (or its nominee), at Seller's sole expense,
each of the following items:

          (a) (i) A limited warranty deed in the form attached hereto as Exhibit
E, conveying good and marketable fee simple title, subject only to the Permitted
Exceptions, in proper form for recording, (ii) (Reserved), (iii) an Assignment
and Assumption Agreement in the form attached hereto as Exhibit G, in proper
form for recording, (iv) the Representation Update Certificate in the form
attached hereto as Exhibit H, (v) the Closing Statement, and (vi) a non-foreign
person certificate sworn to by Seller as required by Section 1445 of the Code,
all duly executed (and, when required, acknowledged) by Seller;

          (b) At least two originals of the Lease;

          (c) All keys in Seller's possession or control to all locks on the
Improvements;

                                       13

<PAGE>

          (d) (Reserved);

          (e) Such evidence or documents as may be reasonably required by the
Title Company or Purchaser relating to: (i) mechanics' or construction liens;
(ii) parties in possession; or (iii) the status and capacity of Seller and the
authority of the Person or Persons who are executing the various documents on
behalf of Seller in connection with the sale of the Property;

          (f) To the extent that any of the following are in Seller's possession
or control, copies or originals of all books, records and other documents in the
possession or control of Seller and material to Purchaser's ownership or
operation of the Property, including Tenant correspondence and credit files, the
Permits, as-built drawings, and the original Plans and Specifications that have
not previously been delivered to Purchaser;

          (g) At least two original Tenant estoppel certificates;

          (h) At least two original SNDAs;

          (i) A notice letter to the Tenant. Such notice shall be prepared by
Purchaser and reasonably approved by Seller, shall notify the Tenant of the sale
and shall contain appropriate instructions relating to the payment of future
rentals, the giving of future notices, the naming of Purchaser (or its nominee)
on insurance policies carried by Tenant, and other matters reasonably required
by Purchaser or required by law. Unless a different procedure is required by
applicable law, in which event such law shall be controlling, Purchaser agrees
to transmit or otherwise deliver such letters to the Tenant promptly after the
Closing;

          (J) At least two originals of any applicable reciprocal easement
agreement estoppels;

          (K) Any certificate of occupancy and other permits in Seller's
possession;

          (l) The Warranty, if applicable, including all related manuals and any
consents necessary in order for the Warranty to be duly assigned to Purchaser as
of the Closing;

          (m) Payoff letters or evidence of release and discharge of all
mortgages, mechanics' and construction liens and attachments, and other
encumbrances on the Property; and

          (n) Such other documents as are consistent with the terms of this
Agreement and reasonably required to close the transaction contemplated hereby.

     SECTION 8.3. PURCHASER'S DELIVERIES. At the Closing, Purchaser shall
deliver into escrow the following items:

          (a) Immediately available federal funds sufficient to pay the Purchase
Price (less the Deposit) and Purchaser's share of all escrow costs and closing
expenses;

          (b) Duly executed and acknowledged originals of the Assignment and
Assumption Agreement and the Closing Statement;

                                       14

<PAGE>

          (c) Such evidence or documents as may reasonably be required by the
Title Company evidencing the status and capacity of Purchaser and the authority
of the Person or Persons who are executing the various documents on behalf of
Purchaser in connection with the purchase of the Property;

          (d) Such other documents as are consistent with the terms of this
Agreement and reasonably required to close the transaction contemplated hereby;
and

          (e) The Representation Update Certificate in the form attached hereto
as Exhibit H.

     SECTION 8.4. COSTS AND PRORATIONS.

     (a) GENERAL. Real estate taxes and installments assessments allocable to
the payment period that includes the the Closing Date, personal property taxes,
if any, rental income and all other items of income and expense with respect to
the Property shall be prorated between Seller and Purchaser as of the Closing
Date in accordance with this Section 8.4. Except as otherwise provided in this
Section 8.4, income and expenses shall be prorated on the basis of a 30-day
month and on the basis of the accrual method of accounting. All such items
attributable to the period prior to the Closing Date shall be credited or
charged to Seller, and all such items attributable to the period commencing on
the Closing Date shall be credited or charged to Purchaser.

     (b) RENTS. The fixed and minimum rents and all additional rents, escalation
charges, common area maintenance charges, imposition charges, heating and
cooling charges, insurance charges, charges for utilities, percentage rent, and
all other rents, charges and commissions (collectively, the "Rents") payable by
the Tenant, to the extent collected by Seller on or prior to the Closing Date
and which represent payments of Rents applicable to a period of time subsequent
to the Closing Date, shall be prorated between Seller and Purchaser at Closing.
Purchaser shall be credited at Closing with (i) all security or other deposits
paid by the Tenant with respect to the Property; and (ii) rent prepaid beyond
the Closing Date.

     (c) ARREARS. Any of the Rents which are due and payable by the Tenants with
respect to the period prior to the Closing Date, but which have not been
collected by Seller on or prior to the Closing Date, or payment of which has
been deferred until after the Closing Date (the "Arrearage Rents") shall not be
prorated at Closing. Any Arrearage Rents that are paid after the Closing Date
shall be paid to Seller, and if the Arrearage Rents are received by Purchaser,
Purchaser shall pay the Arrearage Rents to Seller promptly after collection by
Purchaser; provided, however, that all Rents collected after the Closing Date
shall be applied first to payment of all amounts due Purchaser and second to all
Arrearage Rents due to Seller. Purchaser shall have no obligation to commence
any action to enforce the obligation of Tenant to pay the Arrearage Rents.

     (d) UNKNOWN RENTS. As used herein, the term "Unknown Rents" means any Rents
that have accrued as the Closing but are not due and payable on the Closing
Date: (i) because the lease year or other fiscal period for which such Rents are
to be computed has not yet expired (including, by way of example only,
escalation charges and percentage rents), or (ii) because for any other reason
the amount of such Rents cannot be calculated on the Closing Date. Unknown Rents
shall not be prorated at Closing but shall be apportioned promptly after
expiration of the applicable lease year or other fiscal period and collection of
the Unknown Rents. Purchaser shall make reasonable efforts to ascertain the
amount of the Unknown Rents (but shall not be obligated to commence any action
or proceeding to collect Unknown Rents), and when the amounts of the Unknown
Rents are ascertained and collected by Purchaser, Purchaser shall promptly pay
to Seller a portion (the "Pro Rata Share") of the Unknown Rents determined by
multiplying the Unknown Rents collected by a fraction, the numerator of which is
the number of days

                                       15

<PAGE>

in the applicable Lease year or other fiscal period up to but excluding the
Closing Date and the denominator of which is the number of days in the lease
year or other fiscal period, less any monies Seller has previously received on
account of the Unknown Rents and Seller's Pro Rata Share of the third party
expenses incurred by Purchaser in the collection of the Unknown Rents. In the
event it is determined after Closing that the amount of the Unknown Rents
received by Seller exceeds the Seller's Pro Rata Share, Seller shall promptly
pay such excess to Purchaser upon demand.

     (e) TAXES. All real estate taxes assessed against the Property shall be
prorated between Seller and Purchaser on an accrual basis based upon the actual
current tax bill. If the most recent tax bill received by Seller before the
Closing Date is not the actual current tax bill, then Seller and Purchaser shall
initially prorate the taxes at the Closing by applying 100% of the tax rate for
the period covered by the most current available tax bill to the latest assessed
valuation, and shall reprorate the taxes retroactively when the actual current
tax bill is then available. All real estate taxes accruing before the Closing
Date shall be the obligation of Seller and all such taxes accruing on and after
the Closing Date shall be the obligation of Purchaser. Notwithstanding the
foregoing, such taxes shall not be prorated between Seller and Purchaser to the
extent that the Tenant is obligated to pay such taxes directly to the applicable
taxing authority pursuant to the Lease (and further provided that Tenant has
paid such taxes when due).

     (f) ASSESSMENT INSTALLMENTS. If as of the Closing Date the Property is
encumbered or otherwise affected by any special assessment (whether or not a
lien) which is or may become payable in installments (which the Tenant is not
required to pay under the provisions of the Lease), then for the purposes of
this Agreement, all installments of such assessments that are due and payable
prior to the Closing Date shall either be paid directly by Seller, or Purchaser
shall be entitled to receive a credit against the Purchase Price in an amount
equal to all unpaid installments of such assessments, and in such event
Purchaser shall take title to the Property subject to the unpaid installments
not yet due and payable.

     (g) UTILITIES. To the extent not payable directly by the Tenant, the actual
or estimated charges for utilities accrued and payable by Seller shall be
prorated between Seller and Purchaser. Deposits for utilities (the "Utility
Deposits"), plus any interest on the Utility Deposits to which Seller is or will
be entitled that are held by the provider of the utilities shall be paid to
Seller, or it transferable to Purchaser, shall at the election of the Purchaser
be assigned by Seller to Purchaser and Purchaser shall pay Seller the full
amount thereof at Closing. Seller shall retain the right to obtain a refund of
any Utility Deposits which are not required to be assigned to Purchaser, and
Purchaser will cooperate with Seller as reasonably requested in obtaining any
refund. The parties acknowledge that under the Lease, Tenant is responsible for
utility charges.

     (h) (Reserved)

     (i) CLOSING COSTS. Purchaser and Seller shall each pay their own legal fees
related to the preparation of this Agreement and all documents required to
settle the transaction contemplated hereby. Purchaser shall pay all costs
associated with its due diligence, including the cost of appraisals,
architectural, engineering, credit and environmental reports. Each party shall
pay one-half of the reasonable charges for the escrow services of the Title
Company. Seller shall pay all recording fees in connection with the release of
any encumbrances on the Property, the cost of a current ALTA survey for the
Property (up to the amount of $5,000) and all transfer taxes and documentary
stamp charges. Purchaser shall pay the cost of recording the Deed, the cost
Purchaser's title policy and any survey costs that are not Seller's
responsibility pursuant to the previous sentence. All other customary purchase
and sale closing costs shall be paid by Seller or Purchaser in accordance with
the custom in the jurisdiction where the Property is located.

                                       16

<PAGE>

     (j) CLOSING STATEMENT. Purchaser and Seller shall cooperate to produce
prior to the Closing Date a schedule of prorations to be made as of the Closing
Date in accordance with the terms of this Agreement (the "Closing Statement").

     SECTION 8.5. POSSESSION. Possession of the Property shall be delivered to
Purchaser by Seller at the Closing, subject only to the Lease and the Permitted
Exceptions.

     SECTION 8.6. PURCHASE SUBJECT TO LEASE. Purchaser acknowledges and agrees
that Purchaser is purchasing the Property and taking possession of the Property
subject to the rights of Tenant under the Lease, and subject to the terms,
provisions and obligations of Seller as landlord and Tenant as tenant under the
Lease. Purchaser shall assume all obligations of Seller as landlord under the
Lease at the Closing pursuant to this Agreement and any documents delivered at
the Closing. Notwithstanding any representation, warranty, condition, covenant
or agreement to the contrary set forth in this Agreement, Purchaser acknowledges
and agrees that Seller is not in full possession or control of the Property due
to Tenant's rights under the Lease, and that Tenant has the rights and
obligations set forth in the Lease pertaining to the Property with respect to
Permits, the condition of title to the Property, personal property, Tenant's
employees, fixtures and improvements to be constructed at the Property and other
matters as set forth in the Lease. Except as expressly set forth in this
Agreement, Seller makes no representation or warranty pertaining to any
obligations of Tenant under the Lease.

                                    ARTICLE 9

                             REAL ESTATE COMMISSION

     SECTION 9.1. COMMISSIONS.

     (a) If and when, but only if and when, the Closing is completed and the
Purchase Price is paid in full, Seller shall be obligated to pay a real estate
commission and/or brokerage fee to Seller's Broker in accordance with a separate
agreement between Seller and Seller's Broker. Such commissions shall be paid in
full at Closing.

     (b) Seller represents, warrants and covenants to Purchaser that, except for
Seller's Broker, Seller has not dealt with any real estate agent or broker in
connection with the transaction contemplated hereby. Seller shall indemnify
Purchaser against all claims, costs and liability (including reasonable
attorneys' fees) arising from or relating to any claims by Seller's Broker
and/or any other broker or other Person claiming any commission or similar
compensation by, through or under Seller or Seller's Broker.

     (c) Purchaser represents, warrants and covenants with Seller that, except
for Seller's Broker, Purchaser has not dealt with any real estate agent or
broker in connection with the transaction contemplated hereby.

     The provisions of this Section 9.1 shall survive the Closing.

                                   ARTICLE 10

                             TERMINATION AND DEFAULT

     SECTION 10.1. TERMINATION WITHOUT DEFAULT. If the sale of the Property is
not consummated because of the failure of any condition precedent to Purchaser's
obligations expressly set forth in this Agreement or for any other reason except
a default by Purchaser in its obligation to purchase the Property in accordance
with the provisions of this Agreement (which shall be governed by Section 10.2)
or any

                                       17

<PAGE>

default by Seller of its obligations under this Agreement (which shall be
governed by Section 10.3), the Deposit shall promptly be returned to Purchaser
and neither Party shall have any further obligations hereunder, except for
Purchaser's obligations under Section 5.1(b)(iv), Section 5.2 and Section 5.3.

     SECTION 10.2. PURCHASER'S DEFAULT. If the sale contemplated hereby is not
consummated because of a default by Purchaser in its obligation to purchase the
Property in accordance with the terms of this Agreement, and if such default is
not cured within ten (10) days from written notice thereof from Seller to
Purchaser (or any other cure period provided in this Agreement, or if such
default cannot be reasonably cured within such ten (10) day period, such
additional period as may be reasonably necessary to cure such default), then:
(a) this Agreement shall terminate except for Purchaser's obligations under
Section 5.1(b)(iv), Section 5.2 and Section 5.3; (b) the Deposit shall be paid
to and retained by Seller as liquidated damages; and (c) Seller and Purchaser
shall have no further obligations to each other except for Purchaser's
obligations under Section 5.1(b)(iv), Section 5.2 and Section 5.3. PURCHASER AND
SELLER ACKNOWLEDGE THAT THE DAMAGES TO SELLER IN THE EVENT OF A BREACH OF THIS
AGREEMENT BY PURCHASER WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT THE
AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES' BEST AND MOST ACCURATE ESTIMATE OF
THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE TRANSACTION SHOULD FAIL TO
CLOSE AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING AS
OF THE DATE OF THIS AGREEMENT AND UNDER THE CIRCUMSTANCES THAT SELLER AND
PURCHASER REASONABLY ANTICIPATE WOULD EXIST AT THE TIME OF SUCH BREACH.
PURCHASER AND SELLER AGREE THAT SELLER'S RIGHT TO RETAIN THE DEPOSIT SHALL BE
SELLER'S SOLE REMEDY, AT LAW AND IN EQUITY, FOR PURCHASER'S FAILURE TO PURCHASE
THE PROPERTY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

     SECTION 10.3. SELLER'S DEFAULT. If Seller defaults in its obligation to
sell the Property to Purchaser in accordance with the terms of this Agreement,
and if such default is not cured within ten (10) days from written notice
thereof from Purchaser to Seller (or any other cure period provided in this
Agreement, or if such default cannot be reasonably cured within such ten (10)
day period, such additional period as may be reasonably necessary to cure such
default), then Purchaser may, as its sole and exclusive remedy at law or in
equity: (a) terminate this Agreement by giving written notice thereof to Seller,
in which event the Deposit will promptly be returned to Purchaser, Seller
promptly shall reimburse Purchaser for the actual, reasonable third party costs
that Purchaser has incurred in connection with this Agreement and the
transaction contemplated hereby (provided, however, that the aggregate amount of
such third party costs will not exceed Forty Thousand Dollars [$40,000]), and
the parties shall have no further obligation to each other except for
Purchaser's obligations under Section 5.1(b)(iv), Section 5.2 and Section 5.3;
(b) waive such default and consummate the transactions contemplated hereby in
accordance with the terms of this Agreement; or (c) specifically enforce this
Agreement. Purchaser hereby irrevocably waives any other right or remedy for
such default; provided, however, that if, in breach of this Agreement, Seller
sells the Property (or any portion thereof) to someone other than Purchaser or
otherwise takes action that renders the remedy of specific performance
impossible or impractical to obtain, Seller shall be liable for any damages
suffered by Purchaser as a result of such breach. If Purchaser brings an action
for specific performance, the Deposit shall be returned to Purchaser pending the
outcome of such action.

     SECTION 10.4. BREACH OF REPRESENTATIONS. The representations and warranties
of Seller and Purchaser set forth in this Agreement or in any document or
certificate delivered by Seller or Purchaser in connection herewith shall
survive the Closing for a period of twelve (12) months (the "Claim Period"), and
no action or proceeding thereon shall be valid or enforceable, at law or in
equity, unless within such time, written notice thereof is given to the other
party.

                                       18

<PAGE>

     SECTION 10.5. MUTUAL INDEMNIFICATIONS.

          (a) From and after the Closing, Seller shall indemnify Purchaser and
defend and hold Purchaser harmless from and against any and all claims, demands,
liabilities, costs, expenses, penalties, damages and losses, including actual,
reasonable attorneys' fees, resulting from any misrepresentation or breach of
warranty by Seller in this Agreement or in any document, certificate, or exhibit
given or delivered by Seller pursuant to or in connection with this Agreement.

          (b) From and after the Closing, Purchaser shall indemnify Seller and
defend and hold Seller harmless from and against any and all claims, demands,
liabilities, costs, expenses, penalties, damages and losses, including actual,
reasonable attorneys' fees, resulting from any misrepresentation or breach of
warranty made by Purchaser in this Agreement or in any document, certificate, or
exhibit given or delivered by Purchaser pursuant to or in connection with this
Agreement.

          (c) Seller shall indemnify Purchaser and defend and hold Purchaser
harmless from and against any and all claims, demands, liabilities, costs,
expenses, penalties, damages and losses, including actual, reasonable attorneys'
fees, asserted against, incurred or suffered by Purchaser resulting from any
personal injury or property damage occurring in, on or about the Property or
relating thereto and occurring during any period in which Seller or its
affiliates owned the Property, from any cause whatsoever other than as a
consequence of either (x) the acts or omission of Tenant, its agents, employees
or contractors or (y) the acts or omissions of Purchaser, its agents, employees
or contractors.

          (d) Purchaser shall indemnify Seller and defend and hold Seller
harmless from any claims, losses, demands, liabilities, costs, expenses,
penalties, damages and losses, including actual, reasonable attorneys' fees,
asserted against, incurred or suffered by Seller resulting from any personal
injury or property damage occurring in, on or about the Property or relating
thereto and occurring during any period in which Purchaser or its affiliates
owns the Property or as provided in Section 5.1(b), from any cause whatsoever
other than as a consequence of the acts or omissions of Seller, its agents,
employees or contractors.

          (e) In the event either party hereto receives notice of a claim or
demand which results or may result in indemnification pursuant to Section 10.5,
such party shall promptly give notice thereof to the other party to this
Agreement. The party receiving such notice shall promptly take such measures as
may be reasonably required to properly and effectively defend such claim, and
may defend same with counsel of its own choosing. In the event the party
receiving such notice fails to properly and effectively defend such claim, and
in the event such party is liable therefor, then the party so giving such notice
may defend such claim at the expense of the party receiving such notice. The
provisions of this Section 10.5 shall survive the Closing for a period of twelve
(12) months.

     SECTION 10.6. SECURITY FOR POST CLOSING LIABILITY. To provide security for
any post Closing claims of Purchaser ("Post Closing Claims") made to enforce any
breach of the representations, warranties, and covenants made by Seller in this
Agreement that expressly survive the Closing, GSI Group Inc., a New Brusnwick,
Canada corporation (the "Parent"), the parent of Seller, shall be principally,
jointly and severally liable for Seller's liability for Post Closing Claims
during the Claim Period. In connection with Parent's obligations under this
Section 10.6, Parent agrees to be bound by the provisions of Section 11.2 below.

                                   ARTICLE 11

                                  MISCELLANEOUS

                                       19

<PAGE>

     SECTION 11.1. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS; MISCELLANEOUS
PROVISIONS. This Agreement constitutes the entire agreement between the parties
hereto with respect to the transactions contemplated herein, and it supersedes
all prior discussions, understandings or agreements. All Exhibits and Schedules
attached hereto are a part of this Agreement and are incorporated herein by
reference. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. This Agreement may
be executed in any number of counterparts and it shall be sufficient that the
signature of each party appear on one or more such counterparts, and all
counterparts shall collectively constitute a single agreement. No modification
of this Agreement shall be deemed effective unless in writing and signed by both
Seller and Purchaser. In the event the time for performance of any obligation
hereunder expires on a day that is not a Business Day, the time for performance
shall be extended to the next Business Day. The descriptive headings of the
paragraphs of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any provisions of this
Agreement. Words such as "herein", "hereinafter", "hereof" and "hereunder" when
used in reference to this Agreement, refer to this Agreement as a whole and not
merely to a subdivision in which such words appear, unless the context otherwise
requires. The singular shall include the plural and vice versa, unless the
context otherwise requires. The word "including" shall not be restrictive and
shall be interpreted as if followed by the words "without limitation." This
Agreement shall not be construed more strictly against one party than against
the other merely by virtue of the fact that it may have been prepared primarily
by counsel for one of the parties, it being recognized that both Purchaser and
Seller have contributed substantially and materially to the preparation of this
Agreement.

     SECTION 11.2. WAIVER; GOVERNING LAW. The excuse or waiver of the
performance by a party of any obligation of the other party under this Agreement
shall only be effective if evidenced by a written statement signed by the party
so excusing or waiving. No delay in exercising any right or remedy shall
constitute a waiver thereof, and no waiver by Seller or Purchaser of the breach
of any covenant of this Agreement shall be construed as a waiver of any
preceding or succeeding breach of the same or any other covenant or condition of
this Agreement. This Agreement shall be construed and the rights and obligations
of Seller and Purchaser hereunder determined in accordance with the internal
laws of the State of Minnesota, without regard to the principles of conflict of
laws. The parties and the Parent agree that all actions or proceedings arising
in connection with this Agreement shall be tried and litigated exclusively in
the State and Federal courts located in the County of Suffolk in the
Commonwealth of Massachusetts. The aforementioned choice of venue is intended by
the parties and the Parent to be mandatory and not permissive in nature, thereby
precluding the possibility of litigation between or among the parties and the
Parent with respect to or arising out of this Agreement in any jurisdiction
other than that specified in this paragraph. Each party and the Parent hereby
waive any right each may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the State and Federal courts
located in the County of Suffolk, Commonwealth of Massachusetts shall have in
personam jurisdiction and venue over each of them for the purpose of litigating
any dispute, controversy, or proceeding arising out of or related to this
Agreement. Each party and the Parent hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action against it as
contemplated by this paragraph by registered or certified mail, return receipt
requested, postage prepaid, to its address for the giving of notices as set
forth in this Agreement. Any final judgement rendered against a party in any
action or proceeding shall be conclusive as to the subject of such final
judgement and may be enforced in other jurisdictions in any manner provided by
law.

     SECTION 11.3. NOTICES. All notices or other communications required or
provided to be sent by either party shall be in writing and shall be sent by:
(i) by United States Postal Service, certified mail, return receipt requested,
(ii) by any nationally known overnight delivery service for next day delivery,
(iii) delivered in person or (iv) sent by telecopier or facsimile machine which
automatically generates a transmission report that states the date and time of
the transmission, the length of the document

                                       20

<PAGE>

transmitted and the telephone number of the recipient's telecopier or facsimile
machine (with a copy thereof sent in accordance with clause (i), (ii) or (iii)
above). All notices shall be deemed to have been given upon receipt. All notices
shall be addressed to the parties at the addresses below:

     To Seller or Parent:   GSI Group Corporation or GSI Group Inc.
                            39 Manning Road
                            Billerica, Massachusetts 01821
                            Attention: General Counsel
                            Fax No. 978-663-9466

     With a copy to:        Oppenheimer Wolff & Donnelly LLP
                            Plaza VII, Suite 3300
                            45 South Seventh Street
                            Minneapolis, Minnesota 55402-1609
                            Attention: Lloyd Kepple
                            Fax No. 612-607-7100

     To Purchaser:          c/o STAG Capital Partners, LLC
                            93 Summer Street, 3rd Floor
                            Boston, Massachusetts 02110
                            Attention: Mr. Benjamin S. Butcher
                            Fax No. 617-574-0052

     With a copy to:        DLA Piper Rudnick Gray Cary US LLP
                            One International Place, 21st Floor
                            Boston, Massachusetts 02110-2600
                            Attention: John L. Sullivan, Esq.
                            Fax No. 617-406-6100

Any address or name specified above may be changed by notice given to the
addressee by the other party in accordance with this Section 11.3. The inability
to deliver notice because of a changed address of which no notice was given as
provided above, or because of rejection or other refusal to accept any notice,
shall be deemed to be the receipt of the notice as of the date of such inability
to deliver or rejection or refusal to accept. Any notice to be given by any
party hereto may be given by the counsel for such party.

     SECTION 11.4. ATTORNEYS' FEES. In the event of a judicial or administrative
proceeding or action by one party against the other party with respect to the
interpretation or enforcement of this Agreement, the prevailing party shall be
entitled to recover actual, reasonable costs and expenses including reasonable
attorneys' fees and expenses, whether at the investigative, pretrial, trial or
appellate level. The prevailing party shall be determined by the court based
upon an assessment of which party's major arguments or position prevailed.

     SECTION 11.5. IRS REAL ESTATE SALES REPORTING. Purchaser and Seller hereby
agree that the Title Company shall act as "the person responsible for closing"
the transaction which is the subject of this Agreement pursuant to Section
6045(e) of the Code and shall prepare and file all informational returns,
including IRS Form 1099-S, and shall otherwise comply with the provisions of
Section 6045(e) of the Code.

     SECTION 11.6. FURTHER INSTRUMENTS. Each party, promptly upon the request of
the other, shall execute and have acknowledged and delivered to the other or to
Title Company, as may be appropriate,

                                       21

<PAGE>

any and all further instruments reasonably requested, necessary and appropriate
to evidence or give effect to the provisions of this Agreement and which are
consistent with the provisions of this Agreement.

     SECTION 11.7. SEVERABILITY. The parties hereto intend and believe that each
provision in this Agreement comports with all applicable local, state and
federal laws and judicial decisions. If, however, any provision in this
Agreement is found by a court of law to be in violation of any applicable local,
state, or federal law, statute, ordinance, administrative or judicial decision,
or public policy, or if in any other respect such a court declares any such
provision to be illegal, invalid, unlawful, void or unenforceable as written,
then it is the intent of all parties hereto that, consistent with and with a
view towards preserving the economic and legal arrangements among the parties
hereto as expressed in this Agreement, such provision shall be given force and
effect to the fullest possible extent, and that the remainder of this Agreement
shall be construed as if such illegal, invalid, unlawful, void, or unenforceable
provision were not contained herein, and that the rights, obligations, and
interests of the parties under the remainder of this Agreement shall continue in
full force and effect.

     SECTION 11.8. Before the Closing Date, neither party shall assign this
Agreement without the prior written consent of the other. Notwithstanding the
foregoing, at or immediately prior to Closing, Purchaser shall have the right to
assign Purchaser's interest in this Agreement to a single purpose entity owned
or controlled by Purchaser upon seven (7) days prior written notice to Seller so
long as Purchaser remains liable for Purchaser's obligations under this
Agreement.

     SECTION 11.9. RECORDING NOTICE. Purchaser shall record no claim of interest
to the Property prior to the Closing Date, unless such recording is reasonably
required in connection with Purchaser's enforcement of this Agreement pursuant
to the terms hereof.

            [The remainder of this page is intentionally left blank;
                            signature page follows.]

                                       22

<PAGE>

     IN WITNESS WHEREOF, Seller and Purchaser hereto have executed this
Agreement as of the Effective Date.

                                        SELLER:

                                        GSI Group Corporation

                                        By: \s\ THOMAS R. SWAIN
                                            ------------------------------------
                                        Name: Thomas R. Swain
                                        Title: VP Finance, CFO

                                        PURCHASER:

                                        SAgE Aggregation, LLC

                                        By: \s\ BENJAMIN S. BUTCHER
                                            ------------------------------------
                                        Name: Benjamin S. Butcher
                                        Title: Manager

     Parent executes this Agreement solely to acknowledge its obligations under
Section 10.6.

                                        PARENT

                                        GSI Group Inc.

                                        By: \s\ THOMAS R. SWAIN
                                            ------------------------------------
                                        Name: Thomas R. Swain
                                        Title: VP Finance, CFO

                                       23

<PAGE>

                                  SCHEDULE 1.1
                                  DEFINED TERMS

     "Access Date" has the meaning set forth in the Lease.

     "Agreement" has the meaning set forth in the first paragraph of this
document.

     "Arrearage Rents" has the meaning set forth in Section 8.4(c).

     "Business Day" shall mean any day of the week other than (i) Saturday and
Sunday, (ii) a day on which banking institutions in Boston, Massachusetts or
Minneapolis, Minnesota are obligated or authorized by law or executive action to
be closed to the transaction of normal banking business, or (iii) a day on which
governmental or banking functions in Boston, Massachusetts or Minneapolis,
Minnesota area are interrupted because of extraordinary events such as
hurricanes, power outages or acts of terrorism.

     "Certificate of Occupancy has the meaning set forth in Section 6.1(i).

     "Claim Period" has the meaning set forth in Section 10.4.

     "Closing" shall mean the consummation of the purchase and sale of the
Property pursuant to the terms of this Agreement.

     "Closing Date" shall mean December 28, 2005.

     "Closing Statement" has the meaning set forth in Section 8.4(j).

     "Code" shall mean the Internal Revenue Code of 1986, and all amendments
thereto and all regulations issued thereunder.

     "Confidential Information" shall mean any information concerning the
Property provided to Purchaser by Seller, excluding information that is
available to the general public or from sources other than Seller and any
information or results of testing or investigation of the Property obtained by
the Purchaser during Purchaser's review of the Property..

     "Contracts" shall mean all development, construction, service, management,
leasing, operation, maintenance, repair and other contracts (other than the
Lease) affecting the Land or Improvements and all amendments and modifications
thereto. No Contracts shall be included in the sale of the Property to the
Purchaser.

     "Deposit" has the meaning set forth in Section 3.1.

     "Designated Seller Representatives" has the meaning set forth in Section
7.4.

     "Effective Date" shall mean November 14, 2005.

     "Employee Claims" shall have the meaning set forth in Section 5.6.

     "Environmental Law" shall have the meaning set forth in the definition of
Hazardous Materials below.

<PAGE>

     "Hazardous Materials" shall mean (i) any waste, material or substance
(whether in the form of a liquid, a solid, or a gas and whether or not
air-borne), which is or is deemed to be a pollutant or a contaminant, or which
is or is deemed to be hazardous, toxic, ignitable, reactive, corrosive,
dangerous, harmful or injurious, or which presents a risk to public health or to
the environment, or which is or may become regulated by or under the authority
of any applicable local, state or federal laws, judgments, ordinances, orders,
rules, regulations, codes or other governmental restrictions, guidelines or
requirements, any amendments or successor(s) thereto, replacements thereof or
publications promulgated pursuant thereto (collectively "Environmental Laws",
and individually, "Environmental Law"); (ii) petroleum, including crude oil or
any fraction thereof; (iii) ACM; (iv) any polychlorinated biphenyl; (v) any
radioactive material; and (vi) urea formaldehyde. In addition to the foregoing,
the term "Environmental Laws" shall be deemed to include, without limitation,
local, state and federal laws, judgments, ordinances, orders, rules,
regulations, codes and other governmental restrictions, guidelines and
requirements, any amendments and successors thereto, replacements thereof and
publications promulgated pursuant thereto, which deal with or otherwise in any
manner relate to, environmental matters of any kind.

     "Improvements" shall mean that certain building containing approximately
______ net rentable square feet and located at 8401 Jefferson Highway, Maple
Grove, Minnesota, and all other buildings, structures and other improvements
situated upon the Land and any fixtures, systems and facilities owned by Seller
and located on the Land.

     "Intangible Property" shall mean all of Seller's right, title and interest,
if any, in all intangible assets relating to the Land or Improvements, including
all of Seller's right, title and interest, if any, in all (a) the Warranty, (b)
all licenses, permits and approvals relating to the Land or Improvements, and
(c) all plans and specifications relating to the Land or Improvements, in each
case to the extent that Seller may legally transfer the same.

     "Land" shall mean the land described on Exhibit A attached hereto, together
with all privileges, rights, easements and appurtenances belonging to such land
and all right, title and interest (if any) of Seller in and to any streets,
alleys, passages or other rights-of-way or appurtenances included in, adjacent
to or used in connection with such land and all right, title and interest (if
any) of Seller in all mineral rights appurtenant to such land.

     "Lease" shall mean the lease dated _______________ between the Seller, as
Landlord and Boston Scientific Corporation, as Tenant, as amended by
______________.

     "Lease Transaction" shall mean any of the following: (a) the execution of
any new lease or other occupancy agreement for any portion of the Property; (b)
any modification of the Lease or any other occupancy agreement affecting the
Property; (c) the consent to any assignment of or subletting under the Lease; or
(d) the termination of the Lease.

     "Legal Requirements" means all applicable zoning, building, health and
safety, environmental and all other laws, legislation, rules, codes, by-laws,
ordinances, resolutions, regulations, orders and decrees relating in any way to
the Property.

     "Material Casualty" has the meaning set forth in Section 6.3.

     "Material Taking" has the meaning set forth in Section 6.4.

     "Permitted Exceptions" shall mean all matters shown on the Title
Commitment, including the Lease, (other than Voluntary Liens) or the Survey,
except for those matters as to which, in accordance with

<PAGE>

Section 4.1, Purchaser makes a written objection on or before the Study Period
Notice Deadline, unless the same are waived by the Purchaser in writing. In no
event shall any Voluntary Lien constitute a Permitted Exception, and all
Voluntary Liens shall be paid in full or discharged or bonded over (such that
the same is not listed as an exception to Purchaser's title insurance policy
issued by the Title Company at the Closing) at or before the Closing or out of
the proceeds otherwise due to Seller.

     "Permits" has the meaning set forth in Section 7.3(b)(iv)(C).

     "Person" shall mean any individual, estate, trust, partnership, limited
liability company, limited liability partnership, corporation, governmental
agency or other legal entity.

     "Post Closing Claims" has the meaning set forth in Section 10.6.

     "Property" shall mean, collectively, the Real Property, Seller's interest
in the Leases, and the Intangible Property.

     "Purchase Price" shall mean the purchase price for the Property as
specified in Section 2.2.

     "Purchaser" means the Person named as the Purchaser in the first paragraph
of this Agreement, together with any assignee of the originally named Purchaser.

     "Purchaser Title Objections" has the meaning set forth in Section 4.1.

     "Real Property" shall mean the Land and the Improvements.

     "Reciprocal Easement Agreements" shall mean any and all reciprocal easement
agreements, declarations of covenants, conditions, restrictions and easements,
party wall agreements, "tie-back" agreements, common area agreements, shared
maintenance agreements, common use agreements or similar agreements or
understandings which burden or benefit the Real Property and other adjacent real
property, and all supplements, amendments, modifications and memoranda thereof,
relating to the development, use, operation, management, maintenance or
occupancy of the Real Property.

     "Required Endorsements" shall mean the following ALTA endorsements (to the
extent legally available in the jurisdiction in which the Real Property is
located): (a) Form 9 - Comprehensive (modified as appropriate for an owner's
policy); (b) Form 3.1 Zoning (including parking and loading); (c) survey
endorsement; (d) access endorsement; (e) if the land on which the Property is
located consists of more than one parcel, a contiguity endorsement; and (f) a
tax parcel endorsement. All Required Endorsements shall be paid for by the
Purchaser.

     "Restricted Period" shall mean the period commencing five (5) Business Days
before the end of the Study Period and ending on the earlier of the Closing or
the termination of this Agreement.

     "Seller" has the meaning set forth in the first paragraph of this
Agreement.

     "Seller Representations" shall mean the representations and warranties of
Seller expressly set forth in Section 7.3.

     "Seller's Broker" shall mean Colliers International.

     "SNDA" has the meaning set forth in Section 6.1(d).

<PAGE>

     "Study Period" has the meaning set forth in Section 5.2.

     "Study Period Notice" has the meaning set forth in Section 5.2.

     "Study Period Notice Deadline" has the meaning set forth in Section 5.2.

     "Survey" has the meaning set forth in Section 4.1.

     "Tenant" shall mean Boston Scientific Corporation., a ____________
corporation.

     "Termination Notice" has the meaning set forth in Section 5.2.

     "Title Commitment" has the meaning set forth in Section 4.1.

     "Title Company" shall mean the Boston, Massachusetts office of Stewart
Title Guaranty Company, attention, Terrance Miklas.

     "Unknown Rents" has the meaning set forth in Section 8.4(d).

     "Utility Deposits" has the meaning set forth in Section 8.4(g).

     "Voluntary Liens" shall mean any of the following encumbrances on the
Property or any portion thereof: (a) any mortgage or deed of trust granted or
assumed in writing by Seller; (b) any mechanic's or construction lien; (c) any
lien for unpaid taxes that are due and payable prior to the Closing Date,
assessments, utility, water, sewer or other governmental charges due and payable
as of the Closing Date; and (d) any other lien or encumbrance granted, assumed
or suffered by Seller and securing the repayment of money or other claims made
against Seller.

<PAGE>

                                  SCHEDULE 3.1

                            DEPOSIT ESCROW PROVISIONS

       [ATTACHED TO AND A PART OF REAL ESTATE PURCHASE AND SALE AGREEMENT]

          (a) Title Company shall hold the Deposit in a separate, segregated,
interest bearing account approved by Purchaser and Seller. If the Closing
occurs, the Deposit shall be credited against the Purchase Price. Interest
earned on the Deposit shall be considered part of the Deposit. The Deposit shall
be held and disbursed by Title Company in the following manner:

          (i) to Seller at the upon consummation of the Closing; or

          (ii) to Seller upon receipt of written demand therefor, stating that
Purchaser has defaulted in the performance of Purchaser's obligations under this
Agreement and the facts and circumstances underlying such default; provided,
however, that Title Company shall not honor such demand until at least ten (10)
Business Days after it has sent a copy of such demand to Purchaser, nor
thereafter if Title Company shall have received written notice of good faith
objection from Purchaser in accordance with paragraph (b) below; or

          (iii) to Purchaser upon receipt of written demand therefor, stating
that either (x) this Agreement has been terminated pursuant to a provision
hereof and certifying the basis for such termination, or (y) Seller has
defaulted in performance of Seller's obligations under this Agreement and the
facts and circumstances underlying such default or that Purchaser is otherwise
entitled to the Deposit under the provisions of this Agreement; provided,
however, that except for a termination pursuant to Section 5.2, Title Company
shall not honor such demand until at least ten (10) Business Days after it has
sent a copy of such demand to Seller, nor thereafter if Title Company shall have
received written notice of good faith objection from Seller in accordance with
paragraph (b) below. Notwithstanding anything to the contrary herein, if at any
time before the Study Period Notice Deadline, Purchaser provides Title Company
with written demand for the return of the Deposit, Title Company shall
immediately return the Deposit to Purchaser.

          (b) Upon receipt of written demand for the Deposit by Purchaser or
Seller pursuant to clause (a)(ii) or (a)(iii) above, Title Company shall
promptly send a copy thereof to the other party. Except for a termination under
Section 5.2 (as to which Seller shall have no right to object), the other party
shall have the right to make a good faith objection to the delivery of the
Deposit by sending written notice of such objection to Title Company within ten
(10) Business Days after Title Company sends a copy of the written demand to the
objecting party. Upon receipt of such notice, Title Company shall promptly send
a copy thereof to the party who made the written demand.

          (c) Except for the return of the Deposit to Purchaser as provided in
the last sentence of Section (a)(iii) above, in the event of any dispute between
the parties, Title Company shall disregard all instructions received and may
hold the Deposit until the dispute is mutually resolved and Title Company is
advised of this fact in writing by both Seller and Purchaser, or Title Company
is otherwise instructed by a final judgment of a court of competent
jurisdiction.

          (d) In the event Title Company shall be uncertain as to its duties or
rights hereunder or shall receive conflicting instructions, claims or demands
from the parties hereto, or instructions which conflict with any of the
provisions of this Agreement, Title Company shall be entitled to refrain from
taking any action other than to keep safely the Deposit until Title Company
shall be instructed otherwise in writing signed by both Seller and Purchaser, or
by final judgment of a court of competent jurisdiction.

<PAGE>

          (e) Title Company may rely upon, and shall be protected in acting or
refraining from acting upon, any written notice, instruction or request
furnished to it hereunder and believed by it to be genuine and to have been
signed or presented by the proper party or parties, provided that any
modification of this Schedule 3.1 shall be signed by Title Company, Purchaser
and Seller.

          (f) Seller and Purchaser shall jointly and severally hold Title
Company harmless against any loss, damage, liability or expense incurred by
Title Company not caused by its willful misconduct, gross negligence or breach
of these escrow provisions, arising out of or in connection with its entering
into this Agreement and the carrying out of its duties hereunder, including the
reasonable costs and expenses of defending itself against any claim of liability
or participating in any legal proceeding. As between the Seller and the
Purchaser, the party responsible for any such loss, damage, liability or expense
shall be responsible for any liability to the Title Company pursuant to the
foregoing joint and several indemnification.

                          JOINDER BY THE TITLE COMPANY

     By its execution hereof, the Title Company hereby (i) covenants and agrees
to hold the Deposit in accordance with the above provisions, and (ii)
acknowledges receipt of a copy of the Real Estate Purchase and Sale Agreement to
which this Schedule 3.1 is attached.

                                        By:                                    ,
                                            -----------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        Date:
                                              ----------------------------------

<PAGE>

                                  SCHEDULE 5.1

          (1) the Lease, and all written notices, material correspondence or
other material written communications or agreements between the Seller and the
Tenant relating to the Lease, including any pending or proposed amendments to
the Lease;

          (2) any tenant estoppel certificates or subordination, nondisturbance
and attornment agreements previously provided by the Tenant;

          (3) copies of any documents relating to any proposed or actual
sublease or assignment of the Tenant's interest under the Lease, to the extent
in Seller's possession or control;

          (4) copies of all financial, profile and background information
concerning the Tenant that is in Seller's possession or control;

          (5) a summary of all security deposits paid under the Lease;

          (6) a copy of the Tenant's current insurance certificate, if any;

          (7) copies of Tenant billings and reconciliations for the current
year, if any;

          (8) a copy of any management agreements relating to the Property, if
any;

          (9) a schedule of any leasing commissions that are due under the Lease
or will become due upon and extension, expansion or renewal of the Lease;

          (10) the Warranty;

          (11) all Contracts;

          (12) as-built plans and specifications for the Improvements in
Seller's possession or control;

          (13) the Certificate of Occupancy (as defined in Section 6.1(i)) for
the Improvements and all other Permits in Seller's possession or control;

          (14) all engineering, geotechnical, environmental, and other similar
studies or reports in the possession or control of the Seller relating to the
Property (the "Reports"); it being understood and agreed by the parties hereto
that Seller is in no way warranting or representing, express or implied, the
accuracy or completeness of anything contained in the Reports;

          (15) copies of all tax bills and statements for the Property for the
three (3) calendar years preceding the Effective Date and for the current year,
and copies of any notices of actual or proposed reassessments of the Property;

          (16) copies of all utility bills and statements for the Property for
the 2003 and 2004 calendar years and for the current year;

          (17) copies of monthly and annual operating statements for the
Property for the 2003 and 2004 calendar years and year-to-date statements for
the current year;

<PAGE>

          (18) any information on material maintenance and capital improvements
conducted by Seller at the Property for the three (3) calendar years preceding
the Effective Date and during the current year;

          (19) copies of any notices received in connection with any purported
or actual violation at the property of any Legal Requirement;

          (20) copies of any Reciprocal Easement Agreements, if any, and
agreements with any governmental agencies relating to the development,
construction, ownership or operation of the Property; and

          (21) copies of the existing insurance policies for the Property as
required under the Lease together with recent invoices with respect thereto.

<PAGE>

                                    EXHIBIT A

                               DESCRIPTION OF LAND

<PAGE>

                                    EXHIBIT B

                       FORM OF TENANT ESTOPPEL CERTIFICATE

Re:  Lease dated _________________, by and between GSI Lumonics Corporation, as
     Landlord, and ____________, as Tenant (the "Lease").

To:  Landlord and SAgE Aggregation, LLC and any other purchaser or potential
     purchaser ("Purchaser") of the property commonly known as 8401 Jefferson
     Highway, Maple Grove, Minnesota

The undersigned Tenant under the Lease certifies as follows (Capitalized terms
used herein and not otherwise defined have the meanings set forth in the Lease):

(1) The Lease has been duly authorized, executed and delivered by Tenant to
Landlord (or its predecessor-in-interest), has not been amended, modified,
superceded or supplemented in any way, and constitutes the entire agreement
between Landlord and Tenant with respect to the demised premises identified
therein (the "Premises") and the building and other property of which the
Premises are a part (the "Property");

(2) The Lease is in full force and effect, and Tenant does not have any defense,
credit, offset, claim or counterclaim by or in favor of Tenant against Landlord
(or its predecessor-in-interest) under the Lease against the obligation to pay
rent or other charges due from Tenant under the Lease or against any other
obligations of Tenant thereunder;

(3) (a) The Commencement Date of the Lease was ___________; the Rent
Commencement Date of the Lease was __________; and the expiration date of the
initial term of the Lease is __________;

     (b) There are no options remaining unexercised on the part of the Tenant to
renew the Lease except as set forth in Section ____ of the Lease;

     (c) Base Rent under the Lease is currently $________ per month and all
other components of rent are payable as and when set forth in the Lease;

(4) Tenant has unconditionally taken possession of and is occupying all of the
Premises and Tenant has commenced the payment of rents for all space subject to
the Lease. Landlord has completed all work to be performed by Landlord under the
Lease, if any, in a good and workmanlike manner and in accordance with the Lease
and such work has been accepted by Tenant and all reimbursements and allowances
due to Tenant under the Lease in connection with such work have been paid in
full. Tenant has no knowledge of any defects in the Premises or the Property or
any related improvements or facilities; Tenant has not delivered any notice
alleging any defect or deficiency in the work relating to the Premises or the
Property or any related improvements or facilities, and Tenant is not aware of
any currently existing condition or circumstance which would cause Tenant to
give such any such notice. Landlord has satisfied any and all commitments made
to induce Tenant to enter in to the Lease;

(5) Tenant has no right to cancel or terminate the Lease and no option or right
to purchase all or any part of the Premises, the Property;

(6) Tenant has not paid any security deposit under the Lease except as follows:
____________.

<PAGE>

(7) All minimum and additional rent and other sums payable by Tenant under the
Lease have been fully paid through ______________, 200_ in accordance with the
provisions of the Lease. No rent has been paid more than one month in advance;

(8) Tenant has not been granted and is not entitled to any free rental or any
concession in or abatement of rent;

(9) Neither Tenant nor Landlord is in default of its obligations under the Lease
and, to the best of Tenant's knowledge, there is no state of facts that with the
giving of notice, the passage of time, or both, could ripen into such a default;

(10) Tenant confirms that its address for purposes of notices under the Lease is
as follows: _____________________________________________.

(11) No leasing commissions or similar fees are outstanding in connection with
the Lease or will be due from the then owner of the landlord's interest under
the Lease in connection with any renewal, extension or expansion of the Lease;

(12) The Premises are adequately served by utilities and Landlord has satisfied
all obligations relating thereto under the Lease;

(13) Tenant has not assigned the Lease or any of its interests therein or sublet
any portion of the Premises; Tenant has no current plans to downsize or
eliminate its operations at the Premises; and

(14) A true and complete copy of the Lease is attached hereto and made a part
hereof.

This certificate shall be binding upon Tenant and its successors and assigns (if
any). Tenant understands and agrees that this certificate may be relied upon by
Purchaser (and/or its assignee and/or successors-in-interest as owners of the
Property) and by each lender of Purchaser that finances all or any portion of
the purchase price of the Property or otherwise provides debt financing to
Purchaser.

                                        Tenant

                                        BOSTON SCIENTIFIC CORPORATION

                                        By:                                    ,
                                            -----------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        Date:
                                              ----------------------------------

<PAGE>

                                    EXHIBIT C

                            LEASE RELATED DISCLOSURES

<PAGE>

                                    EXHIBIT D

                      EXCEPTIONS TO SELLER REPRESENTATIONS

<PAGE>

                                    EXHIBIT E

                                      DEED

LIMITED WARRANTY DEED               FORM NO. 23-M              MINNESOTA UNIFORM
CORPORATION, PARTNERSHIP OR LIMITED                CONVEYANCING BLANKS (1/15/97)
LIABILITY COMPANY TO CORPORATION,

PARTNERSHIP OR LIMITED LIABILITY COMPANY (TOP 3 Inches Reserved for Recording
Data)

________________________________________________________________________________

DEED TAX DUE: $_________________________________________________________________

Date: __________________________________________________________________________

FOR VALUABLE CONSIDERATION, ____________________________________________________
________________________________________________________________________________
a ________________________________ under the laws of ___________________________
Grantor, hereby conveys and quitclaims to ______________________________________
________________________________________________________________________________
Grantee, a ___________________________________________________ under the laws of
______________________________________________________________, real property in
________________________________________________ County, Minnesota, described as
follows: _______________________________________________________________________
________________________________________________________________________________
together with all hereditaments and appurtenances.

This Deed conveys after-acquired title. Grantor warrants that Grantor has not
done or suffered anything to encumber the property, EXCEPT: all easements,
covenants and restrictions of record.

Check box if applicable:

[ ]  The Seller certifies that the seller does not know of any wells on the
     described real property.

[ ]  A well disclosure certificate accompanies this document.

[ ]  I am familiar with the property described in this instrument and I
     certify that the status and number of wells on the described real property
     have not changed since the last previously filed well disclosure
     certificate.

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

                                        By:
                                            ------------------------------------
                                        Its:
                                             -----------------------------------

Affix Deed Tax Stamp Here

                                        By:
                                            ------------------------------------
                                        Its:
                                             -----------------------------------

STATE OF MINNESOTA    )
                      )   SS.
COUNTY OF _________   )

    This instrument was acknowledged before me on (Date)

By _____________________________________ and ___________________________________
the ___________________________________, and ___________________________________
of ____________________________________, and ___________________________________
under the laws of _____________________, on behalf of the ______________________

Notarial Stamp or Seal

                                        ----------------------------------------
                                        Signature of Notary Public or other
                                        official

<PAGE>

THIS INSTRUMENT WAS DRAFTED BY          Check here if part all of the land is
(NAME & ADDRESS)                        Registered (Torrens)
_____________________________________   [ ]

_____________________________________   Tax Statements for the real property
                                        described in this instrument should be
                                        sent to (include name and address of
                                        Grantee:
                                        ________________________________________

                                        ________________________________________

<PAGE>

                                    EXHIBIT F

                                   (RESERVED)

<PAGE>

                                    EXHIBIT G

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is executed as
of ________________, 200_ by and between ______________________ ("Assignor"),
and _____________ ("Assignee").

                                   BACKGROUND

     Assignor has this day conveyed to the Assignee the property located in
___________________, and more particularly described in Exhibit A hereto (the
"Premises") and, in connection with the conveyance of the Premises, Assignor and
Assignee intend that Assignor's right, title, interests, powers, and privileges
in and under all leases and security deposits affecting the Premises and other
matters stated herein be assigned and transferred to Assignee.

                                    AGREEMENT

     In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     1. LEASES. Assignor hereby transfers and assigns to Assignee all of
Assignor's right, title and interest as landlord or otherwise in that certain
lease dated __________ between Assignor as landlord and ___________, as tenant
(the "Lease"). By executing this Assignment, Assignee hereby accepts, assumes
and agrees to perform all of the terms, covenants and conditions of the Lease on
the part of the landlord therein required to be performed, including Assignor's
obligations pertaining to the Security Deposits (as such term is defined below),
from and after the date hereof, but not prior thereto. Assignor also hereby
transfers and assigns to Assignee the security deposit held by the Assignor
relative to the Lease (the "Security Deposits").

     2. WARRANTY. Assignor hereby transfers and assigns to Assignee all of
Assignor's right, title and interest in that certain _______________________.

     3.. MUTUAL INDEMNIFICATION. Assignor shall indemnify and hold Assignee
harmless from and against any and all damages, claims, liabilities, costs
(including reasonable attorney's fees), expenses and causes of action which may
arise and accrue from or under the Lease and that are attributable to periods of
time prior to the date hereof, regardless of when same are discovered or
asserted. Assignee shall indemnify and hold Assignor harmless from and against
any and all damages, claims, liabilities, costs (including reasonable attorney's
fees), expenses and causes of action which may arise and accrue from or under
the Lease or any of them and that are attributable to periods of time on or
after the date hereof, regardless of when same are discovered or asserted.

     4. FURTHER ASSURANCES. Assignor and Assignee agree to take all further
actions and execute, acknowledge and deliver all further documents that are
reasonably necessary or useful in carrying out the purposes hereof.

     5. SUCCESSORS AND ASSIGNS. This Assignment shall inure to the benefit of,
and be binding upon, the successors, executors, administrators, legal
representatives and assigns of the parties hereto.

<PAGE>

     IN WITNESS WHEREOF, this Assignment has been duly signed and sealed by the
parties as of the date set forth above.

                                        ASSIGNOR:

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

                                        By:                                    ,
                                            -----------------------------------
                                        Name:
                                              ---------------------------------
                                        Title:
                                               --------------------------------
                                        Date:
                                              ---------------------------------

                                        ASSIGNEE:

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

                                        By:                                    ,
                                            -----------------------------------
                                        Name:
                                              ---------------------------------
                                        Title:
                                               --------------------------------
                                        Date:
                                              ---------------------------------

<PAGE>

                                    EXHIBIT A
                         (to Assignment and Assumption)

                              Property Description

<PAGE>

                                    EXHIBIT B
                         (to Assignment and Assumption)

<PAGE>

                                    EXHIBIT H

                  UPDATED REPRESENTATION CERTIFICATE FOR SELLER

     The undersigned, as Seller under a Real Estate Purchase and Sale Agreement
("Purchase Agreement") dated as of _________________, 200__ between
______________________ ("Seller") and _____________________ ("Purchaser"), does
hereby certify to Purchaser that the representations and warranties set forth in
Section 7.3 of the Purchase Agreement are hereby reaffirmed as of the date
hereof.

     Seller's liability hereunder shall be subject to the limitations set forth
in the Purchase Agreement.

     Dated as of this ____ day of ____________, 200__.

                                        SELLER

                                        [                                      ]
                                         --------------------------------------

                                        By:
                                            -----------------------------------
                                        Name:
                                              ---------------------------------
                                        Title:
                                               --------------------------------

                UPDATED REPRESENTATION CERTIFICATE FOR PURCHASER

     The undersigned, as Purchaser under a Real Estate Purchase and Sale
Agreement ("Purchase Agreement") dated as of _________________, 200__ between
______________________ ("Seller") and _____________________ ("Purchaser"), does
hereby certify to Seller that the representations and warranties set forth in
Section 7.2 of the Purchase Agreement are hereby reaffirmed as of the date
hereof.

     Purchaser's liability hereunder shall be subject to the limitations set
forth in the Purchase Agreement.

     Dated as of this ____ day of ____________, 200__.

                                        PURCHASER

                                        [                                      ]
                                         --------------------------------------

                                        By:
                                            -----------------------------------
                                        Name:
                                              ---------------------------------
                                        Title:
                                               --------------------------------

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