Exhibit 10.1


 


Form 10-QSB for quarter ended
December 31, 2003


 


Purchase Agreement


 


Date: 7-11-03


 


RECEIVED OF Kevin Swanson and/or Assignee the sum of Twenty Thousand
and no/100 ($20,000.00) Dollars Hamilton Ret Acct as earnest money and in part
payment for the purchase of property at 2411 7th St. NW, Rochester, situated in
the County of Olmsted, State of Minnesota and legally described as follows:
    to be supplied


 


together with the following personal property:    see
addendum  


 


all of which property the undersigned has this day sold to the Buyer
for the sum of: One Million Eight Hundred Thousand ($1,800,000.00) Dollars,
which the Buyer agrees to pay in the following manner: Earnest money herein
paid $20,000 and cash as set forth on the addendum, on or before 9/15/03, the
date of closing and the balance of $ see addendum by financing as shown on the
attached addendum.


 


1.               DEED/MARKETABLE TITLE: Subject to
performance by the Buyer, the Seller agrees to executed and deliver a General
Warranty Deed conveying marketable title to said premises subject only to the
following exceptions:


 


(a) Building and zoning laws, ordinances, State and Federal
regulations, (b) Restrictions relating to use or improvement of the premises
without effective forfeiture provision, (c) Reservation of any minerals or
mineral rights to the State of Minnesota, (d) Utility and drainage easements
which do not interfere with present improvements, (e) Rights of tenants as
follows: None


 


2.               REAL ESTATE TAXES.  Real estate taxes due and payable in the
year of closing shall be prorated between Seller and Buyer on a calendar year
basis to the actual date of closing unless otherwise provided in this
Agreement.  Real estate taxes payable in
the years prior to closing shall be paid by Seller.  Real estate taxes payable in the years subsequent to closing
shall be paid by Buyer.


 


3.               SPECIAL ASSESSMENTS. SELLER SHALL PAY on
the date of closing all installments of special assessments certified for
payment with the real estate taxes due and payable in the year of closing.


SELLER SHALL PAY ON DATE OF CLOSING all other special assessments
levied as of the date of this Agreement.


SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as of
the date of this Agreement for improvements that have been ordered by the City
Council or other governmental assessing authorities.  (Seller’s provision for payment shall be by payment into escrow
of 1 1/2 times the estimated amount of the assessments.)


If a special assessment becomes pending after the date of this Agreement
and before the date of closing, Buyer may, at Buyer’s option: (a) Assume
payment of the pending special assessment without adjustment to the purchase
price; or (b) Require Seller to pay the pending special assessment (or escrow
for payment of same a sum equal to 1 1/2 times the projected


 

















 


pending assessment) and Buyer shall pay a commensurate increase on the
purchase price of the property, which increase shall be the same as the
estimated amount of the assessment; or (c) Declare this Agreement null and void
by notice to Seller, and earnest money shall be refunded to Buyer.  Seller shall pay on date of closing any
deferred real estate taxes or special assessments payment of which is required
as a result of the closing of this sale.


 


4.               PRORATIONS.  All items customarily prorated and adjusted in connection with
the closing of the sale of the property herein including but not limited to
rents, operating expenses , interest on any debt assumed by Buyer, shall be
prorated as of the date of closing.  It
shall be assumed that the Buyer will own the property for the entire date of
the closing.


 


5.               DAMAGES TO REAL PROPERTY.  If there is any loss or damage to the
property between the date hereof and the date of closing, for any reason, the
risk of loss shall be on the Seller.  If
the property is destroyed or substantially damaged before the closing, this
Purchase Agreement shall become null and void, at Buyer’s option.  Buyer shall have the right to terminate this
Purchase Agreement within 30 days after Seller notifies Buyer of such
damage.  Upon said termination, the
earnest money shall be refunded to Buyer and Buyer and Seller agree to sign a
cancellation of Purchase Agreement.


 


6.               EXAMINATION OF TITLE.  Within a reasonable time after acceptance of
this Agreement, Seller shall furnish Buyer with an Abstract of Title or a
Registered Property Abstract certified to date including proper searches
covering bankruptcies and State and Federal judgments, liens, and levied and
pending special assessments.  Buyer shall
have 10 business days after receipt of the Abstract of Title or Registered
Property Abstract either to have Buyer’s attorney examine the title and provide
Seller with written objections or, at Buyer’s own expense, to make an
application for a title insurance policy and notify Seller of the
application.  Buyer shall have 10
business days after receipt of the commitment for title insurance to provide
Seller with a copy of the commitment and written objections.  Buyer shall be deemed to have waived any
title objections not made within the applicable 10 day period set forth above,
except that this shall not operate as a waiver of Seller’s covenant to deliver
a Warranty Deed, unless a Warranty Deed is not specified above. If any
objections is so made, Seller shall have 10 business days from receipt of
Buyer’s written title objections to notify Buyer of Seller’s intention to make
title marketable within 120 days from Seller’s receipt of such written
objection.  If notice is given, payments
hereunder required shall be postponed pending correction of title, but upon
correction of title and within 10 days after written notice to Buyer the
parties shall perform this Purchase Agreement according to its terms.  If no such notice is given or if notice is
given but title is not corrected within the time provided for, this Purchase
Agreement shall be null and void, at option of Buyer; neither party shall be
liable for damages hereunder to the other and earnest money shall be refunded
to Buyer.  Buyer and Seller agree to sign
cancellation of Purchase Agreement.  If
title to the property be found marketable or be so made within said time, and
Buyer shall default in any of the agreements and continue in default for a
period of 10 days, then and in that case the Seller may terminate this contract
and on such termination all payments made upon this contract shall be retained
by Sellers as liquidated damages, time being of the essence.  This provision shall not deprive either
party of the right to enforce the specific performance of this contract
provided this contract has not been terminated and provided action to enforce
such specific performance shall be commenced within six months after such right
of action shall arise.


 

















 


7.               POSSESSION.  Seller shall deliver possession of the property on the date of
closing.


 


8.               REPRESENTATIONS AND WARRANTIES.  See attached addendum.


 


9.               TIME IS OF THE ESSENCE FOR ALL
PROVISIONS OF THIS CONTRACT.


 


10.         WELL DISCLOSURE STATEMENT.  No well.


 


11.         ADDENDA. 
Attached is one addenda which is made a part of this Agreement.


 


12.         MISCELLANEOUS PROVISIONS.


(a)          Survival. 
All of the warranties, representations, and covenants of this Agreement
shall survive and be enforceable after the closing.


(b)         Entire Agreement; Modification.  This Agreement constitutes the complete
agreement between the parties and supercedes any prior oral or written
agreements between the parties regarding the property.  There are no verbal agreements that change
this Agreement and no waiver of any of its terms will be effective unless in a
writing executed by the parties.


(c)          Successors and Assigns.  If this Agreement is assigned, all
provisions of this Agreement shall be binding on successors and assigns.


 


13.         ACCEPTANCE DEADLINE.  This offer to purchase, unless accepted sooner, shall be null and
void at 11:59 P.M.
                                                     ,
and in such event all earnest money shall be refunded to Buyer.


 


NOTICE


 




	
   

  	
   

  	
   

  	
   

  	
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THIS IS A LEGALLY BINDING CONTACT, IF NOT UNDERSTOOD, SEEK COMPETENT
ADVICE.


 


	
  Dated:

  	
  Dated: 7-11-03

  	
   

  
	
  SELLER:  Waters Instruments,
  Inc.

  	
  BUYER:

  	
  /s/ Kevin Swanson

  	
   

  	
   

  
	
  SELLER:

  	
  /s/ Gregory Anshus, CFO

  	
   

  	
  BUYER:

  	
   

  
	
   

  	
  SELLING AGENT:

  	
  /s/ Ron Braasch

  	
   

  	
   

  
									



 

















 


Rochester Facility


 


	
  Purchase Price

  	
   

  	
  $1,800,000

  
	
   

  	
   

  	
   

  
	
  9 Cap

  	
   

  	
  $162,000

  
	
   

  	
   

  	
   

  
	
  Square footage

  	
   

  	
  66,000.00

  
	
   

  	
   

  	
   

  
	
  Average rent

  	
   

  	
  $2.45 per sq ft

  
	
   

  	
   

  	
   

  
	
  Waters existing Space rent

  	
   

  	
  $7.00 per sq ft  With ability
  to flex down based on tenants needs

  
	
   

  	
   

  	
   

  
	
  Approximately 15,000 sq ft

  	
   

  	
  $105,000.00 Annual  Will
  consolidate operations to 15,000 sq ft

  
	
   

  	
   

  	
   

  
	
  Water commitment

  	
   

  	
  $35,000 4 months

  



 


With option to enter into long term lease once needs are known.


 


Pass through prorated on square footage.


 

















 


ADDENDUM TO PURCHASE AGREEMENT


 


Addendum to Purchase Agreement between parties dated 7-11-2003
pertaining to the purchase and sale of the property at 2411 7th St. NW,
Rochester.


 


	
  (1)

  	
   

  	
  Offer is subject to Buyer receiving acceptable financing within 15
  days of acceptance.

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  Seller to supply Buyer with environmental appraisal study within 5
  days of acceptance.

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  Offer is subject to Buyer at Buyers cost having property inspected
  for the following:

  
	
   

  	
   

  	
  Heating, cooling, elec, roof, structure, within 20 days of final
  acceptance.

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  It is understood that, and Seller at Seller’s cost, Buyer may do a
  1031 tax deferred exchange and that Seller shall not incur any additional
  cost for this to occur.

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  Air compressor to stay with property, Buyer has interest in buying
  furniture and partition that Seller chooses not to move.

  
	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  Seller to lease back for 4 months from date of closing the
  approximate 15,000 sf to be used by Seller at $9,000.00/month, and to pay pro
  rata utilities, taxes, triple net.

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  Any contingency which does not meet with Buyer’s approval shall null
  and void this agreement and all earnest monies shall be returned to Buyer.

  
	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  Buyer and Seller to agree on sales allocation.

  



 


Offer is accepted, closing date to be on or before Oct. 30, 03.  It is understood that Ron Braasch of Braasch
Commercial Real Estate will be a 50% partner in this transaction.


 


 


	
   

  	
  /s/ Kevin Swanson

  	
   

  	
  7/11/03

  



 


1

















 


ASSIGNMENT OF PURCHASE AGREEMENT


 


Kevin Swanson hereby assigns his interest in and to that certain Real
Estate Purchase Agreement dated the 11th day of July, 2003, between
Kevin Swanson and/or Assigns and Waters Instruments, Inc., to JES Enterprises
of Rochester LLC, a Minnesota limited liability company (an undivided 1⁄2
interest) and to Ronald W. Braasch (an undivided 1⁄2 Interest).  JES Enterprises of Rochester LLC and Ronald
W. Braasch hereby accept this assignment and assume the benefits, liabilities
and obligations of Kevin Swanson under such Purchase Agreement.


 


	
   

  	
  Assignor:

  
	
  Date:  10/21/03

  	
   

  
	
   

  	
  /s/ Kevin Swanson

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Assignees:

  
	
   

  	
   

  
	
   

  	
  JES Enterprises of Rochester LLC

  
	
   

  	
   

  
	
  Date:  10/21/03

  	
  By:

  	
  /s/ Janet E. Swanson

  	
   

  
	
   

  	
   

  	
  Its:  Chief Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:  10/21/03

  	
  /s/  Ronald W. Braasch

  	
   

  
						



 

















 


AMENDMENT TO PURCHASE AGREEMENT


 


Date:  October 28, 2003.


 


The undersigned parties to that certain Purchase Agreement dated
July 11, 2003, pertaining to the purchase and sale of property at 2411 7th
Street NW, Rochester, Minnesota, hereby mutually agree to amend said Purchase
Agreement as follows:


 


1.                                       The
purchase price of $1,800,000.00, is hereby allocated between parcels A, B, C,
and D, on attached Exhibit “A” as follows:


 


	
  Parcel

  	
   

  	
  Purchase
  price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  B

  	
   

  	
  $

  	
  210,000.00

  	
   

  
	
  C

  	
   

  	
  $

  	
  630,000.00

  	
   

  
	
  D

  	
   

  	
  $

  	
  760,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  1,800,000.00

  	
   

  



 


 


2.                                       Except
as herein modified, the Purchase Agreement is hereby ratified and confirmed in
all respects.


 


	
  SELLER

  	
  BUYER

  
	
   

  	
   

  
	
  Waters Instruments, Inc.

  	
  /s/ Kevin Swanson

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gregory Anshus

  	
   

  	
   

  
	
  Its:

  	
  CFO