**Exhibit10.1**

 

**REAL ESTATE PURCHASE AGREEMENT**

 

                **THIS AGREEMENT,** made and entered into this21st day of December, 2004, by and between **MVBProperties, Inc.,**a South Dakota corporation (the “Buyer”) and **HF Financial Corp.,**a Delaware corporation(the “Seller”);

 

                1.             **Sale and Purchase.**

 

                                1.1           Subject to and on the terms andconditions described below, Seller hereby agrees to sell to Buyer and Buyerhereby agrees to purchase from Seller the following described real property inMinnehaha County, South Dakota (the “Property”):

 

The West Half of theNortheast Quarter (W1/2NE1/4), except County Auditor’s Lot H-1 containedtherein and except Iverson’s Tracts 8, 9, 10, 11, 12 and 13 contained therein,of Section 30, Township 101 North, Range 48 West of the 5th P.M., MinnehahaCounty, South Dakota, subject to Section-Line Highways by Operation of Law,SDCL 31-18-1; and,

 

The Northwest Quarter(NW1/4), except Lot H-1 contained therein, except County Auditor’s Lot H-4contained therein, except County Auditor’s Lot H-2 contained therein, exceptIverson’s Tract 1 contained therein, except Iverson’s Tract 2 containedtherein, except Iverson’s Tract 6 contained therein, except Iverson’s Tract 7contained therein, except Iverson’s Tract 3 contained therein, except Iverson’sTract 4A contained therein, except Iverson’s Tract 6A contained therein, exceptTract 1 of Evangelical Covenant Church Addition contained therein, and exceptIverson’s Tract 2A contained therein, of Section 30, Township 101 North, Range48 West of the 5th P.M., Minnehaha County, South Dakota, subject toSection-Line Highways by Operation of Law, SDCL 31-18-1; and,

 

Iverson’s Tract No. 13 inthe North Half of the Northeast Quarter (N1/2NE1/4) of Section 30, Township 101North, Range 48 West of the 5th P.M., Minnehaha County, SouthDakota, according to the recorded plat thereof.

 

together with all existing and futuretangible and intangible property owned, acquired, installed, held, executed orclaimed on or with respect to such real property, including without limitation,structures, fixtures, improvements, approaches, driveways, sewer and waterlines, wells, septic systems, tiling systems, pumps and lift stations, wells,fences, trees and other landscaping, rights-of-way, air space, railroad spursand tracks, easements,

 

1

----

 

means of access, reversionary rights,privileges, tenements, hereditaments, appurtenances, water, riparian, oil, gasand mineral rights, permits, approvals, consents, clearances, licenses, claimsand causes of action for damage to, loss or diminution of value or taking ofany of the foregoing, allotments and rights under government programs accruingas of or after the date of closing.

 

                                1.2           If a survey reveals inaccuracies insize, dimensions or location relative to landmarks or adjoining properties orother deficiencies in description, the description of the Property shall berevised accordingly.

 

                                1.3           Theclosing date shall be December 15, 2005. Time is of the essence of this Agreement.

 

                2.             **Purchase Price.**

 

                                2.1           The purchase price shall be $23,000per acre (including any dedicated rights-of-way) payable as follows:

 

                                                (a)           $100,000.00 in earnest money payableupon full execution of this Agreement, to be escrowed in an interest bearingaccount with Midwest Title Company (the “Title Company”); and

 

                                                (b)           The remaining balance payable on thedate of and at closing.

 

                                2.2           Unlesscorrected by survey, the Property shall be deemed to be 211.44 acres in size.

 

                                2.3           In the event this purchase is notclosed due to a failure of Seller to perform its obligations hereunder or thefailure of any condition precedent described below, Buyer shall be entitled toa refund of all earnest money paid hereunder and the interest accrued thereon.  In the event this purchase is closed, or inthe event this purchase is not closed due to a failure of Buyer to perform itsobligations hereunder, Seller shall be entitled to receipt of the earnest moneypaid hereunder and the interest accrued thereon.

 

                3.             **Title.**

 

                                3.1           Prior to closing, Seller shalldeliver to Buyer a commitment for title insurance issued by the Title Companyin the total amount of the purchase price showing Seller as the holder of goodand merchantable title to the Property, free and clear of all conditions,restrictions, liens, charges, encumbrances and tenancy and other rights ofpossession or use whatsoever, except: (i) any easements and restrictions of record not interfering with Buyer’sexpected use of the Property; (ii) real estate taxes not yet due and

 

2

----

 

payable; (iii) any encumbrances to be satisfied at closing coincident withpayment of the purchase price; (iv) the life estate of Norman and Mary LaVonneIverson (the “Iversons”) as described in the Contract for Deed dated October28, 1998 between the Iversons and Seller and recorded in the office of theMinnehaha County Register of Deeds on November 2, 1998 in Book 233 ofMiscellaneous on page 945; and (v) the rights of the farm tenant for the then-currentcrop year.

 

                                3.2           Buyer shall have 15 days followingreceipt of the title commitment to examine it and to approve of the status oftitle or waive any defects.  If Buyergives written notice of objections to the condition of title which would prohibitBuyer’s expected use of the Property, Seller shall make a reasonable effort toremove the exceptions to which Buyer has objected.  Seller shall then deliver to Buyer writtennotice that either (i) Seller was able to remove the exceptions to which Buyerhas objected on or before the closing date, or (ii) Seller is unable to removeany such exception.  If Seller is unableto remove any such exception to title, Buyer may either (i) purchase theProperty notwithstanding such exceptions, or (ii) terminate this Agreement andrecover the earnest money held by Title Company.

 

                4.             **Seller’s Condition to Closing**.  Seller’s obligation to close this transactionshall be subject to this transaction qualifying as a sale under generallyaccepted accounting principles at the time of closing.

 

                5.             **Buyer’s Conditions to Closing.**  Buyer’s obligation to close this transactionand to pay the purchase price shall, at Buyer’s sole discretion, be subject tosatisfactory completion of each of the following conditions:

 

                                5.1           Titleshall have been found acceptable to Buyer or have been made acceptable inaccordance with the requirements of Section 3 hereof.

 

                                5.2           Sellershall allow Buyer and Buyer’s agents access to the Property without charge andat all reasonable times for the purpose of inspection, survey, study,investigation and testing.

 

                                5.3           Ifa further plat of the Property is required to record the warranty deed, thenSeller shall cooperate in obtaining such plat at Buyer’s expense.  Buyer may also obtain a further survey, plator other review, estimate or inspection of the Property by surveyor, contractorand/or other agent selected by Buyer at its expense for size, boundaries,encroachments, acceptable ecological, geographic, compaction, topography,drainage, utility availability and location, for Buyer’s expected use, and anymatters customarily covered by a survey, the results of which are satisfactoryto Buyer.

 

3

----

 

                                5.4           AtBuyer’s expense, Buyer may also obtain a Phase I environmental site assessment,the results of which are satisfactory to Buyer; however, Buyer shall not obtaina Phase II environmental site assessment without Seller’s prior writtenconsent.

 

                                5.5           Buyershall receive acceptable verification that existing zoning restrictions permitthe Buyer’s expected use, or grant by appropriate authorities of a permit orzoning change sufficient for such use.

 

                                5.6           Noportion of the Property shall constitute a burial site or archaeologicallysignificant site protected, or use of which is restricted, by any federal,state or local law or regulation.

 

                                5.7           Allsoils and subsurface conditions on the Property shall be suitable forresidential, office, commercial,  andretail development and to support structures for those purposes withoutextraordinary construction measures, to be determined before closing byreasonable methods, investigation or testing at Buyer’s expense.

 

                                5.8           TheProperty shall be and remain free of contaminants, pollutants and other hazardoussubstances that would require testing, monitoring, removal or clean-up.  The Property shall otherwise be preservedsubstantially in its present condition until possession is finally delivered toBuyer, it being agreed that all risk of loss or damage shall remain with theSeller until possession of the Property is delivered to Buyer.

 

                6.             **Buyer’s Diligence.**  Buyer shall undertake and complete withreasonable diligence all investigations, surveys, studies, tests and otherprocedures contemplated by Sections 5.2-5.7, and shall give notice beforeOctober 1, 2005, of any adverse discovery, occurrence or condition.  Seller shall have 45 days following receiptof notice to correct any adverse discovery, occurrence or condition determinedby Buyer to exist.  If Seller is unable(following attempts or otherwise) or unwilling to correct the adversediscovery, occurrence or condition within the 45 day period, Buyer may either(i) purchase the Property notwithstanding the adverse discovery, occurrence orcondition, or (ii) terminate this Agreement and recover the earnest money heldby Title Company.  If during theinvestigation, survey, study, and testing of the Property, Buyer causes anydamage to the Property or any crops growing thereon, Buyer shall pay to Seller,or to Seller’s tenant for crop damage, the amount of such damages as are causedby said activities.  Buyer shall defend,indemnify and hold harmless Seller from any and all damages, liabilities,claims and causes of action that any person may have arising out of or inconnection with the completion of Buyer’s investigations, surveys, studies,tests and other procedures contemplated by Sections 5.2-5.7.

 

4

----

 

                7.             **Closing Procedures.**

 

                                7.1           Closingshall take place at the offices of the Title Company.

 

                                7.2           Atclosing, the escrowed downpayment shall be released to Seller, and Buyer shalltender the remaining balance in collected funds.

 

                                7.3           Atclosing, Seller shall execute and deliver a special warranty deed or specialwarranty deeds sufficient to convey good and marketable title as abovedescribed, subject to the exceptions set forth in Section 3.1(i), (ii), (iv)and (v).  Seller shall provide any otheraffidavit or other document or instrument and take all other proceduresrequired by the Title Company to assure marketable title to Buyer.

 

                                7.4           Uponclosing, possession of the Property shall be transferred to Buyer.

 

                                7.5           Uponcompletion of closing, all conditions to closing shall be deemed performed,accomplished or waived.

 

                8.             **Payments and Prorations at Closing.**

 

                                8.1           Real estate taxes assessed in 2004and payable in 2005 shall be paid in their entirety by Seller.  Real estate taxes assessed in 2005 andpayable in 2006 shall be prorated to the date of closing and the purchase priceshall be adjusted accordingly.

 

                                8.2           Assessments levied against theProperty or which will be levied against the Property for improvementscompleted prior to closing, regardless of whether they now are entered on thebooks of the assessing authority, shall be paid by Seller at closing.  All other assessments shall be the soleresponsibility of the Buyer.

 

                                8.3           All other charges attributable tousage or occupation of the Property prior to the date of closing shall be paidby the Seller at closing.

 

                                8.4           The cost of title insurance and anyclosing fee of the Title Company shall be borne equally by Buyer and Seller.

 

                                8.5           The cost of the survey and other workconducted pursuant to Section~~~~5.3 hereof shall be borne by Buyer.

 

5

----

 

                                8.6           Any transfer fee assessed as acondition for recording the special warranty deed(s) shall be paid by theSeller at closing.

 

                                8.7           Each party shall bear its own legalexpenses.

 

                                8.8           Allincome from the Property with respect to the 2005 crop year shall be and remainthe sole property of Seller.

 

                9.             **Brokerage.**  The parties acknowledge that Myron VanBuskirk is an inactive licensee real estate broker and Mike Van Buskirk is anactive licensee under SDCL Chapter 36-21A, but no party has employed orperformed the services of any agent or broker such as to require the payment ofany commission.

 

                10.           **Farm Lease**.  Buyer and Seller shall cooperate with oneanother in leasing the Property to a tenant for the 2005 crop year.  If Buyer and Seller do not agree on tenantand/or the terms of a lease prior to January 15, 2005, Seller shall have theright to enter into a lease on terms and conditions and with a tenantacceptable to Seller, in Seller’s sole discretion.

 

                11.           **Right of First Refusal.**  Seller currently possesses a right of firstrefusal with respect to the following described real property:

 

TheSoutheast Quarter (SE1⁄4) of Section 30, Township 101 North, Range 48 West of the5th P.M., Minnehaha County, South Dakota, except the South 501.84 feet of theWest 404 feet of the East 868 feet thereof, and except Molter Tract 1 thereof,and except Tract 1, Iverson Estates, an Addition in the SE1⁄4 thereof, and exceptTract 1 of Katie Addition in the SE1⁄4 thereof

 

pursuantto a Right of First Refusal Agreement dated October 28, 1998 between Seller andthe Iversons.  The Right of First RefusalAgreement was recorded in the office of the Minnehaha County Register of Deedson November 2, 1998 in Book 233 of Miscellaneous on page 944. The Right ofFirst Refusal Agreement expires in effect upon the later of closing of thisAgreement or death of both Iversons. Following execution of this Agreement,Seller agrees to request permission from the Iversons to extend the term of theRight of First Refusal for a period of nine years, and to assign the Right ofFirst Refusal Agreement to Buyer upon the closing of this transaction.  Any compensation requested by the Iversons inconsideration for the right to assign the Right of First Refusal Agreement shall be negotiated by Buyer and borneby Buyer.

 

6

----

 

                12.           **Public Disclosure.**  Buyer acknowledges that Seller mustpublically disclose the terms and conditions of this Agreement through a Form8-K filing or other filing with the United States Securities and ExchangeCommission (SEC).  A copy of thisAgreement may be filed with the SEC and made available to the public,accordingly.

 

                13.           **Liquidated Damages.**  In the event Buyer does not close on thepurchase of the Property on or before December 15, 2005, for any reason otherthan the default of Seller, failure of title under Section 3.2, or failure ofdue diligence conditions under Section 6, Buyer agrees that the Title Company shall be entitled to transfer theearnest money and any interest earned thereon, to Seller as liquidated damages.

 

                Theparties stipulate and agree that Buyer is experienced and knowledgeable aboutreal estate and real estate law, and further, Buyer has consulted with anattorney regarding the terms and provisions hereof.  The parties both acknowledge that:

 

a.             Atthe time this Agreement was made, the damages in the event of breach by Buyerwere difficult to accurately estimate;

 

b.             Therewas a reasonable endeavor by both Buyer and Seller to fix the damages in theevent of a breach by Buyer;

 

c.             Theamount of earnest money referenced in Section 2.1 bears a reasonable relationto probable damages to Seller in the event of a breach by Buyer hereunder andis not disproportionate to any damages reasonably to be anticipated as of thedate hereof.

 

d.             Aftertaking into account the provisions of this Agreement and all relevantcircumstances at the date of this Agreement, both parties agree that theliquidated damages payable under this Agreement represent a reasonable, genuineestimate of the damages which could be suffered by Seller in the event of theBuyer’s breach of this Agreement and do not constitute a penalty.  Nothing in this Section will limit Seller’sright to seek injunctive relief, to the extent available, with respect to anybreach of this Agreement by Buyer.  Theparties further acknowledge that they have discussed and negotiated thisliquidated damages provision and after such negotiations have agreed upon theliquidated damage amount.

 

                14.           **Condition of Property**. Buyer acknowledges that Buyer is purchasing the Property in its “as is”condition.  Buyer further acknowledgesthat Seller has made no warranties or representations of any kind with respectto the title or condition of the

 

7

----

 

Property, except for those warranties andrepresentations set forth in the Seller’s Property Condition DisclosureStatement and the Disclosure and Acknowledgment of Lead-Based Paint BeforeSale, copies of which will be delivered by Seller to Buyer prior to orcontemporaneous with the execution of this Agreement.

 

                15.           **Notices**.  Any notice or communication under thisAgreement shall be in writing and delivered (by hand, telecopy, telegraph,telex or courier) or deposited in the United States mail (first class,registered or certified), postage fully prepaid and addressed as statedbelow.  Either party may, from time totime, specify as its address for purposes of this Agreement any other addressupon the giving of ten days notice thereof to the other party in the mannerrequired by this paragraph.  Thisparagraph shall not prevent the giving of written notice in any other manner,but such notice shall be deemed effective only when and as of its actualreceipt at the proper address and by the proper addressee.

 

[SignaturePage Follows}

 

8

----

 

                INWITNESS WHEREOF, the parties hereto have executed this Agreement on the day andyear first above-written.

 

 
| ** ** | ** ** | **MVB PROPERTIES, INC.,**

a South Dakota corporation | ** ** |
|------------|------------|-------------------------------------------------------|------------|
|       |       |                                                  |       |
|       | By         | /s/ Myron Van Buskirk                                 |       |
|       |       | Its: President                                        |       |
| ** ** |       | **Address for Notices:**                              |       |
|       |       | 5101 South Nevada Avenue,  Suite 100                  |       |
|       |       | Post Office Box 89634                                 |       |
|       |       | Sioux Falls, SD 57109-1009                            |       |
|       |       | Attention: Steve Van  Buskirk                         |       |
|       |       |                                                  |       |
| ** ** |       | **HF FINANCIAL CORP.,**                               |       |
|       |       | a Delaware corporation                                |       |
|       |       |                                                  |       |
|       | By         | /s/ Darrel L. Posegate                                |       |
|       |       | Its: EVP/CFO                                          |       |
| ** ** |       | **Address for Notices:**                              |       |
|       |       | 225 South Main Avenue                                 |       |
|       |       | Post Office Box 5000                                  |       |
|       |       | Sioux Falls, SD 57117-5000                            |       |
|       |       | Attention: Curtis L. Hage                             |       |

 

9

----