EXHIBIT 10.37


 


PURCHASE AGREEMENT


 


THIS
PURCHASE AGREEMENT is made and entered into as of this
10th day of August, 2005, between Sten Corporation, a Minnesota corporation
(“Seller”), and OLD Holdings, LLC, a Minnesota limited liability company, or
its assigns (“Purchaser”).


 


In
consideration of the covenants and agreements contained herein, the parties
agreed as follows:


 


1.                                       Premises to be Purchased.  Subject to compliance with the terms and
conditions of this Agreement, Seller shall sell to Purchaser and Purchaser
shall purchase from Seller the real property located at 13828 Lincoln Street NE
Ham Lake, MN, legally described on Exhibit A attached hereto, together
with all easements, tenements, hereditaments, and appurtenances belonging
thereto to include the personal property and equipment contained on Exhibit
B attached hereto (the “Premises”).


 


2.                                       Purchase Price.  The purchase price for the Premises
(“Purchase Price”) shall be the sum of One Million Six Hundred Thousand and
no/100 Dollars ($1,600,000.00) payable as follows:


 


A.                                   Twenty-Five
Thousand Dollars ($25,000.00) earnest money (the “Earnest Money”) which is to
be deposited within three (3) days after the execution and delivery of this
Agreement to Land Title, Inc. (“Title Company”) at 1900 Silver Lake Road New
Brighton, Minnesota 55112.  Title
Company, by executing the attached Joinder, acknowledges that it has received
the Earnest Money on behalf of the Seller and agrees to deposit the Earnest
Money in a segregated, interest bearing account insured by the FDIC and to hold
and disburse the Earnest Money in the manner specified by this Agreement.  All interest earned on the Earnest Money
shall be added to and become part of the Earnest Money.  Except as otherwise specifically provided
herein, if this Agreement is terminated by either party pursuant to any right
of termination provided herein or pursuant to a contingency which results in a
termination of this Agreement, all Earnest Money and all interest earned
thereon, shall be promptly returned to Purchaser.


 


B.                                     The
balance of the Purchase Price (subject to prorations, reductions and credits as
provided below) by certified or cashier’s check at the closing hereunder.


 


3.                                       Title to be Delivered.  Seller agrees to convey marketable fee simple
title in the Premises to Purchaser subject only to such exceptions to title as
Purchaser approves in writing.


 


A.                                   As
soon hereafter as reasonably possible, Seller at its sole cost and expense
shall:


 


1.                                       Cause
to be issued and delivered to Purchaser a commitment for an ALTA Form B
extended coverage owner’s title insurance policy issued by Title Company,
wherein said insurer agrees to issue to Purchaser upon the recording of the
Deed and the conveyance documents an ALTA Form B 


 


B-1





















 


Owner’s Title Insurance Policy
in the full amount of the Purchase Price. 
The commitment will be accompanied by copies of all recorded documents
affecting the Premises.


 


2.                                       Seller
has delivered to Purchaser a copy of a survey of the Premises prepared by a
duly licensed land surveyor in the State of Minnesota.  Purchaser, at its sole cost and expense, may
have the survey updated or supplemented.


 


3.                                       Seller
has delivered to Purchaser a set of the Plans and Specifications of the
Premises.


 


Purchaser shall have ten (10) days after
receipt of the above title commitment to render objections to title in writing
to Seller, and Seller shall have twenty (20) days from the date it receives
such objections to have the same removed or satisfied.  If Seller shall fail to have such objections
removed within that time, Purchaser may, at its sole discretion, either (a)
terminate this Agreement without any liability on their part and receive the
Earnest Money (together with interest) back, or (b) if the objections are such
that they may be removed by the expenditures of sums of money, take title to
the Premises and discharged such objections out of the Purchase Price,
crediting the Purchase Price with the same, or (c) if the objections are such
that they may not be removed by expenditures of sums of money, take title
subject to such objections.  Seller
agrees to use his best efforts to promptly satisfy any such objections.


 


4.                                       Rights of Inspection, Testing and Review.


 


A.                                   Upon
execution of this Agreement, Seller shall deliver to Purchaser complete and
accurate copies of all service contracts pertaining to the use, operation and
maintenance of the Premises, copies of all permits, plats, authorizations,
reports (financial or otherwise), notices, consents, approvals, plans,
specifications, surveys, engineering studies, analysis, soil test borings,
environmental studies and other documentation pertaining to the physical
condition, development and operation of the Premises and any other information
reasonably requested by Purchaser (whether prepared by Seller, Seller’s agents
or independent contractors, any governmental authority or agency, federal,
state or local, or any other third party), to the extent that Seller has the
same in its possession, but excluding, appraisals, insurance policies and
insurance records, tax returns and such other records as are normally viewed as
confidential, provided that such other records are not necessary, in Seller’s
reasonable judgment, to the continued operation and management of the Premises
(“Property Data”).


 


B.                                     Purchaser,
their counsel, accountants and agent shall have access to the Premises, upon
twenty-four (24) hours’ notice, to all parts thereof as well as to all other
papers and documents of Seller as they relate to the title, physical condition,
development and operation of the Premises. 
Purchaser and their agents shall also have the right, upon reasonable
notice, to enter upon the Premises after the execution and delivery hereof for
any reasonable purpose including inspecting,


 





















 


surveying, engineering, test
borings, performance of environmental tests and such other work as Purchaser
shall consider appropriate and shall have the further right to make such
inquiries of governmental agencies and utility companies, etc., and to make such
feasibility studies and analyses as it considers appropriate (collectively, the
“Inspections”).  All Inspections to be
performed at Purchaser’s sole cost and expense. 
Purchaser shall conduct its activities in a manner so as not to unreasonably
disturb or interfere with the activities of Seller or any occupant of the
Premises nor materially disturb the structural components of the Building.  Purchaser shall pay all costs and expenses of
the Inspections and shall indemnify and hold Seller and the Premises harmless
from all costs and liabilities, including mechanics’ liens, relating to the
Purchaser’s activities and those of its agents on or about the Premises.  Purchaser shall further repair and restore
any damage to the Premises caused by or occurring during Purchaser’s
Inspections and shall return the Premises to substantially the same condition
as existed prior to such entry. 
Purchaser shall provide copies of all written inspections, tests and
reviews to Seller at no cost to Seller.


 


C.                                     Purchaser
shall review and satisfy itself that any setback or other encroachments are
acceptable to Purchaser in its sole discretion. 
If requested, Seller agrees to pay the reasonable cost of an endorsement
to Purchaser’s title policy to insure over this issue to Purchaser’s
satisfaction.


 


D.                                    For
a period of sixty (60) days after the execution of this Agreement, Purchaser
shall have the right to obtain and review the following all of which shall be
satisfied to the Purchaser’s sole discretion:


 


i.                                          Inspect
all physical aspects of the Premises to include all systems, components, and
service contracts.


 


ii.                                       Investigate
all zoning, code, and governmental requirements, including any setback
encroachments.


 


iii.                                    Review
a Phase I environmental report to be ordered and paid for by Purchaser.


 


iv.                                   Obtain
necessary financing for the purchase including the ordering and payment of an
appraisal.


 


E.                                      Purchaser shall
have sixty (60) days subsequent to execution of this Agreement to cancel the
Agreement and receive a full refund of its earnest money (the “Contingency
Period”).  Purchaser at any time prior to
the expiration of the Contingency Period can waive those contingencies in
writing to Seller.


 


F.                                      Upon release of
the contingencies, Purchaser will be allowed to lease the Premises pursuant to
the Lease attached hereto as Exhibit C (the “Lease”).  The parties agree to execute the Lease upon
Purchaser delivering to Seller a written waiver of all contingencies.


 





















 


5.                                       Control of Premises.  Until the execution of the Lease, Seller
shall have the full responsibility and the entire liability for any and all
damages or injury of any kind whatsoever to the Premises, any and all persons,
whether employees or otherwise, and all property from and connected to the
Premises.  If, prior to the closing, the
Premises shall be the subject of an action in eminent domain or a proposed
taking by a governmental authority, whether temporary or permanent, Purchaser,
at its sole discretion, shall have the right to terminate this Agreement upon
notice to Seller without liability on its part by so notifying Seller and all
sums heretofore paid by Purchaser (with interest) shall be refunded to
Purchaser.  If Purchaser does not
exercise its right of termination, any and all proceeds arising out of any such
eminent domain or taking, shall be held in trust for the benefit of Purchaser
and paid over to the same as of the Closing Date if the same relates to an
action in eminent domain or a public taking. 
In no event shall the Purchase Price be increased by the amount of any
such proceeds.


 


6.                                       Representations of Seller.  In order to induce Purchaser to enter into
this Agreement and purchase the Premises, Seller hereby represents and warrants
to Purchaser:


 


A.                                   No
action in condemnation, eminent domain or public taking proceedings are now
pending or to the best of Seller’s knowledge contemplated against the Premises.


 


B.                                     To
the best of Seller’s knowledge, no ordinance or hearing is now before any local
governmental body which either contemplates or authorizes any public improvements
or special tax levies, the cost of which may be assessed against the
Premises.  There are no special
assessments currently a lien against or encumbering the Premises.


 


C.                                     All
labor or material, which has been furnished to the Premises, have been fully
paid for or will be fully paid for prior to the closing date so that no lien
for labor or materials rendered can be asserted against the Premises.


 


D.                                    Except
as otherwise stated herein, the Premises are in compliance with all subdivision
and platting regulations and with all of the applicable rules, regulations,
ordinances, and requirements of each governmental authority having jurisdiction
over the Premises, constitute a separate tax parcel and are zoned for its
present use without variance, are not a non-conforming use and may be conveyed
without the necessity of the filing of a plat or replat or subdivision or
resubdivision.  Notwithstanding the
foregoing, Buyer acknowledges that the Certificate of Survey provided by Seller
to Buyer as referenced in paragraph 3.A.2 above, indicates that there may be a
minor encroachment of the building into the side setback area.  Buyer shall satisfy itself, pursuant to
paragraph 4.C. that the Premises complies with any applicable setback
requirements and/or it is otherwise acceptable to Buyer.


 


E.                                      All
service contracts affecting the Premises are cancelable without penalty on
thirty (30) days’ notice.


 





















 


F.                                      There
are no leases or tenants of the Premises except as described in Exhibit C
attached hereto.


 


G.                                     To
the best of Seller’s knowledge, and except as disclosed in writing to
Purchaser, the Premises complies and has at all times complied with, and Seller
is not in violation of, has not violated, in connection with its ownership,
use, maintenance or operation of the Premises and the conduct of the business
related thereto, any applicable federal, state, county or local statutes, laws
regulations, rules, ordinances, codes, standards, orders, licenses and permits
of any governmental authorities relating to environmental matters (being
hereinafter collectively referred to as the “Environmental Laws”), including by
way of illustration and not by way of limitation, (A) the Clean Air Act, the
federal Water Pollution Control Act of 1972, the Resource Conservation and
Recovery Act of 1976, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, the Toxic Substances Control Act, or the Minnesota
Environmental Response and Liability Act (including any amendments or
extensions thereof and any rules, regulations, standards or guidelines issued
pursuant to any of said Environmental Laws), and (B) all other applicable
environmental standards or requirements. 
Without limiting the generality of the foregoing to the best of Seller’s
knowledge and except as disclosed in writing to Purchaser:  (i) neither Seller, its agents, employees and
independent contractors nor any tenant, has operated the Premises for the
purpose of receiving, handling, using, storing, treatment, transporting and
disposing of petroleum products or any Hazardous Material as defined in said
Environmental Laws, other toxic dangerous or hazardous chemicals, materials,
substances, pollutants and wastes, or any chemical, material or substance
exposure to which is prohibited, limited or regulated by any federal, state,
county, regional or local authority (all the foregoing being hereinafter
collectively referred to as “Hazardous Materials”); (ii) there are no existing
or pending remedial actions or other work, repairs, construction or capital
expenditures with respect to the Premises in connection with the Environmental
Laws, nor has Seller received any notice of any of the same; (iii) no Hazardous
Materials have been or will be released into the environment, or have been or
will be deposited, spilled, discharged, placed or disposed of at, on, or, to
the best of Seller’s knowledge, adjacent to the Premises, nor have the Premises
been used at any time by any person as a landfill or a disposal site for
Hazardous Materials; (iv) there are not electrical transformers or other
equipment containing dielectric fluid containing polychlorinated biphenyls in
excess of fifty (50) parts per million located in, on or under the Premises,
nor is there any friable asbestos contained in, on or under the Premises; (v)
there are no locations off the Premises where Hazardous Materials generated by
or on the Premises have been treated, stored, deposited or disposed of; (vi) to
the best of Seller’s knowledge, there is no fact pertaining to the physical
condition of either the Premises or the area surrounding the Premises not
disclosed in the Property Data and which materially adversely affects or will
materially adversely affect the Premises or the use or enjoyment or the value
thereof or Seller’s ability to perform the transactions contemplated by this
Agreement; (vii) the sale of the Premises by Seller to Purchaser does not
require notice to or the prior approval,


 





















 


consent or permission of any
federal, state or local governmental agency, body, board or official; (viii) no
notices of any violation of any of the matters referred to in the foregoing
sections relating to the Premises or its use have been received by Seller and
there are not writs, injunctions, decrees, orders or judgments outstanding, no
lawsuits, claims, proceedings or investigations, pending or threatened,
relating to the ownership, use, maintenance or operation of the Premises, nor
is there any basis for any such lawsuit, claim, proceeding or investigation
being instituted or filed.


 


The representations and warranties set forth
in this Section 6 shall be continuing and shall be true and correct on and as
of the closing date with the same force and effect as if made at that time and
all such representations and warranties shall survive closing for a period of twelve
(12) months.  Seller agrees to indemnify,
defend and hold Purchaser harmless from and against and to reimburse Purchaser
with respect to any and all claims, demands, causes of action, loss, damage,
liabilities, and costs (including attorneys’ fees and court costs) asserted
against or incurred by Purchaser by reason of or arising out of the breach of
any representation or warranty as set forth in this Section 6.


 


7.                                       Conditions at Closing.  After the expiration of the Contingency
Period, the closing of the transaction contemplated by this Agreement and the
obligations of Purchaser are subject to and contingent upon the following:


 


A.                                   The
representations and warranties made by Seller in Section 6 shall be correct as
of the Closing Date with the same force and effect as if such representations
were made at such time.


 


B.                                     The
status and marketability of title shall have been established to Purchaser’s
satisfaction in accordance with this Agreement.


 


8.                                       Closing. 
Subject to the fulfillment or waiver of the conditions hereof, the
Closing of the purchase and sale shall be on December 16, 2005 (the “Closing
Date”).  The closing shall take place at
the offices of Landmark Community Bank, N.A. in Ramsey, Minnesota, or such other
place as Seller and Purchaser may mutually determine.  Possession shall be delivered to Purchaser on
the Closing Date, if not done so already pursuant to the Lease.


 


9.                                       Seller’s Obligations At Closing.  At or prior to the Closing Date, Seller
shall:


 


A.                                   Deliver
to Purchaser Seller’s recordable Warranty Deed to the Premises (in a form
satisfactory to Purchaser) conveying to Purchaser marketable fee simple title
to the Premises and all rights appurtenant thereto subject only to exceptions
not objected to by Purchaser.


 


B.                                     Deliver
to Purchaser a Bill of Sale conveying the personal property and equipment
listed in Exhibit B in its as-is condition.


 


C.                                     Deliver
to Purchaser Seller’s assignment of any service contracts, if any, assignable
to Purchaser and which Purchaser elects to have assigned to it in a form
satisfactory to Purchaser.


 





















 


D.                                    Deliver
to Purchaser the affidavit of Seller confirming that Seller is not a “foreign
person” within the meaning of Section 1445 of the Internal Revenue Code.


 


E.                                      Deliver
to Purchaser such other documents as may be required by this Agreement.


 


10.                                 Delivery of Purchase Price; Obligations At Closing.  At closing, and subject to the terms,
conditions, and provisions hereof and the performance by Seller of its
obligations as set forth herein, Purchaser shall deliver the balance of the
Purchase Price to Seller pursuant to Section 2 above, an assumption of any
service contracts, if any, and such other documents as may be required by this
Agreement.


 


11.                                 Closing Costs.  The following costs and expenses shall be
paid as follows in connection with the closing:


 


A.                                   Seller
shall pay:


 


1.                                       The
costs of the title commitment.


 


2.                                       The
state deed tax or transfer fee imposed on the conveyance.


 


3.                                       All
special assessments whether levied, pending or assessed.


 


4.                                       A
pro rata share of the real estate taxes due and payable in 2005.


 


B.                                     Purchaser
shall pay the following costs in connection with the closing:


 


1.                                       The
cost of the survey update or supplement, if applicable.


 


2.                                       The
documentary fee necessary to record the Warranty Deed.


 


3.                                       The
cost of any title insurance policy premium, if applicable.


 


4.                                       The
unearned portions of any payments prepaid on any service contracts Purchaser
elects to assume.


 


5.                                       A
pro rata share of the real estate taxes due and payable in 2005.


 


12.                                 Brokerage. 
Seller acknowledges that it is solely responsible for payment of a
brokerage fee to be paid in full at closing to Welsh Companies, LLC.


 


13.                                 Remedies. 
If Seller defaults in the performance of this Agreement and Purchaser
cancels this Agreement, the Earnest Money (plus any interest) shall be returned
to Purchaser.  If Seller defaults in the
performance of this Agreement and Purchaser does not cancel this Agreement,
Seller acknowledges the Premises are unique and that money damages to Purchaser
in the event of default by Seller are inadequate.  Accordingly, in addition to any other remedy
available, Purchaser shall have the right within six (6) months of the default
to apply for and to receive from a court of competent jurisdiction equitable
relief by way of restraining order, injunction, or otherwise, prohibitory or
mandatory, to prevent a breach or the terms of this Agreement, or by way of
specific performance to 


 





















 


enforce performance to the
terms of this Agreement or rescission, plus reimbursement for costs, including
reasonable attorney fees, incurred in the securing of such relief.  This right to equitable relief shall not be
construed to be in lieu of or to preclude the right to seek a remedy at law.  If Purchaser defaults in the performance of
the Agreement, Seller’s sole and exclusive remedy shall be to cancel this
Agreement pursuant to Minn. Stat. § 559.21 in which event Title Company shall
deliver the Earnest Money (plus any interest) to Seller as liquidated damages.


 


14.                                 Time for Acceptance.  This agreement, when duly executed by all of
the parties hereto, shall be binding upon the parties hereto, their heirs,
representatives, successors and assigns. 
In the event this Agreement has not been duly executed by Seller and
delivered to Purchaser or their agent on or before August 17, 2005, at 5:00
p.m., then the offer herein and herewith made by Purchaser shall automatically
and unconditionally terminate and this Agreement shall be null and void, and
Title Company shall immediately return to Purchaser the Earnest Money.


 


15.                                 Miscellaneous.  The following provisions govern this
Agreement:


 


A.                                   No Waivers. 
The waiver by either party hereto of any condition or the breach of any
term, covenant or condition herein contained shall not be deemed to be a waiver
of any other condition or of any subsequent breach of the same or of any other
term, covenant or condition herein contained. 
Purchaser, in their sole discretion may waive any right conferred upon
Purchaser by this Agreement; provided that such waiver shall only be make by
Purchaser giving Seller written notice specifically describing the right
waived.


 


B.                                     Time of Essence.  Time is of essence of this Agreement.


 


C.                                     Governing Law.  This Agreement is made and executed under and
in all respects to be governed and construed by the laws of the State of
Minnesota and the parties hereto hereby agree and consent and submit themselves
to any court of competent jurisdiction situated in Minnesota.


 


D.                                    Notices. 
All notices and demands given or required to be given by any party
hereto to any other party shall be deemed to have been properly given if and
when delivered in person, sent by telegram (with verification of receipt), sent
by facsimile (with verification of receipt) or three (3) business days after
having been deposited in any U.S. Postal Service and sent by registered or
certified mail, postage prepaid, addressed as follows (or sent to such other
address and any party shall specify to the other party pursuant to the
provisions of this section):


 


	
  If to SELLER:

  Sten Corporation

  Attn: Kenneth W. Brimmer

  13828 Lincoln Street NE

  Ham Lake, MN 55304

  	
   

  	
  If to PURCHASER:

  OLD Holdings, LLC

  Attn: William Doty

  459 W Dual Blvd

  PO Box 518

  Isanti, MN 55040

  



 





















 


In the event either party delivers a notice
by facsimile, as set forth above, such party agrees to deposit the originals of
the notice in a post office, branch post office, or mail depository maintained
by the U.S. Postal Service, postage prepaid and addressed as set forth
above.  Such deposit in the U.S. Mail
shall not affect the deemed delivery of the notice by facsimile, provided that
the procedures set forth above are fully complied with.  Any party, by notice given as aforesaid, may
change the address to which subsequent notices are to be sent to such party.


 


E.                                      Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of each of the parties
hereto.  The assigning party shall
provide written notice of any assignment to the other party.


 


F.                                      Invalidity. 
If for any reason any term or provisions of this Agreement shall be
declared void and unenforceable by any court of law or equity it shall only
affect such particular term or provision of this Agreement and the balance of
this Agreement shall remain in full force and effect and shall be binding upon
the parties hereto.


 


G.                                     Complete Agreement.  All understandings and agreements heretofore
had between the parties are merged into this Agreement which alone fully and
completely expressed their agreement. 
This Agreement may be changed only in writing signed by both of the
parties hereto and shall apply to and bind the successors and assigns of each
of the parties hereto and shall not merge with the deed delivered to Purchaser
at closing.


 


IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date(s) provided below.


 


 


	
  SELLER:

  	
  PURCHASER:

  
	
   

  	
   

  
	
  Sten Corporation 

  	
  OLD Holdings, LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
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