**EXHIBIT 10.37**

 

**PURCHASE AGREEMENT**

 

**THISPURCHASE AGREEMENT** is made and entered into as of this10th day of August, 2005, between Sten Corporation, a Minnesota corporation(“Seller”), and OLD Holdings, LLC, a Minnesota limited liability company, orits assigns (“Purchaser”).

 

Inconsideration of the covenants and agreements contained herein, the partiesagreed as follows:

 

# 1.                                       **Premises to be Purchased.**  Subject to compliance with the terms andconditions of this Agreement, Seller shall sell to Purchaser and Purchasershall purchase from Seller the real property located at 13828 Lincoln Street NEHam Lake, MN, legally described on Exhibit A attached hereto, togetherwith all easements, tenements, hereditaments, and appurtenances belongingthereto to include the personal property and equipment contained on ExhibitB 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 andno/100 Dollars ($1,600,000.00) payable as follows:

 

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

 

## B.                                     Thebalance of the Purchase Price (subject to prorations, reductions and credits asprovided below) by certified or cashier’s check at the closing hereunder.

 

# 3.                                       **Title to be Delivered.**  Seller agrees to convey marketable fee simpletitle in the Premises to Purchaser subject only to such exceptions to title asPurchaser approves in writing.

 

## A.                                   Assoon hereafter as reasonably possible, Seller at its sole cost and expenseshall:

 

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

 

B-1

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### Owner’s Title Insurance Policyin the full amount of the Purchase Price. The commitment will be accompanied by copies of all recorded documentsaffecting the Premises.

 

### 2.                                       Sellerhas delivered to Purchaser a copy of a survey of the Premises prepared by aduly licensed land surveyor in the State of Minnesota.  Purchaser, at its sole cost and expense, mayhave the survey updated or supplemented.

 

### 3.                                       Sellerhas delivered to Purchaser a set of the Plans and Specifications of thePremises.

 

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

 

# 4.                                       **Rights of Inspection, Testing and Review.**

 

## A.                                   Uponexecution of this Agreement, Seller shall deliver to Purchaser complete andaccurate copies of all service contracts pertaining to the use, operation andmaintenance 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 physicalcondition, development and operation of the Premises and any other informationreasonably requested by Purchaser (whether prepared by Seller, Seller’s agentsor independent contractors, any governmental authority or agency, federal,state or local, or any other third party), to the extent that Seller has thesame in its possession, but excluding, appraisals, insurance policies andinsurance records, tax returns and such other records as are normally viewed asconfidential, provided that such other records are not necessary, in Seller’sreasonable 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, upontwenty-four (24) hours’ notice, to all parts thereof as well as to all otherpapers 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 reasonablenotice, to enter upon the Premises after the execution and delivery hereof forany reasonable purpose including inspecting,

 

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## surveying, engineering, testborings, performance of environmental tests and such other work as Purchasershall consider appropriate and shall have the further right to make suchinquiries of governmental agencies and utility companies, etc., and to make suchfeasibility studies and analyses as it considers appropriate (collectively, the“Inspections”).  All Inspections to beperformed at Purchaser’s sole cost and expense. Purchaser shall conduct its activities in a manner so as not to unreasonablydisturb or interfere with the activities of Seller or any occupant of thePremises nor materially disturb the structural components of the Building.  Purchaser shall pay all costs and expenses ofthe Inspections and shall indemnify and hold Seller and the Premises harmlessfrom all costs and liabilities, including mechanics’ liens, relating to thePurchaser’s activities and those of its agents on or about the Premises.  Purchaser shall further repair and restoreany damage to the Premises caused by or occurring during Purchaser’sInspections and shall return the Premises to substantially the same conditionas existed prior to such entry. Purchaser shall provide copies of all written inspections, tests andreviews to Seller at no cost to Seller.

 

## C.                                     Purchasershall review and satisfy itself that any setback or other encroachments areacceptable to Purchaser in its sole discretion. If requested, Seller agrees to pay the reasonable cost of an endorsementto Purchaser’s title policy to insure over this issue to Purchaser’ssatisfaction.

 

## D.                                    Fora period of sixty (60) days after the execution of this Agreement, Purchasershall have the right to obtain and review the following all of which shall besatisfied to the Purchaser’s sole discretion:

 

#### i.                                          Inspectall physical aspects of the Premises to include all systems, components, andservice contracts.

 

#### ii.                                       Investigateall zoning, code, and governmental requirements, including any setbackencroachments.

 

#### iii.                                    Reviewa Phase I environmental report to be ordered and paid for by Purchaser.

 

#### iv.                                   Obtainnecessary financing for the purchase including the ordering and payment of anappraisal.

 

## E.                                      Purchaser shallhave sixty (60) days subsequent to execution of this Agreement to cancel theAgreement and receive a full refund of its earnest money (the “ContingencyPeriod”).  Purchaser at any time prior tothe expiration of the Contingency Period can waive those contingencies inwriting to Seller.

 

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

 

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# 5.                                       **Control of Premises.**  Until the execution of the Lease, Sellershall have the full responsibility and the entire liability for any and alldamages or injury of any kind whatsoever to the Premises, any and all persons,whether employees or otherwise, and all property from and connected to thePremises.  If, prior to the closing, thePremises shall be the subject of an action in eminent domain or a proposedtaking by a governmental authority, whether temporary or permanent, Purchaser,at its sole discretion, shall have the right to terminate this Agreement uponnotice to Seller without liability on its part by so notifying Seller and allsums heretofore paid by Purchaser (with interest) shall be refunded toPurchaser.  If Purchaser does notexercise its right of termination, any and all proceeds arising out of any sucheminent domain or taking, shall be held in trust for the benefit of Purchaserand paid over to the same as of the Closing Date if the same relates to anaction in eminent domain or a public taking. In no event shall the Purchase Price be increased by the amount of anysuch proceeds.

 

# 6.                                       **Representations of Seller.**  In order to induce Purchaser to enter intothis Agreement and purchase the Premises, Seller hereby represents and warrantsto Purchaser:

 

## A.                                   Noaction in condemnation, eminent domain or public taking proceedings are nowpending or to the best of Seller’s knowledge contemplated against the Premises.

 

## B.                                     Tothe best of Seller’s knowledge, no ordinance or hearing is now before any localgovernmental body which either contemplates or authorizes any public improvementsor special tax levies, the cost of which may be assessed against thePremises.  There are no specialassessments currently a lien against or encumbering the Premises.

 

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

 

## D.                                    Exceptas otherwise stated herein, the Premises are in compliance with all subdivisionand platting regulations and with all of the applicable rules, regulations,ordinances, and requirements of each governmental authority having jurisdictionover the Premises, constitute a separate tax parcel and are zoned for itspresent use without variance, are not a non-conforming use and may be conveyedwithout the necessity of the filing of a plat or replat or subdivision orresubdivision.  Notwithstanding theforegoing, Buyer acknowledges that the Certificate of Survey provided by Sellerto Buyer as referenced in paragraph 3.A.2 above, indicates that there may be aminor encroachment of the building into the side setback area.  Buyer shall satisfy itself, pursuant toparagraph 4.C. that the Premises complies with any applicable setbackrequirements and/or it is otherwise acceptable to Buyer.

 

## E.                                      Allservice contracts affecting the Premises are cancelable without penalty onthirty (30) days’ notice.

 

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## F.                                      Thereare no leases or tenants of the Premises except as described in Exhibit Cattached hereto.

 

## G.                                     Tothe best of Seller’s knowledge, and except as disclosed in writing toPurchaser, the Premises complies and has at all times complied with, and Selleris not in violation of, has not violated, in connection with its ownership,use, maintenance or operation of the Premises and the conduct of the businessrelated thereto, any applicable federal, state, county or local statutes, lawsregulations, rules, ordinances, codes, standards, orders, licenses and permitsof any governmental authorities relating to environmental matters (beinghereinafter collectively referred to as the “Environmental Laws”), including byway of illustration and not by way of limitation, (A) the Clean Air Act, thefederal Water Pollution Control Act of 1972, the Resource Conservation andRecovery Act of 1976, the Comprehensive Environmental Response, Compensationand Liability Act of 1980, the Toxic Substances Control Act, or the MinnesotaEnvironmental Response and Liability Act (including any amendments orextensions thereof and any rules, regulations, standards or guidelines issuedpursuant to any of said Environmental Laws), and (B) all other applicableenvironmental standards or requirements. Without limiting the generality of the foregoing to the best of Seller’sknowledge and except as disclosed in writing to Purchaser:  (i) neither Seller, its agents, employees andindependent contractors nor any tenant, has operated the Premises for thepurpose of receiving, handling, using, storing, treatment, transporting anddisposing of petroleum products or any Hazardous Material as defined in saidEnvironmental Laws, other toxic dangerous or hazardous chemicals, materials,substances, pollutants and wastes, or any chemical, material or substanceexposure to which is prohibited, limited or regulated by any federal, state,county, regional or local authority (all the foregoing being hereinaftercollectively referred to as “Hazardous Materials”); (ii) there are no existingor pending remedial actions or other work, repairs, construction or capitalexpenditures with respect to the Premises in connection with the EnvironmentalLaws, nor has Seller received any notice of any of the same; (iii) no HazardousMaterials have been or will be released into the environment, or have been orwill be deposited, spilled, discharged, placed or disposed of at, on, or, tothe best of Seller’s knowledge, adjacent to the Premises, nor have the Premisesbeen used at any time by any person as a landfill or a disposal site forHazardous Materials; (iv) there are not electrical transformers or otherequipment containing dielectric fluid containing polychlorinated biphenyls inexcess 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 byor on the Premises have been treated, stored, deposited or disposed of; (vi) tothe best of Seller’s knowledge, there is no fact pertaining to the physicalcondition of either the Premises or the area surrounding the Premises notdisclosed in the Property Data and which materially adversely affects or willmaterially adversely affect the Premises or the use or enjoyment or the valuethereof or Seller’s ability to perform the transactions contemplated by thisAgreement; (vii) the sale of the Premises by Seller to Purchaser does notrequire notice to or the prior approval,

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## consent or permission of anyfederal, state or local governmental agency, body, board or official; (viii) nonotices of any violation of any of the matters referred to in the foregoingsections relating to the Premises or its use have been received by Seller andthere are not writs, injunctions, decrees, orders or judgments outstanding, nolawsuits, claims, proceedings or investigations, pending or threatened,relating to the ownership, use, maintenance or operation of the Premises, noris there any basis for any such lawsuit, claim, proceeding or investigationbeing instituted or filed.

 

The representations and warranties set forthin this Section 6 shall be continuing and shall be true and correct on and asof the closing date with the same force and effect as if made at that time andall 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 Purchaserwith respect to any and all claims, demands, causes of action, loss, damage,liabilities, and costs (including attorneys’ fees and court costs) assertedagainst or incurred by Purchaser by reason of or arising out of the breach ofany representation or warranty as set forth in this Section 6.

 

# 7.                                       **Conditions at Closing.**  After the expiration of the ContingencyPeriod, the closing of the transaction contemplated by this Agreement and theobligations of Purchaser are subject to and contingent upon the following:

 

## A.                                   Therepresentations and warranties made by Seller in Section 6 shall be correct asof the Closing Date with the same force and effect as if such representationswere made at such time.

 

## B.                                     Thestatus and marketability of title shall have been established to Purchaser’ssatisfaction in accordance with this Agreement.

 

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

 

# 9.                                       **Seller’s Obligations At Closing.**  At or prior to the Closing Date, Sellershall:

 

## A.                                   Deliverto Purchaser Seller’s recordable Warranty Deed to the Premises (in a formsatisfactory to Purchaser) conveying to Purchaser marketable fee simple titleto the Premises and all rights appurtenant thereto subject only to exceptionsnot objected to by Purchaser.

 

## B.                                     Deliverto Purchaser a Bill of Sale conveying the personal property and equipmentlisted in Exhibit B in its as-is condition.

 

## C.                                     Deliverto Purchaser Seller’s assignment of any service contracts, if any, assignableto Purchaser and which Purchaser elects to have assigned to it in a formsatisfactory to Purchaser.

 

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## D.                                    Deliverto Purchaser the affidavit of Seller confirming that Seller is not a “foreignperson” within the meaning of Section 1445 of the Internal Revenue Code.

 

## E.                                      Deliverto 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 itsobligations as set forth herein, Purchaser shall deliver the balance of thePurchase Price to Seller pursuant to Section 2 above, an assumption of anyservice contracts, if any, and such other documents as may be required by thisAgreement.

 

# 11.                                 **Closing Costs.**  The following costs and expenses shall bepaid as follows in connection with the closing:

 

## A.                                   Sellershall pay:

 

### 1.                                       Thecosts of the title commitment.

 

### 2.                                       Thestate deed tax or transfer fee imposed on the conveyance.

 

### 3.                                       Allspecial assessments whether levied, pending or assessed.

 

### 4.                                       Apro rata share of the real estate taxes due and payable in 2005.

 

## B.                                     Purchasershall pay the following costs in connection with the closing:

 

### 1.                                       Thecost of the survey update or supplement, if applicable.

 

### 2.                                       Thedocumentary fee necessary to record the Warranty Deed.

 

### 3.                                       Thecost of any title insurance policy premium, if applicable.

 

### 4.                                       Theunearned portions of any payments prepaid on any service contracts Purchaserelects to assume.

 

### 5.                                       Apro rata share of the real estate taxes due and payable in 2005.

 

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

 

# 13.                                 **Remedies.** If Seller defaults in the performance of this Agreement and Purchasercancels this Agreement, the Earnest Money (plus any interest) shall be returnedto Purchaser.  If Seller defaults in theperformance of this Agreement and Purchaser does not cancel this Agreement,Seller acknowledges the Premises are unique and that money damages to Purchaserin the event of default by Seller are inadequate.  Accordingly, in addition to any other remedyavailable, Purchaser shall have the right within six (6) months of the defaultto apply for and to receive from a court of competent jurisdiction equitablerelief by way of restraining order, injunction, or otherwise, prohibitory ormandatory, to prevent a breach or the terms of this Agreement, or by way ofspecific performance to 

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

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# 14.                                 **Time for Acceptance.**  This agreement, when duly executed by all ofthe 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 anddelivered to Purchaser or their agent on or before August 17, 2005, at 5:00p.m., then the offer herein and herewith made by Purchaser shall automaticallyand unconditionally terminate and this Agreement shall be null and void, andTitle Company shall immediately return to Purchaser the Earnest Money.

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# 15.                                 **Miscellaneous.**  The following provisions govern thisAgreement:

 

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

 

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

 

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

 

## D.                                    **Notices.** All notices and demands given or required to be given by any partyhereto to any other party shall be deemed to have been properly given if andwhen delivered in person, sent by telegram (with verification of receipt), sentby facsimile (with verification of receipt) or three (3) business days afterhaving been deposited in any U.S. Postal Service and sent by registered orcertified mail, postage prepaid, addressed as follows (or sent to such otheraddress and any party shall specify to the other party pursuant to theprovisions 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 |
|------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|

 

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

 

## E.                                      **Successors and Assigns.**  This Agreement shall be binding upon andinure to the benefit of the successors and assigns of each of the partieshereto.  The assigning party shallprovide written notice of any assignment to the other party.

 

## F.                                      **Invalidity.** If for any reason any term or provisions of this Agreement shall bedeclared void and unenforceable by any court of law or equity it shall onlyaffect such particular term or provision of this Agreement and the balance ofthis Agreement shall remain in full force and effect and shall be binding uponthe parties hereto.

 

## G.                                     **Complete Agreement.**  All understandings and agreements heretoforehad between the parties are merged into this Agreement which alone fully andcompletely expressed their agreement. This Agreement may be changed only in writing signed by both of theparties hereto and shall apply to and bind the successors and assigns of eachof the parties hereto and shall not merge with the deed delivered to Purchaserat closing.

 

**INWITNESS WHEREOF,** the parties hereto have executed thisAgreement as of the date(s) provided below.

 

 
| **SELLER:**      | **PURCHASER:**    |
|------------------|-------------------|
|             |              |
| Sten Corporation | OLD Holdings, LLC |
|             |              |
|             |              |
| By:              |              |   |  By: |   |   |
|             |              |   |
| Its:             |              |   |  Its: |   |   |

 

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