EXHIBIT 10.1
PURCHASE AGREEMENT
This Purchase Agreement is made as of the 5th day of May, 2006, by and
between Resistance Technology, Incorporated, a Minnesota corporation ("Seller"),
and MDSC Partners, LLP, a Minnesota limited liability partnership ("Purchaser").
Purchaser desires to purchase certain property owned by Seller, and
Seller desires to sell such property to Purchaser pursuant to the terms and
conditions set forth in this Agreement.
Accordingly, Seller and Purchaser agree as follows:
Article 1. Definitions.
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The following terms shall have the meanings set forth below:
Agreement. This Agreement, including the following exhibits
attached hereto and hereby made a part hereof:
Exhibit A: Legal Description of Land
Exhibit B: Permitted Exceptions
Exhibit C: Personal Property
Exhibit D: Form of the Lease
Broker. Steve Lysen of CB Richard Ellis for Seller and Wally
Kolsrud of Kolsrud Realty Company for Purchaser.
Closing. Concurrently, the transfer of title to the Property
to Purchaser, the payment to Seller of the Purchase Price, and the
performance by each party of the other obligations on its part then to
be performed, all in accordance with Article 4.
Closing Date. The date on which the Closing shall occur as
provided in Section 4.1, subject to Section 5.3 and any other provision
of this Agreement which provides for postponement of the Closing Date.
Commitment. The title insurance commitment with respect to the
Real Property described in Section 5.1.1.
Contingency Date. June 1, 2006
Earnest Money. The earnest money deposit , together with any
interest earned thereon, made by Purchaser and held by Title Company
described Section 3.2.1.
Executory Period. The period between the mutual execution and
delivery of this Agreement and the Closing.
Improvements. All buildings, structures, fixtures and
improvements located on the Land, but excluding any of Seller's
equipment, machinery or trade or business fixtures.
Land. The real property situated at 4400 McMenemy Road, in the
City of Vadnais Heights, County of Ramsey, State of Minnesota, said
real property being legally described on Exhibit A attached hereto.
Lease. The lease with respect to the Property to be executed
at Closing by Purchaser, as Landlord, and Seller, as Tenant, in the
form of Exhibit D attached hereto.
Permitted Exceptions. The easements, restrictions,
reservations and other matters affecting title to the Real Property, if
any, identified on Exhibit B, together with such other matters as may
be determined to be Permitted Exceptions pursuant to Section 5.2.
Personal Property. The items of personal property described on
Exhibit C.
Property. The Real Property, and the Personal Property,
collectively.
Purchase Price. The purchase price for the Property described
in Article 3.
Real Property. The Land and the Improvements, collectively.
Survey. The survey of the Real Property described in Section
5.1.2.
Title Company. Commercial Partners Title, LLC.
Title Evidence. The title evidence with respect to the
Property described in Section 5.1.
Article 2. Purchase and Sale.
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Seller hereby agrees to sell, and Purchaser hereby agrees to purchase,
upon and subject to the terms and conditions hereinafter set forth, the
Property.
Article 3. Purchase Price.
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3.1 Amount. Purchaser shall pay to Seller as and for the Purchase Price
for the Property the sum of Two Million Six Hundred Fifty Thousand and no/100
Dollars ($2,650,000.00).
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3.2 Manner of Payment. The Purchase Price shall be payable as follows:
3.2.1 One Hundred Thousand and no/100 Dollars ($100,000.00) as
Earnest Money, the receipt of which is hereby acknowledged, and which
shall be held and disbursed pursuant to the terms of this Agreement.
3.2.2 The balance of the Purchase Price in cash or by
certified or cashier's check or wire transfer of immediately available
funds on the Closing Date.
Article 4. Closing.
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4.1 Closing Date. The Closing shall occur on June 15, 2006.
The Closing shall be held at 10:00 a.m. on the Closing Date at the
offices of Title Company or at such other place, date and time as
Seller and Purchaser may agree.
4.2 Seller's Closing Documents. At Closing, Seller shall
execute, acknowledge (where appropriate), and deliver to Purchaser the
following, each dated as of the Closing Date.
4.2.1 A limited warranty deed conveying to Purchaser
the Real Property, subject only to Permitted Exceptions.
4.2.2 A quitclaim bill of sale conveying to Purchaser
the Personal Property.
4.2.3 The Lease.
4.2.4 An affidavit of Seller regarding liens,
judgments, residence, tax liens, bankruptcies, parties in
possession, survey and mechanics' or materialmens' liens and
other matters affecting title to the Real Property.
4.2.5 A transferor's certification stating that
Seller is not a "foreign person", "foreign partnership",
"foreign trust" or "foreign estate" as those terms are defined
in Section 1445 of the Internal Revenue Code.
4.2.6 All documents and instruments which (a)
Purchaser or Title Company may reasonably determine are
necessary to evidence the authority of Seller to enter into
and perform this Agreement and the documents and instruments
required to be executed and delivered by Seller pursuant to
this Agreement, or (b) may be required of Seller under
applicable law, including any revenue or tax certificates or
statements, or any affidavits, certifications or statements
relating to the environmental condition of any of the Real
Property, the presence (or absence) of wells about the Real
Property, the presence (or absence) of storage tanks about the
Real Property, or the extent of compliance of any of the
Property with applicable law.
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4.2.7 A settlement statement consistent with this
Agreement.
4.3 Purchaser's Closing Delivery. At Closing, Purchaser shall
cause the following to be delivered to Seller:
4.3.1 The portion of the Purchase Price payable
pursuant to Section 3.2.2, as adjusted pursuant to Section
4.5, in cash or by certified or cashier's check or by wire
transfer of immediately available funds. The Earnest Money
shall be applied to and credited against the Purchase Price
and shall be disbursed to Seller by Title Company at Closing.
4.3.2 The Lease.
4.3.3 All documents and instruments, each executed
and acknowledged (where appropriate) by Purchaser, which (a)
Seller may reasonably determine are necessary to evidence the
authority of Purchaser to enter into and perform this
Agreement and the documents and instruments required to be
executed and delivered by Purchaser pursuant to this
Agreement, or (b) may be required of Purchaser under
applicable law, including any purchaser's affidavits or
revenue or tax certificates or statements.
4.3.4 A settlement statement consistent with this
Agreement executed by Purchaser.
4.4 Closing Escrow. Purchaser and/or Seller at their option
may deposit the respective Closing deliveries described in Sections 4.2
and 4.3 with Title Company with appropriate instructions for recording
and disbursement consistent with this Agreement.
4.5 Closing Adjustments. The following adjustments shall be
made at Closing:
4.5.1 General real estate taxes applicable to any of
the Real Property due and payable in the year of Closing,
together with all special assessments payable therewith, shall
be prorated between Seller and Purchaser on a daily basis as
of the Closing Date based upon a calendar fiscal year, with
Seller paying those allocable to the period prior to the
Closing Date and Purchaser being responsible for those
allocable subsequent thereto.
4.5.2 Purchaser shall assume all special assessments
(and charges in the nature of or in lieu of such assessments)
levied, pending or constituting a lien with respect to any of
the Real Property as of the Closing Date. (Such amounts shall
be billed back to Seller pursuant to the Lease.)
4.5.3 Purchaser shall pay all sales tax due regarding
this transaction, if any.
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4.5.4 Seller shall pay all state deed tax regarding
the deed to be delivered by Seller to Purchaser. Purchaser
shall pay any mortgage registry tax regarding any mortgage
given by Purchaser on the Real Property in connection with
this transaction.
4.5.5 Purchaser shall pay the cost of recording all
documents, including the deed to be delivered by Seller to
Purchaser.
4.5.6 Seller will pay all service charges for and
costs of the Commitment, and the survey.
4.5.7 Purchaser shall pay all premiums required for
any owner's or mortgagee's title insurance policy issued in
connection with this transaction.
4.5.8 Seller and Purchaser shall each pay one half
(1/2) of any Closing fee payable to Title Company with respect
to the transaction contemplated by this Agreement.
4.5.9 All utility expenses, including water, fuel,
gas, electricity, telephone, sewer, trash removal, heat and
other services furnished to or provided for the Property shall
be prorated between Seller and Purchaser on a daily basis as
of the Closing Date, with Seller paying those allocable to the
period prior to the Closing Date and Purchaser being
responsible for those allocable subsequent thereto. Seller
agrees to have all meters with respect to any such utilities
read as of the Closing Date.
4.5.10 All other operating costs of the Property
shall be prorated between Seller and Purchaser on a daily
basis as of the Closing Date, with Seller paying those
allocable to the period prior to the Closing Date and
Purchaser being responsible for those allocable subsequent
thereto.
4.5.11 Except as provided in Article 13, Seller and
Purchaser shall each pay its own attorneys' fees incurred in
connection with this transaction.
4.5.12 Seller shall pay any brokerage commission or
finder's fee payable to Seller's Broker on account of this
transaction and Purchaser shall pay any brokerage commission
or finder's fee payable to Purchaser's Broker on account of
this transaction.
If any of the amounts allocated under this Section 4. cannot be
calculated with complete precision at Closing because the amount or amounts of
one or more items included in such calculation are not then known, then such
calculation shall be made on the basis of the reasonable estimates of Seller and
Purchaser, subject to prompt adjustment (by additional payment or refund, as
necessary) when the amount of any such item or items become known.
4.6 Possession. Seller shall deliver exclusive legal and actual
possession of the Property to Purchaser on the Closing Date, subject to the
Lease.
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Article 5. Title Examination.
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5.1 Title Evidence. Within a reasonable time after the mutual execution
and delivery of this Agreement, Seller shall furnish the following title
evidence to Purchaser:
5.1.1 A commitment to insure title to the Real Property issued
by Title Company. The commitment shall (a) be in an amount equal to the
Purchase Price, and (b) include copies of all documents, instruments
and matters shown as exceptions or referenced therein.
5.1.2 A current and up to date survey of the Property,
prepared and certified by a registered land surveyor licensed in State
of Minnesota, in conformance with the minimum detail requirements of
the American Land Title Association.
5.1.3 A special assessment search.
5.2 Purchaser's Objections and Requirements. Purchaser shall be allowed
twenty (20) days after receipt of the last of the Title Evidence for examination
thereof and making any objections to the marketability of title to the Real
Property. Purchaser shall not object to any of the Permitted Exceptions. Any
objections not made within said ten (10) day period shall be deemed to be waived
by Purchaser and shall be Permitted Exceptions.
5.3 Correction of Title. Seller shall be allowed sixty (60) days after
the making of Purchaser's objections to cure the same but shall have no
obligation to do so. Pending such cure, the Closing shall be postponed to the
extent necessary to accommodate such time period. Upon such cure, the Closing
shall be held on the later of (a) the Closing Date, and (b) the first business
day occurring ten (10) days after the date such cure is completed. If such cure
is not completed within said sixty (60) day period, Purchaser shall have the
option to do any of the following:
5.3.1 Terminate this Agreement.
5.3.2 Waive one or more of its objections and proceed to
Closing.
5.3.3 Withhold from the Purchase Price an amount sufficient to
discharge at Closing any mortgage, judgment or other monetary lien in a
fixed or ascertainable amount objected to by Purchaser.
Article 6. Conditions Precedent.
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6.1 Conditions in Favor of Purchaser. The obligations of Purchaser
under this Agreement are contingent upon each of the following:
6.1.1 On or before the Contingency Date, Purchaser shall have
determined that the matters and conditions disclosed by the reports,
investigations and tests
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received or performed by Purchaser pursuant to Section 8.1 are
reasonably acceptable to Purchaser.
6.1.2 On the Closing Date, each of the representations and
warranties of Seller in Section 7.1 shall be true and correct as if the
same were made on the Closing Date.
6.1.3 On the Closing Date, Seller shall have performed all of
the obligations required to be performed by Seller under this Agreement
as and when required under this Agreement.
If any conditions in this Section 6.1 have not been satisfied on or
before the applicable date set forth in this Section 6.1 with respect to each
condition, then Purchaser may terminate this Agreement by notice to Seller on or
before the applicable date, subject however to Article 13. To the extent that
any of the conditions in this Section 6.1 require the satisfaction of Purchaser,
such satisfaction shall be determined by Purchaser in its reasonable discretion.
The conditions in this Section 6.1 are specifically stated and for the sole
benefit of Purchaser. Purchaser in its discretion may unilaterally waive
(conditionally or absolutely) the fulfillment of any one or more of the
conditions, or any part thereof, by notice to Seller.
6.2 Conditions in Favor of Seller. The obligations of Seller under this
Agreement are contingent upon each of the following:
6.2.1 On the Closing Date, each of the representations and
warranties of Purchaser in Section 7.2 shall be true and correct as if
the same were made on the Closing Date .
6.2.2 On the Closing Date, Purchaser shall have performed all
of the obligations required to be performed by Purchaser under this
Agreement as and when required under this Agreement.
If any of the conditions in this Section have not been satisfied on or
before the applicable date set forth in this Section 6.2 with respect to each
condition, then Seller may terminate this Agreement by notice to Purchaser on or
before the applicable date, subject however to Article 13. The conditions in
this Section 6.2 are specifically stated and for the sole benefit of Seller.
Seller in its discretion may unilaterally waive any one or more of the
conditions, or any part thereof, by notice to Purchaser.
Article 7. Representations and Warranties.
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7.1 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser as of the date of this Agreement as follows:
7.1.1 Seller has been duly incorporated and is in good
standing under the laws of the State of Minnesota, is duly qualified to
transact business in the State of
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Minnesota, and has the requisite power and authority to enter into and
perform this Agreement and the documents and instruments required to be
executed and delivered by Seller pursuant hereto. This Agreement has
been duly executed and delivered by Seller and is a valid and binding
obligation of Seller enforceable in accordance with its terms. This
Agreement and the documents and instruments required to be executed and
delivered by Seller pursuant hereto have each been duly authorized by
all necessary corporate action on the part of Seller and that such
execution, delivery and performance does and will not conflict with or
result in a violation of Seller's articles of incorporation or by-laws,
or any judgment, order or decree of any court or arbiter to which
Seller is a party, or any agreement to which Seller and/or any of the
Property is bound or subject.
7.1.2 Seller is not a "foreign person", "foreign partnership",
"foreign trust" or "foreign estate" as those terms are defined in
Section 1445 of the Internal Revenue Code.
7.1.3 Seller has not received mailed or personally served
written notice from any governmental authority regarding any currently
pending or threatened condemnation or similar eminent domain proceeding
against the Property.
7.1.4 To Seller's knowledge (without duty of further inquiry),
there exists no violation of environmental laws in respect to the
Property requiring remediation under the law.
7.1.5 From the date hereof through the Date of Closing or
termination of this Agreement, Seller shall not create, suffer or
assume any new or additional encumbrances on title to the Real Property
(other than mechanic's liens in the ordinary course of tenant
improvements provided for under the Leases) without Purchaser's
consent, which consent Purchaser may grant or withhold in Purchaser's
sole discretion.
7.1.6 To Seller's knowledge, there are no underground or above
ground storage tanks of any size or type located on the Real Property.
7.1.7 Seller has not entered into any other contracts for the
sale of the Real Property nor are there any rights of first refusal to
purchase or other options to purchase the Real Property available to
any third parties.
Whenever herein a representation is made based upon the
knowledge of Seller, such knowledge is limited to the actual knowledge
of Bill Kullback. Seller represents that Bill Kullback is familiar with
and has first-hand knowledge of conditions at the Property. In the
event any of the representations and warranties contained herein become
untrue as of the Closing Date as a result of information received by
Seller or occurrences subsequent to the date hereof or otherwise,
Seller shall promptly so notify Purchaser in writing. Except as
provided below, Seller will indemnify, defend and hold harmless
Purchaser, its successors and assigns, from any loss, claim, damage or
expense, including reasonable attorneys' fees, that Purchaser, its
successors and assigns, incurs because of the breach of any of the
above representations and warranties, whether such breach is discovered
before or after the Closing Date.
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Notwithstanding anything to the contrary herein, the effect of
the representations and warranties made in this Agreement shall not be
diminished, abrogated or deemed to be waived by any assessments,
inspections or investigations made by Purchaser; provided, however, if
through the delivery to Purchaser of written information from a)
Seller; or b) from any third party engaged by Purchaser in order to
perform any of the tests, studies, investigations and inspections
contemplated under this Agreement, prior to Closing, Purchaser receives
evidence that would provide reasonable grounds to a qualified person to
believe that any of the Seller's representations and warranties made in
this Agreement, or any documents that Seller actually delivers to
Purchaser at Closing, pursuant to the provisions of this Agreement, are
or may be untrue, and Purchaser nevertheless elects to close under this
Agreement, then Purchaser shall be deemed to have waived the breach in
question, and shall have no right, at any time after Closing, to assert
a claim, of any nature whatsoever, against Seller with respect to that
breach.
7.2 Purchaser's Representations and Warranties. Purchaser represents
and warrants to Seller as of the date of this Agreement as follows:
7.2.1 Purchaser has been duly formed and is in good standing
under the laws of the State of Minnesota, is duly qualified to transact
business in the jurisdiction in the State of Minnesota, and has the
requisite power and authority to enter into and perform this Agreement
and the documents and instruments required to be executed and delivered
by Purchaser pursuant hereto. This Agreement has been duly executed and
delivered by Purchaser and is a valid and binding obligation of
Purchaser enforceable in accordance with its terms. This Agreement and
the documents and instruments required to be executed and delivered by
Purchaser pursuant hereto have each been duly authorized by all
necessary partnership action on the part of Purchaser and that such
execution, delivery and performance does and will not conflict with or
result in a violation of Purchaser's partnership agreement or any
judgment, order or decree of any court or arbiter to which Purchaser is
a party, or any agreement to which Purchaser and/or any of the Property
is bound or subject.
7.2.2 Purchaser has not (i) made a general assignment for the
benefit of creditors, (ii) filed any involuntary petition in bankruptcy
or suffered the filing of any involuntary petition by Purchaser's
creditors, (iii) suffered the appointment of a receiver to take
possession of all or substantially all of Purchaser's assets, (iv)
suffered the attachment or other judicial seizure of all, or
substantially all, of Purchaser's assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors generally.
Article 8. Inspection; Condition of Property at Closing, Documents to
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be Delivered.
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8.1 Right of Entry. During the Executory Period, Purchaser and its
employees, agents and independent contractors shall have the right to enter the
Property
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during normal business hours and upon reasonable prior notice to Seller to
inspect the same, perform surveys, environmental assessments, soil and other
tests and for other investigations and activities consistent with the purposes
of this Agreement. Purchaser shall restore any damage to the Property caused by
such inspection and shall indemnify and hold Seller harmless from all
liabilities incurred by Seller and arising out of any such entry. The foregoing
indemnity shall survive termination of this Agreement. Purchaser shall deliver
to Seller a copy of any environmental or other inspection reports obtained in
connection with such inspection within a reasonable time after the same are
received by Purchaser.
8.2 Condition of Property at Closing. Subject to the Seller's
Representations and Warranties in Article 7.1, Purchaser, for itself and for its
corporate successors and assigns, releases Seller from, and waives all claims
and liability against Seller for, any structural, physical or environmental
conditions at the Property and further releases Seller from, and waives all
liability against Seller attributable to, the structural, physical and
environmental condition of the Property, including without limitation the
presence, discovery or removal of any lead, asbestos containing materials or any
other Hazardous Material in, at, about or under the Property, or for, connected
with or arising out of any and all claims or causes of action based upon any
Hazardous Materials Laws. Purchaser takes responsibility and liability for all
obligations attributable to any Hazardous Material in, at, under or about
Property. Seller makes no representations or warranties whatsoever to Purchaser
regarding the presence or absence of any Hazardous Material. Purchaser hereby
acknowledges and agrees that it shall rely solely on the investigations,
information, studies and reports prepared by or through Purchaser, at its sole
cost and expense, with regard to Hazardous Material. Purchaser shall make such
studies and investigations, conduct such tests and surveys, and engage such
specialists as Purchaser deems appropriate to evaluate fairly the Property and
its risks from a Hazardous Material standpoint.
8.3 "As Is" Sale. PURCHASER ACKNOWLEDGES THAT IT WILL HAVE ADEQUATE
OPPORTUNITY TO INSPECT THE PROPERTY AND ACCEPTS THE RISK THAT ANY INSPECTION MAY
NOT DISCLOSE ALL MATERIAL MATTERS AFFECTING THE PROPERTY. SUBJECT ONLY TO THE
TERMS OF SECTIONS 7.1, 8.2 AND ARTICLES 10 AND 11, PURCHASER AGREES TO ACCEPT
THE PROPERTY IN ITS "AS IS" "WHERE IS" AND "WITH ALL FAULTS" CONDITION AT
CLOSING WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER INCLUDING AS TO
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND WITHOUT ANY RIGHT OF
SET-OFF OR REDUCTION IN THE PURCHASE PRICE.
8.4 Documents to be Delivered by Seller. Within ten (10) days of the
date of this Agreement, to the extent not already delivered, Seller shall cause
to be delivered to Purchaser the following:
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(a) copies of all certificates of occupancy for occupied portions
of the Improvements and other necessary governmental licenses,
permits, or approvals in Seller's possession for the use,
occupancy, and operation of the Property;
(b) copies of all final plans and specifications for the "base
building" and for tenant improvements, and any modifications
or amendments thereto, site plans, zoning approvals and
variances, environmental or land use permits and approvals or
waivers and other "as-built" records of the Improvements in or
on the Property, that are in the possession of Seller;
(c) copies of the final real estate tax bills pertaining to the
Property that are in the possession of Seller together with
any information concerning any current tax protests currently
in effect;
(d) a schedule listing all Personal Property, if any;
(e) copies of each and every environmental assessment, impact
report or other third party consultants' geotechnical soil
reports as to the Property that has been ordered or requested
by Seller or that is in Seller's possession, custody, or
control, if any;
(f) a copy of any 2006 fiscal year operating budget and operating
statements for the years 2004 and 2005 (and 2006 through the
month of March) for the Property that are in the possession of
Seller; and,
(g) a methamphetamine disclosure statement pursuant to Minnesota
Statute Section 152.0275.
All "copies" referred to in this Agreement shall be true and
correct copies of the applicable original documents and all amendments
thereto, if applicable. Purchaser will deliver to Seller copies of all
environmental or other inspection reports as to the Property promptly
after receipt.
Article 9. Operation Pending Closing.
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During the Executory Period, Seller shall operate, maintain and manage
the Property in a manner substantially consistent with Seller's past practices.
Article 10. Damage or Destruction.
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If prior to Closing any material portion of the Property is damaged or
destroyed by fire or other casualty, Seller shall immediately give notice
thereof to Purchaser, and Purchaser at its option (to be exercised within thirty
(30) days after Seller's notice) may
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either (a) terminate this Agreement, or (b) proceed to Closing and receive at
Closing a payment or an assignment of all amounts recovered or recoverable by
Seller on account of insurance on the Property. If Purchaser elects to proceed
to Closing, Seller shall be responsible for any deductible associated with such
insurance coverage. As used in this Article 10, the term "material portion of
the Property" shall mean damage to the Property that would cost in excess of One
Hundred Thousand and no/100 Dollars ($100,000.00) to repair.
Article 11. Condemnation.
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If prior to Closing eminent domain proceedings are commenced against
any material portion of the Property, Seller shall immediately give notice
thereof to Purchaser, and Purchaser at its option (to be exercised within thirty
(30) days after Seller's notice) may either (a) terminate this Agreement, or (b)
proceed to Closing and receive at Closing either a credit against the Purchase
Price in the amount of the award, in the case of a completed eminent domain
proceeding, or an assignment of all rights in eminent domain, in the case of a
pending eminent domain proceeding. As used in this Article 11, the term
"material portion of the Property" shall mean a portion of the Property having a
fair market value in excess of One Hundred Thousand and no/100 Dollars
($100,000.00) Dollars.
Article 12. Brokers.
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Except for the commissions payable to Seller's and Purchaser's
respective Brokers, which shall be paid by each respective party at Closing,
each of the parties represents to the other that such party has not incurred any
brokerage commission or finder's fee as a result of this transactions and each
party agrees to hold the other harmless from all liabilities incurred by the
other relating to such brokerage commission or finder's fee incurred as a result
of the actions of such party. The provisions of this Article 12 shall survive
termination of this Agreement.
Article 13. Default.
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If either party shall default in any of their respective obligations
under this Agreement, the other party, by notice to such defaulting party
specifying the nature of the default and the date on which this Agreement shall
terminate (which date shall be not less than thirty (30) days after the giving
of such notice), may terminate this Agreement, and upon such date, unless the
default so specified shall have been cured, this Agreement shall terminate. In
the case of any default by Purchaser, the Earnest Money shall be promptly
forfeited to Seller and Seller may seek damages from Purchaser. In the case of
any default by Seller, upon termination of this Agreement, the Earnest Money
shall be returned to Purchaser. Seller and Purchaser also shall have the right
to specifically enforce this Agreement, provided that any action therefor is
commenced within six (6) months after such right arises. In any action or
proceeding to enforce this Agreement or any term hereof, the prevailing party
shall be entitled to recover its reasonable costs and attorneys' fees.
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Article 14. Termination; Confirmation.
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Except as expressly provided in this Agreement to the contrary, if this
Agreement is terminated pursuant to the terms hereof, the Earnest Money shall be
returned to Purchaser and upon such return the respective rights of Seller and
Purchaser arising out of this Agreement shall immediately cease. In such event,
Purchaser agrees to execute, acknowledge, and deliver to Seller within ten (10)
days after written request, a quit claim deed and/or a termination of this
Agreement in recordable form in order to remove the cloud of this Agreement from
the Property, but failure to give such deed or termination shall not affect the
termination of this Agreement.
Article 15. Assignability.
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Except as provided in Article 17, Purchaser may not assign its rights
under this Agreement without the consent of Seller, which consent may be given
or withheld by Seller in its discretion. Notwithstanding the foregoing,
Purchaser my assign its rights under this Agreement to any entity controlled by,
controlling, or under common control with Purchaser. In such event, Purchaser
shall give Seller written notice of any such assignment.
Article 16. Notices.
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Any notice, consent, waiver, request or other communication required or
provided to be given under this Agreement shall be in writing and shall be
sufficiently given and shall be deemed given when delivered personally or when
mailed by certified or registered mail, return receipt requested, postage
prepaid, or when dispatched by nationally recognized overnight delivery service,
in any event, addressed to the party's address as follows:
If to Seller: Resistance Technology, Incorporated
1260 Red Fox Road
Arden Hills, MN 55112
Attention: Bill Kullback
If to Purchaser: MDSC Partners, LLP
7556 Washington Avenue South
Eden Prairie, MN 55344
Facsimile: 952-941-0242
Attention: Carol Sundet Meeker
With a copy to: Michael J. Mollerus, Ltd.
1150 Wells Fargo Plaza
7900 Xerxes Avenue South
Bloomington, MN 55435
Facsimile 952-831-8444
Attention: Michael J. Mollerus
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or to such party at such other address as such party, by ten (10) days prior
written notice given as herein provided, shall designate, provided that no party
may require notice to be sent to more than two (2) addresses. Any notice given
in any other manner shall be effective only upon receipt by the addressee.
Article 17. Tax Deferred Exchange.
----------------------------------
Each party acknowledges that the other party may elect to buy or sell
(as the case may be) any of the Real Property in connection with the completion
of a tax-deferred exchange under Section 1031 of the Internal Revenue Code of
1986. Each party hereby agrees to take such steps as the other party may
reasonably require in order to complete such tax-deferred exchange, including
paying or receiving all or a portion of the Purchase Price from a third party.
Neither party shall be required to pay the other for increased costs (including
reasonable attorney's fees for review of documentation) arising out of such
exchange or proposed exchange.
Article 18. Miscellaneous.
--------------------------
18.1 Entire Agreement; Modification. This Agreement embodies the entire
agreement and understanding between Seller and Purchaser, and supersedes any
prior oral or written agreements, relating to this transaction. This Agreement
may not be amended, modified or supplemented except in a writing executed by
both Seller and Purchaser. No term of this Agreement shall be waived unless done
so in writing by the party benefited by such term.
18.2 Survival; No Merger. The terms of this Agreement shall survive and
be enforceable after the Closing and shall not be merged therein.
18.3 Governing Law. This Agreement shall be construed under and
governed by the laws of the State or Commonwealth in which the Real Property is
located.
18.4 Severability. If any term of this Agreement or any application
thereof shall be invalid or unenforceable, the remainder of this Agreement and
any other application of such term shall not be affected thereby.
18.5 Time of the Essence. Time is of the essence under this Agreement.
18.6 Construction. The rule of strict construction shall not apply to
this Agreement. This Agreement shall not be interpreted in favor of or against
either Seller or Purchaser merely because of their respective efforts in
preparing it.
18.7 Captions, Gender, Number and Language of Inclusion. The article
and section headings in this Agreement are for convenience of reference only and
shall not define, limit or prescribe the scope or intent of any term of this
Agreement. As used in this Agreement, the singular shall include the plural and
vice versa, the masculine, feminine and
-14-
neuter adjectives shall include one another, and the following words and phrases
shall have the following meanings: (i) "including" shall mean "including but not
limited to", (ii) "terms" shall mean "terms, provisions, duties, covenants,
conditions, representations, warranties and indemnities", (iii) "any of the
Property" or "any of the Real Property" shall mean "the Property or any part
thereof or interest therein" or "the Real Property or any part thereof or
interest therein", as the case may be, (iv) "rights" shall mean "rights, duties
and obligations", (v) "liabilities" shall mean "liabilities, obligations,
damages, fines, penalties, claims, demands, costs, charges, judgments and
expenses, including reasonable attorneys' fees", (vi) "incurred by" shall mean
"imposed upon or suffered or incurred or paid by or asserted against", (vii)
"applicable law" shall mean "all applicable Federal, state, county, municipal,
local or other laws, statutes, codes, ordinances, rules and regulations", (viii)
"about the Property" or "about the Real Property" shall mean "in , on, under or
about the Property" or "in, on under or about the Real Property", as the case
may be, (ix) "operation" shall mean "use, non-use, possession, occupancy,
condition, operation, maintenance or management", and (x) "this transaction"
shall mean "the purchase, sale and related transactions contemplated by this
Agreement".
18.8 Binding Effect. This Agreement shall inure to the benefit of and
shall bind the respective heirs, executors, administrators, successors and
assigns of Seller and Purchaser.
18.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
END OF ARTICLE
-15-
SIGNATURE PAGE
FOR
PURCHASE AGREEMENT
BETWEEN
RESISTANCE TECHNOLOGY, INCORPORATED
AND
MDSC PARTNERS, LLP
Seller and Purchaser have caused this Agreement to be executed and
delivered as of the date first above written.
SELLER:
RESISTANCE TECHNOLOGY
INCORPORATED
By /s/ William J. Kullback
---------------------------
Its CFO
----------------------
PURCHASER:
MDSC PARTNERS, LLP
By /s/ C S Meeker
---------------------------
Its Partner
----------------------
-16-
JOINDER OF TITLE COMPANY
The undersigned hereby agrees to act as Title Company under
the foregoing Purchase Agreement and to hold and disburse the Earnest Money in
accordance with the terms thereof.
Dated: ___________, 2006
COMMERCIAL PARTNERS TITLE, LLC
By
---------------------------
Its
---------------------
-17-
EXHIBIT A
Legal Description of the Land
-----------------------------
That part of the Northwest Quarter of Section 20, Township 30, Range 22, Ramsey
County, Minnesota, as described as follows:
Beginning at a point on the West line of said Northwest Quarter, distance
2023.23 feet South of the Northwest corner thereof; thence Easterly at right
angles a distance of 421.00 feet; thence Northerly at right angles, parallel
with said West line, a distance of 293.16 feet; thence Westerly at right angles
a distance of 421.00 feet to said West line; thence Southerly, along said West
line, a distance of 293.16 feet to the point of beginning.
Ramsey County, Minnesota
Abstract Property
A-1
EXHIBIT B
Permitted Exceptions
--------------------
1. Real estate taxes payable in the year 2006.
2. Easement for street and utility purposes, in favor of City of Vadnais
Heights, a Minnesota municipal corporation, as created in document
dated August 15, 1980, filed August 15, 1980, as Document No. 2088193.
3. Subject to McMenemy Road as disclosed by county maps.
4. Encroachment of power poles and overhead electric lines outside of
right of way of McMenemy Road without the benefit of an easement, as
shown on the survey prepared by Harry S. Johnson Co., Inc., dated April
5, 2006.
5. Electric box along south boundary line without indication as to
property served, as shown on the survey prepared by Harry S. Johnson
Co., Inc., dated April 5, 2006.
B-1
EXHIBIT C
Personal Property
-----------------
None
C-1
EXHIBIT D
Form of the Lease
-----------------
[see attached]
[FILED WITH THIS FORM 8-K AS EXHIBIT 10.2]
D-1