Exhibit 10a
PURCHASE AGREEMENT
THIS AGREEMENT is made as of April 26, 1999 between Dotronix, Inc., a
Minnesota corporation, whose Tax I.D. Number is ▇▇-▇▇▇▇▇▇▇ ("Seller") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual, whose Tax I.D. Number is ("Buyer").
In consideration of this Agreement, Seller and Buyer agree as follows:
1. Sale of Property. Seller agrees to sell to Buyer, and Buyer agrees to
buy from Seller, the following property (collectively, "Property"):
1.1 Real Property. The real property located in ▇▇▇▇▇▇ County, Minnesota,
described on the attached Exhibit A ("Land") together with (1) all
buildings and improvements constructed or located on the Land
("Buildings") and (2) all easements and rights benefiting or
appurtenant to the Land (collectively the "Real Property").
1.2 Personal Property. All of the personal property situated in or about
the Real Property owned by Seller used in connection with Buildings or
Land described on Exhibit B ("Personal Property").
1.3 Leases. Seller's interest as lessor in all of the leases, if any, as
described on the rent roll attached to this Agreement as Exhibit C
("Leases").
1.4 Contracts, Permits, Warranties, Records, Miscellaneous. Seller's
interests in the following items, all of which relate to the Property:
all service and maintenance contracts, equipment leases and other
contracts ("Contracts"); all permits, licenses, and trade names
("Permits"); all warranties and guaranties relating to the Property
("Warranties"); and all business records, including management,
leasing, real estate taxes, assessments, insurance, rents,
maintenance, repairs, capital improvements and services ("Records").
2. Purchase Price and Manner of Payment. The total purchase price
("Purchase Price") to be paid for the Property shall be Five Hundred Seventy
Thousand Dollars ($570,000). The Purchase Price shall be payable as follows:
2.1 $570,000 in cash or by wire transfer of funds on the Closing Date.
3. Contingencies. The obligations of Buyer under this Agreement are
contingent upon each of the following:
3.1 Representations and Warranties. The representations and warranties of
Seller contained in this Agreement must be true now and on the Closing
Date as if made on the Closing Date.
3.2 Title. Title shall have been found acceptable, or been made
acceptable, in accordance with the requirements and terms of Section 6
below.
3.3 Access and Inspection. Seller shall have allowed Buyer, and Buyer's
agents, access to the Real Property without charge and at all
reasonable times for the purpose of Buyer's investigation and testing
the same. Seller shall make available to Buyer and Buyer's Agents
without charge all plans and specifications, records, inventories,
permits and correspondence in Seller's possession relating to
Hazardous Substances affecting the Property; and the right to
interview employees of Seller who may have knowledge of such matters.
Buyer shall pay all costs and expenses of such investigation and
testing, shall restore the Real Property, and shall hold Seller and
the Real Property harmless from all costs and liabilities relating to
Buyer's activities. Buyer shall have been satisfied in its sole
discretion with the results of all tests and investigations performed
by it or on its behalf.
3.4 [Intentionally deleted.]
3.5 Document Review. Buyer shall have determined, in its sole judgment, on
or before the Contingency Date, that it is satisfied with its review
and analysis of the Leases, Contracts, Permits, Warranties, Plans,
Records and Permitted Encumbrances. Seller shall on or before Date of
Closing deliver to Buyer copies of all such documents for review.
3.6 Government Approvals. Buyer shall have obtained at its sole cost and
expense on or before the Closing Date all final governmental
approvals, if any, necessary in Buyer's judgment in order to make the
use of the Property which Buyer intends. Seller shall cooperate in all
reasonable respects with Buyer in obtaining such approvals, and shall
execute such applications, permits and other documents as may be
reasonably required in connection therewith.
3.7 Financing. Buyer shall have received on or before the Closing Date the
proceeds of financing necessary and sufficient in Buyer's opinion to
implement Buyer's plans for and complete the purchase of the Property.
The "Contingency Date" shall be on the same day as the Closing Date, as defined
below. If any contingency has not been satisfied on or before the Closing Date,
then this Agreement may be terminated by notice from Buyer to Seller. Upon
termination, neither party will have any further
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rights or obligations regarding this Agreement or the Property. All the
contingencies are specifically for the benefit of the Buyer, and the Buyer shall
have the right to waive any contingency by written notice to Seller.
4. Closing. The closing of the purchase and sale contemplated by this
Agreement (the "Closing") shall occur on April 26, 1999 (the "Closing Date").
4.1 Seller's Closing Documents. On the Closing Date, Seller shall execute
and deliver to Buyer the following (collectively, "Seller's Closing
Documents"), all in form and content reasonably satisfactory to Buyer:
4.1.1 Deed. A Warranty Deed (in the form of a Minnesota Uniform
Conveyancing Blank) conveying the Real Property to Buyer, free
and clear of all encumbrances, except the Permitted Encumbrances
hereafter defined.
4.1.2 ▇▇▇▇ of Sale. A Warranty ▇▇▇▇ of Sale conveying the Personal
Property to Buyer, free and clear of all encumbrances.
4.1.3 [Intentionally deleted.]
4.1.4 Assignment of Contracts, Permits, Warranties and Miscellaneous
Documents. An Assignment of Contracts, Permits, Warranties and
miscellaneous documents conveying Seller's interest to Buyer
together with the consent of all parties having a right to
consent to such Assignment.
4.1.5 [Intentionally deleted.]
4.1.6 Original Documents. Original copies of the Leases, Contracts,
Permits, Warranties, and Records, all plans and specifications
for the Property in Seller's possession, a Bring Down
Certificate, and copies of all records required to be kept
concerning the presence, location and quantity of asbestos
containing materials and presumed asbestos containing materials
in the Property.
4.1.7 FIRPTA Affidavit. A non-foreign affidavit, properly executed,
containing such information as is required by Internal Revenue
Code Section 1445(b)(2) and its regulations.
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4.1.8 Owner's Duplicate Certificates of Title. The owner's
duplicate certificates of title regarding the Real
Property.
4.1.9 IRS Forms. A Designation Agreement designating the
"reporting person" for purposes of completing Internal
Revenue Form 1099 and, if applicable, Internal Revenue Form
8594.
4.1.10 Well and Septic/Sewer Certificate. A Certificate signed by
Seller warranting that there are no "▇▇▇▇▇" on the Property
within the meaning of Minn. Stat. ss. 103I or if there are
"▇▇▇▇▇", a Well Certificate in the form required by law,
and warranting that there is no septic system in use or
abandoned on the Property, and warranting that sewage from
the property goes to permitted facilities.
4.1.11 Storage Tanks. If the Property contains or contained a
storage tank, an affidavit with respect thereto, as
required by Minn. Stat. ss. 116.48.
4.1.12 Other Documents. All other documents reasonably determined
by Buyer or Title to be necessary to transfer the Property
to Buyer free and clear of all encumbrances.
4.1.13 ACM Materials. Copies of all records required to be kept
concerning the presence, location and quantity of asbestos
containing materials and presumed asbestos containing
materials in the Property.
4.2 Buyer's Closing Documents. On the Closing Date, Buyer will execute
and deliver to Seller the following (collectively, "Buyer's
Closing Documents"):
4.2.1 Purchase Price. Funds representing the Purchase Price, by
wire transfer and execution or delivery of any required
Seller's financing documents.
4.2.2 Assumption Agreement. An Assumption Agreement by which
Buyer will assume all obligations of Seller under the
Leases, Contracts and Permits that accrue after the Closing
Date.
4.2.3 IRS Form. A Designation Agreement designating the
"reporting person" for purposes of completing Internal
Revenue Form 1099 and, if applicable, Internal Revenue Form
8594.
5. Prorations. Seller and Buyer agree to the following pro-rations and
allocation of costs regarding this Agreement:
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5.1 Title Insurance and Closing Fee. Seller will pay all costs of the
Title Evidence, the Title Policy and the fees charged by Title for
any escrow required regarding Buyer's Objections. Buyer will pay
all additional premiums required for the issuance of any
mortgagee's Title Policy. Seller will pay any closing fee or
charge imposed by any closing agent or by the title company.
5.2 Deed Tax. Seller shall pay all State Deed Tax payable in
connection with this transaction. Buyer shall pay all Mortgage
Registry Tax payable in connection with Buyer's financing.
5.3 Real Estate Taxes and Special Assessments. Real Estate Taxes
payable in the year in which Closing occurs shall be pro-rated
based upon a calendar year based upon the Date of Closing. Seller
shall provide for payment of special assessments pending as of the
date of the closing for improvements ordered by the City Council
or other governmental assessing authority. Seller's provision for
payment shall be by payment into escrow 1 1/2 times the estimated
amount of the assessments. Seller shall pay all levied special
assessments and any deferred special assessments or real estate
taxes, including, but not limited to, "Green Acres" taxes under
Minnesota Statutes 273.111, which are required to be paid as a
result of its sale of the Property, at or prior to closing if
required by Buyer's Lender; otherwise Seller may, at its option,
continue to pay such assessments in installments as allowed by the
appropriate taxing authorities. Seller shall pay installments of
special assessments certified to its real estate taxes payable in
the year in which the closing occurs.
5.4 [Intentionally deleted.]
5.5 Other Costs. All other operating costs of the Property shall be
allocated between Seller and Buyer as of the Closing Date, so that
Seller pays that part of operating costs payable before the
Closing Date, and Buyer pays that part of operating costs payable
from and after the Closing Date.
5.6 Attorney's Fees. Each of the parties will pay its own attorney's
fees, except that a party defaulting under this Agreement or any
Closing Document will pay the reasonable attorney's fees and court
costs incurred by the nondefaulting party to enforce its rights
hereunder.
5.7 Sales Tax. Buyer shall pay in addition to the Purchase Price all
state and local sales tax arising from the transaction herein
described, including any additional sales tax assessed by
governmental authority after filing of the sales tax return. At
the Closing, Buyer shall deliver the amount of sales tax to Seller
and Seller shall
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deliver to Buyer evidence that Seller has obtained a Sales Tax
Permit. Seller shall file a sales tax return and pay such tax as
required by law.
6. Title Examination. Title Examination will be conducted as follows:
6.1 Seller's Title Evidence. Seller shall furnish, if requested by
Buyer, the following (collectively, "Title Evidence"): (a) a
commitment ("Title Commitment") for an ALTA Form B 1990 Owner's
Policy of Title Insurance insuring title to the Real Property,
deleting standard exceptions and including affirmative insurance
regarding zoning, contiguity, appurtenant easements and such other
matters as may be identified by Buyer or Buyer's Lender, in the
amount of the Purchase Price, issued by Land Title ("Title"); (b)
Seller shall deliver to Title or Buyer an Abstract of Title and/or
Registered Property Abstract to the Real Property certified to a
current date to include all appropriate judgment and bankruptcy
searches; (c) UCC searches against Seller by name and the
Property; and (d) a certified report of all liens for unpaid sales
or withholding taxes on file against Seller (or against any trade
name or business name used by Seller) which are on file in the
office of the Minnesota Secretary of State or any applicable
County Recorder.
6.2 Buyer's Objections. Buyer hereby acknowledges that it has no
objections to the condition of the Title Evidence as of the
Closing Date.
7. Operation Prior to Closing. During the period, if any, from the date
of Seller's acceptance of this Agreement to the Closing Date (the "Executory
Period"), Seller shall operate and maintain the Property in the ordinary course
of business in accordance with prudent, reasonable business standards, including
the maintenance of adequate liability insurance and insurance against loss by
fire, windstorm and other hazards, casualties and contingencies, including
vandalism and malicious mischief. Seller shall execute no contracts, leases or
other agreements regarding the Property during the Executory Period that are not
terminable on or before the Closing Date, without the prior written consent of
Buyer, which consent may be withheld by Buyer at its sole discretion.
8. Representations and Warranties by Seller. Seller represents and
warrants to Buyer as follows:
8.1 Existence; Authority. Seller is duly organized, qualified and in
good standing, and has the requisite power and authority to enter
into and perform this Agreement and Seller's Closing Documents;
such documents have been duly authorized by all necessary action;
such documents are valid and binding obligations of Seller, and
are enforceable in accordance with their terms.
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8.2 Leases. Seller has made available to Buyer a correct and complete
copy of each Lease and all its amendments. The information
regarding the Leases contained in the attached Rent Roll is
correct and complete as of the date of this Agreement. The Leases,
if any, are in full force and neither Seller, nor any tenant, is
in default under the Leases. There are no other leases or
possessory rights of others regarding the Real Property.
8.3 Contracts. Seller has made available to Buyer a correct and
complete copy of each Contract and its amendments which will
survive a closing hereunder.
8.4 Operations. Seller has received no notice of actual or threatened
cancellation or suspension of any utility services or certificate
of occupancy for any portion of the Real Property. Seller warrants
that the usual utilities are available to the Property as of the
Closing Date. Seller has received no notice of actual or
threatened special assessments or reassessments of the Real
Property. The Property is, and to Seller's best knowledge has
been, used in compliance with all governmental permits. All
necessary permits have been obtained and are in full force and
effect and no default exists thereunder. Seller warrants that the
Property is usable for its current purposes without violating any
zoning or municipal regulations as of the Closing Date.
8.5 Environmental Laws. To the best of Seller's knowledge, no toxic or
hazardous substances or wastes, pollutants or contaminants
(including, without limitation, asbestos, urea formaldehyde, the
group of organic compounds known as polychlorinated biphenyls,
petroleum products including gasoline, fuel oil, crude oil and
various constituents of such products, and any hazardous substance
as defined in any Environmental Law (collectively, "Hazardous
Substances") have been generated, treated, stored, transferred
from, released or disposed of, or otherwise placed, deposited in
or located on the Property in violation of any Environmental Law,
nor has any activity been undertaken on the Property that would
cause or contribute to the Property becoming a treatment, storage
or disposal facility within the meaning of any Environmental Law.
The term "Environmental Law" shall mean any and all federal, state
and local laws, statutes, codes, ordinances, regulations, rules,
policies, consent decrees, judicial orders, administrative orders
or other requirements relating to the environment or to human
health or safety associated with the environment, all as amended
or modified from time to time. To the best of Seller's knowledge
there has been no discharge, release or threatened release of
Hazardous Substances from the Property, and there are no Hazardous
Substances or conditions in or on the Property that may support a
claim or cause of action under any Environmental Law. The Property
is not now, and to the best of Seller's knowledge never has
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been, listed on any list of sites contaminated with Hazardous
Substances, nor used as landfill, dump, disposal or storage site
for Hazardous Substances. Seller has maintained all records
required to be kept concerning the presence, location and quantity
of asbestos containing materials, and presumed asbestos containing
materials, in the Property and will deliver the same to Buyer on
or before closing. To the best of Seller's knowledge means, for
the purposes of this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇, the Seller's Chief
Financial Officer.
8.6 Seller's Defaults. To the best knowledge of Seller, Seller is not
in default concerning any of its obligations or liabilities
regarding the Property.
8.7 Operating Statements. Operating statements for the Property will
be supplied by Seller to Buyer, if requested, and will be correct
and complete and prepared in accordance with generally accepted
accounting standards.
8.8 FIRPTA. 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.
8.9 Proceedings. There is no action, litigation, investigation,
condemnation or proceeding of any kind pending or to the best
knowledge of Seller threatened against Seller or any portion of
the Property.
8.10 Condition. To the best knowledge of Seller, the buildings,
structures and improvements included within the Property are
structurally sound and in good repair and in first-class
condition, and all mechanical, electrical, heating, air
conditioning, drainage, sewer, water and plumbing systems are in
proper working order and comply with applicable state and
municipal codes, statutes and ordinances.
8.11 ▇▇▇▇▇. The Seller certifies and warrants that the Seller does not
know of any "▇▇▇▇▇" on the described Property within the meaning
of Minn. Stat. ss. 103I. This representation is intended to
satisfy the requirements of that statute.
8.12 Storage Tanks. To the best knowledge of Seller after due inquiry,
no above ground or underground tanks are located in or about the
Property, or have been located under, in or about the Property and
have subsequently been removed or filled. To the extent storage
tanks exist on or under the Real Property, such storage tanks have
been duly registered with all appropriate regulatory and
governmental bodies, and otherwise are in compliance with
applicable federal, state and local statutes, regulations,
ordinances and other regulatory requirements.
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8.13 Reports. Seller has delivered to Buyer copies of all environmental
reports and studies relating to the Property which are in the
possession of Seller.
8.14 Wetlands. There does not exist on or contiguous to the Property
any portion of a wetland, watercourse, waterbody, floodplain or
shoreland district, or tidelands or coastal zone, which is
regulated by the Army Corps of Engineers, the Minnesota Department
of Natural Resources or any other federal, state or local
governmental agency under any Environmental Law.
8.15 Individual Sewage Treatment Systems. Solely for purposes of
satisfying the requirements of Minn. Stat. ss.115.55 Sellers
represents that there is no "individual sewage treatment system"
(within the meaning of that statute) in use or abandoned, on or
serving the Property.
Seller will indemnify Buyer, its successors and assigns, against, and will hold
Buyer, its successors and assigns, harmless from, any expenses or damages,
including reasonable attorneys' fees, that Buyer incurs because of the breach of
any of the above representations and warranties, whether such breach is
discovered before or after Closing. Wherever herein a representation is made "to
the best knowledge of Seller", such representation is limited to the actual
knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇ . Except as herein expressly stated, Buyer is
purchasing the Property based upon its own investigation and inquiry and is not
relying on any representation of Seller or other person and is agreeing to
accept and purchase the Property "as is, where is" subject to the conditions of
examination herein set forth and the express warranties herein contained.
Consummation of this Agreement by Buyer with knowledge of any such breach by
Seller will not constitute a waiver or release by Buyer of any claims due to
such breach.
9. Casualty; Condemnation. If all or any part of the Property is
substantially damaged by fire, casualty, the elements or any other cause, Seller
shall immediately give notice to Buyer, and Buyer shall have the right to
terminate this Agreement and receive back all ▇▇▇▇▇▇▇ Money by giving notice
within thirty (30) days after Seller's notice. If Buyer shall fail to give the
notice, then the parties shall proceed to Closing, and Seller shall assign to
Buyer all rights to insurance proceeds resulting from such event. If eminent
domain proceedings are threatened or commenced against all or any part of the
Property, Seller shall immediately give notice to Buyer, and Buyer shall have
the right to terminate this Agreement and receive back all ▇▇▇▇▇▇▇ Money by
giving notice within thirty (30) days after Seller's notice. If Buyer shall fail
to give the notice, then the parties shall proceed to Closing, and Seller shall
assign to Buyer all rights to appear in and receive any award from such
proceedings.
10. Assignment. Either party may assign its rights under this Agreement
with the prior written consent of the other party, before or after the Closing.
Any such assignment will not relieve such assigning party of its obligations
under this Agreement.
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11. Survival. All of the terms of this Agreement and warranties and
representations herein contained shall survive and be enforceable after the
Closing.
12. Notices. Any notice required or permitted hereunder shall be given by
personal delivery upon an authorized representative of a party hereto; or if
mailed by United States registered or certified mail, return receipt requested,
postage prepaid; or if transmitted by facsimile copy followed by mailed notice;
or if deposited cost paid with a nationally recognized, reputable overnight
courier, properly addressed as follows:
If to Seller: Dotronix, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
If to Buyer: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Notices shall be deemed effective on the earlier of the date of receipt or the
date of deposit, as aforesaid; provided, however, that if notice is given by
deposit, the time for response to any notice by the other party shall commence
to run one business day after any such deposit. Any party may change its address
for the service of notice by giving notice of such change 10 days prior to the
effective date of such change.
13. Miscellaneous. The paragraph headings or captions appearing in this
Agreement are for convenience only, are not a part of this Agreement, and are
not to be considered in interpreting this Agreement. This written Agreement
constitutes the complete agreement between the parties and supersedes any prior
oral or written agreements between the parties regarding the Property. There are
no verbal agreements that change this Agreement, and no waiver of any of its
terms will be effective unless in a writing executed by the parties. This
Agreement binds and benefits the parties and their successors and assigns. This
Agreement has been made under the laws of the State of Minnesota, and such laws
will control its interpretation.
15. Remedies. If Buyer defaults under this Agreement, Seller shall have
the right to terminate this Agreement by giving written notice to Buyer. If
Buyer fails to cure such default within 30 days of the date of such notice, this
Agreement will terminate, and upon such termination Seller will retain the
▇▇▇▇▇▇▇ Money as liquidated damages, time being of the essence of this
Agreement. The termination of this Agreement and retention of the ▇▇▇▇▇▇▇ Money
will be the sole remedy available to Seller for such default by Buyer, and Buyer
will not be liable for damages or specific performance. If Seller defaults under
this Agreement, this provision does
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not preclude Buyer from seeking and recovering from Seller damages for
nonperformance or specific performance of this Agreement. If Seller defaults
under this Agreement, Buyer shall have no right to seek damages from Seller for
Buyer's loss of its bargain in failing to acquire the Property, but Buyer shall
recover as damages from Seller all of Buyer's out-of-pocket costs and fees,
including without limitation, attorneys' fees, accountants' fees and other
consultants' fees incurred by Buyer in preparing and negotiating this Agreement,
preparing for the closing, obtaining financing commitments, investigating the
status, title and condition of the Property, and other similar and reasonable
costs and expenses.
16. Withdrawal of Offer. This Agreement shall be deemed to be withdrawn,
unless accepted by Seller, and a fully executed counterpart of this Agreement
returned to Buyer on or before April 23, 1999.
Seller and Buyer have executed this Agreement as of the date first
written above.
DOTRONIX, INC.
Date of Signature By
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
_______________________ , 1999 SELLER
Tax I.D. Number
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Date of Signature
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________ , 1999 BUYER
Tax I.D. Number
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EXHIBIT A
Legal Description
▇▇▇▇ ▇▇-▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of Ramsey,
Minnesota.
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EXHIBIT B
Personal Property
Personal property directly related to the operation and maintenance of the
building, except for those personal property items and fixtures described in the
UCC-1 Financing Statement filed with the Secretary of State as document number
1980526 dated October 14, 1997.
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EXHIBIT C
Leases
None
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EXHIBIT D
Permitted Encumbrances
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