ITEM 1.01. Entry into a Material Definitive Agreement
On
September 12, 2016, the Company executed a Uniform Offer to
Purchase (the “Agreement”) giving it the right to
acquire a commercial office building and associated property (the
“Office Building”) located at 1801 Burdick Expressway
West, Minot, North Dakota. The seller of the property is Evanmark
Enterprises, LLC, a North Dakota limited liability company (the
“Seller”). The Seller has no material relationship with
the Company.
Pursuant to the
terms of the Agreement, the Company had until November 1, 2016 for
their “Study Period.” The Study Period allowed for
normal association finalization of the approval process for the
property, to make assurances that the property and its commercial
inspection, zoning, easements, environmental issues and utilities
are suitable for the Company’s planned use, and come to an
agreement on the list of furniture and fixtures that will transfer
to the Company. If the Company discovered the property for any
reason could not be suitable for its use, its earnest money would
be returned in full to the Company if requested by 4:00 PM on
November 1, 2016. The Company did not request the return of its
earnest money on November 1, 2016.
After
November 1, 2016, the Company’s obligation to close the
acquisition of the Office Building is subject to customary closing
conditions. The Agreement contains customary representations and
warranties by the Seller. Although the Company believes that the
acquisition of the Office Building is probable, there can be no
assurance that the acquisition of the Office Building will be
consummated.
The
contract purchase price for the Office Building is $975,000,
exclusive of closing costs, with all built-in fixtures and other
furniture, fixtures and equipment in the building to remain with
the property. The Company has made a $20,000 refundable earnest
money deposit. The Company anticipates funding the purchase price
with a commercial real estate loan in an amount to be determined
and cash on hand. The amount and terms of the financing are not yet
determined. The Office Building contains approximately 10,720
square feet of existing office space and three storage sheds that
total 3,603 square feet. The consummation of the purchase is
subject to the completion of various closing conditions to be met
by the parties. If the Company does not close on the purchase,
there are circumstances under which it may have the earnest money
deposit refunded.
