SPECIAL MEETING OF THE

UTILITIES COMMISSION

August 22, 2016,

9:15 A.M. or immediately following

the closed meeting (whichever is later)

Utilities Conference Room

13069 Orono Parkway, P.O. Box 430, Elk River, MN 55330-0430

763.441.2020 (O) 7633.441.8099 (F) www.elkriverutilities.com

@ERMU_MN @ERMU_MN

AGENDA

1. CALL MEETING TO ORDER

2. DISCUSS AND TAKE ACTION ON THE PURCHASE OR SALE OF REAL OR

PERSONAL PROPERTY – BUSINESS LINE

3. ADJOURNMENT

RESOLUTION NO. 16-9

BOARD OF COMMISSIONERS

ELK RIVER MUNICIPAL UTILITIES

A RESOLUTION OF THE BOARD OF COMMISSIONERS OF ELK RIVER

MUNICIPAL UTILITIES AUTHORIZING SALE OF MONITORING

ACCOUNTS

WHEREAS, WH Securities, LLC has made an offer to purchase certain security and

medical monitoring accounts from the Elk River Municipal Utilities (“ERMU”);

WHEREAS, A draft Asset Purchase Agreement and draft Bill of Sale Assignment &

Assumption Agreement (collectively “The Agreements”) have been prepared; and

WHEREAS, The Elk River Utility Commission has reviewed the draft Agreements.

NOW, THEREFORE, BE IT RESOLVED:

The Agreements are approved and the Vice Chair and General Manager are authorized to

execute the Agreements subject to the finalization of the Agreements to the satisfaction

of the Vice Chair, General Manager, and Commission Attorney.

This Resolution Passed and Adopted this ______ day of ___________________, 2016.

Al Nadeau, Vice Chair

Troy Adams, P.E., General Manager

ASSET PURCHASE AGREEMENT

ELK RIVER MUNICIPAL UTILITIES (“Seller”)

WH SECURITY, LLC (“Buyer”),

Closing Date: September 30, 2016

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THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is entered into as of

August ____, 2016 (which date shall be filled in as the date of delivery and exchange by each of

the Seller and the Buyer of fully executed counterparts of this Agreement) between ELK RIVER

MUNICIPAL UTILITIES, with principal offices located at 13069 Orono Parkway, Elk River,

MN 55330 (“Seller”), and WH SECURITY, LLC., a Minnesota limited liability company, with

its principal offices at 6800 Electric Drive, Rockford, MN 55373 (“Buyer”).

BACKGROUND

WHEREAS, Seller is engaged in, among other things, a residential and commercial

security business operating under its own name (the “Business”); and

WHEREAS, Seller wishes to sell, transfer and assign to Buyer, and Buyer wishes to

purchase from Seller, certain of Seller’s accounts and other select assets used in the Business,

upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of

which are hereby acknowledged by the parties hereto, it is hereby agreed as follows:

ARTICLE 1

DEFINITIONS AND CONSTRUCTION

1.1 Defined Terms. Capitalized terms used and not otherwise defined in the body of

this Agreement have the meanings assigned to such terms in Annex A.

1.2 Preparation of Agreement. The parties have participated jointly in the negotiation

and drafting of this Agreement and the agreements and instruments to be delivered pursuant

hereto. Each party accepts the terms and conditions of this Agreement, having the right to be

represented by legal counsel and other advisors of their choosing, and each party enters into this

agreement intending to be legally bound hereunder.

ARTICLE 2

SALE AND PURCHASE OF ASSETS

2.1 Purchased Assets. Subject to the conditions contained herein, Seller agrees to sell

to Buyer and Buyer agrees to purchase from Seller on the Closing Date, free and clear of all

Liens, all of Seller’s right, title and interest in and to the following assets, tangible and

intangible, used or held for use in connection with the Business (the “Purchased Assets”). The

Purchased Assets include only the following assets and properties, and shall not include the

Excluded Assets or any other assets of the Seller (Exhibits or Schedules, as applicable, will be

updated to be current as of the Closing Date):

2.1.1. Accounts. All monitoring and security customer accounts of the Business

and Seller as of the Closing Date, as listed on Schedule 2.1.1 totaling approximately eight

hundred thirty-eight (838), along with all contracts, monitoring agreements, and

equipment service agreements in place with such customers, all security and monitoring

equipment owned by Seller and intended exclusively and solely for use in connection

with any of the accounts, and all related data, licensing, customer information,

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monitoring numbers, and other assets pertaining to such accounts (the “Accounts”);

2.1.2. Deposits and Prepaid Expenses. All payments and rights to collections

accruing on the Accounts as of the Closing Date and thereafter, and any customer credits,

pre-paid expenses, advance payments and deposits on the Accounts, as listed on Schedule

2.1.2, if any (the “Deposits and Prepaid Expenses”);

2.1.3. Books and Records. All books of account, records, files, customer

information and correspondence, customer lists, technical information and similar

materials and records and other files and records relating to the Business, the Accounts or

the Deposits and Prepaid Expenses, excluding private data under Minn. Stat. Chapter 13

(the “Books and Records”).

2.1.4. Inventory. All inventory of the Seller used in the Business and held for

sale or use to or use with customers, including security and monitoring equipment, spare

parts, raw materials, component parts, and related materials (the “Inventory”). Inventory

existing as of the Effective Date is as set forth in Schedule 2.1.4.

2.2 Excluded Assets. Except for the Purchased Assets, no other assets of the Seller

(such as cash, accounts receivable, trade name, or good will) are being sold to the Buyer, and all

excluded assets are referred to herein as “Excluded Assets”. Excluded Assets (i) shall not be

sold to Buyer, (ii) shall not be included in the Purchased Assets and (iii) shall be retained by

Seller.

ARTICLE 3

PURCHASE PRICE

3.1 Purchase Price.

3.1.1. Purchase Price. The “Purchase Price” for the Purchased Assets shall be

determined as follows, to be set forth on the Closing Date in writing as agreed to by the

Parties:

a. The Purchase Price for the Accounts, Deposits and Prepaid Expenses, and

Books and Records shall be determined according to the following

formulas:

For Security Accounts: An amount equivalent to the multiple of the (i)

total recurring revenue for a one-month period generated from the

Accounts existing as of the Closing Dates times (ii) the number 24. The

Purchase Price and the formula shall be subject to the following

adjustments determined by mutual agreement of the parties on or before

the Closing Date:

i. prepayments to Seller on Accounts for periods of service after the

Date of Closing shall be deducted from the aggregate Purchase

Price.

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ii. The formula shall be applied to the number of Accounts existing as

of the Closing Date.

For Medical Accounts: An amount equivalent to the multiple of the (i)

total recurring revenue for a one-month period generated from the

Accounts existing as of the Closing Date times (ii) the number 10. The

Purchase Price and the formula shall be subject to the following

adjustments determined by mutual agreement of the parties on or before

the Closing Date:

i. prepayments to Seller on Accounts for periods of service after the

Date of Closing shall be deducted from the aggregate Purchase

Price.

ii. The formula shall be applied to the number of Accounts existing as

of the Closing Date.

b. The Purchase Price for the Inventory shall be a fixed sum of $5,000.00.

The sums set forth in the foregoing subparagraphs (a) and (b) (subject to the

specified adjustments) shall be aggregated to yield a total Purchase Price for all

Purchased Assets.

3.1.2. Payment of Purchase Price. Buyer shall pay the Purchase Price to Seller by

means of check or wire transfer to Seller and delivered at Closing.

3.1.3. Allocation of Purchase Price. The Purchase Price shall be allocated by

category of Purchased Assets as agreed upon by the parties and set forth in Annex B,

which shall be completed by the parties on or before the Closing Date (the “Allocation”).

The parties agree that the Allocation shall be used by them and respected for all

purposes, including all United States Tax purposes, and that the parties shall each file a

Form 8594 with their respective federal income tax returns.

ARTICLE 4

LIABILITIES OF THE SELLER

4.1 Limited Liabilities to be Assumed by Buyer. The Buyer shall assume, as of 12:01

a.m. on October 1, 2016, and agrees to pay, perform, and discharge when and as due, only the

following liabilities and obligations of the Seller and no others (collectively, the "Assumed

Liabilities"):

4.1.1 All liabilities and obligations of the Seller under all monitoring and/or

equipment service agreements in place with Seller and a customer in connection with any

of the Accounts, including to continue to make available the required goods and services

specified in contracts pertaining to the Accounts for the Purchased Assets, but only as to

matters and events which arise and accrue for periods following the Closing Date (and

specifically not including any indemnities, liabilities, or other obligations of the Seller for

matters or events on or prior to the Date of Closing) related to the Accounts.

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4.2 Liabilities Not Assumed by Buyer. Except as specifically provided in Section 4.1

hereof, Buyer shall not assume, or in any way become liable for, any liabilities or obligations of

Seller of any kind or nature, whether accrued, absolute, contingent or otherwise, or whether due

or to become due, or otherwise, whether known or unknown, (the “Excluded Liabilities”) which

liabilities and obligations, if ever in existence, shall continue to be liabilities and obligations of

Seller who shall pay, perform and discharge the Excluded Liabilities when due. Specifically, the

Excluded Liabilities include:

4.1.1. Violation of Representations. Obligations or liabilities which arise or

exist in violation of any of the representations, warranties, covenants or agreements of

Seller contained in this Agreement or otherwise in connection with the transactions

contemplated hereby.

4.1.2. Taxes. Debts, obligations or liabilities of Seller for federal, state, or other

taxes of any kind whatsoever arising from operation of its Business.

4.1.3. Indebtedness. Any liabilities or obligations of the Seller in respect of the

borrowing of money, loans, credit agreement or other evidence of Indebtedness or direct

or indirect guaranty or assumption of indebtedness, liabilities or obligations of others.

4.1.4. Excluded Assets. Any liabilities or obligations arising out of or relating to

the Excluded Assets.

4.1.5. Accounts Payable. Any accounts payable of Seller arising from Seller’s

operation of the Business.

ARTICLE 5

CLOSING

5.1 Closing; Closing Date; Time; Place. Subject to the satisfaction of the conditions

set forth herein, the closing of the transactions contemplated by this Agreement (the “Closing”)

shall take place on September 30, 2016 (the “Closing Date”). On the Closing Date, (i) Seller

shall sell, transfer, assign, convey and deliver to Buyer all right, title and interest in and to the

Purchased Assets, free and clear of all liabilities, obligations and Liens, excepting only for the

Assumed Liabilities; and (ii) the parties shall make the deliveries described in Section 5.2. The

effective time of the transfer of the Purchase Assets and acceptance of the Assumed Liabilities

shall be 12:01 a.m., October 1, 2016.

5.2 Documentation. In order to effectuate the sale, conveyance, transfer and

assignment contemplated by this Agreement, the parties shall execute and deliver on the Closing

Date all such bills of sale, assignment agreements and other documents or instruments of

conveyance, transfer or assignment as shall be necessary or appropriate to vest or confirm in

Buyer, all right, title and interest in and to all of the Purchased Assets, free and clear of all Liens

(excepting only for Assumed Liabilities), all of which documents shall be in form and substance

satisfactory to the parties, as follows:

5.2.1 Deliveries by Seller. At the Closing, Seller shall deliver to Buyer:

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(i) a Bill of Sale, transferring and assigning the Purchased Assets to

Buyer and such other executed assignments, consents, documents

of transfer, and other instruments as Buyer reasonably may

request;

(ii) evidence satisfactory to Buyer of the release of Liens, if any,

against the Purchased Assets;

(iii) any and all schedules, assignments, certificates or such other

documents reasonably requested by the Buyer in order to

effectuate the transactions contemplated by this Agreement;

(iv) a certified copy of resolutions of Seller’s Governing Board

authorizing the transactions contemplated by this Agreement;

(v) such other documents or instruments as are reasonably necessary

or customary to effect the transactions contemplated herein.

(a) Deliveries by Buyer. At the Closing, Buyer shall deliver to Seller:

(i) the Purchase Price pursuant to Section 3.1.2;

(ii) a certified copy of resolutions of Buyer’s Board of Governors

authorizing the transactions contemplated by this Agreement;

(iii) such other documents or instruments as are reasonably necessary

or customary to effect the transactions contemplated herein.

5.3 Further Assurances. If at any time after the Closing Date, Buyer or Seller shall

consider or be advised that any further documents or any other acts are reasonably necessary to

carry out the purposes of this Agreement, Buyer and Seller agree that each of them shall execute

and deliver all such documents and do all acts reasonably necessary to carry out the purposes of

this Agreement.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

6.1 Organization and Qualification. Seller is a municipal Utilitycorporation, duly

organized and validly existing under the laws of the State of Minnesota, and has all requisite

power and authority to transfer with Purchased Assets to Buyer and perform the other

requirements of this Agreement. Seller has not conducted business under any name other than

its corporate name “WH Security, LLC.”No Consents. No consent of, or notice to, any

Governmental Entity, or any other Person, is required to be obtained or given by the Seller in

connection with the execution, delivery or performance of this Agreement or any other

agreement or document to be executed, delivered or performed hereunder by the Seller.

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6.3 Liabilities and Obligations Pertaining to Accounts. Seller does not have any

liabilities or obligations of any nature whatsoever pertaining to the Accounts, accrued or

unaccrued, due or to become due, whether arising out of Contract, tort, Law or otherwise.

6.4 [Reserved]

6.5 Title to and Condition of Assets. Seller is the sole owner of and has good and

marketable title to the Purchased Assets free and clear of all Liens.

6.6 Contracts.Schedule 2.1.1 contains a complete list of the Accounts, which are

customers in good standing for security, monitoring, service and other goods and

products pertaining to the Business and to be acquired by the Buyer.

(b) Copies of all written contracts relating to the Accounts have been made

available to Buyer. All such contracts are assignable to Buyer without any Consent,

constitute legal, valid and binding obligations of customer identified therein, neither

Seller nor any customer are in default under any contract, and all payments and

performance by the Seller and any customer are current and will be current as of the

Closing Date.

6.7 Litigation. Except routine customer complaints, no action, suit, claim, demand or

other proceeding is pending or threatened against Seller in any court, arbitration tribunal,

administrative agency, or otherwise, with respect to the Accounts, the Purchased Assets, and/or the

Business or their operations.

6.8 Authority. Seller has the necessary power, authority, and legal capacity to enter

into, execute and deliver this Agreement and to perform all of its obligations, undertakings and

agreements to be observed and performed by it hereunder. The execution, delivery and

performance of this Agreement has been duly authorized by all necessary action of Seller’s

governing body. This Agreement will constitute the valid and binding agreements of Seller,

enforceable in accordance with their respective terms subject, as to the enforcement of remedies,

to general equitable principles and to bankruptcy, insolvency and similar laws affecting

creditors’ rights generally.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

7.1 Organization and Good Standing. Buyer is a limited liability company duly

organized and existing under the laws of the State of Minnesota, and has all requisite power and

authority to acquire the Purchased Assets from Seller and perform the other requirements of this

Agreement.

7.2 Authority. Buyer has the necessary power, authority, and legal capacity to enter

into, execute and deliver this Agreement and to perform all of its obligations, undertakings and

agreements to be observed and performed by it hereunder. The execution, delivery and

performance of this Agreement has been duly authorized by all necessary action of Buyer’s

Board of Governors. This Agreement will constitute the valid and binding agreements of Buyer,

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enforceable in accordance with their respective terms subject, as to the enforcement of remedies,

to general equitable principles and to bankruptcy, insolvency and similar laws affecting

creditors’ rights generally.No Consents. No Consent of, or notice to, any Governmental Entity,

or any other Person, is required to be obtained or given by the Buyer in connection with the

execution, delivery or performance of this Agreement or any other agreement or document to be

executed, delivered or performed hereunder by the Buyer, except for the consent of Buyer’s sole

member, which has been acquired as of the Effective Date.

ARTICLE 8

PRE-CLOSING COVENANTS

8.1 Covenants of the Seller. Seller covenants and agrees with Buyer that from the

date hereof until the Closing or other termination of this Agreement, unless otherwise consented

to in writing by Buyer:

8.1.1. Investigation. Seller shall, upon reasonable notice from Buyer and at

reasonable times allow Buyer and its representatives full access during normal business

hours to all its property, offices, books, contracts, records and affairs, excluding private

data as fefined in Minn. Statute Chapter 13, for the purpose of completing its due

diligence on the Purchase Assets; provided that such access shall not unreasonably

interfere with the operation and conduct of the Business, and both parties shall adhere to

normal security procedures in connection with such access. Subsequent to the execution

of this Agreement, Seller shall furnish its customer list to Buyer at such time as it is

requested by Buyer, and satisfactory to Seller, so as to enable Buyer to enter said

information into its data base and prepare it for a seamless transition of delivery services

to the Accounts and the newly acquired customers as of the Closing Date.

8.1.2. Conduct of Business; No Material Adverse Change. Seller will:

(i) conduct its business only in the ordinary course; (ii) make no material change in the

Accounts; (iii) not waive any material rights under or terminate any Specified Account;

(iv) perform in all material respects all of its obligations under all Accounts; (v) and

keep all Accounts in good standing and with no default.

8.1.3. Exclusivity. Seller will neither, directly or indirectly, take any action to

solicit indications of interest or offers for the purchase and sale of the Purchased Assets.

8.1.4. Consents and Approvals. Seller agrees that as promptly as possible

following the execution of this Agreement Seller shall use its best efforts to obtain all

Consents to assignment for the Contracts which require consent to assignment.

8.1.5. Payment of Indebtedness. Prior to or contemporaneously with the Closing,

Seller shall arrange for the termination or release of all Liens, if any, on the Purchased

Assets securing or related to such Indebtedness.

8.1.6 Servicing of Accounts. Buyer shall service and maintain the Accounts and

any new accounts pending Close on terms and conditions that are ordinary and customary

for third party management and assistance with security account maintenance. Seller’s

management will coordinate with Buyer’s management on the logistics and specifics of

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the same.

ARTICLE 9

POST-CLOSING COVENANTS

9.1 Account Relations. Neither Seller nor any of its Affiliates will take any action

that is designed or intended to have the effect of discouraging any customer, supplier, or other

business associate of Seller from maintaining the same business relationships with Buyer after

the Closing as maintained with Seller prior to the Closing. The parties will jointly notify the

Accounts of the transfer to the Buyer, under a mutually acceptable notice letter signed on the

Closing Date. Any collections on Accounts for periods after the Closing Date if collected by the

Seller will be promptly paid to the Buyer.

9.2 Non-competition Agreement. Seller agrees that for a period of five (5) years

after the Closing Date, it will not, in its own behalf or in behalf of any other person, firm,

partnership, association, employer or other entity of any nature whatsoever, whether as an owner,

operator, manager, partner, member, independent contractor, investor, lender, member, associate,

agent, advisor, consultant, or any other position whatsoever, directly or indirectly, do any of the

following acts:

a. Engage in the marketing, sales, service, or other activity with

respect to residential and commercial security goods or services, or

b. Engage in any activity that is similar to, or in competition with the

Business.

The geographic area of this Non-competition provision in which Seller shall not engage

in the precluded activities shall be limited to: an area within the city limits of Elk River,

Minnesota and within a fifty (50) mile radius of Elk River, Minnesota. Seller agrees that this

geographic area represents a mutually agreeable restricted area and portion of the trade area of

the Seller, the Business, and Buyer, and that the geographic restriction is reasonable in scope,

and that the time period of the non-competition agreement is reasonable in duration.

The parties acknowledge that the restrictions of this Non-competition provision have

been carefully considered and are reasonable for the protection of the legitimate business

interests of Buyer and that the restrictions contained in these paragraphs will not unduly interfere

with the Seller’s business operations outside the Business.

Recognizing the irreparable nature of the injury that could be worked by violation of any

provision of this provision and recognizing that money damages would be inadequate

compensation for a violation of this provision, it is agreed that any actual or threatened violation

of this Agreement by Seller is the proper subject of immediate injunctive relief, together with

specific performance and any other equitable relief.

Buyer, or its assigns, or any of its officers, governors, or management service providers

shall be entitled to enforce this provision, and recover from the Seller all attorney fees and costs

incurred in any action that is brought for breach or threatened breach of this provision or

otherwise to enforce the terms of this Agreement. If any period of time, or limitation on

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activity, or any geographic limitation stated in this provision is longer or greater than the

maximum limitation permitted by law, then the period of time, activity limitation, or geographic

limitation therein shall be deemed to be the maximum permissible under the law.

ARTICLE 10

CONDITIONS TO CLOSING

10.1 Conditions to Buyer’s Obligations. The obligations of Buyer to consummate the

transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to

Closing of each of the following conditions unless waived by Buyer:

10.1.1 Representations and Warranties. All representations and warranties made

by Seller contained in this Agreement shall be true and correct on the date hereof and as

of the Closing Date as though such representations and warranties were made as of the

Closing Date.

10.1.2 Covenants. Seller shall have materially performed or complied with all of

the covenants and obligations to be performed or complied with by it under the terms of

this Agreement on or prior to Closing.

10.1.3 Due Diligence. Buyer shall have completed customary due diligence of

the Purchased Assets and the legal status of Seller.

10.1.4 Consents and Approvals. All Consents required to be obtained by Seller,

and all Consents required to be obtained by Buyer, shall have been obtained.

10.1.5 Instruments of Assignment, Transfer and Conveyance. Seller shall have

delivered to Buyer all instruments of assignment, transfer and conveyance of the

Purchased Assets, and such other Closing documents as shall have been reasonably

requested by Buyer, all in form and substance reasonably acceptable to Buyer.

10.1.6 Release of Liens. Any Liens on the Purchased Assets shall have been

released or terminated as of the Closing and Seller shall have filed or delivered to Buyer

as of the Closing evidence in form and substance satisfactory to Buyer of such release or

termination.

10.2 Conditions to the Seller’s Obligations. The obligations of Seller to consummate the

transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to the

Closing of each of the following conditions:

10.2.1 Representations and Warranties. The representations and warranties of

Buyer contained in this Agreement shall be true and correct on the date hereof and as of

the Closing Date as though such representations and warranties were made as of the

Closing Date.

10.2.2 Covenants. Buyer shall have materially performed or complied with all of

the covenants and obligations to be performed or complied with by it under the terms of

this Agreement on or prior to Closing.

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ARTICLE 11

TERMINATION

11.1 Termination of Agreement. This Agreement and the transactions contemplated

hereby may be terminated at any time prior to the Closing, as follows:

11.1.1 Mutual Consent. By mutual written consent of all of the parties hereto.

11.1.2 Breach. By Buyer, on the one hand, or by Seller, on the other hand, by

reason of the breach by the other in any material respect of any of its or their

representations, warranties, covenants or agreements contained in this Agreement.

11.1.3 Respective Conditions. By Buyer, on the one hand, or by Seller, on the

other hand, if the conditions precedent to their respective obligations contained in

Sections 10.1 or 10.2 hereof have not been met as of the Closing Date (the

“Termination Date”).

11.2 Procedure and Effect of Termination. In the event of the termination of this

Agreement pursuant to Section 11.1, the terminating party or parties shall give written notice of

termination to the other party or parties and this Agreement shall terminate without further

action by any party hereto. Upon termination of this Agreement in accordance with this

Article 11, there shall be no liability or obligation hereunder on the part of Seller, Buyer (or any

of their respective stockholders/members, directors/governing body members, officers,

managers, employees or representatives), except the obligations which survive any such

termination, and (ii) for any liability resulting from any such party’s breach of this Agreement.

ARTICLE 12

INDEMNIFICATION; SURVIVAL

12.1 Indemnification of Buyer Indemnified Parties. Subject to the terms of this

Agreement, Seller covenants and agrees with Buyer that, following the Closing, Seller shall

reimburse, indemnify, and hold Buyer and its managers, governing body members, officers and

Affiliates (“Buyer Indemnified Parties”) harmless from, against and in respect of any and all

Losses suffered or incurred by any of the Buyer Indemnified Parties resulting from, or which

exist due to or arise out of any of the following:

12.1.1 (i) Any inaccuracy or breach of or in, any of the representations and

warranties made by Seller in this Agreement; (ii) the assertion against any Buyer

Indemnified Party of any Excluded Liabilities or any other liabilities and

obligations of Seller that are not Assumed Liabilities; (iii) any claims, suits or

proceedings brought against any Buyer Indemnified Party by any third parties

arising out of or relating to the operation of the Business or the Purchased Assets

on or prior to the Closing Date, except as otherwise set forth herein; (iv) any

claims, liabilities and obligations in connection with the Excluded Assets;

12.1.2 Any nonfulfillment of any covenant or agreement of Seller under this

Agreement; or

12.1.3 Any claim made by a third party alleging facts which, if true, would entitle

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a Buyer Indemnified Party to indemnification pursuant to any of the above.

12.2 Indemnification of Seller Indemnified Parties. Buyer covenants and agrees with

Seller that, following the Closing, Buyer shall reimburse, indemnify and hold Seller and the

Seller and its officers, governors, member, and Affiliates (the “Seller Indemnified Parties”)

harmless from, against and in respect of any and all Losses resulting from, or which exist due to

or arise out of any of the following:

12.2.1 (i) any inaccuracy or breach of or in, any of the representations and

warranties made by Buyer in this Agreement; (ii) any Assumed Liabilities; or (iii) any

liability arising out of the ownership or operation of the Purchased Assets after the

Closing other than the Excluded Liabilities;

12.2.2 Any nonfulfillment of any covenant or agreement of Buyer under this

Agreement or Ancillary Agreement; or

12.2.3 Any claim made by a third party alleging facts which, if true, would entitle

a Seller Indemnified Party to indemnification pursuant to any of the above.

12.3 Survival. The indemnity obligations of the parties, and any representations and

warranties made by Seller or Buyer under this Agreement, shall survive the Closing.

ARTICLE 13

GENERAL PROVISIONS

13.1 Amendment; Waiver of Terms. This Agreement cannot under any circumstances

be modified orally, and no agreement shall be effective to amend, change, modify or discharge

this Agreement in whole or in part unless such agreement is in writing and is signed by Seller,

Seller and Buyer. No waiver of any provision or right shall be valid unless it is in writing and

signed by the party giving it.

13.2 Payment of Expenses. Each of the parties shall pay its or their own expenses,

including, without limitation, the expenses of its or their own counsel, investment bankers and

accountants, incurred in connection with the preparation, execution and delivery of this

Agreement.

13.3 Entire Agreement; Binding Nature; Assignment. This Agreement and the other

agreements and documents referred to herein set forth the entire understanding of the parties

with respect to the subject matter hereto. None of the rights or obligations of any of the parties

hereto may be assigned without the prior written consent of the other.

13.4 Notices. All notices, requests, demands and other communications (“Notices”)

required or permitted to be given hereunder shall be in writing and shall be given by

hand-delivery, by certified or registered mail return receipt requested, to the parties at the

addresses set forth on the first page of this Agreement. Such Notices shall be deemed given on

the date personally delivered, if delivered by hand or by courier, with receipt confirmed in

writing; on the date five (5) days after the date sent if sent certified or registered mail. Any party

hereto may designate a different address to which notices required or permitted to be given

pursuant to this Agreement shall thereafter be transmitted by giving notice to that effect in

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accordance with this Section.

13.5 Counterparts. This Agreement may be executed in any number of counterparts

which, when taken together, shall constitute a single, binding instrument. The exchange of

copies of this Agreement and of signature pages by facsimile or electronic transmission shall

constitute effective execution and delivery of this Agreement as to the parties and such copies

may be used in lieu of the original Agreement for all purposes. Signatures of the parties

transmitted by facsimile or electronic mail shall be deemed to be their original signatures for all

purposes.

13.6 Governing Law; Jurisdiction; Waiver of Jury. This Agreement shall be governed

by, construed and enforced in accordance with the laws of the State of Minnesota, without

reference to the conflicts of laws rules of that or any other jurisdiction, except that federal laws

shall also apply to the extent relevant. Subject to the requirements of alternative dispute

resolutions set forth below in Section 13.7, venue and exclusive jurisdiction for enforcement of

an arbitration decision shall be in the Minnesota state courts, located in Wright County,

Minnesota. Seller and Buyer each hereby waives any right to jury trial in the event any party

files an action relating to this Agreement or to the transactions or obligations contemplated

hereunder.

13.7 Government Data Practices Act. The Buyer must comply with the Minnesota

Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to all data provided

by the Seller in accordance with this Agreement, and as it applies to all data, created, collected,

received, stored, used, maintained, or disseminated by the Seller in accordance with this

Agreement. Arbitration. Disputes pursuant to this Agreement shall be subject to arbitration. All

disputes, claims, or controversies (“disputes”) arising from or related in any way to this

Agreement or the Purchased Assets or their operation that are not resolved by agreement of the

parties shall, at the request of any party, be resolved by binding arbitration by a single arbitrator.

Arbitration shall take place in Elk River, Minnesota. The selection of the arbitrator and all

arbitration rules and procedures shall be determined pursuant to the Uniform Arbitration Act in

Minnesota Statutes §§ 572B.01-572B.31, or any successor provisions. The determination of any

dispute in arbitration shall be governed by the laws of the State of Minnesota. This agreement to

arbitrate disputes shall survive any termination of this Agreement. The arbitration decision shall

be enforceable in the state courts of Minnesota, or in any other court having competent

jurisdiction over a party.

13.8 Prior Agreements. The existing monitoring agreements between the Buyer and Seller

shall terminate on the closing date without cost to either party.

[Signature Page Follows]

13

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto

on the day and year first above written. Seller: ELK RIVER MUNICIPAL UTILITIES

By: ___________________________________

______________________

Its: _____________________

Dated: August ____, 2016

Buyer: WH SECURITY, LLC By: _________________________________

Tim Sullivan

Its: Chief Manager/President

Dated: August ____, 2016

14

ANNEX A

DEFINED TERMS

As used in the Agreement, the following terms have the respective meanings set forth below:

“Consent” means all consents, approvals, notices, waivers or other actions required in connection

with the execution, delivery and performance of this Agreement.

“Contract” means any agreement, understanding, contract, purchase order, obligation, promise,

arrangement, commitment or undertaking (whether written or oral and whether express or

implied) including, in each case, all amendments, modifications and supplements thereto.

“Governmental Entity” means any federal, state or local governmental authority, any court,

administrative or regulatory agency or commission or other governmental authority or agency,

domestic or foreign.

“Indebtedness” means, as of any particular time, the unpaid principal amount of and accrued

interest on all indebtedness for borrowed money including all outstanding amounts under (i)

notes, bonds, debentures, and similar instruments; (ii) obligations under conditional sale or other

title retention agreements; (iii) deferred purchase price for property or services; (iv) guarantees

of indebtedness of any other Person; (v) repayment of any of the foregoing.

“Law” means any law, rule, regulations, judgment, injunction, order, decree or other restriction

of any court or Governmental Entity.

“Lien” means any lien, security interest, mortgage, deed of trust, pledge, hypothecation, claim,

charge or encumbrance of any kind.

“Losses” means any and all losses, liabilities, damages, obligations, costs, payments,

deficiencies, fines, penalties, assessments, expenses (including expenses incurred in

investigating, defending and asserting claims and reasonable attorneys’ fees), judgments,

settlements and other charges or claims.

“Person” means an individual, a partnership, a corporation, a limited liability company, an

association, a joint stock company, a trust, a joint venture, an unincorporated organization or

other entity, or a Governmental Entity or any department, agency or political subdivision thereof.

SCHEDULE 2.1.1

Accounts

[See Attached]

SCHEDULE 2.1.2

Deposits and Prepaid Expenses*

*Amount to be credited against the Purchase Price payable by Buyer at Closing.

[See Attached]

SCHEDULE 2.1.4

Inventory

[See Attached]

ANNEX B

PURCHASE PRICE ALLOCATION

Accounts

$

Inventory

$ 5,000.00

TOTAL $

1

BILL OF SALE, ASSIGNMENT & ASSUMPTION AGREEMENT

KNOW ALL PERSONS BY THESE PRESENTS, that Elk River Municipal Utilities, a

Minnesota municipal corporation (the “Seller”), pursuant to that certain Asset Purchase

Agreement (the “APA”), dated effective August ____, 2016, by and among the hereinafter

named “Buyer,” and for good and valuable consideration, the receipt of which is hereby

acknowledged, hereby sells, assigns, transfers, sets over, conveys and delivers the following

assets and property unto WH Security, LLC, a Minnesota limited liability company (the

“Buyer”), effective 12:01 a.m. on October 1, 2016 (the “Effective Date”), free and clear of all

Liens, claims and restrictions of any kind or nature:

All right, title and interest in, to and under the Acquired Assets, comprised of the

following:

(a) Accounts. All monitoring and security and medical customer accounts, as

listed on Schedule 2.1.1 totaling eight hundred thirty-eight [838], along with all

contracts, monitoring agreements, and equipment service agreements in place

with such customers, all security and monitoring equipment owned by Seller and

intended exclusively and solely for use in connection with any of the accounts,

and all related data, licensing, customer information, monitoring numbers, and

other assets pertaining to such accounts (the “Accounts”);

(b) Deposits and Prepaid Expenses. All payments and rights to collections

accruing on the Accounts as of the Closing Date and thereafter, and any customer

credits, pre-paid expenses, advance payments and deposits on the Accounts, as

listed on Schedule 2.1.2, if any (the “Deposits and Prepaid Expenses”);

(c) Books and Records. All books of account, records, files, customer

information and correspondence, customer lists, technical information and similar

materials and records and other files and records relating to the Business, the

Accounts or the Deposits and Prepaid Expenses excluding private data under

Minn. Stat. Chapter 13 (the “Books and Records”);

(d) All other assets to be transferred by Seller to Buyer under the APA.

To the extent that any asset otherwise described above is not immediately assignable to

the Buyer, the Seller shall use its reasonable efforts to provide the Buyer with all of the benefits

of such asset. To the extent that any asset described above is not assignable to the Buyer without

the consent of a third party, which consent has not been obtained as of the date hereof, then,

Seller shall immediately disclose to Buyer in writing the name of such party from whom consent

is required, and (i) such asset shall not be assigned to the Buyer until the consent has been

obtained; (ii) the Seller shall use its reasonable efforts to obtain the consent; and (iii) until the

consent is obtained the Seller shall use its reasonable efforts to provide the Buyer with all of the

benefits of such asset.

PROVIDED, HOWEVER, that the Acquired Assets shall not include and the Seller shall

retain all of its right, title and interest in and to the Excluded Assets. Seller transfers the

foregoing Assets based upon the warranties and representations of Seller set forth in the APA,

2

and any limitations thereof, and the terms and conditions of the APA are hereby incorporated by

reference and made a part hereof.

TO HAVE AND TO HOLD, the entire right, title and interest of the Seller in and to the

assets hereby sold, transferred, conveyed and assigned to the Buyer, its successors and assigns, to

and for its and their own use and benefit forever.

Effective as of effective 12:01 a.m. on October 1, 2016, (i) Seller hereby sells, assigns,

conveys and transfers to Buyer the rights, title and interest of Seller under each of the monitoring

and/or equipment service agreements in place with Seller and a customer in connection with any

of the Accounts (collectively, the "Assigned Contracts"), and (ii) Buyer hereby assumes and

agrees to be responsible for the payment, performance and discharge of obligations of Seller

related to or arising under the Assigned Contracts; in all cases, upon the terms and subject to the

conditions contained herein and in the APA.

Buyer hereby assumes, as of effective 12:01 a.m. on October 1, 2016, and agrees to pay,

perform, and discharge when and as due the following liabilities and obligations of Seller (the

"Assumed Liabilities"):

All liabilities and obligations of the Seller under the Assigned Contracts,

including to continue to make available the required goods and services for the

Accounts, but only as to matters and events which arise and accrue for periods on

and after October 1, 2016 (and specifically not including any indemnities,

liabilities, or other obligations of the Seller for matters or events on or prior to the

Date of Closing) related to the Accounts. The Buyer does not assume any other

liability or obligation to pay, satisfy, discharge, perform or fulfill any debts,

obligations, contracts, leases or liabilities of the Seller with respect to the assets

transferred hereunder, except as specifically set forth herein or in the APA, which

shall govern in the event of a conflict with this document.

The Buyer does not assume any other liability or obligation to pay, satisfy, discharge, perform or

fulfill any debts, obligations, contracts, leases or liabilities of the Seller with respect to the assets

transferred hereunder, except as specifically set forth in the APA, which shall govern in the event

of a conflict with this document.

This Bill of Sale, Assignment and Assumption Agreement may be executed in two

counterparts, each of which shall be deemed an original, but both of which shall constitute one

and the same instrument. Capitalized terms not defined herein shall have the meanings given

such terms in the APA. This Bill of Sale, Assignment and Assumption Agreement shall be

binding upon and inure to the benefit of the parties hereto and to their respective successors and

assigns.

GOVERNING LAW; JURISDICTION; WAIVER OF JURY. THIS BILL OF SALE SHALL

BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE

LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO THE CONFLICTS

OF LAWS RULES OF THAT OR ANY OTHER JURISDICTION, EXCEPT THAT FEDERAL

LAWS SHALL ALSO APPLY TO THE EXTENT RELEVANT. VENUE AND EXCLUSIVE

JURISDICTION FOR ANY DISPUTES SHALL BE IN THE MINNESOTA STATE COURTS,

3

LOCATED IN WRIGHT COUNTY, MINNESOTA. SELLER AND BUYER EACH HEREBY

WAIVE ANY RIGHT TO JURY TRIAL IN THE EVENT ANY PARTY FILES AN ACTION

RELATING TO THIS BILL OF SALE OR TO THE TRANSACTIONS OR OBLIGATIONS

CONTEMPLATED HEREUNDER.

IN WITNESS WHEREOF, the Buyer and the Seller have each caused this Bill of Sale,

Assignment and Assumption Agreement to be executed by their respective duly authorized

representatives effective as of the Effective Date.

ELK RIVER MUNICIPAL UTILITIES

By ______________________________________

_______________

Its ________________

WH SECURITY, LLC

By ______________________________________

Tim Sullivan

Its Chief Manager/President

SCHEDULE 2.1.1

Accounts

[See Attached]

SCHEDULE 2.1.2

Deposits and Prepaid Expenses

[See Attached]