another interesting tidbit from the last filed 10k
"
Sale Leaseback with Related Party
On October 1, 2002, the Company's wholly-owned subsidiary, Wakefield Thermal
Solutions, Inc. ("Wakefield") entered into a sale and leaseback transaction for
its 171,235 square foot Pelham, New Hampshire manufacturing facility (the
"Property"). Wakefield sold the Property to 33 Bridge Investors, LLC ("33
Bridge"), a newly-formed entity in which Marshall D. Butler, a director of the
Company owns 50% of the equity interest, for a purchase price of $4,750,000. In
connection with the sale and leaseback transaction, the Company issued warrants
to purchase an aggregate of 250,000 shares of Common Stock, par value $.03 per
share, of the Company to the members of 33 Bridge, including warrants to
purchase 125,000 shares of Common Stock to Marshall D. Butler, at an exercise
price of $1.42 per share. The warrants were valued at approximately $274,000
using the Black Scholes method. The book value of the land, buildings and
improvements was approximately $6.3 million. Selling costs were approximately
$300,000, excluding the value of the warrants.
Effective on October 1, 2002, 33 Bridge and Wakefield entered into a lease
whereby Wakefield leased the Property from 33 Bridge for 15 years at an initial
rent of $630,000 per year with annual increases between 2% and 2.5% per annum.
Wakefield is responsible for operating expenses including taxes, utilities,
insurance and maintenance. As a result of the transaction, the Company expects
annual expenses initially to increase by $325,000 representing the difference
between rental expense
10
and interest and depreciation expense. The obligations of Wakefield under the
lease are guaranteed by the Company.
The purchase price and other terms of the sale and leaseback transaction were
the result of negotiations between representatives of the Company and
representatives of 33 Bridge. The terms of the transaction were negotiated and
approved by the members of the Audit Committee of the Company constituted as a
Special Committee of Independent Directors.
The Company applied the net proceeds of the sale and leaseback transaction to
its $5,000,000 principal payment made on October 1, 2002 pursuant to its Credit
Agreement, dated December 26, 2000, as amended (the "Credit Agreement").
"
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All posts are strictly my opinion and are not buy or sell recommendations.
