SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: OCTOBER 7, 1999
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(DATE OF EARLIEST EVENT REPORTED: SEPTEMBER 23, 1999)
RESEARCH, INCORPORATED
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(Exact name of registrant as specified in its charter)
MINNESOTA 0-2387 41-0908058
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of Incorporation)
6425 FLYING CLOUD DRIVE
EDEN PRAIRIE, MINNESOTA 55344
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 829-8301
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Items 1, 3, 4, 5, 6 and 8 are not included.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On September 23, 1999 Research, Incorporated announced that it had
finalized a Purchase Agreement (the "Agreement") with Continental Property
Group, Inc., a Minneapolis-based real estate development company not affiliated
to the Company. Under the terms of the Agreement, the Company sold its Eden
Prairie building and approximately 11 acres of surrounding land to Continental
and subsequently will lease the property back. The sale price is $3,650,000 in
cash and was determined through negotiations between the parties. The proceeds
from the sale will be used by the Company to reduce debt and accelerate growth.
The transaction will allow the Company to take advantage of deferred tax
benefits and is expected to result in a pre-tax gain of approximately $2.2
million, which will be recognized over the seven-year leaseback period. In
conjunction with the sale, the Company entered into a Lease Agreement (the
"Lease") with Continental under which the Company will pay an increasing base
rent starting at $430,000 per year in year one and ending at $550,000 per year
in year seven. Under the terms of the Lease, either party may terminate the
lease after the first 14 months, provided that the terminating party gives
notice of 18 months. In addition, the Lease may be terminated at any time in the
event that Continental constructs or provides a new facility for the Company and
the parties subsequently enter into a new lease for such facility.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
10.1 Purchase Agreement between the Company and Continental
Property Group, Inc. dated June 25, 1999, incorporated by
reference to Exhibit 10.4 of the Company's quarterly report
filed on Form 10-Q on August 16, 1999.
10.2 Lease Agreement between the Company and Continental Property
Group, Inc. dated September 23, 1999.
99.1 Press Release dated September 24, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RESEARCH INCORPORATED
By /s/ Claude C. Johnson
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Claude C. Johnson
President
October 7, 1999
Exhibit 10.2
STANDARD COMMERCIAL LEASE
ARTICLE 1. BASIC LEASE TERMS
1.1 PARTIES. This lease agreement ("Lease") is entered into this
23rd DAY OF SEPTEMBER, 1999 by and between CONTINENTAL 6425, LLP a Minnesota
limited liability partnership, or its assigns ("Landlord") and RESEARCH,
INCORPORATED, a Minnesota corporation ("Tenant").
1.2 PREMISES. In consideration of the rents, terms, provisions and
covenants of this Lease, Landlord hereby leases, lets and demises to Tenant the
following described premises ("Premises") as illustrated on Exhibit A attached
hereto: approximately 90,000 square feet. of warehouse manufacturing space and
office space located at 6425 Flying Cloud Drive ("Building") which consists of
approximately 90,000 square feet in Eden Prairie, Minnesota, as legally
described on Exhibit B attached hereto. The parties agree that the Premises do
not include (and Tenant is and shall remain the owner of) all of Tenant's trade
fixtures and equipment, the moveable wall partitions located in the Building and
the moveable work stations located in the building.
1.3 TERM. Subject to and upon the conditions set forth herein, the
term of this Lease shall commence on September 23, 1999 the ("Commencement
Date") and shall terminate on the last day of the 60th full month thereafter
unless sooner terminated as hereinafter provided ("Initial Term").
Commencing after the fourteenth (14th) month of this Lease, Tenant
or Landlord shall have the right to terminate this Lease by providing eighteen
(18) months prior written notice to the other party. Additionally, Tenant may
terminate this Lease at any time during the Term if Landlord and Tenant (a)
enter into an agreement whereby Landlord constructs a new facility for Tenant or
(b) enter into a new lease for other premises.
OPTION: Provided Tenant is not in default under any term of this
Lease, Tenant shall have the option to renew this Lease for two (2) consecutive
one-year terms ("Renewal Terms"). The Renewal Terms shall be effective
automatically unless Tenant provides at least six (6) months written notice to
Landlord of Tenant's election to terminate this Lease at the end of the Initial
Term or at the end of any exercised Renewal Term.
1.4 BASE RENT. Base Rent is:
YEAR BASE RENT
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1 $430,000 ANNUAL/$35,833.33 MONTHLY
2 $475,000 ANNUAL/$39,583.33 MONTHLY
3 $489.250 ANNUAL/$40,770.83 MONTHLY
4 $503,927 ANNUAL/$41,993.96 MONTHLY
5 $519,045 ANNUAL/$43,253.78 MONTHLY
6 $534,616 ANNUAL/$44,551.36 MONTHLY
7 $550,654 ANNUAL/$45,887.87 MONTHLY
1.5 ADDRESSES.
LANDLORD'S ADDRESS: TENANT'S BUILDING ADDRESS
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Continental Property Group Inc. Research, Inc.
253 East Lake Street 6425 Flying Cloud Drive
Wayzata, Minnesota 55391 Eden Prairie, Minnesota 55344
Attn: Bradley A. Hoyt Attn: Mr. Claude Johnson
1.6 PERMITTED USE. OFFICE/WAREHOUSE/MANUFACTURING
1.7 SECURITY DEPOSIT. NONE
1.8 PRO-RATA SHARE. 100%
ARTICLE 2. RENT
2.1 BASE RENT. Tenant agrees to pay monthly as base rent during
the term of this Lease the sum of money set forth in Section 1.4 of this Lease,
which amount shall be payable to Landlord at the address shown above. One
monthly installment of rent shall be due and payable on the date of execution of
this Lease by Tenant for the first month's rent and a like monthly installment
shall be due and payable on or before the first day of each calendar month
succeeding the Commencement Date during the term of this lease; provided, if the
Commencement Date should be a date other than the first day of a calendar month,
the monthly rental set forth above shall be prorated to the end of that calendar
month during the term of this Lease. Tenant shall pay, as additional rent, all
other sums due under this Lease.
2.2 OPERATING EXPENSES. Tenant shall also pay as additional rent
Tenant's pro rata share of the operating expenses of Landlord for the Building
and/or project of which the Premises are a part. Landlord shall invoice Tenant
monthly for Tenant's pro rata share of the estimated operating expenses for each
calendar year, which amount shall be adjusted from time-to-time by Landlord
based upon anticipated operating expenses. Within three (3) months following the
close of each calendar year, Landlord shall provide Tenant an accounting showing
in reasonable detail all computations of additional rent due under this Section.
In the event the accounting shows that the total of the monthly payments made by
Tenant exceeds the amount of additional rent due by Tenant under this Section,
the accounting shall be accompanied by evidence of a credit to Tenant's account
or accompanied by a check from Landlord for such excess for the last calendar
year of this Lease. In the event the accounting shows that the total of the
monthly payments made by Tenant is less than the amount of additional rent due
by Tenant under this Section, the accounting shall be accompanied by an invoice
for the additional rent. Notwithstanding any other provision in this Lease,
during the year in which this Lease terminates, Landlord, prior to the
termination date, shall have the option to invoice Tenant for Tenant's pro rata
share of the operating expenses based upon the previous year's operating
expenses. If this Lease shall terminate on a day other than the last day of a
calendar year, the amount of any additional rent payable by Tenant applicable to
the year in which the termination shall occur shall be prorated on the ratio
that the number of days from the commencement of the calendar year to and
including such termination date bears to 365. Tenant agrees to pay any
additional rent due under this Section within ten (10) days following receipt of
the invoice or accounting showing additional rent due. Tenant's pro rata share
set forth in Section 1.8 shall be equal to a percentage based upon a fraction
the numerator of which is the total area of the Premises as set forth in Article
I and the denominator of which shall be the net rentable area of the Building.
2.3 DEFINITION OF OPERATING EXPENSES. The term "operating
expenses" shall mean (a) amounts expended by Landlord for Landlord's Repairs
pursuant to Section 5.1 of this Lease and; (b) all real property taxes and
installments of special assessments, due and payable for the Premises
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during the term of this Lease and legal fees incurred in connection with actions
to reduce the same; an administrative fee not to exceed 2% of gross rent, and
all insurance premiums Landlord is required to pay, including fire and extended
coverage, with respect to the Building.
2.4 LATE PAYMENT CHARGE. Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment or any other payment due from
Tenant to Landlord is not received by Landlord on or before the tenth (10th) day
of the month for which the rent is due, a late payment charge of five percent
(5%) of such past due amount shall become due and payable in addition to such
amounts owed under this Lease.
2.5 INCREASE IN INSURANCE PREMIUMS. It an increase in any
insurance premiums paid by Landlord for the Building is caused by Tenant's use
of the Premises or if Tenant vacates the Premises and causes an increase in such
premiums, then Tenant shall pay as additional rent the amount of such increase
to Landlord.
2.6 SECURITY DEPOSIT. INTENTIONALLY OMITTED.
2.7 HOLDING OVER. In the event that Tenant does not vacate the
Premises upon the expiration or termination of this Lease, Tenant shall be a
tenant at will for the holdover period and all of the terms and provisions of
this Lease shall be applicable during that period, except that Tenant shall pay
Landlord as base rental for the period of such holdover an amount equal to 1.5
times the base rent which would have been payable by Tenant had the holdover
period been a part of the original term of this Lease together with all
additional rent as provided in this Lease. The rental payable during the
holdover period shall be payable to Landlord on demand. No holding over by
Tenant whether with or without the consent of Landlord shall operate to extend
the term of this Lease.
ARTICLE 3. OCCUPANCY AND USE
3.1 USE. Tenant warrants and represents to Landlord that the
Premises shall be used and occupied only for the purpose as set forth in Section
1.6. Tenant shall occupy the Premises, conduct its business and control its
agents, employees, invitees and visitors in such a manner as is lawful, and will
not create a nuisance. Tenant shall neither permit any waste on the Premises nor
allow the Premises to be used in any way which would, be extra hazardous on
account of fire or which would in any way increase or render void the fire
insurance on the Building.
3.2 SIGNS. Except for Tenant's signage in place as of the date of
this Lease, no other sign of any type or description shall be erected, placed or
painted in or about the Premises or project except those signs submitted to
Landlord in writing and approved by Landlord in writing, which approval shall
not be unreasonably withheld, delayed or conditioned.
3.3 COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Tenant at
Tenant's sole cost and expense, shall comply with all laws, ordinances, orders,
rules and regulations of state, federal, municipal or other agencies or bodies
having jurisdiction over the use, condition or occupancy of the Premises, except
where such use requires improvements to be made to the Premises, in which event
such improvements shall be made by Landlord as a Landlord Repair pursuant to
Section 5.1 of this Lease. Tenant will comply with the rules and regulations of
the Building adopted by Landlord in any reasonable manner as may be deemed
advisable for the safety, care, cleanliness, preservation of good order and
operation or use of the Building or the Premises. All changes and amendments to
the rules land regulations of the Building will be sent by Landlord to Tenant in
writing and shall thereafter be carried out and observed by Tenant.
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3.4 WARRANTY OF POSSESSION. Landlord warrants that it has the
right and authority to execute this Lease, and Tenant, upon payment of the
required rents and subject to the terms, conditions, covenants and agreements
contained in this Lease, shall have possession of the Premises during the full
term of this Lease as well as any extension or renewal thereof, except as
otherwise provided in this Lease. Landlord shall not be responsible for the acts
or omissions of any other lessee or third party that may interfere with Tenant's
use and enjoyment of the Premises.
3.5 RIGHT OF ACCESS. Landlord or its authorized agents shall at
any and all reasonable times have the right to enter the Premises to inspect the
same, to show the Premises to prospective purchasers or lessees, and to alter,
improve or repair the Premises or any other portion of the Building, which entry
shall not unreasonable interfere with Tenant's business operations on the
Premises. Tenant hereby waives any claim for damages for injury or inconvenience
to or interference with Tenant's business, any loss of occupancy or use of the
Premises, and any other loss occasioned thereby, except where the same is
occasioned by the negligent or intentional act or omission of Landlord or
Landlord's employees, agents, contractors or invitees. Landlord shall at all
times have and retain a key with which to unlock all of the doors in upon and
about the Premises. Landlord shall have the right to use any and all means which
Landlord may deem proper to open any door in an emergency without liability
therefor. Tenant shall permit Landlord to erect use, maintain and repair pipes,
cables, conduits, plumbing, vents and wires in, to and through the Premises as
often and to the extent that Landlord may now or hereafter deem to be necessary
or appropriate for the proper use, operation and maintenance of the Building.
ARTICLE 4. UTILITIES AND SERVICE
4.1 BUILDING SERVICES. Tenant shall pay when due, all charges for
utilities furnished to or for the use or benefit of Tenant or the or the
Premises. Tenant shall have no claim for rebate of rent on account of any
interruption in service. Notwithstanding the foregoing, in the event that Tenant
is unable to operate its business in the Premises due to interruption in service
that is caused by the negligence or intentional act, or omission of the Landlord
for a period of five (5) consecutive days or more, Tenant may abate the payment
of rent until such time as Tenant is able to resume its business operations in
the Premises.
4.2 THEFT OR BURGLARY. Landlord shall not be liable to Tenant for
losses to Tenant's property or personal injury caused by criminal acts or entry
by unauthorized persons into the Premises or the Building, except where the same
are occasioned by the negligent or intentional act or omission of Landlord or
Landlord's employees, agents, contractors or invitees.
ARTICLE 5. REPAIRS AND MAINTENANCE
5.1 LANDLORD REPAIRS. Landlord shall not be required to make any
improvements, replacements or repairs of any kind or character to the Premises
or the Building during the term of this Lease except as are set forth in this
Section. Landlord shall maintain only the roof, foundation, parking and common
areas, the structural soundness of the exterior walls, doors, corridors, and
other structures serving the Premises, provided, that Landlord's cost of
maintaining, replacing and repairing the items set forth in this Section are
operating expenses subject to the additional rent provisions in Section 2.2 and
2.3. Landlord shall not be liable to Tenant except as expressly provided in this
Lease, for any damage or inconvenience, and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any repairs, alterations or
additions made by Landlord under this Lease. Notwithstanding the foregoing, in
the event that Tenant is unable to operate its business in the Premises due to
interruption in service that is caused by the negligence or intentional act, or
omission of the Landlord for a period of five (5) consecutive days or more,
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Tenant may abate the payment of rent until such time as Tenant is able to resume
its business operations in the Premises.
The parties further agree that if the cost of any single item or
occasion of maintenance, repair or replacement which is otherwise a Tenant
Repair, pursuant to Section 5.2 of this Lease, exceeds $7,500, such item or
occasion shall not be a Tenant Repair, but shall become a Landlord Repair.
Tenant agrees that the expense of any of Tenant's personnel in connection with
any item or occasion of maintenance, repair or replacement shall not be included
in the $7,500 calculation of a Landlord Repair. Within five (5) days of the date
Tenant identifies a Tenant Repair which is a Landlord Repair pursuant to this
Section 5.1, Tenant shall provide written notice of such Landlord Repair to
Landlord. Within five (5) days of the date of such notice, Landlord and Tenant
shall agree upon the appropriate measures to be taken or performed to complete
the maintenance, repair or replacement identified as such Landlord Repair, which
measure will be promptly commenced and diligently pursued to completion by
Landlord. The time periods described in this Section 5.1 shall be shortened in
an emergency or as may be otherwise necessary under the circumstances of the
specific Landlord Repair. The parties further agree that (a) all Landlord
Repairs are capital expenses which shall be amortized in accordance with
generally accepted accounting principles, (b) the amount payable by Tenant for
each month during the Term shall not exceed the monthly amortized amount of such
expense, and (c) Tenant shall not be obligated to pay monthly estimates of the
such capital expenses until Landlord performs such Landlord Repair(s).
5.2 TENANT REPAIRS. Tenant shall, at all times throughout the term
of this Lease, including renewals and extensions, and at its sole expense, keep
and maintain the Premises in a clean, safe, sanitary and first class condition
and in compliance with all applicable laws, codes, ordinances, rules and
regulations. Tenant's obligations hereunder shall include, but not be limited
to, the maintenance, repair, and replacement, if necessary, of all heating,
ventilation, air conditioning, lighting and plumbing fixtures and equipment,
fixtures, motors and machinery, all interior walls, partitions, doors and
windows, including the regular painting thereof, all exterior entrances,
windows, doors and docks the replacement of all broken glass, trash and snow
removal, landscaping, and pest control, as required under the circumstances.
When used in this provision, the term "repairs" shall include replacements or
renewals when necessary, and all such repairs made by the Tenant shall be equal
in quality and class to the original work. The Tenant shall keep and maintain
all portions of the Premises and the sidewalk and parking areas adjoining the
same in a clean and orderly condition, free of accumulation of dirt, rubbish,
snow and ice. If Tenant fails, refuses or neglects to maintain or repair the
Premises as required in this Lease after at least ten (10) days written notice
shall have been given Tenant, except in the event of an emergency in which no
notice shall be required, in accordance with this Lease, Landlord may make such
repairs without liability to Tenant for any loss or damage that may accrue to
Tenant's merchandise, fixtures or other property or to Tenant's business by
reason thereof, and upon completion thereof Tenant shall pay to Landlord all
costs plus fifteen percent (15%) for overhead incurred by Landlord in making
such repairs upon presentation to Tenant of bill therefor.
5.3 TENANT DAMAGES. Tenant shall not allow any damage to be
committed on any portion of the Premises or Building or common areas, and at the
termination of this Lease, by lapse of time or otherwise, Tenant shall deliver
the Premises to Landlord in as good condition as existed at the Commencement
Date of this Lease, ordinary wear and tear excepted, except (a) insured casualty
damage to the Premises and (b) Tenant's right to removal of its trade fixtures,
equipment, moveable wall partitions and moveable work stations from the
Premises, provided, however, that Tenant shall repair damage to the Premises
caused by such removal. The cost and expense of any repairs necessary to restore
the condition of the Premises shall be borne by Tenant.
ARTICLE 6. ALTERATIONS AND IMPROVEMENTS
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6.1 LANDLORD IMPROVEMENTS. INTENTIONALLY OMITTED.
6.2 TENANT IMPROVEMENTS. Tenant shall have the right to make such
alterations, changes and improvements (hereinafter in this Article called
"Alterations") to the interior and exterior of the Premises as Tenant may deem
appropriate, provided that Tenant shall make no structural changes, the cost of
which exceeds $10,000, in the Premises without the consent of Landlord, which
consent shall not be unreasonably withheld or delayed. Tenant shall have the
right to install in the Premises all trade fixtures and equipment which Tenant,
in its sole discretion, may deem necessary or desirable; and in connection with
its Alterations and with the purchase and installation of such trade fixtures
and equipment, Tenant shall select all personnel, labor, materials, equipment,
services, utilities and other elements, enter into contracts therefor and
determine and do any and all matters and things which Tenant, in its sole
discretion, shall deem necessary or advisable.
ARTICLE 7. CASUALTY AND INSURANCE
7.1 SUBSTANTIAL DESTRUCTION. If all or a substantial portion of
the Premises or the Building should be totally destroyed by fire or other
casualty, or if the Premises or the Building should be damaged so that
rebuilding cannot reasonably be completed within one hundred eighty (180) days
after the date of written notification by Tenant to Landlord of the destruction,
this Lease shall terminate at the option of Landlord by written notice to Tenant
within sixty (60) days following the occurrence, effective as of the date of the
written notification. The rent payable under this Lease during the period for
which the Premises are untenantable shall be abated or adjusted to such an
extent as may be fair and reasonable under the circumstances.
7.2 PARTIAL DESTRUCTION. If the Premises should be partially
damaged by fire or other casualty, and rebuilding or repairs can reasonably be
completed within one hundred eighty (180) days from the date of written
notification by Tenant to Landlord of the destruction, and insurance proceeds
are adequate and available to Landlord for restoration, this Lease shall not
terminate, and Landlord shall at its sole risk and expense proceed with
reasonable diligence to rebuild or repair the Building or other improvements to
substantially the same condition in which they existed prior to the damage. If
the Premises are to be rebuilt or repaired and are untenantable in whole or in
part following the damage, and the damage or destruction was not caused or
contributed to by act or negligence of Tenant, its agents, employees, invitees,
or those for whom Tenant is responsible, the rent payable under this Lease
during the period for which the Premises are untenantable shall be adjusted to
such an extent as may be fair and reasonable under the circumstances. In the
event that Landlord fails to complete the necessary repairs or rebuilding within
one hundred eighty (180) days from the date of written notification by Tenant to
Landlord of the destruction, Tenant may at its option terminate this Lease by
delivering written notice of termination to Landlord, whereupon all rights and
obligations under this Lease shall cease to exist.
7.3 PROPERTY INSURANCE. At all times during the term of this
Lease, Landlord shall maintain insurance on the Premises against loss by fire
and other hazards covered by the so-called "all-risk" form of policy. Landlord
shall provide to Tenant a copy of the certificate of insurance evidencing the
insurance required to be maintained by Landlord pursuant to this Lease. Landlord
shall not be obligated in any way or manner to insure any personal property
(including, but not limited to, any furniture, machinery, goods or supplies) of
Tenant upon or within the Premises, any fixtures installed or paid for by Tenant
upon or within the Premises, or any improvements which Tenant may construct on
the Premises. Tenant shall maintain property insurance on its personal property
and shall also maintain plate glass insurance. Tenant shall have no right in or
claim to the proceeds of any policy of insurance maintained by Landlord even if
the cost of such insurance is borne by Tenant as set forth in Article 2.
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7.4 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant hereby waive and release each other of and
from any and all right of recovery, claim, action, or cause of action, against
each other, their agents, officers and employees, for any loss or damage that
may occur to the Premises, the improvements of the Building or personal property
within the Building, by reason of fire or the elements, regardless of cause or
origin, including negligence of Landlord or Tenant and their agents, officers
and employees. Landlord and Tenant agree immediately to give their respective
insurance companies which have issued policies of insurance covering all risk of
direct physical loss, written notice of the teems of the mutual waivers
contained in this Section.
7.5 HOLD HARMLESS. Landlord shall not be liable to Tenant's
employees, agents, invitees, licensees, or visitors, or to any other person, for
an injury to person or damage to property on or about the Premises caused by any
act or omission of Tenant, its agents, servants, or employees, or of any other
person entering upon the Premises under express or implied invitation by Tenant,
or caused by the improvements located on the Premises becoming out of repair,
the failure or cessation of any service provided by Landlord (including security
service and devices), or caused by leakage of gas, oil, water or steam or by
electricity emanating from the Premises. Tenant agrees to indemnify and hold
harmless Landlord of and from any loss, attorney's fees, expenses or claims
arising out of any such damage or injury.
7.6 PUBLIC LIABILITY INSURANCE. Tenant shall during the term
hereof keep in full force and effect at its expense a policy or policies of
public liability insurance with respect to the Premises and the business of
Tenant, on terms and with companies approved in writing by Landlord, in which
both Tenant and Landlord shall be covered by being named as insured parties
under reasonable limits of liability not less than $1,000,000 or such greater
coverage as Landlord may reasonably require, combined single limit coverage for
injury or death. Such policy or policies shall provide that thirty (30) days
written notice must be given to Landlord prior to cancellation thereof. Tenant
shall furnish evidence satisfactory to Landlord at the time this Lease is
executed that such coverage is in full force and effect.
ARTICLE 8. CONDEMNATION
8.1 SUBSTANTIAL TAKING. If all or a substantial part of the
Premises are taken for any public or quasi-public use under any governmental
law, ordinance or regulation, or by right of eminent domain or by purchase in
lieu thereof, and the taking would prevent or materially interfere with the use
of the Premises for the purpose for which it is then being used, this Lease
shall terminate and the rent shall be abated during the unexpired portion of
this Lease effective on the date physical possession is taken by the condemning
authority. Tenant shall have no claim to the condemnation award or proceeds in
lieu thereof, except that Tenant shall be entitled to a separate award for the
cost of relocation of Tenant's business and depreciation or damage to and cost
of removal of Tenant's personal property and trade fixtures.
8.2 PARTIAL TAKING. If a portion of the Premises shall be taken
for any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in Section 8.1 above, the rent payable
under this Lease during the unexpired portion of the term shall be adjusted to
such an extent as may be fair and reasonable under the circumstances. Tenant
shall have no claim to the condemnation award or proceeds in lieu thereof,
except that Tenant shall be entitled to a separate award for the cost of
relocation of Tenant's business and depreciation or damage to and cost of
removal of Tenant's personal property and trade fixtures.
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ARTICLE 9. ASSIGNMENT OR SUBLEASE
9.1 LANDLORD ASSIGNMENT. Landlord shall have the right to sell,
transfer or assign, in whole or in part, its rights and obligations under this
Lease and in the Building. Any such sale, transfer or assignment shall operate
to release Landlord from any and all liabilities under this Lease arising after
the date of such sale, assignment or transfer.
9.2 TENANT ASSIGNMENT. Tenant shall have the right to assign, in
whole or in part, this Lease, or allow it to be assigned, in whole or in part,
by operation of law or otherwise (including without limitation by transfer of a
majority interest of stock, merger, or dissolution, which transfer of majority
interest of stock, merger, or dissolution shall be deemed an assignment) or
mortgage or pledge the same, or sublet the Premises, in whole or in part,
without the prior written consent of Landlord, except as provided below, and in
no event shall any such assignment or sublease release Tenant or any guarantor
from any obligation or liability hereunder, except as provided in Section 9.4 of
this Lease. Specifically and not by way of limitation, Tenant may sublet any
portion of the Premises at any time during the Initial Term without the consent
of Landlord, such that the provisions of Section 9.3 shall not apply to a
sublease of the Premsies. Notwithstanding anything in this Lease to the
contrary, in the event of any assignment or sublease, any option or right of
first refusal granted to Tenant shall not be assigned by Tenant to any assignee
or sublessee. No assignee or sublessee of the Premises or any portion thereof
may assign or sublet the Premises or any portion thereof. Only the balance of
the Initial Term of this Lease shall be assigned or sublet by Tenant. The
Renewal Terms shall not be assigned or sublet by Tenant.
9.3 CONDITIONS OF ASSIGNMENT. If Tenant desires to assign or
sublet all or any part of the Premises, it shall so notify Landlord at least
thirty (30) days in advance of the date on which Tenant desires to make such
assignment or sublease. Tenant shall provide Landlord with a copy of the
proposed assignment or sublease and such information as Landlord might request
concerning the proposed sublessee or assignee to allow Landlord to make informed
judgments as to the financial condition, of the proposed sublessee or assignee.
The sole condition of Landlord's consent to an assignment or sublet shall be
that the proposed assignee or subtenant have a financial condition equal to or
better than Tenant's financial condition as of the execution of this Lease.
Fifteen (15) days after Landlord's receipt of Tenant's proposed assignment or
sublease and all required information concerning the proposed sublessee or
assignee, Landlord shall have the following options: (1) consent to the proposed
assignment or sublease, and, if the rent due and payable by any assignee or
sublessee under any such permitted assignment or sublease (or a combination of
the rent payable under such assignment or sublease plus any bonus or any other
consideration or any payment incident thereto) exceeds the rent payable under
this Lease for such space, Tenant shall pay to Landlord all such excess rent and
other excess consideration within ten (10) days following receipt thereof by
Tenant; or (2) refuse, in its reasonable judgment, to consent to the proposed
assignment or sublease, which reasons shall be provided in writing to Tenant,
together with written notice of Landlord's refusal pursuant to this Section 9.3.
Upon the occurrence of an event of default, if all or any part of the Premises
are assigned or sublet, Landlord, in addition to any other remedies provided by
this Lease or provided by law, may, at its option, collect directly from the
assignee or sublessee all rents becoming due to Tenant by reason of the
assignment or sublease. Any collections directly by Landlord from the assignee
or sublessee shall not be construed to constitute a novation or a release of
Tenant or any guarantor from the further performance of its obligations under
this Lease.
9.4 SALE OF TENANT'S BUSINESS. Notwithstanding the foregoing, in
the event of a sale of Tenant's business, whether by stock purchase, asset
purchase, merger or other means ("Sale of Tenant"), Tenant may, without
Landlord's consent, assign this Lease to the person or entity which purchased
Tenant (the "Purchaser"). Landlord agrees that, upon such assignment to a
Purchaser in the event of the Sale of Tenant which does not result in Tenant
being the surviving entity, Tenant
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shall be released from any liability pursuant to this Lease. Accordingly, the
provisions of Section 9.3 shall not apply to an assignment in the event of a
Sale of Tenant.
9.5 RIGHTS OF MORTGAGE. Tenant accepts this Lease subject and
subordinate to any recorded mortgage presently existing or hereafter created
upon the Building and to all existing recorded restrictions, covenants,
easements and agreements with respect to the Building. Landlord is hereby
irrevocably vested with full power and authority to subordinate Tenant's
interest under this Lease to any first mortgage lien hereafter placed on the
Premises, and Tenant agrees upon twenty (20) days prior written request to
execute additional instruments subordinating this Lease pursuant to the terms
and conditions of this Section 9.5 and provided such instruments do not amend or
modify any terms of this Lease. If the interest of Landlord under this Lease
shall be transferred by reason of foreclosure or other proceedings for
enforcement of any first mortgage or deed of trust on the Premises, Tenant shall
be bound to the transferee (sometimes called the "Purchaser") at the option of
the Purchaser, under the terms, covenants and conditions of this Lease for the
balance of the term remaining, including any extensions or renewals, with the
same force and effect as if the Purchaser were Landlord under this Lease, and,
if requested by the Purchaser, Tenant agrees to attorn to the Purchaser,
including the first mortgagee under any such mortgage if it be the Purchaser, as
its Landlord. Notwithstanding the forgoing, Tenant shall not be disturbed in its
possession of the Premises so long as Tenant is not in default hereunder.
9.6 TENANT'S STATEMENT. Tenant agrees to furnish, from time to
time, within twenty (20) days after receipt of a request from Landlord or
Landlord's mortgagee, a statement certifying, if applicable, the following;
Tenant is in possession of the Premises; the Premises are acceptable; the Lease
is in full force and effect; the Lease is unmodified , Tenant claims no present
charge, lien, or claim of offset against rent; the rent is paid for the current
month, but is not prepaid for more than one month and will not be prepaid for
more than one month in advance; there is no existing default by reason of some
act or omission by Landlord; and such other matters as may be reasonably
required by Landlord or Landlord's mortgagee. Tenant's failure to deliver such
statement, in addition to being a default under this Lease, shall be deemed to
establish conclusively that this Lease is in full force and effect except as
declared by Landlord, that Landlord is not in default of any of its obligations
under this Lease, and that Landlord has not received more than one month's rent
in advance. Tenant agrees to furnish, from time to time, within twenty (20) days
after receipt of a request from Landlord, the most recent quarterly financial
statement of Tenant, certified as true and correct by Tenant.
ARTICLE 10. LIEN
10.1 LANDLORD'S LIEN. INTENTIONALLY OMITTED.
10.2 UNIFORM COMMERCIAL CODE. INTENTIONALLY OMITTED.
ARTICLE 11. DEFAULT AND REMEDIES
11.1 DEFAULT BY TENANT. The following shall be deemed to be events
of default ("Default") by Tenant under this Lease; (1) Tenant shall fail to pay
when due any installment of rent or any other payment required pursuant to this
Lease within five (5) days of the date such payment is due; (3) Tenant shall
fail to comply with any term, provision or covenant of this Lease, other than
the payment of rent, and the failure is not cured within thirty (30) days after
written notice to Tenant, provided, however, that if Tenant commences to cure a
default which is not susceptible of completion within thirty (30) days, Tenant
shall not be in default if Tenant commences said cure within the thirty (30) day
period and diligently prosecutes the same to completion thereafter; (4) Tenant
shall file a petition or if an involuntary petition is filed against
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Tenant, or becomes insolvent, under any applicable federal or state bankruptcy
or insolvency law or admit that it cannot meet its financial obligations as they
become due; or a receiver or trustee shall be appointed for the benefit of
creditors an any of the same are not released, discharged or otherwise removed
from the record within sixty (60) days following the date of the same; or (5)
Tenant shall do or permit to be done any act which results in a lien being filed
against the Premises or the Building and/or project of which the Premises are a
part, provided, however, that Tenant shall have the right to contest any
mechanic's lien or other lien which attaches to the Premises, provided that
Tenant provides Landlord with reasonable security for the same no later than
twenty (20) days following the date Tenant is made aware that such lien is filed
against the Premises.
In the event that an order for relief is entered in any case under
Title 11. U.S.C. (the "Bankruptcy Code") in which Tenant is the debtor and: (A)
Tenant as debtor-in-possession, or any trustee who may be appointed in the case
(the "Trustee") seeks to assume the Lease, then Tenant, or Trustee if
applicable, in addition to providing adequate assurance described in applicable
provisions of the Bankruptcy Code, shall provide adequate assurance to Landlord
of Tenant's future performance under the Lease by depositing with Landlord a sum
equal to the lesser of twenty-five percent (25%) of the rental and other charges
due for the balance of the Lease term of six (6) months' rent ("Security"), to
be held (without any allowance for interest thereon) to secure Tenant's
obligations under the Lease, and (B) Tenant, or Trustee if applicable, seeks to
assign the Lease after assumption of the same, then Tenant, in addition to
providing adequate assurance described in applicable provisions of the
Bankruptcy Code, shall provide adequate assurance to Landlord of the proposed
assignee's future performance under the Lease by depositing with Landlord a sum
equal to the Security to be held (without any allowance or interest thereon) to
secure performance under the Lease. Nothing contained herein expresses or
implies, or shall be construed to express or imply, that Landlord is consenting
to assumption and/or assignment of the Lease. Neither Tenant nor any Trustee
shall conduct or permit the conduct of any "fire", "bankruptcy", "going out of
business" or auction sale in or from the Premises.
11.2 REMEDIES FOR TENANT'S DEFAULT. Upon the occurrence of a
Default as defined above Landlord may elect either (i) to cancel and terminate
this Lease and this Lease shall not be treated as an asset of Tenant's
bankruptcy estate, or (ii) to terminate Tenant's right to possession only
without canceling and terminating Tenant's continued liability under this Lease.
Notwithstanding the fact that initially landlord elects under (ii) to terminate
Tenant's right to possession only, Landlord shall have the continuing right to
cancel and terminate this Lease by giving three (3) days written notice to
Tenant of such further election, and shall have the right to pursue any remedy
at law or in equity that may be available to Landlord.
In the event of election under (ii) to terminate Tenant's right to
possession only, Landlord may, at Landlord's option, enter into the Premises and
take and hold possession thereof, without such entry into possession terminating
this Lease or releasing Tenant in whole or in part from Tenant's obligations to
pay all amounts hereunder for the full stated and exercised term. Upon such
reentry, Landlord may remove all persons and property from the Premises and such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant, without becoming liable for any loss or
damage which may be occasioned thereby. Such reentry shall be conducted in the
following manner; without resort to judicial process or notice of any kind if
Tenant has abandoned or voluntarily surrendered possession of the Premises; and,
otherwise, by resort to judicial process. Upon and after entry into possession
without termination of the Lease, Landlord shall use commercially reasonable
efforts to release the Premises, or any part thereof, to any one other shall the
Tenant for such time and upon such terms as Landlord, in Landlord's commercially
reasonable discretion, shall determine. Landlord may make alterations and
repairs to the Premises to the extent deemed by Landlord necessary or desirable.
Upon such reentry, Tenant shall be liable to Landlord as follows:
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A. For all attorney's fees incurred by Landlord in connection with
exercising any remedy hereunder;
B. For the unpaid installments of base rent, additional rent or
other unpaid sums which were due prior to such reentry, including interest and
late payment fees, which sums shall be payable immediately.
C. For the installments of base rent, additional rent, and other
sums falling due pursuant to the provisions of this Lease for the period after
reentry during which the Premises remain vacant, including late payment charges
and interest, which sums shall be payable as they become due hereunder.
D. For a fraction of all expenses incurred in releasing the
Premises, including leasing commissions, attorney's fees, and costs of
alteration and repairs, which shall be payable by Tenant as they are incurred by
Landlord, the numerator of which fraction shall be the number of months
remaining in the exercised term of this Lease as of the date of the relet lease
and the denominator of which fraction shall be the number of months in the term
of the relet lease; and
E. While the Premises are subject to any new lease or leases made
pursuant to this Section, for the amount by which the monthly installments
payable under such new lease or leases is less than the monthly installment for
all charges payable pursuant to this Lease, which deficiencies shall be payable
monthly.
Notwithstanding Landlord's election to terminate Tenant's right to
possession only, and notwithstanding any releasing without termination,
Landlord, at any time thereafter, may elect to terminate this Lease, and to
recover (in lieu of the amounts which would thereafter by payable pursuant to
the foregoing, but not in diminution of the amounts payable as provided above
before termination), as damages for loss of bargain and not as a penalty, an
aggregate sum equal to the amount by which the rental value of the portion of
the term unexpired at the time of such election is less shall an amount equal to
the unpaid base rent, percentage rent, and additional rent and all other charges
which would have been payable by Tenant for the unexpired portion of the
exercised term of this Lease, which deficiency and all expenses incident
thereto, including commissions, attorney's fees, expenses, of alterations and
repairs, shall be due to Landlord as of the time Landlord exercises said
election, notwithstanding that the exercised term had not expired. If Landlord,
after such reentry, leases the Premises, then the rent payable under such new
lease shall be conclusive evidence of the rental value of the unexpired portion
of the term of this Lease.
If this Lease shall be terminated by reason of the bankruptcy or
insolvency of Tenant, Landlord shall be entitled to recover from Tenant or
Tenant's estate, as liquidated damages for loss of bargain and not as a penalty,
the amount determined by the immediately preceding paragraph.
11.3 LANDLORD'S RIGHT TO PERFORM FOR ACCOUNT OF TENANT. If Tenant
shall be in Default under this Lease, Landlord may cure the Default at any time
for the account and at the expense of Tenant. If Landlord cures a Default on the
part of Tenant, Tenant shall reimburse Landlord upon demand for any amount
expended by Landlord in connection with the cure, including, without limitation,
attorney's fees and interest.
11.4 INTEREST AND ATTORNEY'S FEES. In the event of a Default by
Tenant; (1) if a monetary default, interest shall accrue on any sum due and
unpaid at the rate of the lesser of twelve percent (12%) per annum or the
highest rate permitted by law and, if Landlord places in the hands of an
attorney the enforcement of all or any part of this Lease, the collection of any
rent due or to become
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due or recovery of the possession of the Premises, Tenant agrees to pay
Landlord's costs of collection, including reasonable attorney's fees for the
services of the attorney, whether suit is actually filed or not.
11.5 ADDITIONAL REMEDIES, WAIVERS, ETC.
A. The rights and remedies of Landlord set forth herein shall be
in addition to any other right and remedy now and hereafter provided by law. All
rights and remedies shall be cumulative and not exclusive of each other.
Landlord may exercise its rights and remedies at any times, in any order, to any
extent, and as often as Landlord deems advisable without regard to whether the
exercise of one right or remedy precedes, concurs with or succeeds the exercise
of another.
B. A single or partial exercise of a right or remedy shall not
preclude a further exercise thereof, or the exercise of another right or remedy
from time to time.
C. No delay or omission by Landlord in exercising a right or
remedy shall exhaust or impair the same or constitute a waiver of, or acquiesce
to, a Default.
D. No waiver of a Default shall extend to or affect any other
Default or impair any right or remedy with respect thereto.
E. No action or inaction by Landlord shall constitute a waiver of
a Default.
F. No waiver of a Default shall be effective unless it is in
writing and signed by Landlord.
ARTICLE 12. RELOCATION
12.1 RELOCATION OPTION. INTENTIONALLY OMITTED.
12.2 EXPENSES. INTENTIONALLY OMITTED.
ARTICLE 13. AMENDMENT AND LIMITATION OF WARRANTIES
13.1 ENTIRE AGREEMENT. IT IS EXPRESSLY AGREED BY TENANT, AS A
MATERIAL Consideration FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH
THE SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT
OF THE PARTIES: THAT THERE ARE, AND WERE, NO VERBAL Representations, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE OR
TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
13.2 AMENDMENT. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR
EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LANDLORD AND TENANT.
13.3 LIMITATION OF WARRANTIES. LANDLORD AND TENANT EXPRESSLY AGREE
THAT THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY,
HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT
OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY
SET FORTH IN THIS LEASE.
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ARTICLE 14. MISCELLANEOUS
14.1 ACT OF GOD. Landlord shall not be required to perform any
covenant or obligation in this Lease, or be liable in damages to Tenant, so long
as the performance or non-performance of the covenant or obligation is delayed,
caused or prevented by an act of God, force majeure or by Tenant.
14.2 SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and
inure to the benefit of Landlord and Tenant and their respective heirs, personal
representatives, successors and assigns. It is hereby covenanted and agreed that
should Landlord's interest in the Premises cease to exist for any reason during
the term of this Lease, then notwithstanding the happening of such event this
Lease nevertheless shall remain unimpaired and in full force and effect, and
Tenant hereunder agrees to attorn to the then owner of the Premises.
14.3 RENT TAX. If applicable in the jurisdiction where the
Premises are issued, Tenant shall pay and be liable for all rental, sales and
use taxes or other similar taxes. If any, levied or imposed by any city, state,
country or other governmental body having authority, such payments to be in
addition to all other payments required to be paid to Landlord under the teems
of this Lease. Any such payment shall be paid concurrently with the payment of
the rent, additional rent, operating expenses or other charge upon which the tax
is based as set forth above.
14.4 CAPTIONS. The captions appearing in this Lease are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any Section.
14.5 NOTICE. All rent and other payments required to be made by
Tenant shall be payable to Landlord at the address set forth in Section 1.5 All
payments required to be made by Landlord to Tenant shall be payable to Tenant at
the address set forth in Section 1.5, or at any other address within the United
States as Tenant may specify from time to time by written notice. Any notice or
document required or permitted to be delivered by the teems of this Lease shall
be deemed to be delivered (whether or not actually received) when deposited in
the United States Mail, postage prepaid, certified mail, return receipt
requested, addressed to the parties at the respective addresses set forth in
Section 1.5.
14.6 SUBMISSION OF LEASE. INTENTIONALLY OMITTED.
14.7 CORPORATE AUTHORITY. If Tenant executes this Lease as a
corporation, each of the persons executing this Lease on behalf of Tenant does
hereby personally represent and warrant that Tenant is a duly authorized and
existing corporation, that Tenant is qualified to do business in the state in
which the Premises are located, that the corporation has full right and
authority to enter into this Lease, and that each person signing on behalf of
the corporation is authorized to do so. In the event any representation or
warranty is false, all persons who execute this Lease shall be liable,
individually as Tenant.
14.8 HAZARDOUS SUBSTANCES. Tenant shall not unlawfully bring or
permit to remain on the Premises or the Building any asbestos, petroleum, or
petroleum products, explosives, toxic materials, or substances defined as
hazardous wastes, hazardous materials, or hazardous substances under any
federal, state, or local law or regulation ("Hazardous Materials"). Tenant's
violation of the foregoing prohibition shall constitute a material breach and
default hereunder and Tenant shall indemnify, hold harmless and defend Landlord
from and against any claims, damages, penalties, liabilities, and costs
(including reasonable attorney's fees and court costs) caused by or arising out
of (I) a violation of the foregoing prohibition or (ii) the unlawful presence or
any release of any Hazardous Materials on, under, or about the Premises or the
Building during the term of the Lease.
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Tenant shall clean up, remove, remediate and repair any soil or ground water
contamination and damage caused by the unlawful presence and any release of any
Hazardous Materials in, on, under, or about the Premises or the Building during
the term of the Lease in conformance with the requirements of applicable law.
Tenant shall immediately give Landlord written notice of any suspected breach of
this paragraph upon learning of the presence of any release of any Hazardous
Materials, and upon receiving any notices from governmental agencies pertaining
to Hazardous Materials which may affect the Premises or the Building. The
obligations of Tenant hereunder shall survive the expiration or earlier
termination, for any reason of this Lease.
14.9 SEVERABILITY. If any provision of this Lease or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Lease and the application of
such provisions to other persons or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by law.
14.10 LANDLORD'S LIABILITY. If Landlord shall be in default under
this Lease and, if as a consequence of such default, Tenant shall recover a
money judgment against Landlord, such judgment shall be satisfied only out of
the right, title and interest of Landlord in the Building as the same may then
be encumbered and neither Landlord nor any person or entity comprising Landlord
shall be liable for any deficiency. In no event shall Tenant have the right to
levy execution against any property of Landlord nor any person or entity
comprising Landlord other shall its interest in the Building as herein expressly
provided.
14.11 BROKERAGE. Landlord and Tenant each represent and warrant to
the other that there is no obligation to pay any brokerage fee, commission,
finder's fee or other similar charge in connection with this Lease, other than
fees due to Benchmark Commercial Real Estate Group, Inc. which are the
responsibility of Landlord. Each party covenants that it will defend, indemnify
and hold harmless the other party from and against any loss or liability by
reason of brokerage or similar services alleged to have been rendered to, at the
instance of, or agreed upon by said indemnifying party. Notwithstanding anything
herein to the contrary, Landlord and Tenant agree that there shall be no
brokerage fee or commission due on expansions, options or renewals by Tenant.
14.12 NOTIFICATION TO TENANT. Landlord hereby notifies Tenant that
the person authorized to execute this Lease and manage the Premises is
CONTINENTAL PROPERTY GROUP INC., which has been appointed to act as the agent in
leasing management and on behalf of Landlord. Landlord reserves the right to
change the identity and status of its duly authorized agent upon written notice
to Tenant.
14.13 EXHIBITS. Reference is made to the following Exhibits which
are attached hereto and made apart hereof.
Exhibit A Plan of Demised Premises
Exhibit B Legal Description
Exhibit C None
Exhibit D None
Exhibit E None
Exhibit F Rules and Regulations
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ARTICLE 15. SIGNATURES
SIGNED effective the day and year first above written.
LANDLORD TENANT
By: /s/ Brad Hoyt By: /s/ Claude C. Johnson
--------------------------------- -----------------------------------
Its: Its:
--------------------------------- ----------------------------------
Dated September 23, 1999 Dated September 23, 1999
------------------------------- --------------------------------
15
Exhibit 99.1
FOR IMMEDIATE RELEASE
September 24, 1999
Research, Inc. Contacts: Richard L. Grose
6425 Flying Cloud Drive Research, Inc.
Eden Prairie, MN 55344 612/829-8311
[email protected]
Joe Jennings
The Sage Group, Inc.
612/321-9897
[email protected]
RESEARCH, INC. COMPLETES PROPERTY SALE/LEASEBACK TRANSACTION
PROVIDES COMPANY WITH ENHANCED ASSET MANAGEMENT, FINANCIAL FLEXIBILITY
Eden Prairie, MN--Research, Inc. (Nasdaq: RESR) today announced that it has
finalized a sale/leaseback contract with Continental Property Group, Inc., a
Minneapolis-based real estate development company. Under the terms of the
agreement, Research has sold its building and approximately 11 acres of
surrounding land to Continental and subsequently will lease the property back.
The sale price is $3,650,000, the proceeds of which will be used by Research to
reduce debt and accelerate growth.
The transaction will allow Research to take advantage of deferred tax benefits
and is expected to result in a pre-tax gain of $2.2 million, which will be
recognized over the seven-year leaseback period. In an earlier announcement, the
company had said that the transaction would provide it with enhanced cash flow,
reduce its cost of capital, and facilitate growth.
Research, Inc. designs and manufactures complete product solutions based on its
core competency: the precise control of heat. The company does business
worldwide through its three divisions: Drying, Research International, and
Thermal Solutions. The company's products target high-growth markets including
printing (ink drying) and semiconductor assembly and packaging. Research, Inc.
is headquartered in Eden Prairie, MN, and has subsidiary operations in Plymouth,
England. The Company's common stock trades on the Nasdaq SmallCap Market under
the symbol: RESR. Additional news and information can be found on the Company's
website at http://www.researchinc.com.
STATEMENTS CONTAINED HERE, OTHER THAN HISTORICAL DATA, MAY BE FORWARD-LOOKING
AND SUBJECT TO RISKS AND UNCERTAINTIES INCLUDING, BUT NOT LIMITED TO, THOSE SET
FORTH IN THE COMPANY'S ANNUAL REPORT, 10K, 10Q, AND OTHER SEC FILINGS.
# # #
