SALE AND LEASEBACK AGREEMENT
This Sale and Leaseback Agreement ("Agreement") is dated and effective this
16th day of April 1998 by and between OLYMPIC CASCADE FINANCIAL CORPORATION, 000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 ("Seller") and MATRIX
FUNDING CORPORATION, 0000 Xxxxx Xxxx Xxxxxx, #000, Xxxxxxx, XX 00000 ("Buyer").
WHEREAS, Seller requests Buyer to purchase property listed in the attached
Exhibit A of three (3) page(s), which by reference to is made a part hereof,
("Property") from Seller and to lease the Property to Seller under the terms and
conditions of Master Lease Agreement No. R0678, dated and effective as of April
16, 1998, ("Lease Agreement"); and
WHEREAS, Buyer is willing to purchase and lease the Property to Seller
under the terms and conditions of this agreement and the Lease Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein, Seller and
Buyer agree as follows:
1. SALE AND LEASEBACK. Seller agrees to sell and Buyer agrees to
purchase the Property to be set forth in Lease Schedule No. 1 ("Lease Schedule")
to the Lease Agreement. Concurrent with the sale, Buyer agrees to lease the
Property to Seller and Seller agrees to accept the Property under lease from
Buyer pursuant to the terms and conditions of the Lease Agreement, and the Lease
Schedule. In connection with Seller's sale of the Property to Buyer, Seller
agrees to assign to Buyer all manufacturer warranties and indemnities with
respect to the Property.
2. PURCHASE PRICE AND PAYMENT. Buyer and Seller agree that the purchase
price of the Property is $815,000.00, which shall be payable to Seller pursuant
to the terms and conditions of this Agreement, the Lease Agreement and the Lease
Schedule.
3. TITLE. The parties agree that title and ownership of the Property
shall pass from Seller to Buyer upon payment of the purchase price by Buyer to
Seller.
4. BUYERS PURCHASE AND PERFORMANCE. Seller agrees that Buyer's
obligations hereunder are expressly subject to the following conditions:
a. Buyer's receipt, of the executed Lease Agreement, the Lease
Schedule, a Xxxx of Sale for the Property, UCC-1 financing statement(s),
and any other documentation reasonably required by Buyer, all in form
acceptable to Buyer.
b. Buyer's receipt of corporate resolutions or incumbency
certificates in form acceptable to Buyer evidencing Seller's authority to
enter into this sale and leaseback transaction with Buyer.
5. TAXES. Seller represents and warrants that it is responsible for and
it has paid all sales and use, property and other taxes assessed or due in
connection with Seller's purchase, use and possession of the Property prior to
sale to Buyer hereunder. Seller agrees to pay to Buyer an amount equal to all
taxes paid, payable or required to be collected by Buyer, however designated,
which are levied or based on the rental, on the Lease or on the Property or on
its purchase for lease hereunder, or on its use, lease, operation, control or
value (including, without limitation, state and local privilege or excise taxes
based on gross revenue), any penalties or interest in connection therewith or
taxes or amounts in lieu thereof paid or payable by Lessor in respect of the
foregoing, but excluding taxes based on Lessor's net income. Buyer shall
deliver to Seller a duly executed sales tax exemption certificate for the
Property, prior to Buyer's payment of the purchase price.
6. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Buyer that:
a. Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation and in all
jurisdictions where such qualification is required for it to conduct its
business.
b. Seller has all requisite power and authority to conduct its
business, to own and lease its properties and to enter into and perform all
of its obligations under this Agreement.
c. This Agreement has been duly authorized by Seller, and upon
execution and delivery by the parties thereto, shall constitute the valid,
legal and binding obligation of Seller enforceable in accordance with its
terms.
d. No event has occurred or is continuing which constitutes an event
of default under this Agreement. There is no action, suit or proceeding
pending or threatened against or effecting Seller before or by any court,
administrative agency or other governmental authority which brings into
question the validity of the transaction contemplated by this Agreement or
which might materially impair the ability of Seller to perform its
obligations under this Agreement or the transaction contemplated hereby.
e. Neither the execution and delivery by the Seller of this
Agreement, nor the compliance by the Seller with the provisions of any
thereof, conflicts with or results in a breach of any of the provisions of
the Articles of Incorporation, or By-Laws of Seller, or of any applicable
law, judgment, order, writ, injunction, decree, rule or regulation of any
court, administrative agency or other governmental authority, or of any
agreement or other instrument to which the Seller is a party or by which it
is bound, or constitutes or will constitute a default under any thereof.
f. The transaction contemplated by this Agreement complies with all
applicable federal and state laws, rules and regulations applicable to
Seller.
g. No consent, approval or authorization of or by any court,
administrative agency or other governmental authority is required in
connection with the execution, delivery or performance by Seller of, or the
consummation by Seller of the transaction contemplated by this Agreement.
h. Seller is transferring to Buyer good title to the Property, free
and clear of all liens and encumbrances of any kind or description.
7. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to Seller that:
a. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Utah and in all jurisdictions
where such qualification is required for it to conduct its business.
b. Buyer has all requisite power and authority to conduct its
business, to own and lease its properties and to enter into and perform all
of its obligations under this Agreement.
c. This Agreement has been duly authorized by Buyer, and upon the
execution and delivery by the parties thereto, shall constitute the valid,
legal and binding obligation of Buyer enforceable in accordance with its
terms.
8. DEFAULT AND REMEDIES. In the event any of Seller's representations
or warranties made hereunder should be determined to be false or Seller should
breach any of its obligations under this Agreement, Buyer shall be entitled to
exercise all of its rights and remedies under the Lease Agreement as
if they were set forth in this Agreement and for purposes hereof all such
rights and remedies shall be incorporated herein by this reference.
9. SUCCESSORS. Buyer and Seller agree that this Agreement shall inure to
the benefit of and shall be binding upon Seller and Buyer, their respective
successors and assigns. Any assignment by Buyer shall not require Seller's
prior written approval provided such assignee agrees to observe Lessor's
covenant of quiet enjoyment under the Lease. Seller shall not assign any
interest in this Agreement without Buyer's prior written consent.
10. SURVIVAL OF COVENANTS. Buyer and Seller agree that the warranties,
covenants and agreements contained in this Agreement shall survive the passing
of title to the Property.
11. MISCELLANEOUS. Section titles are not intended to, and shall not
limit or otherwise affect the interpretation of this Agreement. If any
provision of this Agreement shall be held to be invalid or unenforceable, the
validity and enforceability of the remaining provisions hereof shall not be
affected or impaired in any way. Any modifications to this Agreement shall be
in writing and shall be signed by both parties and their last known assignees,
if any. Any terms capitalized herein shall have the meanings set forth in the
Lease Agreement, and Lease Schedule, which are incorporated herein by reference.
12. ENTIRE AGREEMENT. Seller and Buyer agree that this Agreement, the
Lease Schedule and any Riders or Supplements thereto, and the Lease Agreement
shall constitute the entire Agreement and supersede all proposals, oral or
written, all prior negotiations and all other communications between them with
respect to the Property.
13. LEGAL AND ADMINISTRATIVE EXPENSES. Each party shall be responsible
for its own legal and administrative expenses incurred in connection with this
sale/leaseback transaction.
14. NO BROKERS FEE. Each party represents it has retained no brokers in
this transaction and indemnifies the other party against any brokers' or other
fees which might result from the indemnifying party's actions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the day and year first
above written.
BUYER: SELLER:
MATRIX FUNDING CORPORATION OLYMPIC CASCADE FINANCIAL CORPORATION
By: By:
------------------------------------- ----------------------------------
Title: Title:
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CASUALTY LOSS SCHEDULE
LEASE SCHEDULE NO. 1
DATED
APRIL 16, 1998, AS AMENDED
TO
MASTER LEASE AGREEMENT NO. R0678
Upon execution below by the Lessee and Lessor, this Casualty Loss Schedule shall
replace and supersede the original Casualty Loss Schedule previously executed,
which shall from and after the date hereof become null and void.
The Casualty Loss Value for each item of Property shall be determined by
multiplying the original cost of such item to Lessor by the stipulated loss
percentage indicated below which corresponds to the month of the Lease after
commencement in which the last Monthly Rental payment was made. The dollar
amount shown below represents the Casualty Loss Value which would apply if all
of the Property were lost or destroyed.
TOTAL TOTAL
AFTER CASUALTY CASUALTY AFTER CASUALTY CASUALTY
PAYMENT LOSS LOSS PAYMENT LOSS LOSS
NUMBER VALUE PERCENTAGE NUMBER VALUE PERCENTAGE
0 $855,750 105.00%
1 $848,757 104.14% 25 $559,460 68.65%
2 $837,359 102.74% 26 $545,089 66.88%
3 $825,872 101.33% 27 $530,623 65.11%
4 $814,294 99.91% 28 $516,062 63.32%
5 $802,626 98.48% 29 $504,132 61.86%
6 $798,887 98.02% 30 $489,186 60.02%
7 $786,764 96.54% 31 $474,147 58.18%
8 $774,551 95.04% 32 $459,014 56.32%
9 $762,248 93.53% 33 $443,788 54.45%
10 $749,852 92.01% 34 $428,468 52.57%
11 $737,365 90.47% 35 $413,053 50.68%
12 $724,784 88.93% 36 $397,542 48.78%
13 $712,110 87.38% 37 $381,936 46.86%
14 $705,359 86.55% 38 $366,232 44.94%
15 $692,246 84.94% 39 $350,432 43.00%
16 $679,041 83.32% 40 $334,533 41.05%
17 $665,744 81.69% 41 $318,537 39.08%
18 $652,353 80.04% 42 $302,441 37.11%
19 $638,868 78.39% 43 $286,245 35.12%
20 $625,288 76.72% 44 $269,949 33.12%
21 $616,006 75.58% 45 $253,552 31.11%
22 $602,009 73.87% 46 $237,054 29.09%
23 $587,919 72.14% 47 $220,453 27.05%
24 $573,736 70.40% 48 $203,750 25.00%
LESSOR: LESSEE:
MATRIX FUNDING CORPORATION OLYMPIC CASCADE FINANCIAL CORPORATION
By: By: /s/ [ILLEGIBLE]
------------------------------------- ----------------------------------
ITS: ITS: Chief Financial Officer
------------------------------------- ---------------------------------
DATE: DATE: April 24, 1998
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AMENDMENT NO. 1
TO
LEASE SCHEDULE NO. 1
Reference is made to Lease Schedule No. 1 (the "Schedule") to Master Lease
Agreement No. R0678 dated April 16, 1998 (the "Master Lease"), by and between
MATRIX FUNDING CORPORATION (the "Lessor") and OLYMPIC CASCADE FINANCIAL
CORPORATION (the "Lessee"). The Schedule as it incorporates the terms and
conditions of the Master Lease is referred to herein as the "Lease". Pursuant
to the Lease, Lessor has agreed to purchase and lease to Lessee property
specified in the Lease. All capitalized terms used herein but not defined
herein shall have the same meanings ascribed to them in the Lease.
The Schedule is hereby amended retroactive to April 16, 1998 by deleting, in
their entirety, Sections 1, 2, 4, 5, 6, 8 and 9 of the Schedule and replacing
them with the following:
Section 1. Property: Computers, phone systems, furniture and services as
more fully described per the attached Exhibit A. which by
reference to is made a part hereof
Section 2. Property Locations: Various locations as more fully described
per the attached Exhibit A, which by reference to is made a part
hereof
Section 4. Initial Period: Forty-eight (48) months from Commencement Date
Section 5. Monthly Rental: $18,068.55, plus applicable sales tax (Lease
Rate Factor times Total Cost Not to Exceed)
Section 6. Deposit: $10,000.00 applied to the last Monthly Rental, plus
applicable sales tax
Section 8. Base Lease Rate Factor: .02217
Section 9. Floating Lease Rate Factor: The Base Lease Rate Factor of .02217
shall increase .00015238 for every five (05) basis point increase
in forty-eight (48) month U.S. Treasury Notes, as of the
Acceptance Date of the Property, at which time the final Monthly
Rental amount under this Schedule shall be determined based upon
the new lease rate factor redetermined under this provision
("Lease Rate Factor"). The forty-eight (48) month U.S. Treasury
Note yield used as the basis for the derivation of the Lease Rate
Factor contained herein is 5.43%. Not applicable if transaction
closes on or before April 30, 1998.
All other terms and conditions of the Lease shall continue in full force and
effect without change.
Dated: Xxxxx 00, 0000
XXXXXX: LESSEE:
MATRIX FUNDING CORPORATION OLYMPIC CASCADE FINANCIAL CORPORATION
By: By: /s/ [ILLEGIBLE]
------------------------------------- ----------------------------------
ITS: ITS: Chief Financial Officer
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XXXX OF SALE
For valuable consideration, the receipt of which is acknowledged, Olympic
Cascade Financial Corporation (hereinafter "Seller"), having its principal place
of business at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX, 00000 hereby
sells and transfer its right(s) and interest(s) in the property described herein
to:
MATRIX FUNDING CORPORATION
0000 Xxxxx Xxxx Xxxxxx, #000
Xxxxxxx, XX 00000
(hereinafter "Buyer")
Equipment: Per the attached Exhibit A of three (3) pages, which by reference to
is made a part hereof.
Seller hereby represents and warrants to buyer that Seller is the absolute
owner of said property, that said property is free and clear of all liens,
charges and encumbrances, and that Seller his full right, power and authority to
sell said property, and to make this Xxxx of Sale. All warranties of quality,
fitness and merchantability are hereby excluded.
SELLER: OLYMPIC CASCADE FINANCIAL CORPORATION
BY: /s/ [ILLEGIBLE]
------------------------------------
TITLE: Chief Financial Officer
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DATE: April 24, 1998
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