Equipment Lease - Carlton Financial Corp. and BW-3 Inc.
[LETTERHEAD]
MARCH 11, 1998
Ms. Mary Twinem, CFO
Buffalo Wild Wings Grill & Bar
1919 Interchange Tower
600 S. Highway 169
Minneapolis, MN 55426
Dear Ms. Twinem:
Pursuant to your request for a lease proposal, we are pleased to submit the
following:
The following terms and conditions generally outline the proposed transaction
and are based upon information furnished to us by you.
LESSEE: bw-3, Inc.
LESSOR: Carlton Financial Corporation and/or its nominees
and participants
EQUIPMENT: FF&E for up to 11 locations through 6/30/99
EQUIPMENT COST: Approximately $2,500,000 or $225,000 per location
DELIVERY/
ACCEPTANCE DATE: To be determined
LEASE
COMMENCEMENT DATE: To be determined.
INITIAL LEASE TERM: 60 Months
INTERIM LEASE TERM: An interim lease term will commence from the
Delivery/Acceptance Date and terminate on the
Lease Commencement Date
<PAGE>
INTERIM RENT: Interim Rent will be calculated based on the daily
equivalent of the lease factor rate multiplied by
the Equipment Cost and will be payable on the
Lease Commencement Date
RENTAL PAYMENTS: Base Rents are to be monthly in advance, with
first payment in advance.
PURCHASE OPTION
---------------
A B
-- --
Lease Rate Factor: = .02200 .02069
LEASE ADJUSTMENTS: The effective lease rate contained within this
proposal is tied to the five year treasury index.
If there is a change in the treasury index at the
time of lease commencement, the effective rate
within the lease will be adjusted basis point for
basis point for such change.
INVOICING: A single invoice will be furnished on a monthly
basis.
TAXES: Lessee will pay all fees, assessments, sales, use,
property and other taxes imposed upon Lessor.
INSURANCE: Lessee will be required to maintain physical
damage and liability insurance in accordance with
industry standards and acceptable to Lessor naming
Lessor as additional insured.
EQUIPMENT CONDITION/
MAINTENANCE: Lessee shall maintain (or cause to be maintained)
the Equipment in the same condition as when
originally delivered, normal wear and tear
expected. The Equipment must be capable of
performing the task for which it was originally
intended and conform to all regulatory
requirements imposed by any governmental body
during the Lease Term.
TRANSACTION EXPENSES: Lessee shall each pay any and all transaction
expenses incurred. These expenses could include
but are not limited to, UCC Financing
Statement(s), recording, appraisal, registration
and perfection of title for the account of Lessee.
PURCHASE OPTION A: At the end of the base lease term the Lessee shall
purchase the equipment for $1.00.
PURCHASE OPTION B: Lessee, at it's option, may purchase all of
Lessor's right, title and interest in and to all,
but not less than all of the equipment described
in and covered by the Schedule for a purchase
price equal to the greater of the (a) fair market
value of the equipment, or (b) 11% of the original
cost of the equipment or (c) renew for twelve
months at .01008 of the original equipment cost.
UPGRADE OPTION: Beginning after the Commencement Date of the
Lease, Lessee shall have the option to upgrade the
Equipment defined in the
<PAGE>
Lease subject to the following additional
conditions: (1) Lessee is in compliance with all
the terms and conditions of the Lease Agreement;
(2) The new equipment to be leased from Lessor
under a new Lease or additional Schedule is
subject to Lessor's then current lease charges and
documentation which shall be mutually satisfactory
to Lessee and Lessor: (3) Lessee's then current
financial condition must be approved by Lessor for
purposes of the new lease or additional schedule,
such determination to be at Lessor's sole
discretion; (4) The upgrade of new equipment
covered by the Lease, the equipment remaining and
new equipment must meet Lessor's approval.
EARLY BUYOUT OPTIONS: The Lessee will have the opportunity to buyout the
Lease based on the following schedule:
PAYMENT PERIOD PREPAYMENT
-------------- PENALTY
-------
1-24 2%
25-48 1%
49-60 0%
Prepayment penalty based on schedule of payments attached.
CREDIT INFORMATION: For our credit committee, we will need complete
financial statements for the last three years,
three trade references with their names and
telephone numbers, bank references with the names
and telephone numbers of the officers to contact,
and a complete equipment list indicating equipment
descriptions, prices and vendors. We may request
additional information as necessary.
CONDITIONS PRECEDENT: The Lessor shall, at it's option, may terminate
the funding commitment in the event of any one of
the following:
1. Any material adverse changes in the financial
condition of the Lessee up to the funding
date of the Master Lease or any subsequent
schedule thereto.
2. Any significant change in the equipment
specifications.
3. Any change in the location of the specified
equipment.
Upon acceptance of this proposal, and prior to submission of this transaction
to the lessor's credit committee, proposal fee in the $25,000 will be due and
payable.
If the transaction is approved, this fee will be applied, pro rata to the first
monthly rental due under the lease, less a documentation fee and any transaction
expenses. If the transaction is not approved, the fee will be returned. If
the transaction is approved but takedown does not occur through no fault of
Carlton Financial Corporation, this fee will be considered earned by Carlton
Financial Corporation.
This Proposal is subject to Lessor's Senior Finance Committee's approval and
documentation must be satisfactory to Lessor.
<PAGE>
I appreciate the opportunity to present to you the preceding proposal as a
service of Carlton Financial Corporation. Should you have questions, please
contact me at (612) 896-0314.
Sincerely,
CARLTON FINANCIAL CORPORATION
/s/ James D. Wanningman
James D. Wanningman
Senior Vice President
This proposal must be accepted by March 25, 1998 or it will expire
automatically.
ACCEPTED:
By: /s/ Mary Twinem
-------------------------------------
Its: Treasurer
------------------------------------
Date: 3/17/98
-----------------------------------