Matrix Lease

6925 Union Park Center, Suite 250
Midvale, Utah 84047


LEASE NO. R0546


MASTER LEASE AGREEMENT


This agreement (the "Agreement") is made this 11th day of April, 1996 between MATRIX FUNDING CORPORATION, with its principal office at 6925 Union Park Center, Suite 250, Midvale, Utah 84047, (the "Lessor"), and ELEXSYS INTERNATIONAL, INC., with its principal office at 1188 Bordeaux Drive, Sunnyvale, California 94089, (the "Lessee").


1. LEASE:


Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the equipment and property (collectively, "Equipment") described in any Equipment Schedule executed and delivered by Lessor and Lessee in connection with this Agreement. Each Equipment Schedule shall incorporate the terms and conditions of this Agreement and constitute a separate lease. In the event of conflict between the provisions of this Agreement and any Equipment Schedule, the provisions of the Equipment Schedule shall govern. Each Equipment Schedule shall constitute a separate lease.


2. ADDITIONAL DEFINITIONS:


(a) "Acceptance Date" means, as to the Equipment designated on any Equipment Schedule, the earliest to occur of (i) the date Lessee accepts the Equipment as set forth in any certificate of acceptance or delivery signed by the Lessee (the "Acceptance Certificate"), or (ii) the date which is determined by the manufacturer or vendor of the Equipment to be the date of installation of such Equipment.


(b) "Commencement Date" means, as to the Equipment designated on any Equipment Schedule, where the Acceptance Date for such Equipment Schedule falls on the first day of a calendar quarter, that date, and, in any other case, the first day of the calendar quarter following the calendar quarter in which such Acceptance Date falls.


3. TERM OF LEASE:


The term of this Agreement, as to all Equipment designated on any Equipment Schedule, shall commence on the Acceptance Date for such Equipment, and shall continue for an "Initial Period" ending that number of months from the applicable Commencement Date as specified in such Equipment Schedule. Thereafter, Lessee shall have options to purchase or return the Equipment or to extend the Lease as provided in Section 19.(k) of this Agreement.


4. RENT AND PAYMENT:


As to any Equipment leased hereunder, the "Monthly Rental" payable by Lessee to Lessor shall be as set forth in the applicable Equipment Schedule. The Monthly Rental shall begin on the Commencement Date and shall be due and payable by Lessee in advance on the first day of each month throughout the Initial Period. If the Acceptance Date does not fall on the first day of a calendar quarter, then the first rental payment shall be calculated by multiplying the number of days from and including the Acceptance Date to the Commencement Date by a daily rental equal to one thirtieth (1/30) of the Monthly Rental, and shall be due and payable on the Acceptance Date. Lessee shall pay all rentals hereunder to Lessor, its successors or assigns, at Lessor's address set forth above (or as otherwise directed in writing by Lessor, its successors or assigns), whether or not Lessee has received any notice that such payment is due. LESSEE SHALL NOT ABATE, SET OFF, OR DEDUCT ANY AMOUNT OR DAMAGES FROM OR REDUCE ANY RENTAL FOR ANY REASON WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, ITS SUCCESSORS OR ASSIGNS.


Late charges on any past due payments, taxes or other charges hereunder shall accrue at the rate of 1 1/2% per month (or if such rate shall exceed the maximum rate allowed by law, then at the highest rate that is permitted to be charged on liquidated amounts after judgment) beginning with the date that such amount was due and continuing until the amount is paid. If late charges are assessed by a lending institution due to any late payment, Lessee agrees to pay such late charges or to reimburse Lessor for their payment. Lessee agrees to make payment for any late charges promptly upon demand by Lessor.


5. TAXES:


Lessee shall pay to Lessor an amount equal to all taxes paid, payable or required to be collected by Lessor, however designated, which are levied or based on the Monthly Rental or on the possession, use, operation, lease, rental, sale, purchase, control or value of the Equipment, including, without limitation, registration and license fees and assessments, state and local privilege or excise taxes, sales and use taxes, personal and other property taxes, and taxes or charges based on gross revenue, but excluding taxes based on Lessor's net income. Lessor shall invoice Lessee for all such taxes in advance of their payment due date, and Lessee shall promptly remit to Lessor all such taxes and charges upon receipt of such invoice from Lessor. Lessee shall pay all penalties and interest resulting from its failure to timely remit such taxes to Lessor when invoiced by Lessor. Lessor shall file all required sales and use tax and personal property tax returns and reports concerning the Equipment with all applicable governmental agencies.


6. USE; ALTERATIONS AND ATTACHMENTS:


(a) After Lessee receives and inspects any Equipment and is satisfied that the Equipment is satisfactory, Lessee shall execute and deliver to Lessor an Acceptance Certificate in a form provided by Lessor; provided, however, that Lessee's failure to execute and deliver an Acceptance Certificate for any Equipment shall not affect the validity of this Agreement with respect to the Equipment.


(b) Lessee shall be entitled to unlimited usage of the Equipment during the Initial Period or any renewal periods approved by Lessor in writing.


(c) Lessee shall at all times keep the Equipment in its sole possession and control. The Equipment shall not be moved from the location stated in the Equipment Schedule without the prior written consent of Lessor.


(d) Lessee shall cause the Equipment to be installed, used, operated and, at the termination of this Agreement as to each Equipment Schedule, removed (i) in accordance with any applicable manufacturer's manuals or instructions; (ii) by competent and duly qualified personnel only; and (iii) in accordance with applicable governmental regulations, if any.


(e) Lessee may not make alterations in or add attachments to the Equipment without first obtaining the written consent of Lessor. Any such alterations or attachments shall be made at Lessee's expense and shall not interfere with the normal and satisfactory operation or maintenance of the Equipment. The manufacturer may incorporate engineering changes or make temporary alterations to the Equipment upon request of Lessee. Unless Lessor shall otherwise agree in writing, all such alterations and attachments shall be and become the property of Lessor or, at the option of Lessor, shall be removed by Lessee at the termination of this Agreement as to such Equipment and the Equipment restored at Lessee's expense to its original condition, reasonable wear and tear only excepted.


(f) Lessee acknowledges that the Equipment is and shall remain personal property during the term of this Agreement. Lessee shall not permit the Equipment to become an accession to other goods or a fixture to, or part of, any real property. If the Equipment becomes an accession to other goods, Lessee shall provide to Lessor signed waivers in form acceptable to Lessor.


(g) In the event the Equipment includes software (including all documentation, later versions, updates, modifications; herein "Software"), the following shall apply: (i) Lessee shall possess and use the Software in accordance with the terms and conditions of any license agreement ("License") entered into with the owner/vendor of such Software (at Lessor's request, Lessee shall provide a complete copy of the License to Lessor); (ii) as due consideration for Lessor's payment of the Software price and for providing the Software to Lessee at a lease rate (as opposed to a debt rate), Lessee agrees that Lessor is leasing (and not financing) the Software to Lessee; (iii) except as otherwise specifically provided herein, the Software shall be deemed Equipment for all purposes under this Agreement.


(h) Lessee shall comply with all applicable laws, regulations and orders relating to the Equipment and this Agreement.


(i) The Equipment is leased solely for commercial or business purposes.


7. MAINTENANCE AND REPAIRS; RETURN OF EQUIPMENT:


(a) During the continuance of this Agreement, at its expense, and in accordance with all manufacturer maintenance specifications, Lessee (i) shall keep the Equipment in good repair, working order and condition; (ii) shall make all necessary adjustments, repairs and replacements; (iii) shall furnish all required parts, mechanisms, devices and servicing; and (iv) shall not use or permit the Equipment to be used for any purpose for which, in the opinion of the manufacturer, the Equipment is not designed or reasonably suitable. Such parts, mechanisms and devices shall immediately become a part of the Equipment for all purposes hereunder. If the manufacturer does not provide maintenance specifications, Lessee shall perform all maintenance in accordance with industry standards for like equipment.


(b) During the continuance of this Agreement and at its own expense, Lessee shall enter into and maintain in force a contract with the manufacturer or other qualified maintenance organization for maintenance of each item of Equipment. Such contract as to each item shall commence upon the Acceptance Date. Lessee shall furnish Lessor with a copy of such contract upon demand.


(c) At the termination of this Agreement and at its expense, Lessee shall return the Equipment to Lessor at the location within the Continental United States designated by Lessor. Upon such return, the Equipment shall be in the same operating order, repair, condition and appearance as on the Acceptance Date, excepting reasonable wear and tear from proper use thereof including all engineering changes theretofore prescribed by the manufacturer. Lessee shall provide maintenance qualification letters and/or arrange for and pay all costs which are necessary for the manufacturer to accept the Equipment under contract maintenance at its then standard rates.


(d) At the termination of any Schedule, Lessee shall, at its expense, return the Software to Lessor at the location within the Continental United States designated by the Lessor. Upon such return, Lessee shall also (i) delete from its systems all Software then installed, (ii) destroy all copies or duplicates of the Software which were not returned to Lessor, and (iii) cease using the Software altogether. Upon its receipt from Lessee, Lessor shall be responsible to return the Software to the owner/vendor or destroy the Software so that Lessee shall not be in breach of any software license.


8. OWNERSHIP AND INSPECTION:


(a) The Equipment shall at all times remain the property of Lessor or its assigns. By this Agreement, Lessee acquires no ownership rights in the Equipment. Lessor may affix (or require Lessee to affix) tags, decals or plates to the Equipment indicating Lessor's ownership, and Lessee shall not permit their removal or concealment.


(b) LESSEE SHALL KEEP THE EQUIPMENT AND LESSEE'S INTEREST UNDER THIS AGREEMENT FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES, EXCEPT THOSE PERMITTED IN WRITING BY LESSOR OR ITS ASSIGNS.


(c) Lessor, its assigns and their agents shall have free access to the Equipment at all reasonable times during normal business hours for the purpose of inspecting the Equipment and for any other purpose contemplated in this Agreement.


(d) Lessee shall immediately notify Lessor in writing of all details concerning any damage or loss to the Equipment arising from the alleged or apparent improper manufacture, functioning or operation of the Equipment.


9. WARRANTIES:


(a) LESSEE ACKNOWLEDGES THAT LESSOR HAS NOT MADE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, WARRANTIES RELATING TO ANY OF THE FOLLOWING: (i) THE DESCRIPTION, CONDITION, DESIGN, QUALITY OR PERFORMANCE OF THE EQUIPMENT; (ii) ITS MERCHANTABILITY OR FITNESS OR SUITABILITY FOR A PARTICULAR PURPOSE WHETHER OR NOT DISCLOSED TO LESSOR; AND (iii) DELIVERY OF THE EQUIPMENT FREE OF THE RIGHTFUL CLAIM OF ANY PERSON BY WAY OF INFRINGEMENT OR THE LIKE. LESSOR EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES. LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE OF ANY KIND OR NATURE WHATSOEVER, INCLUDING SPECIAL OR CONSEQUENTIAL DAMAGES.


(b) Lessor assigns to Lessee all assignable warranties on the Equipment, as described in Lessor's purchase contract, which assignme ...