Document:

Exhibit
10.109

 

NÖRR STIEFENHOFER LUTZ

RECHTSANWÄLTE
STEUERBERATER WIRTSCHAFTSPRÜFER

 

	
  Via courier

  	
   

  	
  Otto Stolberg-Stolberg 

  
	
  Southwall Technologies Inc.

  	
   

  	
  Rechtsanwalt

  
	
  Mr. Thomas G. Hood 

  	
   

  	
  Louis-Braille-Str. 5

  
	
  President & CEO

  	
   

  	
  01099 Dresden

  
	
  1029 Corporation Way 

  	
   

  	
   

  
	
  Palo Alto, California 94303

  	
   

  	
  Telefon:  
  0351-81660-11

  
	
  USA

  	
   

  	
  Zentrale:  
  0351-81660-0

  
	
   

  	
   

  	
  Telefax:  
  0351-81660-81

  
	
   

  	
   

  	
  nsldd@noerr.de

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Unser Zeichen: OST/00/syw

  
	
   

  	
   

  	
  0147DD-99-109DD

  
	
   

  	
   

  	
   

  
	
  Dresden, December 21, 2000

  	
   

  	
   

  

 

Re:          Last
portion of the Capital Project List

 

 

Dear Tom,

 

hereinwith I send you the copy of the letter of Deutsche Bank of
December 18, 2000.  The original is
withheld at me and put into the file of original contracts.

 

The English translation of the letter is attached.

 

If you agree, please sign the copy of the letter of December 18, 2000
with the original signings of Mr. Linnemann and Mr. Lampart and send it back to
me.  Than I will forward it to the bank.

 

Thanks in advance.

 

	
  Best regards

  
	
  NÖRR STIEFENHOFER LUTZ

  
	
   

  
	
  /s/ Otto Stolberg-Stolberg 

  
	
  Otto Stolberg-Stolberg

  
	
  Rechtsanwalt

  

 

 

IKB
Deutsche Industriebank

 

	
  Southwall Europe GmbH

  
	
  Management

  
	
  Southwallstr. 1

  
	
   

  
	
  01900 Großröhrsdorf

  
	
   

  
	
   

  	
  December 19, 2000

  

 

Dear Sirs:

 

Further to our discussions, we are pleased to offer a loan (loan no. 7)
on the following terms:

 

	
  Loan amount
  (nominal):

  	
  € 258,708.12

  
	
   

  	
   

  
	
  Payout rate:

  	
  100 %

  
	
   

  	
   

  
	
  Interest rate:

  	
  7.5 % p.a.

  
	
   

  	
   

  
	
  Interest
  computation method:

  	
  360 days divided
  by 360

  
	
   

  	
   

  
	
  Interest due
  dates:

  	
  quarterly in
  retrospect on March 15, June 15, September 15 and December 15 of each year

  
	
   

  	
   

  
	
  Repayment:

  	
  12 installments of € 21,599.01, quarterly as of the
  interest due dates first installment: March 15, 2002 last installment:
  December 15, 2004

  
	
   

  	
   

  
	
  Damages for delayed
  payment:

  	
  On amounts not received by us in time we will charge
  interest in the amount of the base interest rate pursuant to Section 1 of the
  Diskontsatz-Überleitungs-Gesetz (Transitory Law concerning discount rates)
  plus 5 % p.a.

  
	
   

  	
   

  
	
  Reservation:

  	
  The obligation to pay expires if the payment
  requirements have not been by April 7, 2001

  

 

 

For the Bank

For the borrower

 

	
  IKB Deutsche Industriebank AG

  
	
  Berlin branch

  
	
  P.O. Box 11 04 69

  
	
   

  
	
  10834 Berlin

  

 

 

Declaration
of Consent

 

We hereby confirm our consent to your commitment concerning

 

 

loan no. 7 of 19 December 2000

 

to which your General Terms and Conditions known to us apply.

 

We request you to transfer the loan money at our expense and risk as
soon as the payment requirements are met to:

 

 

Bank account no.

 

Bank:                                      Bank
identification number:

 

Account holder

 

 

	
  Dresden,

  
	
   

  
	
  Southwall Europe GmbH

  
	
  - Management -

  
	
   

  
	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  
	
  January 8, 2001

  

 

 

Translation

 

Deutsche
Bank

Corporate and Real Estate

Dresden Branch

 

	
  To

  
	
  Southwall Europe GmbH

  
	
  c/o NÖRR STIEFENHOFER LUTZ

  
	
  Louis-Braille-Strasse 5

  
	
   

  
	
  01099 Dresden

  
	
   

  	
  December 18, 2000

  

 

Re: 
Loan for DM 500,000 (Capital Project List)

 

Dear Sirs:

 

Further to the telephone conversation held between Mr. Übelein and
Erhard Lamparter on the 15th of this month, we agree with you on the following
conditions for a partial amount of DM 500,000 in connection with the 1st
Addendum of April 19, 2000 to our Loan Commitment of May 12, 1999:

 

	
  Loan amount:

  	
   

  	
  DM 500,000

  
	
  Account #:

  	
   

  	
  5370333 08

  
	
  Term:

  	
   

  	
  4 years

  
	
  Sum paid out:

  	
   

  	
  100%

  
	
  Interest rate:

  	
   

  	
  7.5% fixed for a
  period of 4 years, payable quarterly retrospectively

  
	
  Repayment:

  	
   

  	
  Quarterly in
  equal installments of DM 38,860.10, initially on December 30, 2001

  
	
  Commitment fee:

  	
   

  	
  0.25% per month
  on the partial amount not paid out, from the 30th day after this loan
  commitment

  

 

 

All other terms under our Commitment of May 12, 1999 and the 1st
Addendum of April 19, 2000 shall remain unaffected.

 

In addition to the above, our General Business Terms and Conditions
(AGB) apply.

 

Please confirm your agreement with the conditions set out above by
validly signing (corporate seal and signature) and returning to us the attached
copy of this letter.

 

Sincerely yours,

 

	
  Deutsche Bank AG

  	
   

  
	
  Dresden Branch

  	
   

  
	
   

  	
   

  
	
  [signature]

  	
  [signature]

  
	
  Stefan Linnemann

  	
  Erhard Lamparter

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Place, date)

  	
  [signature]

  
				

 

2Exhibit
10.111

 

 

M A T R I X

F U N D I N G  C O R P O R A T I O N

 

6975 Union Park Center,
Second Floor

Midvale, Utah 84047

 

MASTER LEASE AGREEMENT
NO. R0825

 

This Master Lease
Agreement is made this 19th day of July, 1999 between MATRIX FUNDING CORPORATION,
with its principal office at 6975 Union Park Center, Second Floor, Midvale, UT
84047 (the “Lessor”), and SOUTHWALL TECHNOLOGIES, INC., with its principal
office at 1029 Corporation Way, Palo Alto, CA 94303 (the “Lessee”).

 

1.             LEASE:

 

Lessor agrees to lease to Lessee, and Lessee agrees to
lease from Lessor, the property (together with all attachments, replacements,
parts, substitutions, additions, repairs, accessions and accessories,
incorporated therein and/or affixed thereto) (collectively, the “Property”)
described in any Lease Schedule (“Schedule”) executed and delivered by Lessor
and Lessee in connection with this Master Lease Agreement.  Each Schedule shall incorporate by reference
the terms and conditions of this Master Lease Agreement, and together with the
Acceptance Certificate (as defined herein) and Master Progress Funding
Agreement, if applicable, shall constitute a separate “Lease”.  In the event of conflict between the
provisions of this Master Lease Agreement and any Schedule, the provisions of
the Schedule shall govern.

 

2.             ADDITIONAL
DEFINITIONS:

 

(a)           Except
as otherwise provided in Section 6(a) hereof, “Acceptance Date” means, as to
the Property designated on any Schedule, the date Lessee accepts the Property
as set forth in any acceptance certificate signed by the Lessee which is
acceptable to Lessor (the “Acceptance Certificate”).  If Lessee fails to sign and deliver an Acceptance Certificate,
then except as otherwise provided in Section 6(a) hereof, the Acceptance Date
shall be a date determined by Lessor which shall be no sooner than the date
Lessee receives substantially all of the Property.

 

(b)           “Commencement
Date” means, as to the Property designated on any Schedule, where the
Acceptance Date for such 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 any Lease, as to all Property designated
on the applicable Schedule, shall commence on the Acceptance Date for such
Property, and shall continue for an “Initial Period” ending that number of
months from the Commencement Date as specified in the Schedule.  Thereafter, Lessee shall have options to
purchase or return the Property or to extend the Lease, all as provided in
Section 18(m) of this Agreement.

 

4.             RENT
AND PAYMENT:

 

Lessee shall pay as rent
for use of the Property, aggregate rentals equal to the sum of all the Monthly
Rentals (defined in the Schedule) and other payments due under the Lease for
the entire Initial Period.  The Monthly
Rental shall begin on the Acceptance 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 to Lessor, or its assigns, at Lessor’s address set forth above (or as
otherwise directed in writing by Lessor, or its assigns), without notice or
demand.  LESSEE SHALL NOT ABATE, SET OFF
OR DEDUCT ANY AMOUNT OR DAMAGES FROM OR REDUCE ANY MONTHLY RENTAL OR OTHER
PAYMENT DUE FOR ANY REASON.  THIS 

 

 

LEASE IS NON-CANCELABLE FOR THE ENTIRE TERM OF THE INITIAL PERIOD AND
ANY EXTENSION PERIODS.

 

If any rental or other payment due under any Lease
shall be unpaid after its due date, Lessee will pay on demand, as a late
charge, but not as interest, the greater of twenty–five dollars ($25) or
five percent (5%) of any such unpaid amount but in no event to exceed maximum
lawful charges.  If late charges are
assessed by a lending institution due to any late payment by Lessee, Lessee
agrees to pay such late charges or to reimburse Lessor for their payment.

 

5.             TAXES:

 

Lessee shall pay to Lessor when due all taxes, fees,
assessments and charges paid, payable or required to be collected by Lessor,
however designated, which are levied or based on the Monthly Rental or other
payment due under the Lease, or on the possession, use, operation, lease,
rental, sale, purchase, control or value of the Property, including without
limitation, registration and license fees and assessments, state and local
privilege or excise taxes, documentary stamp taxes or assessments, 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 (collectively,
“taxes”).  Lessor shall invoice Lessee
for all taxes in advance of their payment due date, and Lessee shall promptly remit
to Lessor all taxes upon receipt of an invoice from Lessor.  Lessee shall pay all penalties and interest
resulting from its failure to timely remit all 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
Property with all applicable governmental agencies.

 

6.             USE;
ALTERATIONS AND ATTACHMENTS:

 

(a)           After
Lessee receives and inspects any Property and is satisfied that the Property is
satisfactory, Lessee shall execute and deliver to Lessor an Acceptance
Certificate in form provided by Lessor; provided, however, that Lessee’s
failure to execute and deliver an Acceptance Certificate for any Property shall
not affect the validity and enforceability of the Lease with respect to the
Property.  If Lessee has signed and
delivered a Master Progress Funding Agreement, Lessor may, in its sole
discretion, at any time by written notice to Lessee, declare all prior
Authorizations signed in connection with the Master Progress Funding Agreement
to be and constitute the “Acceptance Certificate” for all purposes under the
Lease, and the Acceptance Date of the Lease shall be the date determined by
Lessor in its sole discretion which shall not be earlier than the date of the
last Authorization.

 

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

 

(c)           Lessee
shall cause the Property to be installed, used, operated and, at the
termination of the Lease, 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.

 

(d)           Lessee
may not make alterations or attachments to the Property 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
Property.  The manufacturer may
incorporate engineering changes or make temporary alterations to the Property
upon request of Lessee.  Unless Lessor
shall otherwise agree in writing, all such alterations and attachments shall be
and become the property of Lessor upon their attachment to the Property or, at
the option of Lessor, shall be removed by Lessee at the termination of the
Lease as to such Property and the Property restored at Lessee’s expense to its
original condition, reasonable wear and tear only excepted.

 

(e)           The
Property is and shall remain personal property during the term of the Lease
notwithstanding that any portion thereof may in any manner become affixed,
attached to or located on real property or any building or improvement thereon.  Lessee shall not permit the Property to
become an accession to other goods or a fixture to or part of any real
property.  Lessee will obtain and
deliver to Lessor a waiver of liens, in form satisfactory to Lessor, from all
persons not a party hereto who might secure an interest, lien or other claim in
the Property.

 

2

 

(f)            In
the event the Property includes software (which Lessee agrees shall include all
documentation, later versions, updates, upgrades, and 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 and shall not
breach the License (at Lessor’s request, Lessee shall provide a complete copy
of the License to Lessor); (ii) Lessee agrees that Lessor has an interest in
the License and Software due to its payment of the price thereof and is an
assignee or third–party beneficiary of the License; (iii) as due
consideration for Lessor’s payment of the price of the License and Software 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; (iv) except for the original price paid by Lessor, Lessee shall, at its
own expense, pay promptly when due all servicing fees, maintenance fees, update
and upgrade costs, modification costs, and all other costs and expenses relating
to the License and Software and to maintain the License in effect during the
term of the Lease; and (v) the Software shall be deemed Property for all
purposes under the Lease.

 

(g)           Lessee
shall comply with all applicable laws, regulations, requirements, rules and
orders, all manufacturer’s instructions and warranty requirements, and with the
conditions and requirements of all policies of insurance with respect to the
Property and the Lease.

 

(h)           The
Property is leased solely for commercial or business purposes.

 

7.             MAINTENANCE
AND REPAIRS; RETURN OF PROPERTY:

 

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

 

(b)           During
the continuance of each Lease, Lessee shall, at its own expense, enter into and
maintain in force a contract with the manufacturer or other qualified
maintenance organization satisfactory to Lessor for maintenance of each item of
Property.  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)           Lessee
shall pay all shipping and delivery charges and other expenses incurred in
connection with the Property.  Upon
default, or at the expiration or earlier termination of any Lease, Lessee
shall, at its own expense, assemble, prepare for shipment and promptly return
the Property to Lessor at the location within the Continental United States
designated by Lessor.  Upon such return,
the Property shall be in the same operating order, repair, condition and
appearance as on the Acceptance Date, except for reasonable wear and tear from
proper use thereof, and shall include all engineering changes theretofore
prescribed by the manufacturer.  Lessee
shall provide maintenance certificates or qualification letters and/or arrange
for and pay all costs which are necessary for the manufacturer to accept the
Property under contract maintenance at its then standard rates
(“recertification”).  The term of the
Lease shall continue upon the same terms and conditions until such recertification
has been obtained.  With regard to
Software, at the expiration or earlier termination of any Lease, or upon demand
by Lessor upon the occurrence of an Event of Default under the Lease, Lessee
shall (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/licensor so that Lessee shall not be in breach of any
software license.

 

8.             OWNERSHIP
AND INSPECTION:

 

(a)           The
Property shall at all times be the property of Lessor or its assigns, and
Lessee shall have no right, title or interest therein except as to the use
thereof subject to the terms and conditions of the Lease.  For purposes of the foregoing, Lessee
transfers to Lessor all right, title and interest (including all ownership
interest) which Lessee may have in and to the Property.  Lessor may affix (or require Lessee to
affix) tags, decals or plates to 

 

3

 

the Property indicating Lessor’s ownership, and Lessee shall not permit
their removal or concealment.  Lessee
shall not permit the name of any person or entity other than Lessor or its
assigns to be placed on the Property as a designation that might be interpreted
as a claim of ownership or security interest.

 

(b)           LESSEE
SHALL KEEP THE PROPERTY AND LESSEE’S INTEREST UNDER ANY LEASE 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 Property at all
reasonable times during normal business hours for the purpose of inspecting the
Property and for any other purpose contemplated in the Lease.

 

(d)           Lessee
shall immediately notify Lessor in writing of all details concerning any damage
or loss to the Property, including without limitation, any damage or loss
arising from the alleged or apparent improper manufacture, functioning or
operation of the Property.

 

9.             WARRANTIES:

 

(a)           Lessee
acknowledges that Lessor is not the manufacturer of the Property nor the
manufacturer’s agent nor a dealer therein. 
The Property is of a size, design, capacity, description and manufacture
selected by the Lessee.  Lessee is
satisfied that the Property is suitable and fit for its purposes.  LESSEE AGREES THAT LESSOR HAS NOT MADE AND
DOES NOT MAKE ANY WARRANTY OR REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, AS
TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR REPRESENTATION
AS TO: (i) THE DESCRIPTION, CONDITION, DESIGN, QUALITY OR PERFORMANCE OF THE
PROPERTY OR QUALITY OR CAPACITY OF MATERIALS OR WORKMANSHIP IN THE PROPERTY;
(ii) ITS MERCHANTABILITY OR FITNESS OR SUITABILITY FOR A PARTICULAR PURPOSE
WHETHER OR NOT DISCLOSED TO LESSOR; AND (iii) DELIVERY OF THE PROPERTY FREE OF
THE RIGHTFUL CLAIM OF ANY PERSON BY WAY OF INFRINGEMENT OR THE LIKE.  LESSOR EXPRESSLY DISCLAIMS ALL SUCH
WARRANTIES.  If the Software is not
properly installed, does not function as represented or warranted by original
licensor, or is unsatisfactory for any reason, Lessee shall make any claim on
account thereof solely against original licensor and shall nevertheless pay all
sums payable under the Lease, Lessee hereby waiving the right to make any such
claims, against Lessor.  Lessor shall
not be liable to Lessee for any loss, damage or expense of any kind or nature
caused, directly or indirectly, by the Property or the use, possession or maintenance
thereof, or the repair, service or adjustment thereof, or by any delay or
failure to provide any such maintenance, repair, service or adjustment, or by
any interruption of service or loss of use thereof (including without
limitation, Lessee’s use of or right to use any Software) or for any loss of
business howsoever caused.

 

(b)           NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THE LEASE, LESSOR SHALL NOT, UNDER ANY
CIRCUMSTANCES, BE LIABLE TO LESSEE OR ANY THIRD PARTY, FOR CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THE
TRANSACTION CONTEMPLATED HEREUNDER, WHETHER IN AN ACTION BASED ON CONTRACT,
TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY OTHER LEGAL THEORY,
INCLUDING WITHOUT LIMITATION, LOSS OF ANTICIPATED PROFITS, OR BENEFITS OF USE
OR LOSS OF BUSINESS, EVEN IF LESSOR IS APPRISED OF THE LIKELIHOOD OF SUCH
DAMAGES OCCURRING.

 

IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT EACH AND
EVERY PROVISION OF ANY LEASE WHICH PROVIDES FOR A LIMITATION OF LIABILITY,
DISCLAIMER OF WARRANTIES OR EXCLUSION OF DAMAGES, IS INTENDED BY THE PARTIES TO
BE SEVERABLE FROM ANY OTHER PROVISION AND IS A SEPARABLE AND INDEPENDENT
ELEMENT OF RISK ALLOCATION AND IS INTENDED TO BE ENFORCED AS SUCH.

 

(c)           Lessor
assigns to Lessee all assignable warranties on the Property, including without
limitation any warranties described in Lessor’s purchase contract, which
assignment shall be effective only (i) during the Initial Period and any
extensions thereof, and (ii) so long as no Event of Default exists.

 

4

 

10.           NET
LEASE; LESSEE’S OBLIGATIONS ABSOLUTE AND UNCONDITIONAL:

 

This Agreement is a “net lease” and, as between Lessor
and Lessee, Lessee shall be responsible for and shall indemnify Lessor against,
all costs, expenses and claims of every nature whatsoever arising out of or in
connection with or related to the Lease or the Property.

 

Lessee agrees that its obligation to pay Monthly
Rental and other obligations under the Lease shall be irrevocable, independent,
absolute and unconditional and shall not be subject to any abatement,
reduction, recoupment, defense, offset or counterclaim otherwise available to
Lessee; nor, except as otherwise expressly provided herein or as agreed to by
Lessor in writing, shall this Agreement terminate for any reason whatsoever
prior to the end of the Initial Period.

 

11.           ASSIGNMENT
BY LESSOR:

 

Lessor may assign or transfer its rights and interests
in the Lease and Property to another party (“Lessor’s Assignee”) either
outright or as security for loans.  Upon
notice of any such assignment and instructions from Lessor, Lessee shall pay
its Monthly Rental and other payments and perform its other obligations under
the Lease to the Lessor’s Assignee (or to another party designated by Lessor’s
Assignee).  Upon any such sale or
assignment, LESSEE’S OBLIGATIONS TO LESSOR’S ASSIGNEE UNDER THE ASSIGNED
SCHEDULE SHALL BE ABSOLUTE AND UNCONDITIONAL AND LESSEE WILL NOT ASSERT AGAINST
LESSOR’S ASSIGNEE ANY CLAIM, DEFENSE, OFFSET OR COUNTERCLAIM WHICH LESSEE MIGHT
HAVE AGAINST LESSOR.  Lessor’s Assignee
shall have all of the rights but none of the obligations of Lessor under the
assigned Lease, and after such assignment Lessor shall continue to be
responsible for all of Lessor’s obligations under the Lease.

 

Upon any such assignment, Lessee agrees to execute and
deliver to Lessor: (i) estoppel certificates, acknowledgments of assignment and
other documents requested by Lessor which acknowledge the assignment and affirm
provisions of the Lease, and (ii) UCC–1 financing statements or
precautionary filings as requested.

 

Only one executed counterpart of any Schedule shall be
marked “Original”; any other executed counterparts shall be marked “Duplicate
Original” or “Counterpart”.  No security
interest in any Schedule may be created through the transfer and possession of
any counterpart other than the “Original”.

 

12.           RISK
OF LOSS ON LESSEE:

 

From the earlier of the date the supplier ships the
Property to Lessee or the date Lessor confirms Lessee’s purchase order or contract
to supplier until the date the Property is returned to Lessor as provided in
the Lease, Lessee hereby assumes and shall bear all risk of loss for theft,
damage or destruction to the Property, howsoever caused.  NO SUCH LOSS OR DAMAGE SHALL IMPAIR ANY
OBLIGATION OF LESSEE UNDER THIS LEASE WHICH SHALL CONTINUE IN FULL FORCE AND
EFFECT.

 

In the event of damage or loss to the Property (or any
part thereof) and irrespective of payment from any insurance coverage
maintained by Lessee, but applying full credit therefore, Lessee shall at the
option of Lessor, (a) place the Property in good repair, condition and working
order; or (b) replace the Property (or any part thereof) with like property of
equal or greater value, in good repair, condition and working order and
transfer clear title to such replacement property to Lessor whereupon such
replacement property shall be deemed the Property for all purposes under the
Lease; or (c) pay to Lessor the total rent due and owing at the time of such
payment plus an amount calculated by Lessor which is equal to the Casualty Loss
Value specified in the Casualty Loss Schedule attached to the applicable
Schedule.

 

13.           INSURANCE:

 

Lessee shall obtain and maintain for the entire term
of this Lease, at its own expense (as primary insurance for Lessor and Lessee),
property damage and liability insurance and insurance against loss or damage to
the Property including without limitation loss by fire (including so–called
extended coverage), theft, collision and such other risks 

 

5

 

of loss as are customarily insured against on the type of Property
leased under any Lease and by businesses in which Lessee is engaged, in such
amounts, in such form and with such insurers as shall be satisfactory to
Lessor; provided, however, that the amount of insurance against loss or damage
to the Property shall be equal to or greater than the Casualty Loss Value of
such items of Property as specified in the Casualty Loss Schedule attached to
the Schedule.  Each insurance policy
will name Lessee as insured and Lessor and its assignees as additional insureds
and loss payees thereof as their interests may appear, shall contain cross–liability
endorsements and shall contain a clause requiring the insurer to give Lessor
and its assignees at least 30 days prior written notice of any material
alteration in the terms of such policy or of the cancellation thereof.  Lessee shall furnish to Lessor a certificate
of insurance or other evidence satisfactory to Lessor that such insurance
coverage is in effect; provided, however, that Lessor shall be under no duty
either to ascertain the existence of or to examine such insurance policy or to
advise Lessee in the event such insurance coverage shall not comply with the requirements
hereof.  All insurance covering loss or
damage to the Property shall contain a breach of warranty clause satisfactory
to Lessor.

 

14.           INDEMNIFICATION:

 

Except for the gross negligence or willful misconduct
of Lessor, Lessee shall indemnify and hold Lessor harmless from and against any
and all claims, (including without limitation negligence, tort and strict
liability), damages, judgments, suits and legal proceedings, and any and all
costs and expenses in connection therewith (including attorney’s fees incurred
by Lessor either in enforcing this indemnity or in defending against such
claims), arising out of or in any manner connected with or resulting from the
Lease or the Property, including, without limitation the manufacture, purchase,
financing, ownership, rejection, non–delivery, transportation, delivery,
possession, use, operation, maintenance, condition, lease, return, storage or
disposition thereof; including without limitation (a) claims for injury to or
death of persons and for damage to property; (b) claims relating to patent,
copyright, or trademark infringement, (c) claims relating to latent or other
defects in the Property whether or not discoverable by Lessor and (d) claims
for wrongful, negligent or improper act or misuse by Lessor.  Lessee agrees to give Lessor prompt notice
of any such claim or liability.  For
purposes of this paragraph and any Lease, the term “Lessor” shall include
Lessor, its successors and assigns, shareholders, directors, officers,
representatives and agents, and the provisions of this paragraph shall survive
expiration of any Lease with respect to events occurring prior thereto.

 

Upon request of Lessor, Lessee shall assume the
defense of all demands, claims, or actions, suits and all proceedings against
Lessor for which indemnity is provided and shall allow Lessor to participate in
the defense thereof.  Lessor shall be
subrogated to all rights of Lessee for any matter which Lessor has assumed
obligation hereunder, and may settle any such demand, claim, or action without
Lessee’s prior consent, and without prejudice to Lessor’s right to
indemnification hereunder.

 

15.           EVENTS
OF DEFAULT:

 

An “Event of Default” shall occur under any Lease if
Lessee:

 

(a)           fails
to pay any Monthly Rental or other payment required under the Lease when the
same becomes due and payable and such failure continues for ten (10) days after
its due date;

 

(b)           attempts
to or does, remove, sell, assign, transfer, encumber, sublet or part with
possession of any one or more items of the Property or any interest under any
Lease, except as expressly permitted herein, or permits a judgment or other
claim to become a lien upon any or all of Lessee’s assets or upon the Property;

 

(c)           permits
any item of Property to become subject to any levy, seizure, attachment,
assignment or execution; or Lessee abandons any item of Property;

 

(d)           or
any guarantor, fails to observe or perform any of its covenants and obligations
required to be observed or performed under the Lease and such failure continues
uncured for ten (10) days after occurrence thereof, except that the ten (10)
day cure period shall not apply and an Event of Default shall occur immediately
upon Lessee’s failure to maintain insurance;

 

6

 

(e)           or
any guarantor, breaches any of its representations and warranties made under
any Lease, or if any such representations or warranties shall be false or
misleading in any material respect;

 

(f)            or
any guarantor, shall (i) be adjudicated insolvent or a bankrupt, or cease, be
unable, or admit in writing its inability, to pay its debts as they mature, or
make a general assignment for the benefit of creditors or enter into any
composition or arrangement with creditors; (ii) apply for or consent to the
appointment of a receiver, trustee or liquidator of it or of a substantial part
of its property, or authorize such application or consent, or proceedings
seeking such appointment shall be instituted against it without such
authorization, consent or application and shall continue undismissed for a
period of 60 days; (iii) authorize or file a voluntary petition in bankruptcy
or apply for or consent to the application of any bankruptcy, reorganization in
bankruptcy, arrangement, readjustment of debt, insolvency, dissolution, moratorium
or other similar law of any jurisdiction, or authorize such application or
consent; or proceedings to such end shall be instituted against it without such
authorization, application or consent and such proceeding instituted against it
shall continue undismissed for a period of 60 days;

 

(g)           or
any guarantor, shall suffer an adverse change in its financial condition after
the date hereof as determined by Lessor in its sole discretion, or there shall
occur a substantial change in ownership of the outstanding stock of Lessee or a
substantial change in control of its board of directors;

 

(h)           shall
be in default under any other Schedule or agreement executed with Lessor; or
shall fail to sign and deliver to Lessor any document requested by Lessor in
connection with any Lease or shall fail to do any thing determined by Lessor to
be necessary or desirable to effectuate the transaction contemplated by the
Lease or to protect Lessor’s rights and interests in the Lease and Property; or
shall fail to provide financial statements to Lessor as provided in Section
18(g) hereof.

 

(i)            breach
by Lessee of any license or other agreement for Software.

 

16.           REMEDIES:

 

Upon the occurrence of any Event of Default and at any
time thereafter, Lessor may, with or without giving notice to Lessee and with
or without canceling the Lease, do any one or more of the following:

 

(a)           enforce
this Agreement according to its terms;

 

(b)           advance
funds on Lessee’s behalf to cure the Event of Default, whereupon Lessee shall
immediately reimburse Lessor therefor, together with late charges accrued
thereon;

 

(c)           refuse
to deliver the Property to Lessee;

 

(d)           upon
notice to Lessee, cancel this Master Lease Agreement and any or all Schedules
executed pursuant thereto;

 

(e)           if
Lessor determines, in its sole discretion, not to take possession of the
Property, Lessor shall continue to be the owner of the Property and may, but is
not obligated to, dispose of the Property by sale or otherwise, all of which
determinations may be made by Lessor in its sole discretion and for its own
account;

 

(f)            declare
immediately due and payable all amounts due or to become due hereunder for the
full term of the Lease (including any renewal or purchase options which Lessee
has contracted to pay);

 

(g)           with
or without terminating the Lease, recover the Casualty Loss Value of the
Property as of the rent payment date immediately preceding the date of default
together with all costs and expenses incurred by Lessor in the repossession,
recovery, storage, repair, sale, re–lease or other disposition of the
Property, including without limitation, reasonable attorneys’ fees and costs
incurred in connection therewith or otherwise resulting or arising from
Lessee’s default, and any indemnity if then determinable, plus interest on all
of the above until paid (before and after judgment) at the lesser of the rate
of eighteen percent (18%) per annum or the highest rate permitted by law
(collectively, “Lessor’s Damages”);

 

7

 

(h)           without
notice to Lessee, repossess the Property wherever found, with or without legal
process, and for this purpose Lessor and/or its agents or assigns may enter
upon any premises of or under the control or jurisdiction of Lessee or any
agent of Lessee, without liability for suit, action or other proceeding by
Lessee (any damages occasioned by such repossession being hereby expressly
waived by Lessee) and remove the Property therefrom; Lessee further agrees on
demand, to assemble the Property and make it available to Lessor at a place to
be designated by Lessor;

 

(i)            in
its sole discretion, re–lease or sell any or all of the Property at a
public or private sale on such terms and notice as Lessor shall deem reasonable
(such sale may, at Lessor’s sole option, be conducted at Lessee’s premises),
and recover from Lessee liquidated damages for the loss of a bargain and not as
a penalty an amount equal to the Lessor’s Damages;

 

(j)            if
Lessee breaches any of its obligations under Section 7(c) of this Agreement
with regard to Software, Lessee shall be liable to Lessor for additional
damages in an amount equal to the original price paid by Lessor for the
Software, and in addition, at Lessor’s option, Lessor shall be entitled to
injunctive relief;

 

(k)           exercise
any other right or remedy which may be available to it under the Uniform
Commercial Code or any other applicable law;

 

(l)            a
cancellation hereunder shall occur only upon notice by Lessor and only as to
such items of Property as Lessor specifically elects to cancel and this Lease
shall continue in full force and effect as to the remaining items, if any.

 

(m)          by
notice to Lessee, declare any license agreement with respect to Software
terminated, in which event the right and license of Lessee to use the Software
shall immediately terminate, and Lessee shall thereupon cease all use of the
Software and return all copies thereof to Lessor or original licensor; (ii)
have access to and disable the Software by any means deemed necessary by
Lessor, for which purposes Lessee hereby expressly consents to such access and
disablement, promises to take no action that would prevent or interfere with
Lessor’s ability to perform such access and disablement, and waives and
releases any and all claims that it has or might otherwise have for any and all
losses, damages, expenses, or other detriment that it might suffer as a result
of such access and disablement; and (iii) Lessee agrees that the detriment
which Lessor will suffer as a result of a breach by Lessee of the obligations
contained in the Lease cannot be adequately compensated by monetary damages,
and therefore Lessor shall be entitled to injunctive and other equitable relief
to enforce the provisions of this paragraph 16(m).  LESSEE AGREES THAT LESSOR SHALL HAVE NO DUTY TO MITIGATE LESSOR’S
DAMAGES UNDER ANY LEASE BY TAKING LEGAL ACTION TO RECOVER THE SOFTWARE FROM
LESSEE OR ANY THIRD PARTY, OR TO DISPOSE OF THE SOFTWARE BY SALE, RE–LEASE
OR OTHERWISE.

 

In the event Lessor in good faith believes the
Property to be in danger of misuse, abuse or confiscation or to be in any other
way threatened; or believes in good faith that the Property is no longer
sufficient or has declined or may decline in value; or believes in good faith
for any other reason that the prospect of payment or performance has become
impaired, Lessor shall have the right, in its sole discretion, to either
require additional collateral or declare the entire indebtedness under any
Lease immediately due and payable.

 

Lessor may exercise any and all rights and remedies
available at law or in equity, including those available under the Uniform
Commercial Code.  The rights and
remedies afforded Lessor hereunder shall not be deemed to be exclusive, but
shall be in addition to any rights or remedies provided by law.  Lessor’s failure promptly to enforce any
right or remedy hereunder shall not operate as a waiver of such right or
remedy, and Lessor’s waiver of any default shall not constitute a waiver of any
subsequent or other default.  Lessor may
accept late payments or partial payments of amounts due under the Lease and may
delay enforcing any of Lessor’s rights or remedies hereunder without losing or
waiving any of Lessor’s rights or remedies under the Lease.

 

8

 

17.           LESSEE’S
REPRESENTATIONS AND WARRANTIES:

 

Lessee represents and warrants as follows:

 

(a)           If
Lessee is a corporation, duly organized and validly existing in good standing
under the laws of the jurisdiction of its incorporation, duly qualified to do
business in each jurisdiction where any Property is, or is to be located, and
has full corporate power and authority to hold property under lease and to
enter into and perform its obligations under any Lease; the execution, delivery
and performance by Lessee of any Lease has been duly authorized by all
necessary corporate action on the part of Lessee, and is not inconsistent with
its Articles of Incorporation or By–Laws or other governing instruments;

 

(b)           If
Lessee is a partnership, duly organized by written partnership agreement and
validly existing in accordance with the laws of the jurisdiction of its
organization, duly qualified to do business in each jurisdiction where the
Property is, or is to be located, and has full power and authority to hold
property under lease and to enter into and perform its obligations under any
Lease; the execution, delivery and performance by Lessee of any Lease has been
duly authorized by all necessary action on the part of the Lessee, and is not
inconsistent with its partnership agreement or other governing
instruments.  Upon request, Lessee will
deliver to Lessor certified copies of its partnership agreement and other
governing instruments and original certificate of partners and other
instruments deemed necessary or desirable by Lessor.  To the extent required by applicable law, Lessee has filed and
published its fictitious business name certificate;

 

(c)           The
execution, delivery and performance by Lessee of any Lease does not violate any
law or governmental rule, regulation, or order applicable to Lessee, does not
and will not contravene any provision, or constitute a default under any
indenture, mortgage, contract, or other instrument to which it is bound and,
upon execution and delivery of each Lease, will constitute a legal, valid and
binding agreement of Lessee, enforceable in accordance with its terms;

 

(d)           No
action, including any permits or consents, in respect of or by any state,
federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by Lessee of any Lease;

 

(e)           All
computer hardware and software that is utilized by Lessee in the operation of
its businesses is and will be

“Year 2000 Compliant” in that it is and will be capable of accepting,
processing and printing date data between and within the twentieth and
twenty-first centuries, and neither the performance nor functionality of any
computer hardware or software is affected by dates prior to, during, or after
the Year 2000.  Upon request, Lessee
shall provide written assurances to Lessor that its hardware and software are
“Year 2000 Compliant”.

 

18.           GENERAL:

 

(a)           Entire
Agreement. Each Schedule shall incorporate the terms and conditions of this
Master Lease Agreement and, together with the Acceptance Certificate (as
defined herein) and Master Progress Funding Agreement (and Authorizations
thereunder), if applicable, and any amendments to any of the foregoing
documents, shall supersede all prior agreements and constitute the entire
understanding and agreement between the Lessor and Lessee with regard to the
subject matter hereof and thereof, and there is no understanding or agreement,
oral or written, which is not set forth herein or therein.

 

(b)           Time
Is of the Essence; Provisions Severable. Time is of the essence with
respect to any Lease.  The provisions
contained in any agreement shall be deemed to be independent and
severable.  The invalidity or partial
invalidity of any one provision or portion of the Lease under the laws of any
jurisdiction shall not affect the validity or enforceability of any other
provisions of the Lease.  The captions
and headings set forth herein are for convenience of reference only and shall
not define or limit any of the terms hereof.

 

(c)           Notices.
Notices or demands required to be given hereunder shall be in writing and
addressed to the other party at the address herein or such other address
provided by written notice hereunder and shall be effective (i) upon the next
business day if sent by guaranteed overnight express service (such as Federal
Express);

 

9

 

(ii) on the same day if personally delivered; or (iii) three days after
mailing if sent by certified or registered U.S. mail, postage prepaid.

 

(d)           Governing
Law; Waiver of Trial by Jury. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.  LESSEE AGREES TO SUBMIT TO THE JURISDICTION
OF THE STATE AND/OR FEDERAL COURTS IN THE STATE OF UTAH IN ALL MATTERS RELATING
TO THE LEASE, THE PROPERTY AND THE CONDUCT OF THE RELATIONSHIP BETWEEN LESSOR
AND LESSEE.  THIS LEASE WAS EXECUTED IN
THE STATE OF UTAH (BY THE LESSOR HAVING COUNTERSIGNED IT IN UTAH) AND IS TO BE
PERFORMED IN THE STATE OF UTAH (BY REASON OF ONE OR MORE PAYMENTS REQUIRED TO
BE MADE TO LESSOR IN UTAH).  LESSOR AND
LESSEE HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF
THE LEASE OR PROPERTY OR THE CONDUCT OF THE RELATIONSHIP BETWEEN LESSOR AND
LESSEE.

 

(e)           Binding
Effect; Survivability. The provisions of each Lease shall inure to the
benefit of and shall bind Lessor and Lessee and their respective permitted
successors and assigns.  All
representations, warranties, covenants and indemnities of Lessee made or agreed
to in the Lease or in any certificates delivered in connection therewith shall
survive the expiration, termination or cancellation of the Lease for any
reason.

 

(f)            Further
Assurances; Financing Statements. Lessee will cooperate with Lessor in protecting
Lessor’s interests in the Property, the Lease and the amounts due under the
Lease, including, without limitation, the execution and delivery of Uniform
Commercial Code statements and filings, patent and copyright registration
documents with respect to proprietary Software (if applicable), and other
documents requested by Lessor.  Lessee
shall pay all costs of filing any financing, continuation or termination
statements with respect to the Property and Lease, including without
limitation, any intangibles tax, documentary stamp tax or other similar tax or
charge relating thereto and of all UCC or other lien searches deemed necessary
or advisable by Lessor.  Lessee will do
whatever may be necessary or advisable to have a statement of the interest of Lessor
in the Property noted on any certificate of title relating to the Property and
will deposit said certificate with Lessor. 
Lessee will execute and deliver to Lessor such other documents and
written assurances and take such further action as Lessor may request to more
fully carry out the implementation, effectuation, confirmation and perfection
of the Lease and any rights of Lessor thereunder.  Lessee grants to Lessor a security interest in all deposits and
other property transferred or pledged to Lessor to secure the payment and
performance of all of Lessee’s obligations under the Lease.

 

(g)           Financial
Statements. Lessee shall provide to Lessor a copy of its annual audited
financial statements within 90 days after its fiscal year end, and a copy of
its quarterly unaudited financial statements within 45 days after the end of
each fiscal quarter.

 

(h)           Security
Interest. In the event a court of competent jurisdiction or other governing
authority shall determine that the Lease is not a “true lease” or is a lease
intended as security or that Lessor (or its assigns) does not hold legal title
to or is not the owner of the Property, then the Lease shall be deemed to be a
security agreement with Lessee, as debtor, having granted to Lessor, as secured
party, a security interest in the Property effective the date of the Lease, and
the Property shall secure all duties and obligations of Lessee under any Lease
or other agreement with Lessor.  As
security for the performance by Lessee of its duties and obligations under any
Lease, Lessee hereby grants to Lessor a security interest in all of Lessee’s
rights under any license agreement related to any Software, including, without
limitation, all of its rights with respect to the Software.  With regard to any security interest created
hereunder in any of the Property, Lessee consents and agrees that Lessor shall
have all of the rights, privileges and remedies of a secured party under the
Utah Uniform Commercial Code.

 

(i)            Change
in Lessee’s Name or Address. Lessee shall not change its name or address
from that set forth above, unless it shall have given Lessor or its assigns no
less than 30 days’ prior written notice.

 

(j)            Covenant
of Quiet Possession. Lessor agrees that so long as no Event of Default has
occurred and is continuing, Lessee shall be entitled to quietly possess the
Property subject to and in accordance with the terms and conditions of this
Agreement.

 

10

 

(k)           Lessor’s
Right to Perform for Lessee. If Lessee fails to perform or comply with any
of its agreements contained herein, Lessor may perform or comply with such
agreements and the amount of any payments and expenses of Lessor incurred in
connection with such performance or compliance (including attorneys’ fees),
together with interest thereon at the lesser of the rate of eighteen percent
(18%) per annum, or the highest rate permitted by law shall be deemed
additional rent payable by Lessee upon demand.

 

(l)            Attorneys’
Fees. Lessee shall reimburse Lessor for all charges, costs, expenses and
attorneys’ fees incurred by Lessor (a) in defending or protecting its interest
in the Property; (b) in the execution, delivery, administration, amendment and
enforcement of the Lease or the collection of any rent or other payments due
under the Lease; and (c) in any lawsuit or other legal or arbitration/mediation
proceeding to which the Lease gives rise, including without limitation, actions
in tort.

 

(m)          Lessee’s
Options at End of Initial Period. At the end of the Initial Period of any
Lease, or upon any expiration of any renewal or extension thereof as provided
for in option (2) herein or otherwise, Lessee shall, provided at least one
hundred eighty (180) days prior written notice is received by Lessor from
Lessee via certified mail, do one of the following: (1) purchase the Property
for a price to be determined by Lessor and Lessee, (2) extend the Lease for
twelve (12) additional months at the rate specified on the respective Schedule,
or (3) return the Property to Lessor at Lessee’s expense to a destination
within the continental United States specified by Lessor and terminate the
Schedule; provided, however, that for option (3) to apply, all accrued but
unpaid late charges, interest, taxes, penalties, and any and all other sums due
and owing under the Schedule must first be paid in full, the provisions of
Sections 6(c) and (d) and 7(c) hereof must be specifically complied with, and
Lessee must enter into a new Schedule with Lessor to lease Property which
replaces the Property listed on the old Schedule.  With respect to options (1) and (3), each party shall have the
right in its absolute and sole discretion to accept or reject any terms of
purchase or of any new Schedule, as applicable.  In the event Lessor and Lessee have not agreed to either option
(1) or (3) by the end of the Initial Period or any renewal or extension period
then in effect, or if Lessee fails to give written notice of its option via
certified mail at least one hundred eighty (180) days prior to the termination of
the Initial Period or any renewal or extension period then in effect, then
option (2) shall apply at the end of the Initial Period or any renewal or
extension period then in effect.

 

(n)           Amendment
and Modification. The Lease may not be amended or modified except by a
writing signed by a duly authorized representative of each party, but no such
amendment or modification needs further consideration to be binding.  Notwithstanding the foregoing, Lessee
authorizes Lessor to amend any Schedule to identify more accurately the
Property (including, without limitation, supplying serial numbers or other
identifying data), and such amendment shall be binding on Lessor and Lessee
unless Lessee objects thereto within 10 days after receiving notice of the
amendment from Lessor.

 

(o)           Joint
and Several Liability. In the event two or more parties sign the Agreement
as Lessee, each party shall be jointly and severally liable for all Lessee
representations, warranties, and obligations (including without limitation,
payment obligations) under this Agreement or under any Schedule or other
document executed in connection herewith.

 

19.           WAIVERS:

 

To the extent permitted by applicable law, Lessee
hereby waives any and all rights and remedies conferred upon a Lessee by
Sections 2A–508 through 2A–522 of the Uniform Commercial Code,
including but not limited to Lessee’s rights to: (i) cancel the Lease; (ii)
repudiate the Lease; (iii) reject the Property; (iv) revoke acceptance of the
Property; (v) recover damages from Lessor for any breaches or warranty or for
any other reason; (vi) claim, grant or permit a security interest in the
Property in Lessee’s possession or control for any reason; (vii) deduct all or
any part of any claimed damages resulting from Lessor’s default, if any, under
the Lease; (viii) “cover” by making any purchase or lease of or contract to
purchase or lease Property in substitution for those due from Lessor; (ix)
recover any general, special, incidental or consequential damages, for any
reason whatsoever; and (x) commence legal action against Lessor for specific
performance, replevin, detinue, sequestration, claim and deliver or the like
for any Property identified to the Lease. 
To the extent permitted by applicable law, Lessee also hereby waives any
rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell, lease or otherwise use any Property in mitigation of Lessor’s
damages as set forth in Section 16 hereof or which may otherwise limit or
modify any of Lessor’s rights or remedies in that section.

 

11

 

No waiver or modification by Lessor of any of the
terms and conditions hereof shall be effective unless in writing signed by an
officer of Lessor.

 

20.           ASSIGNMENT
BY LESSEE:

 

LESSEE MAY NOT ASSIGN THIS AGREEMENT OR ANY OF ITS
RIGHTS HEREUNDER OR SUBLEASE THE PROPERTY WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR WHICH WILL NOT BE UNREASONABLY WITHHELD.  NO PERMITTED ASSIGNMENT OR SUBLEASE SHALL RELIEVE LESSEE OF ANY
OF ITS OBLIGATIONS HEREUNDER.

 

BY INITIALING THIS SECTION, LESSEE ACKNOWLEDGES THAT
IT HAS READ THE ABOVE PARAGRAPHS UNDER SECTIONS 18, 19 AND 20, AND FULLY
UNDERSTANDS THEIR CONTENT AND AGREES TO THEIR PROVISIONS.

 

	
   

  	
  Initialed

  	
  /s/ Finley

  

 

21.           POWER
OF ATTORNEY.  LESSEE HEREBY AUTHORIZES
AND APPOINTS LESSOR AND LESSOR’S AGENTS AND ASSIGNS AS LESSEE’S ATTORNEY–IN–FACT
TO COMPLETE, EXECUTE, FILE AND AMEND ON LESSEE’S BEHALF UCC FINANCING
STATEMENTS, PRECAUTIONARY OR OTHERWISE, IN CONNECTION WITH THE PROPERTY AND
LEASE AND TO CONFORM THE DESCRIPTION OF THE PROPERTY (INCLUDING SERIAL NUMBERS)
IN ANY SUCH FINANCING STATEMENTS OR OTHER DOCUMENTATION.

 

IN WITNESS WHEREOF, Lessor and Lessee have executed this Agreement on
the day and year first above written.

 

	
  LESSOR:

  	
  LESSEE:

  
	
   

  	
   

  
	
  MATRIX FUNDING CORPORATION

  	
  SOUTHWALL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Kay Paul

  	
   

  	
  BY:

  	
  /s/  Bill R.
  Finley

  	
   

  
	
   

  	
   

  
	
  TITLE: 

  	
  Assistant Vice President

  	
  TITLE:

  	
  Vice President and CFO

  
	
   

  	
   

  	
  Bill R. Finley

  
								

 

 

12

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