PERSONAL PROPERTY
MASTER LEASE AGREEMENT
This Master Lease Agreement is made as of the 1st day of January, 1996,
between XXXXX X. XXXXXXX and XXXXX X. XXXXXXX, AS TRUSTEES OF THE XXXXXXX FAMILY
TRUST ("LESSOR") AND DETAILS, INC. ("LESSEE") with respect to the following
recitals of fact:
RECITALS
A. LESSOR is the owner of the equipment set forth on Schedule "A" hereto
("Equipment"), which is currently leased to LESSEE under Lease Agreements dated
May 1, 1981 and June 25, 1982, respectively, which Lease Agreements have been
amended from time to time and which have been extended through December 31, 1995
(collectively "Terminated Leases"). The Equipment is located in various of
LESSEE's facilities on Xxxxx Xxxx and Xxxxx Circle in Anaheim, California.
B. The aggregate current monthly rental for the Equipment as of December
1, 1995 is $30,400,00.
C. The parties desire by this Master Lease Agreement to consolidate the
Lease Agreements and the various amendments, to provide for a single rental
rate, and to provide for common lease terms.
NOW THEREFORE, in consideration of the mutual covenants and conditions
hereof, the parties agree as follows:
1. EQUIPMENT LEASED. LESSOR hereby leases to LESSEE and LESSEE hereby
leases from LESSOR the Equipment on and subject to the terms and conditions
hereinafter set forth.
2. RENT. The rent during the term hereof shall be $30,400 per month,
commencing on January 1, 1996. Rent shall be payable on the first day of each
month. Rent not paid by the tenth of each month shall bear interest at the
rate of 10% per annum from the first of such month, and shall be subject to a
late charge not exceeding 10% of the amount due, in addition to other remedies
at law or hereunder.
3. TERM. The term of this Master Lease Agreement shall be from January
1, 1996 to December 31, 2005. The term may be extended at LESSEE's option for
an additional ten years commencing on January 1, 2006 to December 31, 2015,
provided that (i) this Master Lease Agreement has not theretofor been
terminated, (ii) LESSEE is not then in default under the terms of this Master
Lease Agreement, and (iii) LESSEE has exercised this Extension Option. LESSEE
may only exercise this Extension Option by delivering to LESSOR written notice
that LESSEE by such notice elects to exercise its Extension Option not later
than August 1, 2005, and shall be thereupon bound to perform the obligations of
LESSEE during the ten years commencing on January 1, 2006.
4. PURCHASE OPTION. LESSEE shall have a purchase option to purchase all
Equipment under this Master Lease Agreement at the Purchase Option Exercise
Date. LESSEE may purchase all such Equipment provided that (i) this Master
Lease Agreement has not theretofor been terminated, (ii) LESSEE is not then in
default under the terms of this Master Lease Agreement, and (iii) LESSEE has
exercised this Purchase Option. LESSEE may only exercise this Purchase Option
by delivering to LESSOR written notice that LESSEE by such notice elects to
exercise its Purchase Option on the Purchase Option Exercise Date, which shall
be (i) not later than July 1, 2005, or (ii) if LESSEE has exercised its
Extension Option, not later than July 1, 2015, and shall be thereupon obligated
to purchase the Equipment on December 31, 2005 (or if LESSEE has exercised its
Extension Option, on December 31, 2015) and if such December 31 is a legal
holiday, then the purchase shall be consummated on the first business day
preceding such December 31 that is not a legal holiday. To be valid such notice
from LESSEE shall be accompanied by escrow instructions executed by LESSEE with
a responsible escrow company in Orange County, reflecting LESSEE'S deposit with
such escrow holder of $100,000, forfeitable to LESSOR should LESSEE fail to
purchase such Equipment for any reason other than LESSOR's inability to deliver
title. LESSOR shall within seven days of receipt execute and deliver such
escrow instructions to LESSEE and the escrow holder. The escrow shall obligate
LESSOR solely to deliver an assignment to all Equipment then subject to this
Master Lease Agreement. LESSOR shall cause the condition of title not later
than the close of escrow to be free and clear of all liens and encumbrances,
except solely (i) the lien for current taxes, (ii) any liens or assessments for
municipal
- 2 -
improvements hereafter arising, and (iii) any lien or encumbrance caused by any
act or omission of LESSEE occurring on or after the date hereof. Escrow holder
shall deduct and pay from the purchase price, the amount of any liens or
encumbrances other than items (i) and (ii). The purchase price shall be paid in
cash on close of escrow to LESSOR, and LESSOR shall be without cost in the
escrow, all fees, charges and costs shall be paid for by LESSEE. The purchase
price shall be fair market value of the Equipment as determined: (i) by
negotiation between the parties, or (ii) if they are unable to agree within
thirty days following exercise of the option, by an appraiser selected by the
parties to determine the fair market value in such appraiser's discretion within
thirty days following such appointment. If the parties cannot agree on an
appraiser, they shall each appoint an appraiser ("party appraiser") within 45
days following exercise of the option, who in turn within five days following
such appointment shall together appoint a third appraiser. Within thirty days
thereafter, each appraiser shall independently submit his or her appraisal in
writing. The purchase price shall be the fair market value of the Parcels so
determined by the third appraiser, except that if both of the party appraisers
submit a higher value, the purchase price shall be the lowest of the amounts
submitted by the party appraisers.
5. NONWARRANTY AND NONMAINTENANCE.
Notwithstanding anything contained in the incorporated provisions of this Master
Lease Agreement, LESSOR makes no warranty with respect to the condition of the
Equipment. LESSEE acknowledges that it has had exclusive possession and use of
the Equipment, prior to entering this Master Lease Agreement, and has inspected
and accepts same, all AS IS and WITH ALL FAULTS. LESSEE shall be exclusively
responsible for the continuing maintenance of all Equipment.
6. INSURANCE, INDEMNITY AND RISK OF LOSS.
LESSEE shall maintain at all times, at LESSEE's cost, insurance against all
insurable risks of loss for the full replacement value thereof, together with
insurance against all public liability, employer and other liability which may
arise from possession and use of the Equipment by LESSEE. Each such policy shall
name LESSOR as an additional insured, and shall contain an endorsement
requirement not less than thirty days prior notice to LESSOR in the event of
cancellation or non-renewal. LESSEE shall furnish LESSOR with a copy of each
policy.
-3-
Notwithstanding any insurance requirement hereunder, LESSEE shall bear the
entire risk of loss or damage from any cause, and no loss or damage shall impair
any obligation of LESSEE hereunder, including without limitation, the obligation
to pay rent during the term hereof, LESSEE shall further indemnify, save
harmless and defend LESSOR, from and against all claims and demands, and any
loss, liability and expense, including reasonable attorneys fees, arising out of
the LESSEE's possession or use of the Equipment.
7. DEFAULT. Upon any default in the payment of rent, in addition to
late charges and interest, or upon any failure to observe the covenants of this
Master Lease Agreement, LESSOR may elect to declare a default. Upon such
election, LESSOR shall give LESSEE written notice of such default, and the
amount due if a rent default, or the nature of the default and the action
required to correct the default if other than nonpayment of rent. LESSEE shall
have twenty four hours thereafter to cure a rent default by full payment in
cash of the full amount due including late charges and interest, and by
compliance with the requirements for cure if other than payment of rent within
twenty four hours, or if same cannot be cured within twenty four hours to
commence such cure and pursue same diligently until completion. If such cure is
not so effected, or the default is of a nature which is not capable of cure,
then LESSOR may exercise any or all of the following remedies, the exercise of
any one or more of which shall not constitute an election of remedies and shall
not preclude recovery of any rent or damages due or to become due under this
Master Lease Agreement:
(a) Acceleration of Rent. To declare the entire amount of rent due
during the term of this Master Lease Agreement to be immediately due and
payable.
(b) Legal Action. To xxx and recover all rents and other amounts due,
and recover the Equipment.
(c) Seizure. To enter the premises and take possession and remove the
Equipment, without demand or notice, wherever located, without court order or
other process of law, and without liability for damages occasioned thereby,
hereby waived by LESSEE.
(d) Termination. To terminate this Master Lease Agreement.
-4-
(e) Other Remedies. To pursue any other remedy available to LESSOR at
law.
8. EXPENSES. LESSEE shall pay all costs and expenses, including
reasonable attorneys fees, incurred by LESSOR in enforcing any of the provisions
of this Master Lease Agreement.
9. ASSIGNMENT. LESSEE may assign its rights hereunder or sublease the
Equipment or portions thereof, provided that no such assignment or sublease
shall relieve LESSEE of any obligation hereunder, and that LESSEE shall remain
liable for the performance of all obligations of LESSEE hereunder.
10. OWNERSHIP. The Equipment is and shall remain owned solely by LESSOR,
unless a purchase of the Equipment by LESSEE is completed hereunder. The
Equipment shall at all times remain personal property, whether or not affixed in
any manner to real property.
11. PERMITS AND TAXES. LESSEE shall at its sole cost and expense obtain
all necessary permits, consents and authorizations connected with the movement,
installation, use and operation of the Equipment. LESSEE shall pay, on a timely
basis, all property taxes and assessments levied with respect to the Equipment.
12. NONWAIVER. No covenant of this Master Lease Agreement shall be
deemed to have been waived or released, unless LESSOR shall have waived or
released such covenant in writing. Any breach deemed waived by operation of law,
shall be a waiver solely of such individual circumstance of breach, and shall
not apply to any subsequent or continuing breach.
13. NOTICES. Any notice hereunder shall be in writing and shall be
deemed delivered when personally served, whether by courier or other person, or
three business day after deposit with the U.S. Postal Service, postage prepaid
and certified, addressed as follows, or to such other address as either party by
notice hereunder shall designate:
IF TO LESSEE: Details, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
-5-
IF TO LESSOR: THE XXXXXXX FAMILY TRUST
XXXXX X. AND XXXXX X. XXXXXXX, TRUSTEES
34372 Street of the Cove Lanterns
Xxxx Xxxxx, Xxxxxxxxxx 00000
with copy to:
XXXX X. XXXXX, ESQ.
XXXX XXXXXX XXX 0000
XXXX XXX, XXXXXXXXXX 00000
14. TERMINATED LEASES. Upon execution hereof, the Terminated Leases
shall be without further force or effect, and each party hereto, as lessee and
lessor thereunder, hereby acknowledges that the other has performed all
obligations required under the Terminated Leases, and that neither party any
further claim or right against the other arising from the Terminated Leases,
except that lessee thereunder shall be responsible for any third party charges
for property taxes, insurance and maintenance charges otherwise payable by
lessee, but not yet billed.
15. FAIR DEALING, CONSENTS, ASSIGNMENT. In connection with the
performance of their respective obligations under this Master Lease Agreement,
LESSOR and LESSEE shall act in good faith and in a commercially reasonable
manner. Should any consent of LESSOR be required in connection with the
provisions hereof, (i) such consent shall not unreasonably be withheld, and (ii)
such consent shall be deemed granted if any trustee of LESSOR, or trustee or
other person (in the event LESSOR is not a trust) with the power to bind LESSOR,
while acting in the capacity of an officer or director of LESSEE shall take any
action, or while exercising rights as a shareholder of LESSEE, shall vote or
consent in writing to authorize s specific act or omission, requiring consent of
LESSOR under this Master Lease Agreement. LESSOR hereby consents to one or
more collateral assignments of LESSEE's interest hereunder pursuant to one or
more loan agreements, which each involve an extension of credit of not less than
$7 million to LESSEE. LESSOR agrees to evidence its consent to such assignments
by executing documents reasonably satisfactory to LESSOR.
-6-
16. MISCELLANEOUS. This Master Lease Agreement: (i) is an
integration of all promises and agreements of the parties, (ii) shall be
governed and interpreted under California law, (iii) shall inure to the benefit
of and be binding upon the parties, their successors and assigns, (iv) may be
amended or modified solely by an agreement in writing signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Master Lease
Agreement as of the day and year first above written.
LESSOR: THE XXXXXXX FAMILY TRUST
by /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Trustee
by /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Trustee
LESSEE: DETAILS, INC.
by /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Chairman
and Chief Executive Officer
by /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Secretary
- 7 -
SCHEDULE "A"
SCHEDULE LEASED EQUIPMENT
--------------------------------------------------------------------------------
ITEM DESCRIPTION MODEL
SERIAL NUMBER
---- ----------- -------------
1 Orbotech Computerized Optical 390
Inspection System
2 Xxxx Area Calculator KC-141-043
3 Electro Mechanico Drill Xxxx 000X
0 Xxxxxxx Xxxxxx 000
0 Screening Set Up Xxxx 0000
0 Xxxxxx Xxxxxxxxxx with Zoom 570
7 Light Table LT
8 Pressure Washer OPS 12
9 Arbor Press 125
10 Smear Removal Line -
11 Unidrill Unit 1230
12 Laminating Press PC75-18-4-TM
13 Grieve Oven 333
14 Light Table -
15 Screening Chases -
16 Gold Saver Pump and Resin Column -
17 Screening Table 5000
18 Xxxx VI Drilling Machine -
------
* All Equipment is wholly owned by LESSOR, except that LESSEE has a one/third
undivided interest in Item 1 only.
- 8 -
SCHEDULE "A" PAGE 2
SCHEDULE LEASED EQUIPMENT
--------------------------------------------------------------------------------
ITEM DESCRIPTION MODEL
SERIAL NUMBER
---- ----------- -------------
19 Wabash Multilayer Laminator -
20 Kol-Press Multilayer Laminator -
21 OPIC III "B" with General -
Automation Controller, CPC,
CRT, Power Supply 01731,
Reader, Punch, Accessory Kit
X/Y Display, Plotter and MCC
Software
22 XL5 "A" C/R with General -
Automation Controller, CNC-5,
Power Supply, Excellon Quiet
Drills, Automatic Tool Changer
Tooling Plates, Accessory Kit
Heat Exchanger, Subplates,
Automatic Feeds and Speeds,
Step Up Transformer, MCC Software
23 HYD Shear Unit - 16 Gauge -
24 Rotary Air Compressor with 120 -
Gallon Horizontal Air Receiver,
Aftercooler, Moisture Separator,
Fused Switch, Refrigerated Air
Dryer, Coalescing In-Line Filter
- 9 -