1
EXHIBIT 10.19
CUSTOMER NO. 1140
MASTER LEASE AGREEMENT
Lessor: TRANSAMERICA BUSINESS CREDIT CORPORATION
Riverway II
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lessee: GENOMIC SOLUTIONS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of
June 24, 1998, is Transamerica Business Credit Corporation ("Lessor"). All
equipment, together with all present and future additions, parts, accessories,
attachments, substitutions, repairs, improvements, and replacements thereof or
thereto, which are the subject of a Lease (as defined in the next sentence)
shall be referred to as "Equipment." Simultaneous with the execution and
delivery of this Agreement, the parties are entering into one or more Lease
Schedules (each, a "Schedule") which refer to and incorporate by reference this
Agreement, each of which constitutes a lease (each, a "Lease") for the Equipment
specified therein. Additional details pertaining to each Lease are specified in
the applicable Schedule. Each Schedule that the parties hereafter enter into
shall constitute a Lease. Lessor has no obligation to enter into any additional
leases with, or extend any future financing to, Lessee.
1. LEASE. Subject to and upon all of the terms and conditions of this
Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor the Equipment for the Term (as defined in
Paragraph 2 below) thereof. The timing and financial scope of Lessor's
obligation to enter into Leases hereunder are limited as set forth in the
Commitment Letter executed by Lessor and Lessee, dated as of May 5, 1998 and
attached hereto as Exhibit A (the "Commitment Letter").
2. TERM. Each Lease shall be effective and the term of each Lease
("Term") shall commence on the commencement date specified in the applicable
Schedule and, unless sooner terminated (as hereinafter provided), shall expire
at the end of the term specified in such Schedule; provided, however, that
obligations due to be performed by Lessee during the Term shall continue until
they have been performed in full. Schedules will only be executed after the
delivery of the Equipment to Lessee or upon completion of deliveries of items of
such Equipment with aggregate cost of not less than $50,000.
3. RENT. Lessee shall pay as rent to Lessor, for use of the Equipment
during the Term or Renewal Term (as defined in Paragraph 8), rental payments
equal to the sum of all rental payments including, without limitation, security
deposits, advance rents, and interim rents payable in the amounts and on the
dates specified in the applicable Schedule ("Rent"). If any Rent or other amount
payable by Lessee is not paid within five days after the day on which it becomes
payable, Lessee will pay on demand, as a late charge, an amount equal to 5% of
such unpaid Rent or other amount but only to the extent permitted by applicable
law. All payments provided for herein shall be payable to Lessor at its address
specified above, or at any other place designated in writing by Lessor.
4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease may be
canceled or terminated except as expressly provided herein. Lessee's obligation
to pay all Rent due or to become due hereunder shall be absolute and
unconditional and shall not be subject to any delay, reduction, set-off,
defense, counterclaim, or recoupment for any reason whatsoever, including any
failure of the Equipment or any representations by the manufacturer or the
vendor thereof. If the Equipment is unsatisfactory for any reason, Lessee shall
make any claim solely against the manufacturer or the vendor thereof and shall,
nevertheless, pay Lessor all Rent payable hereunder.
2
5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection and use of, and results obtained from, the
Equipment and any other associated equipment or services.
6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN
OR CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY, QUALITY, OR
FITNESS FOR A PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR FOR BREACH OF ANY
WARRANTY WHATSOEVER. LESSEE LEASES THE EQUIPMENT "AS IS." IN NO EVENT SHALL
LESSOR HAVE ANY LIABILITY, NOR SHALL LESSEE HAVE ANY REMEDY AGAINST LESSOR, FOR
ANY LIABILITY, CLAIM, LOSS, DAMAGE, OR EXPENSE CAUSED DIRECTLY OR INDIRECTLY BY
THE EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR THE OPERATION, MAINTENANCE,
OR REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS THAT TERM IS USED IN SECTION
2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS AMENDED FROM TIME TO TIME
("UCC"). Lessor grants to Lessee, for the sole purpose of prosecuting a claim,
the benefits of any and all warranties made available by the manufacturer or
the vendor of the Equipment to the extent assignable.
7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent for the sole
and limited purpose of accepting delivery of the Equipment from each vendor
thereof. Lessee shall pay any and all delivery and installation charges. Lessor
shall not be liable to Lessee for any delay in, or failure of, delivery of the
Equipment.
8. RENEWAL. So long as no Event of Default or event which, with the giving
of notice, the passage of time, or both, would constitute an Event of Default,
shall have occurred and be continuing, or the Lessee shall not have exercised
its purchase option under Paragraph 9 hereof, each Lease will automatically
renew for a term specified in the applicable Schedule (the "Renewal Term") on
the terms and conditions of this Agreement or as set forth in such Schedule;
provided, however, that Obligations due to be performed by the Lessee during the
Renewal Term shall continue until they have been performed in full.
9. PURCHASE OPTION. So long as no Event of Default or event which, with the
giving of notice, the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, Lessee may, upon written notice
to Lessor received at least one hundred eighty days before the expiration of a
Term, purchase all, but not less than all, the Equipment covered by the
applicable Lease on the date specified therefor in the applicable Schedule
("Purchase Date"). The purchase price for such Equipment shall be its fair
market value as set forth in the applicable Schedule determined on an "In-place,
In-use" basis, as mutually agreed by Lessor and Lessee, or, if they cannot
agree, as determined by an independent appraiser selected by Lessor and approved
by Lessee, which approval will not be unreasonably delayed or withheld. Lessee
shall pay the cost of any such appraisal. It is hereby agreed that at the end of
the Term, the fair market value of the Equipment shall not be less than ten
percent (10%) nor more than fifteen percent (15%) of its original Equipment
Cost, as set forth on the applicable Schedule. So long as no Event of Default or
event which, with the giving of notice, the passage of time, or both, would
constitute an Event of Default shall have occurred and be continuing, Lessee
may, upon written notice to Lessor received at least one hundred eighty days
prior to the expiration of the Renewal Term, purchase all, but not less than
all, the Equipment covered by the applicable Schedule by the last date of the
Renewal Term (the "Alternative Purchase Date") at a purchase price equal to its
then fair market value on an "In-place, In-use" basis. Fair market value shall
be as mutually agreed by Lessor and Lessee, or, if they cannot agree, as
determined by an independent appraiser selected by Lessor and approved by
Lessee, which approval will not be unreasonably delayed or withheld. On the
Purchase Date or the Alternative Purchase Date, as the case may be, for any
Equipment, Lessee shall pay to Lessor the purchase price, together with all
sales and other taxes applicable to the transfer of the Equipment and any other
amount payable and arising hereunder, in immediately available funds, whereupon
Lessor shall transfer to Lessee, without recourse or warranty of any kind,
express or implied, except as to the absence of Lessor liens, all of Lessor's
right, title, and interest in and to such Equipment on an "As Is, Where Is"
basis. Lessor agrees to execute a ▇▇▇▇ of sale or other instrument reasonably
required to effect such transfer.
10. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee shall
affix to the Equipment any labels supplied by Lessor indicating ownership of
such Equipment. The Equipment is and shall be the sole property of Lessor.
Lessee shall have no right, title, or interest therein, except as lessee
2
3
under a Lease. The Equipment is and shall at all times be and remain personal
property and shall not become a fixture. Lessee shall obtain and record such
instruments and take such steps as may be necessary to prevent any person from
acquiring any rights in the Equipment by reason of the Equipment being claimed
or deemed to be real property. Upon request by Lessor, Lessee shall obtain and
deliver to Lessor valid and effective waivers, in recordable form, by the
owners, landlords, and mortgagees of the real property upon which the Equipment
is located or certificates of Lessee that it is the owner of such real property
or that such real property is neither leased nor mortgaged. Lessee shall make
the Equipment and its maintenance records available for inspection by Lessor
at reasonable times and upon reasonable notice. Lessee shall execute and deliver
to Lessor for filing any UCC financing statements or similar documents Lessor
may reasonably request.
11. EQUIPMENT USE. Lessee agrees that the Equipment will be operated by
competent, qualified personnel in connection with Lessee's business for the
purpose for which the Equipment was designed and in accordance with applicable
operating instructions, laws, and government regulations, and that Lessee shall
use all reasonable precautions to prevent loss or damage to the Equipment from
fire and other hazards. Lessee shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the Equipment.
12. MAINTENANCE. Lessee, at its sole cost and expense, shall keep the
Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent, shall meet all recertification requirements, and
shall maintain the Equipment in its original condition and working order,
ordinary wear and tear excepted. At the reasonable request of Lessor, Lessee
shall furnish all proof of maintenance.
13. ALTERATION; MODIFICATIONS; PARTS. Lessee may alter or modify the
Equipment only with the prior written consent of Lessor. Any alteration shall be
removed and the Equipment restored to its normal, unaltered condition at
Lessee's expense (without damaging the Equipment's originally intended function
or its value) prior to its return to Lessor. Any part installed in connection
with warranty or maintenance service or which cannot be removed in accordance
with the preceding sentence shall be the property of Lessor.
14. RETURN OF EQUIPMENT. Except for Equipment that has suffered a Casualty
Loss (as defined in Paragraph 15 below) and is not required to be repaired
pursuant to Paragraph 15 below or Equipment purchased by Lessee pursuant to
Paragraph 9 above, upon the expiration of the Renewal Term of a Lease, or upon
demand by Lessor pursuant to Paragraph 22 below, Lessee shall contact Lessor for
shipping instructions and, at Lessee's own risk, immediately return the
Equipment, freight prepaid, to a location in the continental United States
specified by Lessor. At the time of such return to Lessor, the Equipment shall
(i) be in the operating order, repair, and condition as required by or specified
in the original specifications and warranties of each manufacturer and
vendor thereof, ordinary wear and tear excepted, and (ii) be capable of being
promptly assembled and operated by a third party purchaser or third party lessee
without further repair, replacement, alterations, or improvements. Except as
otherwise provided under Paragraph 9 hereof, at least one hundred eighty days
before the expiration of the Renewal Term, Lessee shall give Lessor notice of
its intent to return the Equipment at the end of such Renewal Term. During the
one hundred eighty-day period prior to the end of a Term or the Renewal Term,
Lessor and its prospective purchasers or lessees shall have, upon not less than
two business days' prior notice to Lessee and during normal business hours, or
at any time and without prior notice upon the occurrence and continuance of an
Event of Default, the right of access to the premises on which the Equipment is
located to inspect the Equipment, and Lessee shall cooperate in all other
respects with Lessor's remarketing of the Equipment. The provisions of this
Paragraph 14 are of the essence of the Lease, and upon application to any court
of equity having jurisdiction in the premises, Lessor shall be entitled to a
decree against Lessee requiring specific performance of the covenants of Lessee
set forth in this Paragraph 14. If Lessee fails to return the Equipment when
required, the terms and conditions of the Lease shall continue to be applicable
and Lessee shall continue to pay Rent until the Equipment is received by Lessor.
15. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain, at its own
expense, liability and property damage insurance relating to the Equipment,
insuring against such risks as are customarily insured against on the type of
equipment leased hereunder by businesses in which Lessee is engaged in such
amounts, in such form, and with insurers satisfactory to Lessor; provided,
however, that the amount of
3
4
insurance against damage or loss shall not be less than the greater of (a) the
replacement value of the Equipment and (b) the stipulated loss value of the
Equipment specified in the applicable Schedule ("Stipulated Loss Value"). Each
liability insurance policy shall provide coverage (including, without
limitation, personal injury coverage) of not less than $1,000,000 for each
occurrence, and shall name Lessor as an additional insured; and each property
damage policy shall name Lessor as sole loss payee and all policies shall
contain a clause requiring the insurer to give Lessor at least thirty days'
prior written notice of any alteration in the terms or cancellation of the
policy. Lessee shall furnish to Lessor a copy of each insurance policy (with
endorsements) or other evidence satisfactory to Lessor that the required
insurance coverage is in effect; provided, however, Lessor shall have no duty to
ascertain the existence of or to examine the insurance policies to advise Lessee
if the insurance coverage does not comply with the requirements of this
Paragraph. If Lessee fails to insure the Equipment as required, Lessor shall
have the right but not the obligation to obtain such insurance, and the cost of
the insurance shall be for the account of Lessee due as part of the next due
Rent. Lessee consents to Lessor's release, upon its failure to obtain
appropriate insurance coverage, of any and all information necessary to obtain
insurance with respect to the Equipment or Lessor's interest therein.
Until the Equipment is returned to and received by Lessor as provided in
Paragraph 14 above, Lessee shall bear the entire risk of theft or destruction
of, or damage to, the Equipment including, without limitation, any condemnation,
seizure, or requisition of title or use ("Casualty Loss"). No Casualty Loss
shall relieve Lessee from its obligations to pay Rent except as provided in
clause (b) below. When any Casualty Loss occurs, Lessee shall immediately
notify Lessor and, at the option of Lessor, shall promptly (a) place such
Equipment in good repair and working order; or (b) pay Lessor an amount equal
to the Stipulated Loss Value of such Equipment and all other amounts (excluding
Rent) payable by Lessee hereunder, together with a late charge on such amounts
that are past due at a rate per annum equal to the rate imputed in the Rent
payments hereunder (as reasonably determined by Lessor) from the date of the
Casualty Loss through the date of payment of such amounts, whereupon Lessor
shall transfer to Lessee, without recourse or warranty (express or implied),
except as to the absence of Lessor liens, all of Lessor's interest, if any, in
and to such Equipment on an "AS IS, WHERE IS" basis and the Lease shall
terminate. Lessor agrees to execute a ▇▇▇▇ of sale or other instrument
reasonably required to effect such transfer. The proceeds of any insurance
payable with respect to the Equipment shall be applied, at the option of Lessee,
either towards (i) repair or replacement of the Equipment or (ii) payment of any
of Lessee's obligations hereunder. Lessee hereby appoints Lessor as Lessee's
attorney-in-fact to make claim for, receive payment of, and execute and endorse
all documents, checks or drafts issued with respect to any Casualty Loss under
any insurance policy relating to the Equipment.
16. TAXES. Lessee shall pay when due, and indemnify and hold Lessor
harmless from, all sales, use, excise, and other taxes, charges, and fees
(including, without limitation, income, franchise, business and occupation,
gross receipts, licensing, registration, titling, personal property, stamp and
interest equalization taxes, levies, imposts, duties, charges, or withholdings
of any nature), and any fines, penalties, or interest thereon, imposed or levied
by any governmental body, agency, or tax authority upon or in connection with
the Equipment, its purchase, ownership, delivery, leasing, possession, use, or
relocation of the Equipment or otherwise in connection with the transactions
contemplated by each Lease or the Rent thereunder, excluding taxes on or
measured by the net income of Lessor. Upon request, Lessee will provide proof of
payment. Unless Lessor elects otherwise, Lessee will pay all property taxes on
the Equipment. Lessee shall timely prepare and file all reports and returns
which are required to be made with respect to any obligation of Lessee under
this Paragraph 16. Lessee shall, to the extent permitted by law, cause all
▇▇▇▇▇▇▇▇ of such fees, taxes, levies, imposts, duties, withholdings, and
governmental charges to be made to Lessor in care of Lessee. Upon request,
Lessee will provide Lessor with copies of all such ▇▇▇▇▇▇▇▇.
17. LESSOR'S PAYMENT. If Lessee fails to perform its obligations under
Paragraph 15 or 16 above, or Paragraph 23 below, Lessor shall have the right to
substitute performance, in which case Lessee shall immediately reimburse Lessor
therefor.
18. GENERAL INDEMNITY. Each Lease is a net lease. Therefore, Lessee shall
indemnify Lessor and its successors and assigns against, and hold Lessor and its
successors and assigns harmless from, any and all claims, actions, damages,
obligations, liabilities, and all costs and expenses, including, without
limitation, reasonable legal fees incurred by Lessor or its successors and
assigns arising out of each Lease including, without limitation, the purchase,
ownership, delivery, lease, possession, maintenance, condition, use, or return
of the Equipment, or arising by operation of law, except that Lessee shall not
be liable for any claims, actions, damages,
4
5
obligations, and costs and expenses determined by a non-appealable, final order
of a court of competent jurisdiction to have occurred as a result of the gross
negligence or willful misconduct of Lessor or its successors and assigns. Lessee
agrees that upon written notice by Lessor of the assertion of any claim, action,
damage, obligation, liability, or lien for which Lessor is entitled to
indemnification hereunder, Lessee shall assume full responsibility for the
defense thereof, provided that Lessor's failure to give such notice shall not
limit or otherwise affect its rights hereunder, except to the extent that
Lessee's rights have been prejudiced by such failure. Any payment pursuant to
this Paragraph (except for any payment of Rent) shall be of such amount as shall
be necessary so that, after payment of any taxes required to be paid thereon by
Lessor, including taxes on or measured by the net income of Lessor, the balance
will equal the amount due hereunder. The provisions of this Paragraph with
regard to matters arising during a Lease shall survive the expiration or
termination of such Lease. Notwithstanding the foregoing, Lessor shall not be
entitled to recover from Lessee an amount in excess of the amount necessary to
put Lessor in the same position it would have been in had it not incurred the
claim, action, damage, obligation, liability or lien for which its being
indemnified by Lessee hereunder.
19. ASSIGNMENT BY LESSEE. Lessee shall not, without the prior written
consent of Lessor, (a) assign, transfer, pledge, or otherwise dispose of any
Lease or Equipment, or any interest therein; (b) sublease or lend any Equipment
or permit it to be used by anyone other than Lessee and its employees; or (c)
move any Equipment from the location specified for it in the applicable
Schedule, except that Lessee may move Equipment to another location within the
United States provided that Lessee has delivered to Lessor (A) prior written
notice thereof and (B) duly executed financing statements and other agreements
and instruments (all in form and substance satisfactory to Lessor) necessary or,
in the opinion of the Lessor, desirable to protect Lessor's interest in such
Equipment. Notwithstanding anything to the contrary in the immediately preceding
sentence, Lessee may keep any Equipment consisting of motor vehicles or rolling
stock at any location in the United States.
20. ASSIGNMENT BY LESSOR. Lessor may assign its interest or grant a
security interest in any Lease and the Equipment individually or together, in
whole or in part. If Lessee is given written notice of any such assignment, it
shall immediately make all payments of Rent and other amounts hereunder directly
to such assignee. Each such assignee shall have all of the rights of Lessor
under each Lease assigned to it. Lessee shall not assert against any such
assignee any set-off, defense, or counterclaim that Lessee may have against
Lessor or any other person.
21. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all of the
obligations of Lessee hereunder (together with Lessee, the "Lease Parties")
shall be in default under each Lease upon the occurrence of any of the following
events (each, an "Event of Default"): (a) Lessee fails to pay within two days
after notice of failure to pay when due any amount required to be paid by Lessee
under or in connection with any Lease; (b) any of the Lease Parties fails to
perform in any material respect any other provision under or in connection with
a Lease or violates in any material respect any of the covenants or agreements
of such Lease Party under or in connection with a Lease, and such failure to
perform or violation is not cured within fifteen (15) days after written notice;
(c) any representation made or financial information delivered or furnished by
any of the Lease Parties under or in connection with a Lease shall prove to have
been inaccurate in any material respect when made; (d) any of the Lease Parties
makes an assignment for the benefit of creditors, whether voluntary or
involuntary, or consents to the appointment of a trustee or receiver, or if
either shall be appointed for any of the Lease Parties or for a substantial part
of its property without its consent and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for sixty days
following the commencement thereof, (e) any petition or proceeding is filed by
or against any of the Lease Parties under any Federal or State bankruptcy or
insolvency code or similar law and, in the case of any such involuntary petition
or proceeding, such petition or proceeding remains undismissed or unstayed for
sixty days following the filing or commencement thereof, or any of the Lease
Parties takes any action authorizing any such petition or proceeding; (f) any of
the Lease Parties fails to pay when due any indebtedness in an amount in excess
of $200,000 for borrowed money or under conditional sales or installment sales
contracts or similar agreements, leases, or obligations evidenced by bonds,
debentures, notes, or other similar agreements or instruments to any creditor
(including Lessor under any other agreement) after any and all applicable cure
periods therefor shall have elapsed; (g) any judgment shall be rendered against
any of the Lease Parties which shall remain unpaid or unstayed for a period of
sixty days; (h) any of the Lease Parties shall dissolve, liquidate, wind up or
cease its business, sell or otherwise dispose of all or substantially all of its
assets; (i) any of the Lease Parties shall amend or modify its name, unless such
Lease Party delivers to Lessor, thirty days prior to any such proposed amendment
or modification, written notice of such amendment or modification and within ten
days before
5
6
such amendment or modification delivers executed financing statements (in form
and substance satisfactory to the Lessor); (j) any of the Lease Parties shall
suffer any loss or suspension of any material license, permit, or other right or
asset necessary to the profitable conduct of its business, fail generally to pay
its debts as they mature, or call a meeting for purposes of compromising its
debts; (l) any of the Lease Parties shall deny or disaffirm its obligations
hereunder or under any of the documents delivered in connection herewith; or (k)
any of the Lease Parties suffers a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities, or condition
(financial or otherwise).
22. REMEDIES. Upon the occurrence and continuation of an Event of Default,
Lessor shall have the right, in its sole discretion, to exercise any one or more
of the following remedies: (a) terminate each Lease; (b) declare any and all
Rent and other amounts then due and any and all Rent and other amounts to become
due under each Lease (collectively, the "Lease Obligations") immediately due and
payable; (c) take possession of any or all items of Equipment, wherever located,
without demand, notice, court order, or other process of law, and without
liability for entry to Lessee's premises, or otherwise; (d) demand that Lessee
immediately return any or all Equipment to Lessor in accordance with Paragraph
14 above, and, for each day that Lessee shall fail to return any item of
Equipment, Lessor may demand an amount equal to the Rent payable for such
Equipment in accordance with Paragraph 14 above; (e) lease, sell, or otherwise
dispose of the Equipment in a commercially reasonable manner, with or without
notice and on public or private bid, (f) recover the following amounts from the
Lessee (as damages, including reimbursement of costs and expenses, liquidated
for all purposes and not as a penalty): (i) all costs and expenses of Lessor
reimbursable to it hereunder, including, without limitation, expenses of
disposition of the Equipment, legal fees, and all other amounts specified in
Paragraph 23 below; (ii) an amount equal to the sum of (A) any accrued and
unpaid Rent through the later of (1) the date of the applicable default, (2) the
date that Lessor has obtained possession of the Equipment, or (3) such other
date as Lessee has made an effective tender of possession of the Equipment to
Lessor (the "Default Date") and (B) if Lessor resells or re-lets the Equipment,
Rent at the periodic rate provided for in each Lease for the additional period
that it takes Lessor to resell or re-let all of the Equipment; (iii) the present
value of all future Rent reserved in the Leases and contracted to be paid over
the unexpired Term of the Leases discounted at five percent compound interest;
(iv) the present value of the reversionary value of the Equipment as of the
expiration of the Term of the applicable Lease as set forth on the applicable
Schedule; and (v) any indebtedness for Lessee's indemnity under Paragraph 18
above, plus a late charge at the rate specified in Paragraph 3 above, less the
amount received by Lessor, if any, upon sale or re-let of the Equipment; and (g)
exercise any other right or remedy to recover damages or enforce the terms of
the Leases. Upon the occurrence and continuance of an Event of Default, Lessor
shall have the right, whether or not Lessor has made any demand or the
obligations of Lessee hereunder have matured, to appropriate and apply to the
payment of the obligations of Lessee hereunder all security deposits and other
deposits (general or special, time or demand, provisional or final) now or
hereafter held by and other indebtedness or property now or hereafter owing by
Lessor to Lessee. Lessor may pursue any other rights or remedies available at
law or in equity, including, without limitation, rights or remedies seeking
damages, specific performance, and injunctive relief. Any failure of Lessor to
require strict performance by Lessee, or any waiver by Lessor of any provision
hereunder or under any Schedule, shall not be construed as a consent or waiver
of any other breach of the same or of any other provision. Any amendment or
waiver of any provision hereof or under any Schedule or consent to any departure
by Lessee herefrom or therefrom shall be in writing and signed by Lessor.
Notwithstanding the foregoing, Lessor shall not be entitled to recover an amount
in excess of the amount it would have received had each Lease been fully
performed in a timely manner for its full term, plus any costs incurred in
connection with the Leases.
No right or remedy is exclusive of any other provided herein or permitted
by law or equity. All such rights and remedies shall be cumulative and may be
enforced concurrently or individually from time to time.
23. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all costs and
expenses (including legal fees and expenses) incurred in connection with the
preparation, execution and delivery of this Agreement and any other agreements
and transactions contemplated hereby, which expenses shall not exceed $2,500
without the written consent of Lessee and all costs and expenses in protecting
and enforcing Lessor's rights and interests in each Lease and the equipment,
including, without limitation, legal, collection, and remarketing fees and
expenses incurred by Lessor in enforcing the terms, conditions, or provisions of
each Lease or upon the occurrence and continuation of an Event of Default.
24. LESSEE'S WAIVERS. To the extent permitted by applicable law, Lessee
hereby waives any and all rights and remedies conferred upon a lessee by
Sections 2A-503 through 2A-522 of the UCC.
6
7
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 Equipment in mitigation of Lessor's damages as
set forth in Paragraph 22 above or which may otherwise limit or modify any of
Lessor's rights or remedies under Paragraph 22. Any action by Lessee against
Lessor for any default by Lessor under any Lease shall be commenced within two
years after any such cause of action accrues.
25. NOTICES; ADMINISTRATION. Except as otherwise provided herein, all
notices, approvals, consents, correspondence, or other communications required
or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to Lessor, then to Transamerica Technology Finance Division,
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant
Vice President, Lease Administration, if to Lessee, then to Genomic Solutions,
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial
Officer or such other address as shall be designated by Lessee or Lessor in
writing to the other party. All such notices and correspondence shall be
effective when received.
26. REPRESENTATIONS. Lessee represents and warrants to Lessor that (a)
Lessee is duly organized, validly existing, and in good standing under the laws
of the State of its incorporation; (b) the execution, delivery, and performance
by Lessee of this Agreement are within Lessee's powers, have been duly
authorized by all necessary action, and do not and will not contravene (i)
Lessee's organizational documents or (ii) any law, regulation, rule, or
contractual restriction binding on or affecting Lessee; (c) no authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution,
delivery, and performance by Lessee of this Agreement; (d) each Lease
constitutes the legal, valid, and binding obligations of Lessee enforceable
against Lessee in accordance with its terms; (e) the cost of each item of
Equipment does not exceed the fair and usual price for such type of equipment
purchased in like quantity and reflects all discounts, rebates, and allowances
for the Equipment (including, without limitation, discounts for advertising,
prompt payment, testing, or other services) given to the Lessee by the
manufacturer, supplier, or any other person; and (f) all information supplied by
Lessee to Lessor in connection herewith is correct in all material respects and
does not omit any material statement necessary to insure that the information
supplied is not misleading.
27. FURTHER ASSURANCES. Lessee, upon the request of Lessor, will execute,
acknowledge, record, or file, as the case may be, such further documents and do
such further acts as may be reasonably necessary, desirable, or proper to carry
out more effectively the purposes of this Agreement. Lessee hereby appoints
Lessor as its attorney-in-fact to execute on behalf of Lessee and authorizes
Lessor to file without Lessee's signature any UCC financing statements and
amendments relating to the Equipment Lessor reasonably deems advisable.
28. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as soon as
available, but not later than 120 days after the end of each fiscal year of
Lessee and its consolidated subsidiaries, the consolidated balance sheet, income
statement, and statements of cash flows and shareholders equity for Lessee and
its consolidated subsidiaries (the "Financial Statements") for such year,
reported on by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that such Financial Statements have been prepared in accordance with
generally accepted accounting principles and are fairly stated in all material
respects (subject to normal year-end audit adjustments). Lessee shall also
deliver to Lessor as soon as available copies of all press releases and other
similar communications issued by Lessee.
29. CONSENT TO JURISDICTION. Lessee irrevocably submits to the jurisdiction
of any Illinois state or federal court sitting in Illinois for any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and Lessee irrevocably agrees that all claims in respect of
any such action or proceeding may be heard and determined in such Illinois state
or federal court.
30. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
7
8
31. FINANCE LEASE. Lessee and Lessor agree that each Lease is a "Finance
Lease" as defined by Section 2A-103(g) of the UCC. Lessee acknowledges that
Lessee has reviewed and approved each written Supply Contract (as defined by UCC
2A-103(y)) covering Equipment purchased from each "Supplier" (as defined by UCC
2A-103(x)) thereof.
32. NO AGENCY. Lessee acknowledges and agrees that neither the manufacturer
or supplier, nor any salesman, representative, or other agent of the
manufacturer or supplier, is an agent of Lessor. No salesman, representative, or
agent of the manufacturer or supplier is authorized to waive or alter any term
or condition of this Agreement or any Schedule and no representation as to the
Equipment or any other matter by the manufacturer or supplier shall in any way
affect Lessee's duty to pay Rent and perform its other obligations as set forth
in this Agreement or any Schedule.
33. SPECIAL TAX INDEMNIFICATION. Lessee acknowledges that Lessor, in
determining the Rent due hereunder, has assumed that certain tax benefits as are
provided to an owner of property under the Internal Revenue Code of 1986, as
amended (the "Code"), and under applicable state tax law, including, without
limitation, depreciation deductions under Section 168(b) of the Code, and
deductions under Section 163 of the Code in an amount at least equal to the
amount of interest paid or accrued by Lessor with respect to any indebtedness
incurred by Lessor in financing its purchase of the Equipment, are available to
Lessor as a result of the lease of the Equipment. In the event Lessor is unable
to obtain such tax benefits solely as a result of an act or omission of Lessee
which Lessee is unable to cure after having a reasonable opportunity to do so,
is required to include in income any amount other than the Rent, or is required
to recognize income in respect of the Rent earlier than anticipated pursuant to
this Agreement, Lessee shall pay Lessor additional rent ("Additional Rent") in a
lump sum in an amount needed to provide Lessor with the same after-tax yield and
after-tax cash flow as would have been realized by Lessor had Lessor (i) been
able to obtain such tax benefits, (ii) not been required to include any amount
in income other than the Rent, and (iii) not been required to recognize income
in respect of the Rent earlier than anticipated pursuant to this Agreement. The
Additional Rent shall be computed by Lessor, which computation, absent manifest
error, shall be binding on Lessee. The Additional Rent shall be due immediately
upon written notice by Lessor to Lessee of Lessor's inability to obtain tax
benefits, the inclusion of any amount in income other than the Rent or the
recognition of income in respect of the Rent earlier than anticipated pursuant
to this Agreement. The provisions of this Paragraph 33 shall survive for two
years after the termination of this Agreement.
34. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. IF ANY PROVISION SHALL BE HELD TO BE INVALID OR
UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL
NOT IN ANY WAY BE AFFECTED OR IMPAIRED.
LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND THE SCHEDULE HERETO,
UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER,
LESSEE AND LESSOR AGREE THAT THIS AGREEMENT, THE SCHEDULES DELIVERED IN
CONNECTION HEREWITH FROM TIME TO TIME, AND THE COMMITMENT LETTER ARE THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES,
SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER
COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. SHOULD
THERE EXIST ANY INCONSISTENCY BETWEEN THE TERMS OF THE COMMITMENT LETTER AND
THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL PREVAIL.
8
9
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed by their duly authorized officers as of the
date first written above.
GENOMIC SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Richalsky
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. Richalsky
Title: Chief Financial Officer
Federal Tax ID: ▇▇-▇▇▇▇▇▇▇
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
9
10
FIRST AMENDMENT TO MASTER
LEASE AGREEMENT
THIS FIRST AMENDMENT to MASTER LEASE AGREEMENT (the "Amendment"), dated as
of October 13, 1999, by and between Genomic Solutions, Inc. (the "Lessee"), a
Delaware Corporation, having its principal place of business and chief executive
office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and TRANSAMERICA
BUSINESS CREDIT CORPORATION (the "Lessor"), a Delaware Corporation, having its
principal office at Riverway II, West Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
WITNESSETH:
WHEREAS, the Lessee and the Lessor are parties to Master Lease Agreement,
dated as of June 24, 1998 (as amended, the "Lease Agreement"; capitalized terms
used herein shall have the meanings assigned to such terms in the Lease
Agreement unless otherwise defined herein); and
WHEREAS, the parties hereto desire to amend the Lease Agreement in the
manner set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the Lessee and Lessor hereby agree as follows:
1. AMENDMENT TO LEASE AGREEMENT. Effective as of the date this
Amendment is fully executed by the Lessor and Lessee hereof, and subject to the
satisfaction of the Lessee of conditions as determined by Lessor, the Lease
Agreement is hereby amended as follows:
(a) The paragraph entitled "Lease" is hereby deleted in its
entirety and the following is inserted in lieu thereof:
1. LEASE. Subject to and upon all of the terms and conditions of
this Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and
Lessee hereby agrees to lease from Lessor the Equipment for the Term (as
defined in Paragraph 2 below) thereof. The timing and financial scope of
Lessor's obligation to enter into Leases hereunder are limited as set forth in
the Commitment Letters executed by Lessor and Lessee, dated as of May 5, 1998
and September 23, 1999 and attached hereto as Exhibit A and Exhibit B
(collectively the "Commitment Letter").
2. REPRESENTATIONS AND WARRANTIES OF THE LESSEE. The Lessee represents and
warrants as follows:
(a) Since June 24, 1998, there has occurred no development, event
or change that has had or could reasonably be expected to have a Material
Adverse Effect.
(b) No Default or Event of Default has occurred and is continuing.
(c) The representations and warranties of such Lessee contained in
Section 26 of the Lease Agreement are true and correct in all material respects
on the date hereof as though made on and as of the date hereof, except to the
extent that such representation and warranties expressly relate solely to an
earlier date (in which case such representations and warranties were true and
correct on and as of such earlier date).
(d) This Amendment constitutes the legal, valid and binding
obligation of such Lessee, enforceable against the Lessee in accordance with
its terms, except as enforceablility may be limited by bankruptcy, insolvency
and other laws affecting creditors' rights generally and by general principles
of equity.
-1-
11
3. EXPENSES. The Lessee shall pay for all of the reasonable costs and
expenses incurred by the Lessor in connection with the transactions
contemplated by the Amendment, including, without limitation, the reasonable
fees and expenses of counsel to the Lessor.
4. MISCELLANEOUS.
(a) Except as expressly amended herein, all of the terms and
provisions of the Lease Agreement and the other Lease Documents are ratified and
confirmed in all respects and shall remain in full force and effect.
(b) Upon the effectiveness of this Amendment, all references in the
Lease Documents to the Lease Agreement shall mean the Lease Agreement as amended
by this Amendment and all references in the Lease Agreement to the "this
Agreement", "hereof", "herein", or similar terms, shall mean and refer to the
Lease Agreement as amended by this Amendment.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as an amendment to or waiver
of any right, power or remedy of the Lessor under any of the Lease Documents, or
constitute an amendment or waiver of any provision of any of the Lease
Documents.
(d) This Amendment may be executed by the parties hereto individually
or in combination, in one or more counterparts, each of which shall be an
original and all of which shall constitute one and the same agreement. This
Amendment may be executed and delivered by telecopier with the same force and
effect as if the same were a fully executed and delivered original manual
counterpart.
(e) This Amendment shall constitute a Lease Document.
5. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
12
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective duly authorized
officers as of the date first above written.
LESSEE
GENOMIC SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive V.P. &
Chief Financial Officer
Hereunto Duly Authorized
LESSOR
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Hereunto Duly Authorized