<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended JUNE 27, 1998
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 0-18281
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HOLOGIC, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 04-2902449
-------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)
590 LINCOLN STREET, WALTHAM, MASSACHUSETTS 02451
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(Address of principal executive offices) (Zip Code)
(781) 890-2300
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
As of August 5, 1998 13,376,476 shares of the registrant's Common Stock, $.01
par value, were outstanding.
1
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HOLOGIC, INC. AND SUBSIDIARIES
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
June 27, 1998 and September 27, 1997............................ 3
Consolidated Statements of Income
Three and Nine Months Ended June 27, 1998 and June 28, 1997..... 4
Consolidated Statements of Cash Flows
Nine Months Ended June 27, 1998 and June 28, 1997............... 5
Notes to Consolidated Financial Statements...................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ...................................... 9
PART II - OTHER INFORMATION ............................................... 13
SIGNATURES ................................................................ 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
June 27, September 27,
1998 1997
------------ -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents......................... $ 45,930,265 $ 28,091,933
Short-term investments............................ 42,446,613 56,173,247
Accounts receivable, less reserves of $1,460,000.. 31,760,653 29,231,105
Inventories....................................... 17,996,382 13,204,528
Prepaid expenses and other current assets......... 4,889,993 4,067,715
------------ ------------
Total current assets............................. 143,023,906 130,768,528
------------ ------------
PROPERTY AND EQUIPMENT, at cost:
Equipment......................................... 8,281,091 6,397,509
Furniture and fixtures............................ 1,875,200 1,655,557
Leasehold improvements............................ 1,712,208 1,687,523
------------ ------------
11,868,499 9,740,589
Less- Accumulated depreciation and amortization... 6,031,995 5,036,017
------------ ------------
5,836,504 4,704,572
------------ ------------
Other assets, net.................................. 19,373,972 9,194,142
------------ ------------
$168,234,382 $144,667,242
============ ============
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 27, September 27,
1998 1997
------------- --------------
<S> <C> <C>
CURRENT LIABILITIES:
Line of credit.................................... $ 1,406,133 $ 82,764
Accounts payable.................................. 5,851,798 5,232,270
Accrued expenses.................................. 12,310,971 9,297,552
Deferred revenue.................................. 10,719,359 3,287,924
------------ ------------
Total current liabilities........................ 30,288,261 17,900,510
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value-
Authorized - 30,000,000 shares
Issued and outstanding 13,359,652 and
13,111,442 shares, respectively................ 133,597 131,114
Capital in excess of par value.................... 93,924,436 91,668,270
Retained earnings................................. 44,871,604 35,798,846
Cumulative translation adjustment................. (983,516) (831,498)
------------ ------------
Total stockholders' equity....................... 137,946,121 126,766,732
------------ ------------
$168,234,382 $144,667,242
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------- --------------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Product sales...................................... $33,569,051 $25,846,988 $88,163,369 $79,275,601
Other revenues..................................... 856,779 1,100,949 2,580,342 2,781,967
----------- ----------- ----------- -----------
34,425,830 26,947,937 90,743,711 82,057,568
COSTS AND EXPENSES:
Cost of product sales.............................. 15,910,124 11,941,298 43,312,401 36,344,625
Research and development........................... 2,335,123 2,225,704 7,179,799 6,162,790
Selling and marketing.............................. 8,187,926 4,734,783 22,776,948 13,826,980
General and administrative......................... 2,710,210 2,027,462 7,287,407 7,726,109
----------- ----------- ----------- -----------
29,143,383 20,929,247 80,556,555 64,060,504
----------- ----------- ----------- -----------
Income from operations.................... 5,282,447 6,018,690 10,187,156 17,997,064
Interest income..................................... 1,628,890 1,384,626 4,409,961 3,717,041
Other expense....................................... (121,907) (7,013) (324,359) (68,607)
----------- ----------- ----------- -----------
Income before provision for income taxes.. 6,789,430 7,396,303 14,272,758 21,645,498
PROVISION FOR INCOME TAXES.......................... 2,500,000 2,650,000 5,200,000 7,840,000
----------- ----------- ----------- -----------
Net income................................ $ 4,289,430 $ 4,746,303 $ 9,072,758 $13,805,498
=========== =========== =========== ===========
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE:
Basic earnings per share.................. $.32 $.36 $.69 $1.07
=========== =========== =========== ===========
Diluted earnings per share................ $.31 $.35 $.66 $1.01
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING.......................... 13,334,355 13,035,419 13,221,227 12,956,335
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON AND DILUTIVE POTENTIAL
COMMON SHARES OUTSTANDING..................... 13,806,564 13,676,353 13,785,098 13,658,336
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
HOLOGIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------
June 27, June 28,
1998 1997
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 9,072,758 $ 13,805,498
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation and amortization.......................... 1,254,945 906,694
Compensation expense related to issuance of stock
options............................................... 216,820 27,000
Changes in assets and liabilities-
Accounts receivable............................... (2,514,151) (9,988,957)
Inventories....................................... (4,791,854) (347,912)
Prepaid expenses and other current assets......... (710,893) (1,069,141)
Accounts payable.................................. 619,809 (265,297)
Accrued expenses.................................. 3,553,469 5,051,412
Deferred revenue.................................. 7,431,435 557,073
------------ ------------
Net cash provided by operating activities....... 14,132,338 8,676,370
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of held-to-maturity investments................. (60,324,459) (7,592,430)
Sales of held-to-maturity investments..................... 66,331,053 1,330,561
Purchases of available-for-sale investments............... -- (58,807,813)
Sales of available-for-sale investments................... -- 63,726,357
Purchases of property and equipment....................... (2,127,910) (1,441,972)
Increase in other assets.................................. (2,735,716) (34,532)
------------ ------------
Net cash provided by (used in) investing
activities..................................... 1,142,968 (2,819,829)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease ) in line of credit................ 1,074,564 (2,533,692)
Proceeds from issuance of common stock pursuant to options
and employee stock purchase plans........................ 1,300,480 1,339,720
Tax benefit from stock option exercises................... 340,000 470,000
------------ ------------
Net cash provided by (used in) financing
activities..................................... 2,715,044 (723,972)
------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH..................... (152,018) (583,844)
------------ ------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS.......................................... 17,838,332 4,548,725
CASH AND CASH EQUIVALENTS, beginning of period.............. 28,091,933 28,754,023
------------ ------------
CASH AND CASH EQUIVALENTS, end of period.................... $ 45,930,265 $ 33,302,748
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes................ $3,602,919 $5,137,126
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
HOLOGIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements of Hologic, Inc. (the Company)
presented herein have been prepared pursuant to the rules of the Securities and
Exchange Commission for quarterly reports on Form 10-Q and do not include all of
the information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended September
27, 1997, included in the Company's Form 10-K as filed with the Securities and
Exchange Commission on December 23, 1997.
The consolidated balance sheet as of June 27, 1998, the consolidated
statements of income for the three and nine months ended June 27, 1998 and
June 28, 1997 and the consolidated statements of cash flows for the nine months
ended June 27, 1998 and June 28, 1997, are unaudited but, in the opinion of
management, include all adjustments (consisting of normal, recurring
adjustments) necessary for a fair presentation of results for these interim
periods.
The results of operations for the three and nine months ended June 27,
1998 are not necessarily indicative of the results to be expected for the entire
fiscal year ending September 26, 1998.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements reflect the
application of certain accounting policies described in this and other notes to
the consolidated financial statements.
(a) Inventories: Inventories are stated at the lower of cost (first-
in, first-out) or market and consist of the following:
<TABLE>
<CAPTION>
June 27, September 27,
1998 1997
----------- -------------
<S> <C> <C>
Raw materials and work-in-process.. $12,700,766 $ 9,967,707
Finished goods..................... 5,295,616 3,236,821
----------- -----------
$17,996,382 $13,204,528
=========== ===========
</TABLE>
Work-in-process and finished goods inventories consist of material,
labor and manufacturing overhead.
6
<PAGE>
(b) Earnings Per Share: In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 128-
Earnings per Share. This standard is effective for fiscal periods ending after
December 15, 1997 and requires presentation of both basic and diluted earnings
per share on the face of the Consolidated Statements of Income. These financial
statements have been prepared and presented based on the new standard. Prior
period amounts have been restated to conform to current year presentation. Anti-
dilutive weighted shares of 422,106 and 344,232 for the three and nine months
ended June 27, 1998, respectively, and 243,852 and 168,737, for the three and
nine months ended June 28, 1997, respectively, have been excluded from the
weighted average number of common and dilutive potential common shares
outstanding.
Basic and diluted share amounts are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- -------------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding.................... 13,334,355 13,035,419 13,221,227 12,956,335
Common stock equivalents outstanding
pursuant to the treasury stock method............... 472,209 640,934 563,871 702,001
---------- ---------- ---------- ----------
Weighted average number of common and dilutive
potential common shares outstanding................. 13,806,564 13,676,353 13,785,098 13,658,336
========== ========== ========== ==========
</TABLE>
(3) LINE OF CREDIT
The Company has an international line of credit with a bank for the
equivalent of $3,000,000, which bears interest at PIBOR plus 1.50%. The
borrowings under this line are denominated in the local currency of its European
subsidiaries and are primarily used by these subsidiaries to settle intercompany
sales.
(4) CONCENTRATION OF CREDIT RISK
The Company sells certain of its systems to a leasing company, which in
turn leases the systems to third parties. The leasing company accounted for 39%
and 14% of DXA product sales in the nine months ended June 27, 1998 and June
28, 1997, respectively.
(5) RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued SFAS No. 130 Reporting Comprehensive Income
and SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information. Both SFAS No. 130 and SFAS No. 131 are effective for fiscal years
beginning after December 15, 1997. The Company believes that the adoption of
these new accounting standards will not have a material impact on the Company's
financial statements.
7
<PAGE>
(6) PATENT RIGHTS ACQUISITION
In January 1998, the Company made the final payment with respect to the
acquisition of certain patent rights pursuant to an agreement entered into in
fiscal 1992 and amended in May 1993. The Company paid $1,086,250 (the
equivalent of 55,000 shares of common stock) for these patent rights. The
additional cost of these patent rights will be amortized over the remaining
expected life of approximately five years.
(7) SUBSEQUENT EVENT--BUILDING PURCHASE
On July 30, 1998, the Company purchased a 200,000 square foot building for
approximately $20 million in cash. The Company plans to renovate the building at
an additional cost of approximately $4 million and to occupy this facility in
early 1999.
8
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
HOLOGIC, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
The Company's results of operations have and may continue to be subject to
significant quarterly variation. The results for a particular quarter may vary
due to a number of factors, including the introduction of new products or
product enhancements by the Company or its competitors, the timing of FDA
approvals or clearances for such introductions, the overall state of health care
and cost containment efforts, the development status and demand for drug
therapies to treat osteoporosis, the status and amount of reimbursement for
approved procedures, the use of mini c-arms in minimally-invasive surgical
procedures, the availability of financing alternatives, including fee-per-scan
programs, for the Company's products, economic conditions in the Company's
markets, the timing of orders, the timing of expenditures in anticipation of
future sales, the mix of products sold by the Company, and pricing and other
competitive conditions.
Revenues. Total revenues for the third quarter of fiscal 1998 increased
28% to $34,425,830 from $26,947,937 in the third quarter of fiscal 1997. Total
revenues for the current nine month period increased 11% to $90,743,711 from
$82,057,568 for the first nine months of fiscal 1997. This increase was
primarily due to an increase in the total number of DXA bone densitometer and
Sahara (the Company's ultrasound bone sonometer) product shipments in the United
States. Sahara was approved for sale in the United States in March 1998. These
increases were partially offset by a decrease in DXA bone densitometers sold
internationally. In the United States, the increase in the number of DXA bone
densitometers sold was partially offset by lower average selling prices
primarily attributable to a shift in sales to the primary care market. The
primary care market accounted for 42% of total revenues in the current quarter
and 37% for the nine months ended June 27, 1998. The Company began actively
selling to this new market in July 1997. ACCLAIM sales to the hospital and
radiology markets were lower than in the previous year as the high rate of
penetration in the last two years has begun to slow . Other revenues decreased
for the current three and nine month periods, as compared to the same periods of
the previous year, due to a decrease in revenues received under a development
agreement for a biochemical marker strip test. This decrease was partially
offset by an increase in royalties from the license of the Company's technology
to Vivid Technologies, Inc.
Total revenues for the third quarter of fiscal 1998 increased 14% from
$30,197,233 in the immediately preceding quarter primarily due to a shift in the
DXA systems sales to the QDR-4500C ACCLAIM from the lower priced QDR-1000plus
and an increase in the number of Sahara systems sold in the United States to the
primary care market.
In the first nine months of fiscal 1998, approximately 73% of product sales
were generated in the United States, 17% in Europe, 6% in other international
markets, and 4% in Asia. In the first nine months of fiscal 1997, approximately
58% of product sales were generated in the United States, 21% in Europe, 12% in
Asia, and 9% in other international markets.
9
<PAGE>
The number of x-ray bone densitometers and ultrasound bone sonometers sold
by the Company reached record levels as interest in bone diseases, such as
osteoporosis, has grown, especially in the primary care market in the United
States, as new drug therapies have become available to treat these diseases, as
reimbursement rates for testing have been established and increased to
financially attractive levels and as the use of DXA and ultrasound systems to
measure bone density has become more widespread.
Costs and Expenses. The cost of product sales increased as a percentage
of product sales to 47% in the current three month period of fiscal 1998 from
46% in the same three month period of fiscal 1997. The cost of product sales
increased as a percentage of product sales to 49% in the current nine month
period of fiscal 1998 from 46% in the same nine month period of fiscal 1997. In
the current quarter and nine month periods, these costs increased as a
percentage of product sales primarily due to a dramatic shift in the product
sales mix to the primary care market in the United States. In the current
quarter, sales to this market of the Company's QDR-4500C increased significantly
but at an average selling price less than in the prior year. In the first half
of the fiscal year, the Company predominantly sold the lower gross margin QDR-
1000plus in this market. Partially offsetting this increase was increased sales
of the higher gross margin Sahara ultrasound sonometers, especially in the
United States. In 1997, the Company had higher sales to its hospital and
radiology markets which tended to purchase the higher gross margin ACCLAIM
systems.
Research and development expenses increased 5% to $2,335,123 (7% of total
revenues) in the current quarter from $2,225,704 (8% of total revenues) in the
third quarter of fiscal 1997. For the current nine month period, research and
development expenses increased 17% to $7,179,799 (8% of total revenues) from
$6,162,790 (8% of total revenues) for the first nine months of 1997. The
increase in research and development expenses in 1998 is primarily due to the
addition of engineering personnel and outside consultants working on the
development of new products.
Selling and marketing expenses increased 73% to $8,187,926 (24% of product
sales) in the current quarter from $4,734,783 (18% of product sales) in the
third quarter of fiscal 1997. For the current nine month period, selling and
marketing expenses increased 65% to $22,776,948 (26% of product sales) from
$13,826,980 (17% of product sales) for the first nine months of 1997. The
increase in selling and marketing expenses in 1998 is primarily due to an
increase in sales commissions based on the higher sales volume in the primary
care market in the United States.
General and administrative expenses increased 34% to $2,710,210 (8% of
total revenues) in the current quarter from $2,027,462 (8% of total revenues)
in the third quarter of fiscal 1997. During the first nine months of fiscal
1998, general and administrative expenses decreased 6% to $7,287,407 (8% of
total revenues) from $7,726,109 (9% of total revenues) in the first nine months
of 1997. The increase in general and administrative expenses in the current
quarter from the third quarter of fiscal 1997 is primarily due to an increase in
employee benefit related expenditures. The decrease in general and
administrative expenses in the first nine months of fiscal 1998 compared to the
same period of 1997 was primarily due to certain efficiencies achieved in
connection with the integration of FluoroScan.
10
<PAGE>
Interest Income. Interest income increased to $1,628,890 in the current
quarter from $1,384,626 in the same quarter of fiscal 1997 and increased to
$4,409,961 in the current nine month period from $3,717,041 in the comparable
period in fiscal 1997 as the Company held a higher investment base than in the
prior year. The company also increased the number of long-term receivables to
Latin American customers resulting in additional interest income.
Other Expense. The Company incurred other expense of $121,907 for the third
quarter of fiscal 1998 compared to $7,013 for the third quarter of fiscal 1997.
For the first nine months of fiscal 1998 and 1997, the Company incurred other
expense of $324,359 and $68,607, respectively. In the current quarter and nine
month periods, these expenses were primarily attributable to interest costs
related to increased borrowings on the line of credit established for use by the
Company's European subsidiaries to borrow funds in their local currencies to pay
for intercompany sales, thereby reducing the foreign currency exposure on those
transactions and, to a lesser extent, to foreign currency transaction losses.
For the third quarter and first nine month periods of fiscal 1997, other expense
was primarily related to interest costs incurred on the European line of credit.
To the extent that foreign currency exchange rates fluctuate in the future, the
Company may be exposed to continued financial risk. Although the Company has
established a borrowing line denominated in the two foreign currencies (the
French Franc and the Belgian Franc) in which the subsidiaries currently conduct
business to minimize this risk, there can be no assurance that the Company will
be successful or can fully hedge its outstanding exposure.
Provision for Income Taxes. The Company's effective tax rate was
approximately 36% in the first nine months of fiscal 1998 and 1997. The
effective tax rate is less than the combined Federal and state statutory rates
due primarily to the favorable Federal and state tax treatment afforded the
Company's foreign sales corporation and the favorable state tax treatment of
certain of the Company's interest income.
LIQUIDITY AND CAPITAL RESOURCES
At June 27, 1998, working capital was approximately $113 million, and cash,
cash equivalents and short-term investments totaled $88 million. The Company
has funded its operations primarily through cash flows from operations and the
issuance of securities. The cash, cash equivalents and short-term investments
balance increased approximately $4.1 million from September 27, 1997 primarily
due to operating activities which included net income of $9.1 million and an
increase in the Company's deferred revenue, which were partially offset by an
increase in inventory. This increase in inventory is primarily related to
increased production of Sahara. The Company finances certain sales to Latin
America over a two-to-three year time-frame. At June 27, 1998, the Company had
long-term accounts receivable outstanding of approximately $3.5 million which
was included in other assets and $5.8 million in accounts receivable relating
to these sales. Also included in other assets were marketable securities with
maturities exceeding one year totaling $12 million. As of June 27, 1998, the
Company has not experienced any significant change in these receivables,
however, the economic and currency related uncertainties in these countries may
increase the likelihood of non-payment. In the first nine months of 1998, the
Company purchased approximately $2.1 million of property and equipment,
primarily computers and other equipment associated with the hiring of additional
personnel.
11
<PAGE>
In July 1998, the Company purchased a 200,000 square foot building for
approximately $20 million in cash and the Company plans to spend approximately
$4 million to renovate the facility. The Company does not have any other
significant capital commitments and believes that existing sources of liquidity
and funds expected to be generated from operations will provide adequate cash to
fund the Company's anticipated working capital and other cash needs for the
foreseeable future.
RECENT ACCOUNTING PRONOUNCEMENT
In June 1997, the FASB issued SFAS No. 130 Reporting Comprehensive Income
and SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information. Both SFAS No. 130 and SFAS No. 131 are effective for fiscal years
beginning after December 15, 1997. The Company believes that the adoption of
these new accounting standards will not have a material impact on the Company's
financial statements.
YEAR 2000 ISSUE
The Company is currently working to resolve the potential impact of the
year 2000 on the processing of date-sensitive information by the Company's
computerized information systems and by the Company's products. The year 2000
problem is the result of computer programs being written using two digits
(rather than four) to define the applicable year. Any of the Company's programs
that have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000, which could result in miscalculation or system
failures. Based on preliminary information, costs of addressing potential
problems are not currently expected to have a material adverse impact on the
Company's financial position, results of operations or cash flows in future
periods. However, failure of the Company, its customers or vendors to resolve
such processing issues in a timely manner, could have a material adverse effect
on the Company's business, financial condition and results of operations.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Certain statements in this filing, and elsewhere (such as in other filings
by the Company with the Securities and Exchange Commission, press releases,
presentations by the Company or its management, and oral statements) constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things,
technical and marketing risks associated with the development of new products,
regulation, including the timing of FDA approvals or clearances for the
introduction of new products, regulatory policies in the United States and other
countries, reimbursement policies of public and private health care payors, the
availability of financing alternatives, including fee-per-scan programs, for the
Company's products, introduction and acceptance of new drug therapies,
competition from existing products and from new products or technologies, and
market and general economic factors.
12
<PAGE>
PART II - OTHER INFORMATION
HOLOGIC, INC. AND SUBSIDIARIES
Item 1. Legal Proceedings.
No material litigation.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security-Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished:
(10) Building Purchase and Sale Agreement.
(27) Financial Data Schedule.
(b) Reports on Form 8-K:
None.
13
<PAGE>
HOLOGIC, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Hologic, Inc.
(Registrant)
August 6, 1998 /s/ S. David Ellenbogen
- -------------- -------------------------------
Date S. David Ellenbogen
Chairman and Chief Executive Officer
August 6, 1998 /s/ Glenn P. Muir
- -------------- -------------------------------
Date Glenn P. Muir
Vice President, Finance and Treasurer
(Principal Financial and Chief Accounting
Officer)
14
<PAGE>
PURCHASE AND SALE AGREEMENT
Seller: 35 CROSBY DRIVE, LLC
A Massachusetts limited liability company
Buyer: HOLOGIC, INC.,
a Delaware corporation
Dated as of: June 12, 1998
Property: 35 CROSBY DRIVE
BEDFORD, MASSACHUSETTS
<PAGE>
Buyer and Seller hereby enter into this Purchase and Sale Agreement (this
"Agreement"), intending to be legally bound hereby, as of the Effective Date.
1. DEFINED TERMS:
--------------
a. The terms listed below shall have the following meanings
throughout this Agreement:
BASF Indemnity: That certain Limited Environmental Indemnity Agreement dated
April 29, 1997 by and between BASF Corporation and Seller.
Buyer: Hologic, Inc., a Delaware corporation.
Buyer's Address: 590 Lincoln Street
Waltham, Massachusetts 02451
Facsimile:
Closing Date: July 31, 1998 or such earlier date as may be specified by
written notice from Buyer to Seller given no less than seven
(7) days prior to such earlier specified closing date.
Deposit: One Million and 00/100 Dollars ($1,000,000.00), which shall be
payable as follows:
Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
has been paid by Buyer to Seller prior to the date hereof
(the "First Deposit Installment");
Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
(the "Second Deposit Installment") shall be paid by Buyer
to Seller on May 29, 1998; and
Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the
"Third Deposit Installment") shall be paid by Buyer to
Seller on the last day of the Review Period.
Description of
Improvements: A 2 and 3-story office/warehouse building with accessory
surface parking areas known as 35 Crosby Drive, Bedford,
Massachusetts, containing approximately 200,000 square feet of
rentable area.
<PAGE>
Effective Date: June __, 1998, the date both parties have executed this
Agreement, and a fully executed copy has been delivered to
each of Seller and Buyer.
Improvements: The building and other improvements located on or affixed to
the Land, including, without limitation, any and all utility,
plumbing, electrical, heating, air conditioning and
ventilation lines, systems, and boilers, fixtures, parking
and maneuvering areas, and landscaping.
Land: That certain parcel of land in Bedford, Middlesex County,
Massachusetts described in Certificate of Title No. 208063
issued by the Middlesex South Registry District of the Land
Court, more particularly described on Exhibit A attached
---------
hereto, together with all rights and interests appurtenant
thereto.
Personal Property: All tangible and intangible personal property interests of
Seller in each case in any way relating directly or
indirectly to the Real Property, including without limitation
the BASF Indemnity, and any all licenses, permits, plans,
drawings, soils reports, engineering reports, and warranties,
guaranties, and indemnities of the Seller relating to or
affecting the ownership, maintenance or use of the Property
to the extent the same are transferable or assignable.
Property: The Real Property and the Personal Property.
Property Location 35 Crosby Drive
(Street, City, Bedford, Middlesex County, Massachusetts
County and State):
Purchase Price: Twenty Million Seven Hundred Thousand and 00/100 Dollars
($20,700,000.00).
Real Property: The Land and the Improvements.
Review Period: The period from May 22, 1998, being the date that Seller
accepted Buyer's offer to purchase the Property, and ending
June 12, 1998.
Seller: 35 Crosby Drive, LLC, a Massachusetts limited liability
company.
Seller's Address: c/o Nordic Properties, Inc.
31 Third Avenue
Burlington, Massachusetts 01803
Facsimile: (781) 270-0359
2
<PAGE>
Title Company: Lawyers Title Insurance Corporation
225 Franklin Street
Boston, Massachusetts 02110
b. The following terms are defined in the referenced portion of
this Agreement:
<TABLE>
<CAPTION>
DEFINED TERM DEFINED IN
<S> <C>
Agreement Preliminary Statement
Buyer's Agents Section 4
Closing Section 7
Contingencies Section 5
Deed Section 2.a
Disapproved Title Exception Section 6.a
Extended Closing Date Section 7.c
Extension Period Section 7.c
Forced Removal Title Exceptions Section 6.b
General Instrument Section 2.b
Hazardous Substances Section 5.a(2)
Known Hazardous Substances Section 5.a(2)
Mortgage Exceptions Section 6.b
Notice Section 12.g
Pre-approved Exceptions Section 6.b
Response Notice Section 6.c
Response Period Section 6.c
Review Materials Section 4
Section 6.a Notice Section 6.a
Seller's Agents Section 13.e
Seller's Documents Section 8.a
Seller's Extension Period Section 7.c
Seller's Title Requirements Section 6.a
Seller's Work Section 13.e
Specimen Title Policy Section 5.a(6)
Survey Section 5.a(6)
Title Commitment Section 5.a(6)
Title Requirements Section 5.a(6)
</TABLE>
2. PURCHASE OF PROPERTY; PAYMENT OF PURCHASE PRICE.
-----------------------------------------------
Seller shall sell the Property to Buyer, and Buyer shall purchase the Property
from Seller, subject to all of the terms, covenants and conditions hereinafter
set forth in this Agreement.
3
<PAGE>
a. Real Property. Seller shall sell the Real Property to Buyer, and
-------------
Buyer shall purchase the Real Property from Seller, on all of the mutual terms,
covenants and conditions hereinafter set forth in this Agreement. The Real
Property shall be conveyed to Buyer or a nominee of Buyer of which Buyer has
given Seller notice no less than seven (7) days prior to the Closing Date, by a
Quitclaim Deed (the "Deed") in the form attached hereto as Exhibit B and
incorporated herein by this reference and sufficient to entitle Buyer to a
Transfer Certificate of Title.
b. Other Interests. All other interests of Seller in the Property
---------------
(including, without limitation, the Personal Property) shall be transferred and
assigned by Seller to Buyer pursuant to the General Instrument of Transfer (the
"General Instrument") in the form annexed hereto as Exhibit C and incorporated
herein by this reference.
3. DEPOSIT. On or prior to the Effective Date, Buyer has deposited with
-------
Seller the First Deposit Installment and the Second Deposit Installment as a
deposit on account of the Purchase Price. Unless this Agreement is terminated
by Buyer on or before the last day of the Review Period, Buyer shall deposit
with Seller the Third Deposit Installment on the last day of the Review Period.
Seller shall hold the Deposit pursuant to the terms of this Agreement. Interest
earned on the Deposit, if any, shall belong to the Seller; provided, however
that if the Deposit is returned to Buyer pursuant to the provisions of this
Agreement, the Deposit shall be returned together with an amount equal to simple
interest at the rate of 5% per annum on the Deposit held from time to time by
Seller hereunder. Except in the case of Seller's default in the performance of
its obligations hereunder on the Closing Date or as otherwise expressly provided
in this Agreement, the Deposit shall be non-refundable and shall belong to
Seller.
4. DELIVERY OF MATERIALS FOR REVIEW; CONFIDENTIALITY.
-------------------------------------------------
In connection with Buyer's acquisition of the Property, the Seller has
delivered to Buyer or made available to Buyer for its review at Seller's
Address, the materials ("Review Materials") set forth on the Due Diligence
Information List attached hereto as Exhibit D. In addition to the Review
---------
Materials set forth on said Exhibit D, Seller shall so deliver or make available
---------
to Buyer copies of all other materials and other information contained in
Seller's or Seller's property manager's files, to the extent the same are
requested from time to time in writing by Buyer or its counsel during the Review
Period and are reasonably material to Buyer's due diligence investigation of the
Property. Requests for and delivery of such additional materials shall not
extend the Review Period. The Review Materials and all materials, books and
records examined by or on behalf of Buyer pursuant to this Agreement shall: (i)
be held in strict confidence by Buyer; (ii) not be used for any purpose other
than the investigation and evaluation of the Property by Buyer and its lenders,
attorneys, employees, agents, engineers, consultants and representatives
(collectively, "Buyer's Agents"); and (iii) not be disclosed, divulged or
otherwise furnished to any other person or entity except to Buyer's Agents or as
required by law. If this Agreement is terminated for any reason whatsoever,
Buyer shall return to Seller all of the Review Materials in the possession of
Buyer and Buyer's Agents. The provisions of this Section shall survive the
termination of this Agreement.
4
<PAGE>
5. CONTINGENCIES.
-------------
a. Contingencies to Purchase. Buyer's obligation to purchase the
-------------------------
Property is subject to Buyer's satisfaction with the contingencies described
below (the "Contingencies"). Buyer shall promptly commence and diligently
prosecute its efforts to satisfy the Contingencies; however, with respect to any
Contingency whose satisfaction requires Buyer's approval or determination, such
matter shall be within Buyer's sole discretion. All Contingencies are solely for
Buyer's benefit, and may be waived only by Buyer.
(1) Physical Condition, Access and Utilities. Buyer shall be satisfied (a)
----------------------------------------
with the physical condition of the Property (including, but not limited to
the roof, facade, HVAC system, structure, elevators, mechanicals, fuel
storage equipment, security, fire safety, sprinkler, plumbing, electrical
and security systems), (b) that access to the Property is in compliance
with applicable laws, permits, and restrictions contained in any recorded
title exception document, and (c) the adequacy of utilities available to
the Property, such as gas, electricity, telephone, water, sewerage and
storm drain.
(2) Environmental Conditions. Buyer shall be satisfied (i) with the soils,
------------------------
ground water, topography and geology, and (ii) that Hazardous Substances,
as hereinafter defined, other than Known Hazardous Substances, as
hereinafter defined, are not present on, under or about the Property in
violation of applicable law. As used herein, the term "Hazardous
Substances" shall include, but not be limited to, asbestos-containing
materials, polychlorinated biphenyls, flammable materials, explosives,
radioactive materials, petroleum products and those materials or substances
now or heretofore defined as "hazardous substances," "hazardous materials,"
"hazardous waste," "toxic substances," or other similar designations under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act,
42 U.S.C. Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., the Refuse Act, 33 U.S.C. Section 407 et seq., the
Emergency Planning and Community Right-To-Know Act, the Massachusetts
Hazardous Waste Management Act, M.G.L. Chapter 21C, the Massachusetts Oil
and Hazardous Material Release Prevention and Response Act, M.G.L. Chapter
21E, together with all implementing regulations, including without
limitation the Massachusetts Contingency Plan or any other applicable
similar state federal, county, regional, municipal or local law, statute,
ordinance, rule or regulation governing the control of substances dangerous
to public health or safety as same may be amended from time to time. As
used herein, the term "Known Hazardous Substances" means Dioxane,
Tetrahydrofuran, and all of the constituent elements thereof or
combinations or recombination of such constituent elements which may result
from the break-down thereof.
5
<PAGE>
(3) Governmental Regulations. Buyer shall be satisfied with the Property's
------------------------
compliance with applicable laws, ordinances, rules and regulations.
(4) Title Commitment; Survey. Buyer, at Buyer's expense, no later than
------------------------
June 12, 1998, shall cause the issuance of (i) a commitment of the Title
Company (the "Title Commitment") for an owner's title insurance policy in
the form of a specimen ALTA Form B (1987) with respect to the Real Property
(the "Specimen Title Policy"), containing such endorsements, affirmative
coverages, deletions of printed exceptions and title exceptions, and
reinsurance agreements as Buyer shall approve, and Title Company agrees to
issue, and specifying Title Company's requirements relating to the issuance
of such Specimen Title Policy (the "Title Requirements") and (ii) an ALTA
survey of the Real Property by a duly licensed surveyor showing all
physical conditions affecting the Real Property sufficient for the deletion
of the survey exception in accordance with the Title Requirements (the
"Survey").
b. Review Period. Buyer shall have the Review Period in which to
-------------
satisfy or waive the Contingencies. Buyer may waive any of the Contingencies at
any time prior to the expiration of the Review Period by notice to Seller.
c. Termination or Satisfaction. At any time within the Review
---------------------------
Period Buyer may deliver a notice to Seller that the Contingencies are not
satisfied or waived and that this Agreement has terminated and is of no further
force or effect. If Buyer has not given notice within the Review Period that the
Contingencies are not satisfied or waived, the Contingencies shall be deemed to
have been satisfied or waived. Buyer may, but shall not be obligated to, deliver
a confirmatory notice to Seller that the Contingencies are satisfied or waived.
If the Contingencies are satisfied or waived, the parties shall be obligated to
proceed to Closing, as defined below. Notwithstanding the subject matter of the
Contingencies and the waiver or satisfaction of the same, Buyer acknowledges
that, except as provided in Section 13.e and Section 16, the sale of the
Property hereunder shall be AS IS, WHERE IS, with all faults as more fully
stated in Section 11.l below
6. TITLE.
-----
a. Notice of Disapproved Title Exceptions. Within five (5) business
--------------------------------------
days after Buyer receives both the Title Commitment and the Survey, Buyer shall
have the right, but not the obligation, to give notice (a "Section 6.a Notice")
to Seller of Buyer's disapproval of any of the title exceptions contained in the
Title Commitment and Specimen Title Policy (a "Disapproved Title Exception") and
specifying those Title Requirements, if any, contained in the Title Commitment
to be performed by or on behalf of Seller ("Seller's Title Requirements").
6
<PAGE>
b. Response Period. In the event that Buyer shall give a
---------------
Section 6.a Notice to Seller, then Seller shall within five (5) business days
after receipt thereof (the "Response Period"), give a responsive notice to Buyer
(the "Response Notice") wherein Seller shall either (i) agree to remove or
satisfy, as the case may be, the Disapproved Title Exception or Seller's Title
Requirement, or (ii) object to removing, satisfying the Disapproved Title
Exception or Seller's Title Requirement, on or before the Closing Date;
provided, however, that Seller hereby agrees that it shall agree to remove, and
shall not object to, any Disapproved Title Exception which is (x) a mechanic's
or materialman's lien for work performed on the Property; (y) a mortgage or
related security documents or similar encumbrance given to secure indebtedness
for money borrowed ("Mortgage Exceptions"); or (z) any other Disapproved Title
Exception, which can be removed by Seller at a cost to Seller of not more than
$200,000 (all of the foregoing Disapproved Title Exceptions in (x) through (z)
hereinafter collectively referred to as "Forced Removal Title Exceptions;"
provided, however, that in no event shall the Forced Removal Title Exceptions
include any of the exceptions which are contained in the Owner's Policy of Title
Insurance issued to Seller by the Title Company as Policy No. 136-00-425529
dated April 29, 1997, other than Mortgage Exceptions (the "Pre-approved
Exceptions")).
c. Uncured Disapproved Title Exception . If Seller fails to give
------------------------------------
the Response Notice within the Response Period, Seller shall be deemed to have
agreed to remove or satisfy, as the case may be, the Disapproved Title
Exceptions other than the Pre-approved Exceptions and the Seller's Title
Requirements. If Seller objects in the Response Notice to removing or satisfying
on or before the Closing Date any of the Disapproved Title Exceptions or
Seller's Title Requirements, then Buyer shall have the right, but not the
obligation, at any time on or before the expiration of five (5) days following
the expiration of the Response Period to either (i) give Seller notice that
Buyer waives its objection(s) to such Disapproved Title Exceptions or waives
such Seller's Title Requirements or (ii) give Seller notice that Buyer is
unwilling to waive such objection(s) or Seller's Title Requirements (it being
agreed that if Buyer shall fail to give Seller any such notice pursuant to the
immediately preceding clause (i) or (ii), then Buyer shall be deemed to have
given Seller a notice pursuant to the immediately preceding clause (ii) to the
effect that it is unwilling to waive such objection(s) and Seller's Title
Requirements). Upon giving of such notice that Buyer is unwilling to waive such
objection(s), this Agreement shall automatically terminate and be void and
without further recourse to the parties hereto, provided that if such
termination relates to a Disapproved Title Exception which is other than a Pre-
approved Title Exception, the Deposit shall be returned promptly to Buyer.
d. Later Changes Relating to Title Buyer shall have the right to
-------------------------------
approve or disapprove any exceptions to title that arise or occur during the
period which begins after the date and time of the Title Commitment and ends at
the time of recording the Deed from Seller to Buyer in connection with the
Closing hereunder, provided, however, that if Buyer has been made aware of any
such exceptions to title within the Review Period and Buyer has not given notice
to Seller in accordance with Section 5.c. that the Contingencies are not
satisfied or waived, Buyer shall be deemed to have approved any such exceptions
to title. If Buyer disapproves of any such exception to title, then Buyer may
give to Seller a notice to such effect, in which case the provisions of this
Section 6 shall apply mutatis, mutandis.
------- --------
7
<PAGE>
7. CLOSING REQUIREMENTS.
--------------------
a. The Closing. On the Closing Date, all matters to be performed
-----------
under this Agreement incident to the sale of the Property, and the payment of
the Purchase Price (collectively, the "Closing") shall be performed at the
offices of Seller's counsel, Rubin and Rudman, 50 Rowes Wharf, Boston,
Massachusetts 02110, or other mutually acceptable location. The Closing shall
commence at 10:00 a.m. All documents to be delivered at the Closing and all
payments to be made shall be delivered to the Title Company on the Closing Date,
in escrow, pending the prompt recording of the Deed and such other instruments
as are required to be filed to effect the transfer and conveyance of the
Property, upon which filing , and confirmation from the Title Company that it is
prepared to issue an owner's policy of title insurance in the form of the
Specimen Title Policy, all instruments and funds shall then be delivered out of
escrow. Transfer of the Purchase Price to Seller must be completed on the
Closing Date. The Deed shall not be recorded and such other instruments, funds,
and other Closing deliveries shall be returned by the Title Company to the party
which delivered them in the event that on the Closing Date (i) Seller shall be
unable to give title, or to make conveyance, or to deliver possession, all as
herein provided, (ii) the Seller's Title Requirements which Seller has agreed to
satisfy are not satisfied, or (iii) the Property does not conform to the
provisions of Section 7.b. hereof, and in either such event the provisions of
Section 7.c through 7.e hereof shall then be applicable. It is acknowledged that
time is of the essence of this Agreement.
b. Possession and Condition of the Property. Without limiting the
----------------------------------------
generality of the foregoing, at Closing full possession of the Real Property
free of all tenants and occupants is to be delivered, the Property to be then
(i) in substantially the same condition as it now is, reasonable use and wear
thereof excepted and except as otherwise provided in Section 16, and (ii) in
compliance with the provisions of Section 6 hereof. Buyer and/or Buyer's Agents
shall be entitled to inspect the Property prior to the delivery of the Deed in
order to determine whether the condition thereof reasonably complies with the
terms hereof.
c. Extension to Cure. If on the Closing Date Seller shall be unable
-----------------
to give title, or to make conveyance, or to deliver possession, all as herein
provided, or if on the Closing Date the Property does not conform to the
provisions of Section 7.b., Seller, shall give notice to Buyer, on or before the
Closing Date, that it will use reasonable efforts to cure all impediments which
cause it to be unable to give title, make conveyance or deliver possession as
aforesaid, all as herein provided, in which case the Closing Date shall be
extended for a period (the "Seller's Extension Period") of up to thirty (30)
days to permit Seller to cure as aforesaid. Seller's "reasonable efforts" shall
not require the expenditure of more than $200,000 other than for the elimination
of any Forced Removal Title Exception.
d. Termination. If, at the expiration of the Seller's Extension
-----------
Period, Seller shall have failed so to give title, make conveyance, deliver
possession, or make the Property conform, as the case may be, all as herein
provided, then, subject to Buyer's rights under Section 7.e, this Agreement
shall terminate, whereupon Seller shall promptly return the Deposit to Buyer and
all obligations of the parties hereto shall cease without recourse to the
parties hereto except as otherwise specifically set forth herein.
8
<PAGE>
e. Buyer's Election. Buyer shall have the election, on the original
----------------
or any extended Closing Date, to accept such title as Seller can deliver to the
Property in its then condition and to pay therefor the Purchase Price without
deduction (except to the extent necessary to clear title of any Forced Removal
Title Exceptions), in which case Seller shall convey such title by delivering
the Deed subject to the conditions contained in this Agreement.
f. Accuracy of Representations and Warranties. It is a condition to
------------------------------------------
each party's obligations to proceed to Closing that all of the representations
and warranties of the other party hereunder are true and correct in all material
respects as of the Closing Date as if those representations and warranties were
made on the Closing Date (subject to any update or modification thereof as
hereinafter provided) and such party has performed all of its covenants
hereunder. If any condition to Buyer's or Seller's obligations hereunder is not
fulfilled, Buyer or Seller, as the case may be, shall have no obligation to
proceed to Closing.
8. CLOSING DELIVERIES.
------------------
a. Seller's Deliveries. Seller shall deliver or cause to be
-------------------
delivered the following documents (the "Seller's Documents") at Closing:
(1) The duly executed and acknowledged Deed.
(2) A certification duly executed by Seller under penalty of
perjury stating that Seller is not a "foreign person"
within the meaning of Section 1445 of the Internal Revenue
Code of 1986, as amended, in the form annexed hereto as
Exhibit E.
----------
(3) Originals (or copies thereof if originals are not
available) of all documents and materials assigned pursuant
to the General Instrument.
(4) Originals (or copies thereof if originals are not
available) of all other Review Materials if not already
provided, together with all updates and modifications
thereof and additions thereto through the Closing, and all
other books and records of Seller pertaining in a material
way to the operation and management of the Property.
(5) A certificate by Seller to Buyer to the effect that all of
the representations and warranties of Seller hereunder, as
the same may be modified or updated as set forth herein,
remain true and correct in all material respects as of the
Closing, in the form annexed hereto as Exhibit F.
---------
9
<PAGE>
(6) Such affidavits and indemnities as the Title Company may
reasonably require in order to omit from any title
insurance policy issued to Buyer or Buyer's mortgagee
exceptions for (i) parties in possession and
(ii) mechanic's liens created by or through Seller.
(7) Any corporate, partnership or other authorization documents
necessary to record the Deed.
(8) Evidence of the authority of any individuals or constituent
members in Seller to execute any instruments executed and
delivered by Seller at Closing.
(9) Any of the following which are requested by Buyer and in
the possession of or reasonably available to Seller: any
and all keys, and lock and safe combinations.
(10) Any discharges, releases, other documents or other
conditions required by the Title Company as Seller's Title
Requirements under the Title Commitment which Seller is
obligated to satisfy as a Disapproved Title Exception, in
such form and substance as is reasonably satisfactory to
the Title Company so as to enable Title Company to issue
the owner's title policy in the form of the Specimen Title
Policy.
(11) A written sign-off by the Building Inspector of the Town of
Bedford indicating that the work performed pursuant to
Building Permit #13926 dated August 20, 1997 has been
inspected and approved, and certificates of inspection for
the two passenger elevators in the Property (Buyer
acknowledging that the freight elevator will not be
operative and will have no such inspection certificate).
To the extent that Buyer fails to receive the above
deliveries, any of the deliveries specified in Section 8.b
below, or any of the conditions set forth in this Agreement
as conditions to Buyer's obligation to close pursuant to
this Agreement shall fail to be fulfilled, then Buyer may,
as its sole remedy, terminate this Agreement by notice to
Seller, and upon such notice Seller shall return the
Deposit to Buyer promptly and this Agreement shall be null
and void and without recourse to the parties hereto except
as otherwise specifically set forth herein.
b. Mutual Deliveries. Buyer and Seller shall deliver or cause to be
-----------------
delivered the following at the Closing:
(1) Executed counterparts of the General Instrument; and
(2) A closing statement reflecting the adjustments made at the
Closing and described in Section 9 hereof.
10
<PAGE>
c. Buyer's Deliveries. Buyer shall deliver or cause to be delivered
------------------
at the Closing:
(1) The Purchase Price for the Property in excess of the
Deposit (plus any additional funds necessary to pay Buyer's
share of closing costs and prorations, as hereinafter set
forth) by wire transfer of immediately available funds; and
(2) A certificate by Buyer to Seller to the effect that all of
the representations and warranties of Buyer hereunder, as
the same may be modified or updated as set forth herein,
remain true and correct in all material respects as of the
Closing, in the form annexed hereto as Exhibit G.
---------
9. CLOSING COSTS AND PRORATIONS. At Closing, closing costs shall be paid and
----------------------------
prorations made as follows:
a. Closing Costs. Seller shall pay any state, county, or local
-------------
transfer taxes and recording charges customarily paid by Seller.
Buyer shall pay any recording costs customarily paid by Buyer,
and the title insurance premium for the Owner's title insurance
policy issued at Closing to Buyer by the Title Company and the
costs for the Survey.
b. Prorations. The Purchase Price shall be subject to the following
----------
prorations. All such prorations shall be made so that Buyer has
the benefit of rent and bears the burden of expenses for the
date of Closing.
(1) Taxes. Real property taxes and general and special
-----
assessments shall be prorated through the Closing Date on
the basis of the fiscal year for such taxes and
assessments. If the Closing Date shall occur before the
real property tax rate for such fiscal year is fixed, the
apportionment of taxes shall be made on the basis of the
taxes assessed for the preceding fiscal year. After the
real property taxes are finally fixed for the fiscal year
in which the Closing Date occurs, Seller and Buyer shall
make a recalculation of the apportionment of such taxes,
and Seller or Buyer, as the case may be, shall make an
appropriate payment to the other based on such
recalculation. To the extent Seller has undertaken to
obtain any real estate tax abatement, the amount of the net
proceeds of such tax abatement shall be prorated through
the Closing Date, if, as and when such proceeds are paid by
the applicable governmental taxing authority.
(2) Utilities. Final readings on all gas, water and electric
---------
meters shall be made as of the Closing Date, if possible.
If final readings are not possible, gas, water and
electricity charges will be prorated based on the most
recent period for which costs are available. Any deposits
made by Seller with utility companies shall be returned to
Seller by such utility companies. Buyer shall be
responsible for making all arrangements for the
continuation of utility services.
11
<PAGE>
c. Post Closing Cooperation. After the Closing, Buyer and Seller
------------------------
shall cooperate with each other, and shall cause their
respective property managers for the Property to cooperate with
each other, including without limitation making available books
and records for the Property, in order to respond to any Tenant
inquiry concerning, challenge to or audit of, any operating
expense or similar additional rent or rent escalation item. To
the extent that any adjustment or proration required hereunder
was based on estimates at the time of Closing, the parties shall
readjust and re-prorate based upon final numbers when available,
and make payment as appropriate based upon such readjustment and
re-proration.
The provisions of this Section 9 shall survive Closing.
10. DEFAULT.
-------
a. Buyer's Default. If Seller has complied with all of the
----------------
covenants and conditions contained herein and is ready, willing
and able to convey the Property in accordance with this
Agreement and Buyer fails to consummate this Agreement and take
title, then the parties hereto recognize and agree that the
damages that Seller will sustain as a result thereof will be
substantial, but difficult if not impossible to ascertain.
Therefore, the parties agree that, in the event of Buyer's
default, Seller shall, as its sole remedy, be entitled to retain
the Deposit as liquidated damages, and not as a penalty and
neither party shall have any further rights or obligations with
respect to the other under this Agreement, except for the those
covenants and indemnities which are expressly state to survive
termination of this Agreement. Buyer agrees not to interpose any
defense or otherwise seek to interfere with Seller's retention
and ownership of the Deposit.
b. Seller's Default. In the event that Buyer has complied with all
----------------
of the covenants and conditions contained herein and is ready,
willing and able to take title to the Property in accordance
with this Agreement, and Seller fails to consummate this
Agreement and convey title as set forth herein, Purchaser shall
have an action for specific performance of this Agreement to
obtain such title as Seller is able to convey. Alternatively, in
the case of Seller's default, Buyer may elect to terminate this
Agreement and recover the Deposit. In either such case, Buyer
shall have no right to an action for damages against Seller
other than for the return of the Deposit.
11. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby makes the
---------------------------------------
following representations and warranties to Buyer as of the Effective Date:
a. Delivery of Written Materials. All Review Materials and other
-----------------------------
written materials (including, without limitation, the Exhibits
to this Agreement) which Seller has delivered or shall deliver
to Buyer pursuant this Agreement are and shall be complete in
all material respects.
12
<PAGE>
b. Other Agreements. On the Closing Date there will be no
----------------
contracts, agreements or understandings, oral or written, with
any person relating to operation, maintenance or management of
the Property except (i) terms and conditions of any licenses and
permits required by any zoning or environmental laws, and the
applications therefor, (ii) the exceptions to title to the
Property permitted under this Agreement, and (iii) any other
agreements delivered by Seller to Buyer during the Review
Period.
c. Due Authorization. Seller is duly organized, validly existing,
-----------------
and in good standing under the laws of the Commonwealth of
Massachusetts, has all necessary power and authority to own and
use its properties and to transact the business in which it is
engaged, and has full power and authority to enter into this
Agreement, to execute and deliver the documents and instruments
required of Seller herein, and to perform its obligations
hereunder. Seller is duly authorized to execute and deliver, and
perform this Agreement and all documents and instruments and
transactions contemplated hereby or incidental hereto.
d. Enforceability. This Agreement and all documents required hereby
--------------
to be executed by Seller, when so executed, shall be legal,
valid, and binding obligations of Seller enforceable against
Seller in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
and other similar laws affecting the rights of creditors
generally and, as to enforceability, the general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
e. No Conflict. The execution and delivery of, and consummation of
-----------
the transactions contemplated by this Agreement is not
prohibited by, and will not conflict with, constitute grounds
for termination of, or result in the breach of any agreement or
instrument to which Seller is now a party or otherwise subject.
f. Notices. Seller has received no written notice or citation (a
-------
"Notice"):
(1) From any federal, state, county or municipal authority
alleging any fire, health, safety, building pollution,
environmental, zoning or other violation of any law,
regulation, permit, order or directive in respect of the
Property or any part thereof, which has not been entirely
corrected;
(2) From any insurance company or bonding company of any
defects or inadequacies in the Property or any part
thereof, which would adversely affect the insurability of
the same or of any termination or threatened termination of
any policy of insurance or bond.
If any such Notice is received by Seller prior to Closing,
Seller shall notify Buyer promptly thereof and provide a
copy of such Notice to Buyer.
13
<PAGE>
g. Legal Proceedings. There are no actions, suits or proceedings,
-----------------
pending, or, to Seller's knowledge, threatened before any court,
commission, agency or other administrative authority against, or
affecting Seller or the Property.
h. No Employees. Seller does not directly employ any employees who
------------
work at the Property.
i. Updating of Schedules, Exhibits, Representations and Warranties.
---------------------------------------------------------------
Seller shall have the right to modify, update and supplement all
representations, warranties, exhibits and schedules attached to
or delivered in connection with this Agreement through the
Closing Date to the extent required to make such
representations, warranties, exhibits and schedules true,
accurate and complete, provided, however, that if any such
modification, update or supplement has the effect of decreasing
the value of the Property by One Million Dollars ($1,000,000) or
more, or has a material adverse effect on Buyer's intended use
of the Property for a combination of office and light
manufacturing uses, Buyer shall have the right to terminate this
Agreement by notifying Seller, in writing, within five (5)
business days of receipt of such updated representation,
warranty, exhibit or schedule, and Seller shall promptly return
the Deposit to Buyer. If Buyer does not give such notice within
the aforesaid five (5) business day period, Buyer shall be
deemed to have accepted all matters shown on such modified
representations, warranties, exhibits and schedules.
j. As-Is Purchase. As a material inducement to Seller to execute
--------------
this Agreement, Buyer acknowledges, represents and warrants
that, subject to and in reliance on the representations and
warranties of Seller set forth in Section this Section 11, upon
the satisfaction or waiver of the Contingencies (i) Buyer will
have fully examined and inspected the Property, together with
the Review Materials and such other documents and materials with
respect to the Property which Buyer deems necessary or
appropriate in connection with its investigation and examination
of the Property, (ii) Buyer will have accepted the foregoing and
the physical condition, value, presence/absence of Hazardous
Substances, financing status, use, leasing, operation, tax
status, income and expenses of the Property, (iii) except as
provided in Section 13.e hereof with respect to Seller's Work
and as provided in Section 16, the Property will be purchased by
Buyer "AS IS" and "WHERE IS" and with all faults and, upon
Closing, Buyer shall assume responsibility for the physical
condition of the Property and (iv) Buyer will have decided to
purchase the Property solely on the basis of its own independent
investigation. Except as expressly set forth herein or in
Seller's Documents, Seller has not made, does not make, and has
not authorized anyone else to make any representation as to the
present or future physical condition, value, presence/absence of
Hazardous Substances, financing status, leasing, operation, use,
tax status, income and expenses or any other matter or thing
pertaining to the Property, and Buyer acknowledges that no such
representation or warranty has been made and that in entering
into this Agreement it does not rely on any representation or
warranty other than those expressly set forth in this Agreement
or in Seller's Documents. Without limiting the generality of the
foregoing, Buyer acknowledges the presence on and under the
Property of the Known Hazardous Substances. EXCEPT AS EXPRESSLY
SET FORTH IN THIS
14
<PAGE>
AGREEMENT OR IN SELLER'S DOCUMENTS, SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED OR ARISING BY OPERATION OF
LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF CONDITION,
HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE OF THE PROPERTY. Seller shall not be liable for or bound
by any verbal or written statements, representations, real
estate broker's "setups" or information pertaining to the
Property furnished by any real estate broker, agent, employee,
servant or any other person unless the same are specifically set
forth in this Agreement or in Seller's Documents. The provisions
of this Section 11.j. shall survive the Closing. If Buyer shall
proceed to Closing with actual knowledge of any matter, or as to
any matter set forth in the Review Materials which is in
conflict with any of Seller's representations, warranties or
indemnities made in this Agreement, Buyer shall be deemed to
have waived such Seller's representations, warranties or
indemnities to the extent inconsistent with such actual
knowledge or the contents of such Review Materials.
k. Environmental Status. Except as disclosed in (i) that certain
--------------------
"Report on Oil and Hazardous Material Site Evaluation, Former
BASF Facility, 35 Crosby Drive, Bedford, Massachusetts" prepared
by Haley & Aldrich, Inc., File No. 11837-043, dated April, 1997,
and (ii) that certain letter from Haley & Aldrich, Inc. to
Seller, File No. 11837-043, dated October 3, 1997, concerning
Underground Storage Tank Removal Activities, and (iii) the
additional reports and/or governmental files referred to
therein, to the best of Seller's knowledge, no Hazardous
Substances other than the Known Hazardous Substances are present
on, under or about the Property in violation of applicable law.
The liability of Seller for damages actually incurred by the
Buyer by reason of the breach of the representation made in this
Section 11.k shall be limited to One Million Dollars
($1,000,000).
l. Limitation of Seller's Representations. The representations and
--------------------------------------
warranties set forth in this Section 11 shall survive the
Closing to the date occurring twelve (12) months after the
Closing Date, at which time such representations and warranties
shall terminate and be of no further force or effect. All other
representations and warranties made by Seller in this Agreement,
unless expressly provided otherwise, shall not survive the
Closing. Where representations and warranties are made in this
Agreement to the "best of Seller's knowledge," such phrase shall
mean and be limited to the actual knowledge of Ogden Hunnewell,
Peter Nordblom, or Steve Logan.
12. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby makes the following
--------------------------------------
representations and warranties to Seller as of the Effective Date:
a. Due Authorization. Buyer is duly organized, validly existing,
-----------------
and in good standing under the laws of the State of Delaware, is
duly qualified and in good standing under the laws of the
Commonwealth of Massachusetts, has full power to execute,
deliver and carry out the terms and provisions of this Agreement
and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, and the
individual(s) executing this Agreement on behalf of Buyer has
the authority to bind Buyer to the terms and conditions of this
Agreement.
15
<PAGE>
b. Enforceability. This Agreement and all documents required hereby
--------------
to be executed by Buyer, when so executed, shall be legal,
valid, and binding obligations of Buyer, enforceable against
Buyer in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
and other similar laws affecting the rights of creditors
generally and, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
The representations and warranties set forth in this Section 12
shall survive the Closing to the date occurring twelve (12)
months after the Closing Date, at which time such
representations and warranties shall terminate and be of no
further force or effect.
13. ACTIONS AFTER THE EFFECTIVE DATE. The parties covenant to do the
following through the Closing Date.
a. Title. Seller shall not make any changes in the condition of
-----
title to the Property from and after the Effective Date which
will not be released and removed at Closing, except with Buyer's
advance written consent, which consent shall not be unreasonably
withheld or delayed.
b. Maintenance and Operation of Property. Seller shall continue to
-------------------------------------
operate, maintain and insure the Property consistent with the
present business and operations thereof and in a first-class
manner, and Seller shall maintain the buildings, improvements,
utilities, and systems that comprise or that are upon the
Property in good condition and repair, normal wear and tear and
casualty excepted, it being the intention of the parties hereto
that the general operations of the Property shall not be changed
between the date hereof and the date of Closing. Seller shall
maintain all existing insurance coverages (or similar
replacements thereof) in full force and effect. Seller shall not
enter into any contract or equipment lease that cannot be
terminated by Seller by the Closing Date without the prior
written consent of Buyer.
c. Representations and Warranties. Each party shall use diligent
------------------------------
efforts to prevent any act or omission that would render any of
its representations and warranties herein untrue or misleading,
and shall immediately notify the other party if such act or
omission occurs.
d. Entry; Buyer's Inspection. Buyer and Buyer's Agents may enter
-------------------------
the Property from time to time for purposes of (i) performing
non-invasive physical tests (except that Buyer may perform minor
testing to determine the presence of asbestos-containing
materials, termites and other wood destroying insects, provided
that all damage resulting therefrom is promptly repaired by
Buyer at its sole expense and to Seller's reasonable
satisfaction) and (ii) conduct any and all engineering,
environmental and other inspections at the Property and examine
and evaluate the Review Materials and all other relevant
agreements and documents within the possession of Seller or
subject to its control, and the performance of Seller's Work, as
16
<PAGE>
Buyer may reasonably request. No soil and/or ground water
sampling shall be performed unless and until the location, scope
and methodology of such sampling and the environmental
consultant selected by Buyer to perform such sampling have all
been approved by Seller. Seller hereby approves the scope of
work to be performed by Jaworski Geotech, Inc. as described in a
scope of work dated June 3, 1998. Prior to conducting any such
sampling, Buyer shall have a utility mark-out performed for the
Property. Copies of all environmental and engineering reports
prepared by or on behalf of Buyer with respect to the Property
shall be provided promptly to Seller. With respect to Buyer's
right to inspect the Property, Buyer agrees that (i) each
inspection shall be performed during normal business hours or at
such other times as Seller and Buyer shall mutually agree and
(ii) Buyer and Buyer's Agents shall use not disrupt or interfere
with the remediation activity being conducted on the Property by
BASF Corporation. Buyer shall give to Seller reasonable advance
notice of any such inspections, reviews or examinations. Buyer
shall perform any testing or inspection of the Property only
after Buyer has provided to Seller certificates of insurance or
other evidence reasonably satisfactory to Seller that Buyer
and/or Buyer's Agents carries general liability insurance in an
amount of at least One Million Dollars ($1,000,000) together
with evidence of adequate worker's compensation insurance.
Seller shall have the right, at its option, to cause Seller's
representative to be present at all inspections, reviews and
examinations conducted on the Property by Buyer. Notwithstanding
anything to the contrary contained in this Agreement, any
investigation or examination of the Property, the Review
Materials or other materials with respect to the Property
performed by Buyer or Buyer's Agents prior to the Closing shall
be performed at the sole risk and expense of Buyer, and Buyer
shall be solely responsible for the acts or omissions of any of
Buyer's Agents brought on, or to, the Property by Buyer. In
addition, Buyer shall defend, indemnify and hold Seller harmless
from and against all loss, expense (including, but not limited
to, reasonable attorneys' fees and court costs arising from the
enforcement of this indemnity), damage and liability resulting
from claims for personal injury, wrongful death or property
damage against Seller or any of the Property arising from or as
a result of, any act or omission of Buyer or Buyer's Agents in
connection with any inspection or examination of the Property by
Buyer or Buyer's Agents, except that Buyer's agreements as set
forth in this sentence shall not extend to any condition that is
discovered by Buyer to be present on, under or about the
Property. The provisions of this Section 13.d shall survive the
Closing or the earlier termination of this Agreement.
e. Work to be Completed by Seller. Prior to the Closing, Seller
------------------------------
shall complete the work ("Seller's Work") described on Exhibit H
---------
in a good and workmanlike manner, using first class materials.
If Seller's Work is not complete on the Closing Date, Seller
shall remain responsible for completion of all incomplete
portions of Seller's Work other than those items specified on
Exhibit H with a "credit" amount, all of which shall be
completed within thirty (30) days after the Closing Date. For
any item of incomplete work for which a credit amount is
specified in Exhibit H, the Purchase Price shall be reduced by
---------
the credit amount so specified and Seller shall have no further
obligation with respect to such work. For all other items an
amount equal to 125% of the reasonable estimate of the cost to
complete such items shall be withheld from the proceeds due
Seller at Closing and placed in escrow with the Title Company
pursuant to an escrow agreement to be executed at closing by
Buyer, Seller and the
17
<PAGE>
Title Company to insure the completion of such portion of
Seller's Work. The amount held in escrow shall be released to
Seller by the Title Company from time to time upon presentation
to Title Company of joint written instructions from Buyer and
Seller authorizing said release. Buyer reserves the right to
inspect Seller's Work prior to authorizing any release of the
escrowed funds, provided, however, that Buyer shall not
unreasonably withhold or delay instructions for the release of
the escrowed funds upon request of Seller. If any work remains
incomplete more than thirty (30) days after the Closing Date,
Seller shall forfeit any remaining amounts held in escrow to
Buyer and Seller shall have no further obligation with respect
to such work. The provisions of this Section 13.e shall survive
the Closing for a period of one (1) year.
f. Change in Environmental Condition. If, during the interval
---------------------------------
between the end of the Review Period and the Closing Date, there
shall newly occur any release of Hazardous Substances on, under
or about the Property of which either Seller or Buyer has actual
knowledge, the party gaining such actual knowledge of such
release shall give notice to the other party. Seller shall
promptly select a licensed site professional (as defined in the
Massachusetts Contingency Plan), who shall be reasonably
acceptable to Buyer, to estimate the cost to remediate such
release in accordance with applicable laws, and Seller shall
provide such estimate to Buyer. If the estimated cost of such
remediation shall exceed One Million Dollars ($1,000,000), Buyer
shall have the right to terminate this Agreement by notifying
Seller, in writing, within five (5) business days of receipt of
such estimate, and Seller shall promptly return the Deposit to
Buyer. If Buyer does not give such notice within the aforesaid
five (5) business day period, Buyer shall be deemed to have
accepted the condition of the Property after such release and
shall proceed to Closing.
14. USE OF PROCEEDS TO CLEAR TITLE. Any unpaid taxes, assessments, water
------------------------------
charges and sewer rents, together with the interest and penalties thereon to
Closing Date, and any other liens and encumbrances which Seller is obligated to
pay and discharge, together with the cost of recording and filing any
instruments necessary to discharge such liens and encumbrances of record, may be
paid out of the proceeds of the monies payable on the Closing Date provided
satisfactory arrangements are made with the Title Company to endure obtaining
and recording of discharges with respect to the same.
15. SURVIVAL. The terms, covenants and indemnities contained in this
--------
Agreement required to be operative after delivery of the Deed shall survive
delivery of the Deed without limitation as to time, unless a time limitation is
expressly provided, and shall not be deemed to have been merged in the Deed.
16. DAMAGE TO PROPERTY. If the Property or any part thereof (i) is damaged
------------------
by casualty or (ii) is taken by exercise of the power of eminent domain prior to
the Closing Date, and in the case of either such casualty or taking the damage
to the Property exceeds One Million Dollars ($1,000,000), as reasonably
determined by Seller, Buyer may terminate this Agreement by notice given to
Seller within ten (10) days of the date Seller gives notice to Buyer of such
casualty or taking. If Buyer does so terminate this Agreement, Seller shall
promptly return the
18
<PAGE>
Deposit to Buyer. If Buyer does not so terminate this Agreement or such damage
does not exceed One Million Dollars ($1,000,000) the parties shall proceed to
Closing without any reduction in the Purchase Price except as specifically
provided below. At the Closing, Seller shall assign to Buyer all insurance
proceeds arising from the casualty (to the extent not applied to any restoration
relating thereto), together with a credit against the Purchase Price equal to
the deductible amount under the applicable insurance policy, or pay over or
assign to Buyer all awards recovered or recoverable on account of such taking.
As an inducement to Buyer to agree to the provisions of this Section 16, Seller
represents to Buyer that Seller maintains property insurance for the Property in
an amount equal to the full replacement cost of the Improvements, and Seller
agrees to continue coverage in such amount in effect through the Closing Date.
17. BROKERAGE COMMISSION. Seller and Buyer each warrant to the other party
--------------------
that its sole contact with the other party or the Property regarding this
transaction has been directly with the other party or with Grubb & Ellis.
Seller shall be responsible for any fees or commissions payable to Grubb & Ellis
in connection with the transaction contemplated by this Agreement. Seller and
Buyer further warrant to each other that no other broker or finder can properly
claim a right to a commission or finder's fee based upon contacts between the
claimant and the warranting party with respect to the other party or the
Property. Seller and Buyer shall indemnify, defend and hold the other party
harmless from and against any loss, cost or expense, including, but not limited
to, reasonable attorneys' fees and court costs, resulting from any claim for a
fee or commission by any broker or finder in connection with the Property and
this Agreement resulting from the indemnifying party's actions. The foregoing
indemnities shall survive the Closing.
18. SUCCESSORS AND ASSIGNS. The terms, covenants and conditions herein
----------------------
contained shall be binding upon and inure to the benefit of the successors and
assigns of the parties hereto. Buyer may not assign Buyer's rights hereunder to
any party without Seller's consent. No such assignment shall relieve Buyer
named herein of any liability to Seller.
19. ENTIRE AGREEMENT. This Agreement contains all of the covenants,
----------------
conditions and agreements between the parties and shall supersede all prior
correspondence, agreements and understandings, both verbal and written. The
parties intend that this Agreement constitute the complete and exclusive
statement of its terms and that no extrinsic evidence may be introduced in any
proceeding involving this Agreement.
20. ATTORNEYS' FEES. In the event of any litigation regarding the rights and
---------------
obligations under this Agreement or in the Escrow Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees and court costs. Each
party shall bear its own attorneys' fees in connection with the preparation of
this Agreement and the consummation of the transactions contemplated hereunder.
21. NOTICES. All notices required to be given pursuant to the terms hereof
-------
shall be in writing and delivered by hand delivery, in which case notice shall
be deemed given on the day of
19
<PAGE>
delivery, or by overnight delivery service (such as Federal Express) or via
facsimile transmission (with confirmation copy sent by overnight delivery
service), in which case notice shall be deemed given on the day after the day
sent, addressed to Seller at Seller's Address, with a courtesy copy to Myrna
Putziger, Esq., Rubin and Rudman, 50 Rowes Wharf, Boston, Massachusetts 02110,
Facsimile (617) 439-9556 or to Buyer at Buyer's Address with a courtesy copy to
Carl E. Axelrod, Esq., Brown, Rudnick, Freed & Gesmer, One Financial Center,
Boston, Massachusetts 02111, Facsimile (617) 856-8201. The foregoing addresses
may be changed by written notice to the other party as provided herein.
22. EXHIBITS AND DEFINED TERMS. All exhibits attached hereto are
--------------------------
incorporated herein by reference thereto. All of the terms and definitions set
forth in the Defined Terms section are incorporated in this Agreement by
reference thereto.
23. TIME. Time is of the essence of every provision herein contained. When
----
the last day for the performance of any act permitted or required hereunder
falls on any day which is not a business day in the City of Boston,
Massachusetts, such act may be performed on the next business day in said city.
When an act must be form or a notice given by the end of a specified day, such
act must be performed or such notice given by 5:00 p.m. in the City of Boston,
Massachusetts.
24. STANDSTILL PERIOD. During the Review Period and until this Agreement is
-----------------
terminated, Seller will not directly or indirectly solicit, provide any
information to, engage in discussions or negotiations with, or enter into any
agreement or understanding with any person, entity or group, concerning sale of
the Property or interests therein, or any similar transaction, provided, however
that the foregoing shall not restrict Seller's right to respond to any
unsolicited offer so long as such response does not entail any such negotiation
or the entering into any such agreement or understanding.
25. APPLICABLE LAW. This Agreement shall be governed by the laws of the
--------------
Commonwealth of Massachusetts.
26. NO ORAL MODIFICATION OR WAIVER. This Agreement may not be changed or
------------------------------
amended orally, but only by an agreement in writing. No waiver shall be
effective hereunder unless given in writing, and waiver shall not be inferred
from any conduct of either party.
27. NO RECORDING. Buyer agrees that it shall not record this Agreement or
------------
any summary of the provisions thereof with the Middlesex South Registry of Deeds
nor file the same with the Middlesex South Registry District of the Land Court.
Any such recording or filing shall automatically render this Agreement null and
void.
28. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20
<PAGE>
29. CAPTIONS. The captions of this Agreement are for convenience and
--------
reference only and in no way define, describe, extend or limit the scope,
meaning or intent of this Agreement.
30. SEVERABILITY. The invalidation or unenforcability in any particular
------------
circumstance of any of the provisions of this Agreement shall in no way affect
any of the other provisions hereof, which shall remain in full force and effect.
31. NO JOINT VENTURE. This Agreement shall not be construed as in any way
----------------
establishing a partnership, joint venture, express or implied agency, or
employer-employee relationship between Buyer and Seller.
32. NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole benefit of
----------------------------
the parties hereto, their respective successors and permitted assigns, and no
other person or entity shall be entitled to rely upon or receive any benefit
from this Agreement or any term hereof.
33. NO PERSONAL LIABILITY. No general or limited partner of Seller, no
---------------------
officer, director, or stockholder or member of any corporation or limited
liability company which is a partner at any tier in Seller, no disclosed or
undisclosed principal of Seller, and no person or entity in any way affiliated
with Seller shall have any personal liability with respect to this Agreement,
any instrument delivered by Seller at Closing, or the transaction contemplated
hereby, nor shall the property of any such person or entity be subject to
attachment, levy, execution or other judicial process.
34. EXECUTION. The submission of this Agreement for examination does not
---------
constitute an offer by or to either party. This Agreement shall be effective
and binding only after due execution and delivery by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed one or more copies of
this Agreement under seal the day and year first above written.
"SELLER"
35 CROSBY DRIVE LLC
By: Nordic Holdings I LLC, Manager
By:___________________________
Name: Peter C. Nordblom
Title: Manager
Hereunto duly authorized
21
<PAGE>
By:___________________________
Name: Ogden Hunnewell
Title: Manager
Hereunto duly authorized
"BUYER"
HOLOGIC, INC.
By:_________________________
Name:
Title:
Hereunto duly authorized
22
<PAGE>
EXHIBIT A
LAND DESCRIPTION
----------------
That certain parcel of land situate in Bedford in the County of Middlesex,
Commonwealth of Massachusetts described as follows:
Westerly: by the easterly line of Crosby Drive, in three courses, one hundred
ninety six and 83/100 feet, two hundred eleven and 69/100 feet, and five hundred
forty eight and 36/100 feet, respectively;
Northerly: by Lot 7 three hundred forty and 27/100 feet;
Easterly: by Lot 7 one hundred nine and 76/100 feet;
Northerly: again by Lot 7 six hundred seventy eight and 87/100 feet;
Easterly: by land now or formerly of 54 Middlesex Realty Trust one hundred
nine and 12/100 feet;
Northerly: by land now or formerly of 54 Middlesex Realty Trust three hundred
forty seven and 76/100 feet;
Easterly: by Lot 6 four hundred thirty six and 35/100 feet;
Southerly: by land now or formerly of John H. Cardwell, Trustee three hundred
forty nine and 81/100 feet;
Easterly: by land now or formerly of John H. Cardwell, Trustee, and land now
or formerly of Trident Realty Trust three hundred one and 48/100
feet; and
Southerly: by land now or formerly of Eikonix Realty Trust one thousand
nineteen and 22/100 feet.
Said parcel is shown as Lot 5 on plan hereinafter mentioned (Plan No. 34759C).
All of said boundaries are determined by the Court to be located as shown on a
subdivision plan as approved by the Court filed in the Land Registration Office
as Plan No. 34759C, a copy of which is filed with Certificate of Title No.
208063.
Subject to, and with the benefit of, all restrictions, easements, covenants,
conditions, agreements, and other appurtenant rights of record insofar as the
same may be now in force and applicable.
23
<PAGE>
EXHIBIT B
FORM OF DEED
------------
QUITCLAIM DEED
35 CROSBY DRIVE LLC, a Massachusetts limited liability company having a place
of business c/o Nordblom Company, 31 Third Avenue, Burlington Massachusetts
01803-4470 ("Grantor"), for consideration of Twenty Million Seven Hundred and
00/100 Dollars and 00/100 Dollars ($20,700,000.00) paid, hereby grants to
HOLOGIC, INC., a Delaware corporation having a place of business at 590 Lincoln
Street, Waltham, Massachusetts 02154, with QUITCLAIM COVENANTS,
That certain parcel of land situated in Bedford in the County of Middlesex,
Commonwealth of Massachusetts described as follows:
Westerly: by the easterly line of Crosby Drive, in three courses, one hundred
ninety six and 83/100 feet, two hundred eleven and 69/100 feet, and
five hundred forty eight and 36/100 feet, respectively;
Northerly: by Lot 7 three hundred forty and 27/100 feet;
Easterly: by Lot 7 one hundred nine and 76/100 feet;
Northerly: again by Lot 7 six hundred seventy eight and 87/100 feet;
Easterly: by land now or formerly of 54 Middlesex Realty Trust one hundred
nine and 12/100 feet;
Northerly: by land now or formerly of 54 Middlesex Realty Trust three hundred
forty seven and 76/100 feet;
Easterly: by Lot 6 four hundred thirty six and 35/100 feet;
Southerly: by land now or formerly of John H. Cardwell, Trustee three hundred
forty nine and 81/100 feet;
Easterly: by land now or formerly of John H. Cardwell, Trustee, and land now
or formerly of Trident Realty Trust three hundred one and 48/100
feet; and
Southerly: by land now or formerly of Eikonix Realty Trust one thousand
nineteen and 22/100 feet.
24
<PAGE>
Said parcel is shown as Lot 5 on plan hereinafter mentioned (Plan No. 34759C).
All of said boundaries are determined by the Court to be located as shown on a
subdivision plan as approved by the Court filed in the Land Registration Office
as Plan No. 34759C, a copy of which is filed with Certificate of Title No.
208063.
The premises are conveyed subject to, and with the benefit of, all restrictions,
easements, covenants, conditions, agreements, and other appurtenant rights of
record insofar as the same may be now in force and applicable.
For Grantor's title see deed dated April 24, 1997 from BASF Corporation to
Grantor filed with the Middlesex South Registry District of the Land Court as
Document No. 1029886, and Transfer Certificate No. 208063 in Book 1170, Page
113.
Deed stamps in the amount of $94,392.00 are affixed to this deed.
IN WITNESS WHEREOF, said 35 CROSBY DRIVE, LLC has caused this instrument to be
executed under seal by Nordic Holdings I LLC, its Manager, this ___ day of July,
1998.
35 CROSBY DRIVE LLC
By: Nordic Holdings I LLC, Manager
By:___________________________
Name: Peter C. Nordblom
Title: Manager
Hereunto duly authorized
By:___________________________
Name: Ogden Hunnewell
Title: Manager
Hereunto duly authorized
25
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
______________, ss July __, 1998
Then personally appeared before me Peter C. Nordblom, the Manager of
Nordic Holdings I LLC, Manager of 35 Crosby Drive, LLC, who acknowledged that he
executed the foregoing instrument as his free act and deed as Manager of Nordic
Holdings I LLC, and the free act and deed of Nordic Holdings I LLC and of 35
Crosby Drive, LLC.
_______________________
Notary Public
My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS
______________, ss July __, 1998
Then personally appeared before me Ogden Hunnewell, the Manager of
Nordic Holdings I LLC, Manager of 35 Crosby Drive, LLC, who acknowledged that he
executed the foregoing instrument as his free act and deed as Manager of Nordic
Holdings I LLC, and the free act and deed of Nordic Holdings I LLC and of 35
Crosby Drive, LLC.
_______________________
Notary Public
My Commission Expires:
26
<PAGE>
EXHIBIT C
FORM OF GENERAL INSTRUMENT
--------------------------
GENERAL INSTRUMENT OF TRANSFER
35 CROSBY DRIVE
BEDFORD, MASSACHUSETTS
This General Instrument of Transfer (this "Instrument") is made as of the
__th day of July, 1998, by and between 35 Crosby Drive LLC, a Massachusetts
limited liability company having a place of business c/o Nordblom Company,
31 Third Avenue, Burlington Massachusetts 01803-4470 ("Assignor"), and Hologic,
Inc., a Delaware corporation having a place of business at 590 Lincoln Street,
Waltham, Massachusetts 02154 ("Assignee").
In connection with the conveyance of certain property owned by Assignor known
and numbered as 35 Crosby Drive, in Bedford, Middlesex County, Massachusetts,
more particularly described on SCHEDULE I attached hereto and made a part hereof
(the "Premises"), and in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby sells, assigns, transfers, grants and conveys unto
Assignee, all of Assignor's right, title and interest in and to the following to
the extent the same apply to the Premises and are transferable or assignable
(collectively, the "Interests"):
1. All appurtenances and privileges belonging to the Premises and the rights,
benefits and privileges of owning and operating the same;
2. All rights, entitlements and/or approvals to develop the Premises which
have been or may hereafter be granted by governmental bodies having
jurisdiction or authority over the Premises, and any certificates
evidencing compliance therewith;
3. All variances, conditional use permits, special permits, exceptions,
rezonings, general plan amendments, parcel maps, development agreements,
permits, licenses, applications, any other governmental approvals and
consents (if any) relating to the Premises;
4. All guarantees, warranties, and indemnities giving rise to any rights or
benefits of Assignor in respect of the Premises and all claims and/or
causes of action against contractors with respect to the Premises or any
part thereof or any buildings, structures or improvements thereon,
including without limitation that certain Limited Environmental Indemnity
Agreement dated April 29, 1997 by and between BASF Corporation and Seller,
provided, however, that Assignor reserves, in common with Assignee, such
rights in respect of the matters assigned in this paragraph 4 as may be
necessary or convenient for Assignor's discharge of liabilities, or defense
of claims, relating to the Premises which are not assigned to or assumed by
Buyer in connection with the acquisition of the Premises;
27
<PAGE>
5. All bonds, construction contracts, architect's contracts, licenses,
applications, permits, plans, drawings, specifications, "as-built" plans
and/or surveys, site plans, maps, and any other plans relating to the
construction of the improvements on the Premises;
6. All engineering, soils, ground water and environmental reports and other
technical descriptions and environmental reports concerning the Premises;
and
7. All tangible personal property owned by Assignor and attached and
appurtenant to, or forming part of, or used predominantly in connection
with the Premises, including without limitation all the items listed in
SCHEDULE II attached hereto and made a part hereof (the "Personal
Property"). Assignor hereby covenants with Assignee that Assignor is the
lawful owner of the Personal Property subject to no liens or encumbrances
other than those encumbrances to which the Premises are subject as set
forth in Certificate of Title No. 208063 filed in the Middlesex South
Registry District of the Land Court in Registration Book 1170, Page 113,
and has good right to sell the same, and that Assignor will warrant and
defend title to the Personal Property unto Assignee against the lawful
claims and demands of all persons claiming by, through or under Assignor,
but not further or otherwise.
Assignee hereby accepts the foregoing transfer from Assignor of the above-
assigned Interests.
This Instrument shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and assigns and shall be governed
by the laws of the Commonwealth of Massachusetts.
This Instrument may be executed in multiple counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
28
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Assignment under seal as of
the date first written above.
ASSIGNOR:
35 CROSBY DRIVE LLC
By: Nordic Holdings I LLC, Manager
By:___________________________
Name: Peter C. Nordblom
Title: Manager
Hereunto duly authorized
By:___________________________
Name: Ogden Hunnewell
Title: Manager
Hereunto duly authorized
ASSIGNEE:
HOLOGIC, INC.
By:_________________________
Name:
Title:
Hereunto duly authorized
29
<PAGE>
SCHEDULE I
THE PREMISES
That certain parcel of land situated in Bedford in the County of Middlesex,
Commonwealth of Massachusetts described as follows:
Westerly: by the easterly line of Crosby Drive, in three courses, one hundred
ninety six and 83/100 feet, two hundred eleven and 69/100 feet, and
five hundred forty eight and 36/100 feet, respectively;
Northerly: by Lot 7 three hundred forty and 27/100 feet;
Easterly: by Lot 7 one hundred nine and 76/100 feet;
Northerly: again by Lot 7 six hundred seventy eight and 87/100 feet;
Easterly: by land now or formerly of 54 Middlesex Realty Trust one hundred
nine and 12/100 feet;
Northerly: by land now or formerly of 54 Middlesex Realty Trust three hundred
forty seven and 76/100 feet;
Easterly: by Lot 6 four hundred thirty six and 35/100 feet;
Southerly: by land now or formerly of John H. Cardwell, Trustee three hundred
forty nine and 81/100 feet;
Easterly: by land now or formerly of John H. Cardwell, Trustee, and land now
or formerly of Trident Realty Trust three hundred one and 48/100
feet; and
Southerly: by land now or formerly of Eikonix Realty Trust one thousand
nineteen and 22/100 feet.
Said parcel is shown as Lot 5 on plan hereinafter mentioned (Plan No. 34759C).
Being the property described in Certificate of Title No. 208063 in
Registration Book 1170, Page 113.
30
<PAGE>
EXHIBIT D
DUE DILIGENCE INFORMATION LIST
------------------------------
Easements
Any easements, vault agreement, etc.
Real Estate Tax Bills for past two years
Physical
Title: Title Insurance Policies (owner and mortgagee) currently in effect
Survey: Last as-built survey and related surveyor's report
Certificates of Occupancy
Any warranties in effect for any portion of the Property
Environmental Reports
Other
Information concerning pending lawsuits or claims (if any)
Any outstanding notices received by Seller from any governmental authority
with respect to a violation of law or regulation (if any).
31
<PAGE>
EXHIBIT E
FORM OF NON-FOREIGN CERTIFICATE
-------------------------------
NON-FOREIGN CERTIFICATE
35 CROSBY DRIVE
BEDFORD, MASSACHUSETTS
Section 1445 of the Internal Revenue Code provides that a purchaser of a
United States Property interest must withhold tax if the seller is a foreign
person. To inform Hologic, Inc. ("Buyer") that withholding of tax is not
required upon the disposition of a United States Property interest by 35 Crosby
Drive, LLC ("Seller"), the undersigned hereby certifies the following on behalf
of Seller:
1. Seller is not a foreign person (as that term is defined in the Internal
Revenue Code and Income Tax Regulations);
2. Seller's United States employer identification number is ___________; and
3. Seller's office address is c/o Nordic Properties, Inc.
31 Third Avenue
Burlington, Massachusetts 01803
Seller understand that this certification may be disclosed to the Internal
Revenue Service by Buyer and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this certification and
to the best of my knowledge and belief it is true, correct, and complete, and I
further declare that I have authority to sign this document on behalf of Seller.
35 CROSBY DRIVE LLC
By: Nordic Holdings I LLC, Manager
By:___________________________
Name: Peter C. Nordblom
Title: Manager
Hereunto duly authorized
By:___________________________
Name: Ogden Hunnewell
Title: Manager
Hereunto duly authorized
32
<PAGE>
EXHIBIT F
FORM OF SELLER'S CERTIFICATE
----------------------------
SELLER'S CLOSING CERTIFICATE
35 CROSBY DRIVE
BEDFORD, MASSACHUSETTS
Reference is made to that certain Purchase and Sale Agreement dated May __,
1998 by and between 35 Crosby Drive, LLC, as "Seller," and Hologic, Inc., as
"Buyer," (the "Agreement"). Capitalized terms used herein without definition
which are defined in the Agreement shall have the meanings ascribed to them
therein.
35 Crosby Drive hereby certifies to Hologic, Inc. that all of the
representations and warranties of Seller contained in the Agreement are true and
correct in all material respects as of the date hereof.
Date: July ___, 1998
35 CROSBY DRIVE LLC
By: Nordic Holdings I LLC, Manager
By:___________________________
Name: Peter C. Nordblom
Title: Manager
Hereunto duly authorized
By:___________________________
Name: Ogden Hunnewell
Title: Manager
Hereunto duly authorized
33
<PAGE>
EXHIBIT G
FORM OF BUYER'S CERTIFICATE
---------------------------
BUYER'S CLOSING CERTIFICATE
35 CROSBY DRIVE
BEDFORD, MASSACHUSETTS
Reference is made to that certain Purchase and Sale Agreement dated May __,
1998 by and between 35 Crosby Drive, LLC, as "Seller," and Hologic, Inc., as
"Buyer," (the "Agreement"). Capitalized terms used herein without definition
which are defined in the Agreement shall have the meanings ascribed to them
therein.
Hologic, Inc hereby certifies to 35 Crosby Drive, LLC. that all of the
representations and warranties of Buyer contained in the Agreement are true and
correct in all material respects as of the date hereof.
Date: July ___, 1998
HOLOGIC, INC.
By:_________________________
Name:
Title:
Hereunto duly authorized
34
<PAGE>
EXHIBIT H
SELLER'S WORK
-------------
North Lobby:
Complete installation of floor tiles;
Install carpet to match carpet in East and West lobbies; and
Install handrails on stairs.
Office Areas:
Install 2' x 4' exposed grid Armstrong "Second Look" dropped ceiling;
Install 2' x 4'parabolic light fixtures, Paralux II, on 8' x 12' center to
center grid;
Turn existing sprinkler heads down through dropped ceiling;
Remove existing vinyl tiles from first floor; and
Patch and flash second floor to receive carpet.
HVAC:
Install VAV boxes and distribution suitable for open floor plan occupancy
of office spaces in accordance with [insert plan reference];
Install heating in warehouse space typical for warehouse use.
Parking/Loading Areas:
Repave upper loading dock area;
Seal coat lower parking lot; and
Restripe parking areas in accordance with Plans entitled "Plans
Accompanying Special Permit and Site Plan Review Application, 35 Crosby
Drive, Bedford, Massachusetts" dated April 25, 1997, last revised 6/11/97,
prepared by The BSC Group, Inc.
Signage:
Furnish and install signage in accordance with signage program prepared by
Lee Newbury Design Co. dated April 28, 1998.
35
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 27, 1998 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-26-1998
<PERIOD-END> JUN-27-1998
<CASH> 45,930,265
<SECURITIES> 42,446,613
<RECEIVABLES> 31,760,653
<ALLOWANCES> 1,460,000
<INVENTORY> 17,996,382
<CURRENT-ASSETS> 143,023,906
<PP&E> 11,868,499
<DEPRECIATION> 6,031,995
<TOTAL-ASSETS> 168,234,382
<CURRENT-LIABILITIES> 30,288,261
<BONDS> 0
0
0
<COMMON> 133,597
<OTHER-SE> 137,812,524
<TOTAL-LIABILITY-AND-EQUITY> 168,234,382
<SALES> 33,569,051
<TOTAL-REVENUES> 34,425,830
<CGS> 15,910,124
<TOTAL-COSTS> 29,143,383
<OTHER-EXPENSES> 121,907
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,789,430
<INCOME-TAX> 2,500,000
<INCOME-CONTINUING> 4,289,430
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,289,430
<EPS-PRIMARY> .32
<EPS-DILUTED> .31
</TABLE>
