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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 29, 1999
HOLOGIC, INC.
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(Exact Name Of Registrant As Specified In Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-18281 04-2902449
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(Commission File Number) (I.R.S. Employer Identification No.)
35 Crosby Drive, Bedford, MA 01730
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(Address of Principal Executive Offices) (Zip Code)
(781) 999-7300
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. GENERAL
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On September 29, 1999, Hologic, Inc. filed suit against Fleet Business
Credit Corporation, formerly known as Sanwa Business Credit Corporation, in
Massachusetts Superior Court in Middlesex County. The lawsuit seeks declaratory
relief and damages relating to Hologic's Strategic Alliance Program with Fleet
Business Credit Corporation. Under the program, which was discontinued in
February of this year, Hologic sold bone densitometers to Sanwa, which Sanwa
leased to physicians on a fee per scan basis. Sanwa agreed to bear the primary
risk under the leases and to reimburse Hologic for remarketing expenses. Fleet
has advised Hologic that it has incurred substantial losses under the program
and has sought to shift the losses that Fleet faces to Hologic and has failed to
reimburse Hologic for its remarketing expenses. In its suit, Hologic is seeking
declaratory judgment regarding Fleet's contractual obligations, reimbursement of
remarketing expenses, damages for Fleet's violation of its covenant of good
faith and fair dealing, and attorney's fees.
This Current Report on Form 8-K contains forward-looking information that
involves risks and uncertainties, including statements about Hologic's plans,
objectives, expectations and intentions. Litigation is unpredictable and, as a
result, there can be no guaranty that Hologic will be successful in its lawsuit
against Fleet. Hologic cautions readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made. Hologic
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statements to reflect any change in Hologic's
expectations or any change in events, conditions or circumstance on which any
such statement is based.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) EXHIBIT.
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10.1 Master Product Financing Agreement (filed as Exhibit 10.34
to the Registrant's Form 10-K for the fiscal year ended
September 26, 1998 filed with the Securities and Exchange
Commission on December 23, 1998).
10.2 Amendment to Master Product Financing Agreement by and
between the Registrant and Sanwa Business Credit
Corporation.
10.3 Amended and Restated Program Supplement Number 1 to Master
Product Financing Statement by and between the Registrant
and Sanwa Business Credit Corporation.
<PAGE>
SIGNATURE
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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 hereunto duly authorized.
Dated: October 1, 1999 HOLOGIC, INC.
By: /s/ Glenn P. Muir
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Glenn P. Muir,
Chief Financial Officer
<PAGE>
EXHIBIT 10.2
AMENDMENT TO MASTER PRODUCT FINANCING AGREEMENT
This Amendment (the "Amendment") is entered into by and between
Hologic Inc., 590 Lincoln Street, Waltham, Massachusetts 02154 ("Hologic") and
Sanwa Business Credit Corporation, One South Wacker Drive, Suite 3900, Chicago,
Illinois 60606 ("SBCC"), as of December 30, 1998, effective in accordance with
Section VI below.
WHEREAS, Hologic and SBCC are parties to that certain Master Product
Financing Agreement dated as of September 25, 1996 (together with all Program
Supplements, the "Agreement"); and
WHEREAS, Hologic and SBCC wish to amend the Agreement as hereinafter
provided;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, Hologic and
SBCC hereby agree as follows:
I. Amendment. The Agreement shall be amended as follows:
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A. The final sentence of Section 1 is deleted in its entirety and
replaced by the following:
"Inconsistencies between a Program Supplement and this Agreement will
be controlled (a) with respect to the terms of a particular Program,
by the terms of the applicable Program Supplement, and (b) with
respect to the Programs generally or the overall relationship between
the parties and the obligations of the parties to each other and their
rights under the Agreement, by the Agreement."
B. The following definition is added to Section 2:
"Contract Termination" shall be deemed to have occurred upon the
--------------------
occurrence of any of the following events: (i) the Contract is
cancelled or avoided during any trial period or is not converted to a
firm term Contract at the end of any applicable trial period; (ii) the
Contract is terminated, cancelled or suspended prior to the end of the
projected firm term thereof, or (iii) if the Contract provides for
payments on a per-use or per-scan basis, the number of average monthly
uses or scans over any three (3) month period occurring after any
trial period is less than the number of uses or scans needed to
generate cash flows equal to those contemplated for such period under
the applicable Program Supplement for that Contract."
C. The definitions of "As-Placed Investment" and "Loss" in Section 2
are deleted in their entireties and replaced by the following:
"As-Placed Investment" means as of any date of determination, for
--------------------
each item of Equipment purchased under a Program Supplement, the sum
of (i) the amount specified as `As-Placed Investment' in the Program
Supplement or schedule thereto as of the last month for which the
projected Payment amounts under the related Contract have been paid
(assuming that actual payments are applied against the longest-
outstanding scheduled Payment), plus (ii) the sum of any unpaid taxes
or other costs and expenses accrued or incurred by SBCC with respect
to the Equipment or the Contract. The As-Placed Investment will
reflect the amount attributed to SBCC's unrecovered investment in
Equipment through the end of the projected term (but not after the
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projected term) of the related Contract. Revised schedules of the
"As-Placed Investment" and the " Residual Investment" as to particular
Programs are attached hereto as Schedule A, which shall replace and
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supersede the schedules of the same contained in the original Program
Supplements relating to such particular Programs.
`Loss' means the amount by which the indemnity payment paid under
----
Section 11 with respect to an item of Equipment exceeds the amount
distributed to Hologic under Section 11(c)(iii) on account of the
remarketed Equipment. The amount of Loss shall be reduced by the
amount of any payments received by Hologic from or on behalf of the
Obligor after Hologic's indemnity payment and increased by the amount
of any of Hologic's unrecovered remarketing expenses (as are
reasonably approved by SBCC). For purposes of calculating "Loss", the
amount attributed to remarketed Equipment will be determined as
follows:
(i) if the remarketing was an arm's length, good faith cash
or installment sale or a full pay-out lease in accordance with
Hologic's standard practices, the gross proceeds of such sale or lease
(discounted to present value provided in the last sentence of this
definition);
(ii) if the remarketing was an arm's length "true" or
"operating" lease in accordance with Hologic's standard practices, the
greater of (x) the fair market value of the Equipment, as determined
by SBCC in good faith or (y) the gross rentals owing under such lease
(discounted to present value as provided in the last sentence of this
definition) plus the estimated fair market value of the Equipment at
the end of the lease term, as determined by SBCC in good faith
(discounted to present value as provided in the last sentence of this
definition); and
(iii) if the remarketing was other than as described above,
an amount determined by SBCC in good faith.
The discount rate to be used in the calculations described in clauses
(i) - (iii) shall be the discount rate then used by SBCC for contracts
which are the most similar to the contract resulting from the
remarketing. The parties acknowledge that Hologic's remarketing
expenses include (and SBCC shall approve, if reasonable in amount and
scope), without limitation, the costs of Equipment transportation, de-
installation and re-installation, training of Equipment purchasers or
lessees and sales commissions but shall not include Hologic's overhead
or the imputed cost of its own employees. Hologic's remarketing
expenses shall also include, if approved in writing by SBCC before
being provided, the "value" of any promotional, "loaner" or other
additional Equipment or items provided by Hologic as an inducement to
a purchaser or lessee to acquire repossessed Equipment, with such
"value" being Hologic's actual cost of such items.
D. The following definition is added to Section 2:
"Super-Ineligible Contract" means a Contract that is not or ceases to
be an Eligible Contract as a result of Hologic's alteration,
modification, change or amendment after the date hereof (without
SBCC's prior written consent) to any Contract in a manner materially
adverse to SBCC or Hologic's knowing or intentional violation of its
covenants under Section 6 or Section 8 of this Agreement (but, as to
Section 8
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violations only, only to the extent that the violating act, omission
or occurrence does not also constitute a breach of any of Hologic's
warranties under Section 5 of the Agreement).
E. Section 11 is deleted in its entirety and replaced by the
following:
"11. Repurchase of Contracts and Equipment, Indemnity.
(a) Super-Ineligible Contracts. In the event any Contract
--------------------------
is or becomes a Super-Ineligible Contract, Hologic agrees, upon demand
by SBCC and Hologic's failure to cure the violation causing the same
within thirty (30) days of its receipt of written notice of such
violation, to (i) compensate SBCC for its actual and direct losses
caused by such violation, or (ii) repurchase the Contract and related
Equipment for cash for a price equal to the Investment Balance of the
Equipment. Such repurchases will be made on or before the tenth
(10th) day of the month following the month in which repurchase is
requested. After SBCC receives the Investment Balance for any
repurchased Contract and Equipment, SBCC will reassign to Hologic all
of its right, title and interest in the repurchased Equipment and
Contract, and any Payments due thereunder, without recourse to, and
without representations or warranties by, SBCC of any kind whatsoever.
Any payments or compensation made by Hologic under this Section 11(a)
shall be not included in any Loss Limitation as to any Contract.
(b) Indemnity Payment. If (i) any Contract is not an Eligible
-----------------
Contract or ceases to be an Eligible Contract, or (ii) an Obligor
Default occurs under any Contract purchased by SBCC, and in either
case SBCC requests in writing that Hologic indemnify SBCC pursuant to
this Section 11(b), Hologic will, within ten (10) days after receipt
of SBCC's request, pay SBCC an amount equal to the As-Placed
Investment of the subject Equipment. If an Obligor under a Contract,
in exercising Contract rights that SBCC has consented to, converts its
Contract to a firm term Contract or purchases the Equipment (i.e., a
buy-out) and, if the present value of the Payments and Equipment under
the converted Contract or buy-out (calculated by using the discount
rate then used by SBCC for contracts which are most similar to the
subject Contract) is less than the As-Placed Investment plus the
Residual Investment for such Contract as of the date of conversion,
then Hologic will pay such shortfall to SBCC within ten (10) days
after the conversion or, if applicable, Hologic's receipt of SBCC's
notification of the amount due.
(c) Remarketing, Contract Terminations. Upon Hologic's payment
----------------------------------
of a Section 11(b) indemnity or a Contract Termination with respect to
any Contract, Hologic will promptly take all reasonable steps to
recapture possession of the Equipment covered by such Contract and to
use its best efforts to promptly remarket the Equipment. All
remarketing proceeds of such Equipment, including, without limitation,
after the Remarketing Period (as defined below) ends, net of any costs
and expenses reasonably approved by SBCC ("Proceeds"), will be applied
in the following order:
(i) to SBCC, up to the amount of its unrecovered As-Placed
Investment (if any) for the Equipment;
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(ii) to SBCC, up to the amount of its unrecovered Residual
Investment for the Equipment;
(iii) to Hologic, up to the indemnity amount paid to SBCC
under Section 11(b) with respect to the Equipment;
and then
(iv) thirty percent (30%) to SBCC and seventy percent
(70%) to Hologic.
If Hologic remarkets Equipment for which a Contract Termination has
occurred, and at the end of the Remarketing Period (as defined below)
the proceeds of such remarketing, after application as provided in
clauses (i)-(iv) above have not reduced SBCC's As-Placed Investment
and Residual Investment to zero, Hologic will, within ten (10) days
after completion of the remarketing, or, if applicable, Hologic's
receipt of SBCC's notification of the amount due, pay SBCC an amount
equal to such shortfall. Hologic will notify SBCC of its receipt of
any Proceeds after the Remarketing Period ends.
(d) Determination and Timing of Certain Indemnity Payments. The
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determination and timing of Hologic's payment of any amount owed to
SBCC under Section 11(c) above (a "Section 11(c) Payment") shall be as
follows:
(i) As used herein, the term "Remarketing Period" means, as
to any Contract, the period commencing on the date on
which Hologic is first able to take legal possession
and dispose of the Equipment subject to such Contract,
and shall end at the earlier of (A) the date on which
Hologic actually receives the Proceeds of such
Equipment, and (B) the later of (I) July 31, 1999, and
(II) the date nine months after the commencement of
such Period; provided, however, that the Remarketing
Period for any particular item of Equipment shall be
tolled during any time that Hologic is legally stayed,
enjoined or otherwise prevented from disposing of such
Equipment.
(ii) Hologic shall remit to SBCC any Section 11(c) Payment
payable hereunder as to any Contract within ten (10)
days of the earlier of (A) Hologic's receipt of the
Proceeds of such Contract, and (B) the end of the
Remarketing Period with respect to such Contract (the
"Section 11(c) Payment Deadline").
(e) Limitation on Indemnity and Payment Obligations. Subject to
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Section 11(f) below, the maximum amount of Loss which Hologic will be
required to bear on account of its indemnities and
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payment obligations under this Agreement (the "Loss Limitation") in
the aggregate shall be equal to the greater of:
(i) ten percent (10%) percent of the aggregate Fair Market
Value Purchase Price paid for all Contracts and
Equipment purchased under this Agreement, or
(ii) the aggregate Fair Market Value Purchase Price paid
for the first four Contracts (and the Equipment covered
thereunder) purchased under this Agreement.
(f) Scope of Loss Limitation. The limitation on Losses set
------------------------
forth at Section 11(e) above applies to all Losses resulting from
Section 11(b) and 11(c) indemnities and payments (that is, to all
Losses on account of all Obligor Defaults, all Contract Terminations
and all Contracts which become or are not Eligible Contracts and any
other indemnity obligations of or payments by Hologic arising under
this Agreement, the intent of the parties being that Hologic shall in
no event be or become liable to pay to SBCC more than the Loss
Limitation; except, that such limitation shall not apply only to any
losses suffered by SBCC on any Contracts that are or become Super-
Ineligible Contracts. Also, the parties acknowledge that, while this
Amendment relates to both programs governed by the Agreement (that is,
both the so-called "Strategic Alliance Program" (or "SAP") and the
Lease Program), there shall be a separate Loss Limitation for each
such program, each based on the Fair Market Value Purchase Price of
the Contracts and Equipment relating to that particular program.
(g) Excess Loss; Continuing Obligations. If Hologic's aggregate
-----------------------------------
Loss resulting from its indemnities and payments under this Agreement
exceeds the Loss Limitation computed under Section 11(d), then Hologic
may invoice SBCC for the amount of such excess Loss. SBCC will refund
the excess Loss within ten (10) days after receipt of Hologic's
invoice (provided that the invoice shows the calculations of the
excess Loss). Nothing in this Section 11(g) shall relieve Hologic
from its obligation to remarket Equipment for SBCC on a best-efforts
basis (and at SBCC's risk and expense) if Hologic's Loss Limitation is
reached under this Section 11.
(h) Remarketing and Recovery Reports. Hologic will provide
--------------------------------
monthly remarketing and recovery reports to SBCC, which shall be in a
form reasonably acceptable to SBCC and which shall specify, for
remarketings and recoveries occurring during such month, (a) the
amount of proceeds and remarketing costs for Equipment which was
remarketed during such month but before the end of its Remarketing
Period , (b) the proceeds and remarketing costs for Equipment which
was remarketed during such month but after its Remarketing Period, and
(c) all non-remarketing payments and recoveries received on account of
Contracts or Equipment for which Seller has previously paid a Section
11(b) 11(c) payment or indemnity. These reports will be provided to
SBCC in a timely manner.
(i) Section Controls Over Program Supplements.
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Notwithstanding any provision of this Agreement or any
Program Supplement, this Section 11 shall control over
and supersede any conflicting provisions of Program
Supplements."
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II. Certain Changes to Obligor Contracts.
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A. Early Termination. Hologic may waive, or delete from, any or
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all Obligor Contracts that do not contain minimum fixed monthly
payments the provision that requires an Obligor's termination of such
a Contract to be preceded by ninety (90) days written notice, and
Hologic may otherwise accept such termination immediately upon
Obligor's notice that it wishes to terminate.
B. Contract Conversions. The parties acknowledge that Hologic,
--------------------
with SBCC's knowledge, has endeavored to cause certain Obligors
holding "pay per scan" Contracts who may otherwise terminate such
Contracts to convert such Contracts to fixed payment leases or similar
Contracts, and that Hologic may continue to do so in accordance with
the parties' current practice. All such "conversions" have been, and
will continue to be, effective upon acceptance by SBCC.
III. Severability.
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Any provision of this Amendment which is prohibited by or is
unlawful or unenforceable under any applicable law of any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof; provided, however, that any such prohibition in any
jurisdiction shall not invalidate such provision in any other
jurisdiction; provided, further, that where the provisions of any such
applicable law may be waived, they hereby are waived by Hologic and
SBCC to the full extent permitted by applicable law to the end that
this Amendment shall be deemed to be a valid and binding agreement in
accordance with its terms.
IV. Counterparts.
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This Amendment may be executed in any number of counterparts
and/or by facsimile, and each such counterpart shall be deemed to be
an original, but all such counterparts together shall constitute one
and the same Amendment.
V. Governing Law.
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This Amendment shall be construed and governed according to the
laws of (but not the choice of law rules of) the State of Illinois.
VI. Binding Effect.
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This Amendment shall be binding upon and inure to the benefit of
Hologic and SBCC and their respective successors and assigns. Except
as hereby amended, the Agreement shall otherwise remain in full force
and effect, and the term "Agreement" shall refer to the Agreement as
hereby modified.
VII. Interest on Late Payments.
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All payments required to be made hereunder not made within ten
(10) days of the date due hereunder shall bear interest at the rate of
twelve percent (12%) per annum from the date on which such payment
becomes due through the date payment is actually made. Interest
payable hereunder shall not be included in any Loss Limitation.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Amendment, effective as of September 25,
1996.
HOLOGIC, INC.
By: /s/ Glenn P. Muir
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Name: Glenn P. Muir
Title: Vice President/Treasurer
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Thomas P. McGlinch
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Name: Thomas P. McGlinch
Title: Vice President
<PAGE>
EXHIBIT 10.3
AMENDED AND RESTATED PROGRAM SUPPLEMENT NUMBER I
TO
MASTER PRODUCT FINANCING AGREEMENT
(Strategic Alliance Lease Program)
This Amended and Restated Program Supplement Number 1 ("Restated
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Supplement") is entered into between Hologic Inc., ("Seller") and Sanwa Business
- ------------ ----------
Credit Corporation ("Buyer"), effective as of April 15, 1998. This Restated
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Supplement is made pursuant to, and shall constitute additional terms and
conditions to that certain Master Product Financing Agreement ("Master
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Agreement") dated September 25, 1996, between Buyer and Seller. This Restated
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Supplement entirely replaces and supersedes Program Supplement Number 1 dated
September 25, 1996. The terms of this Restated Supplement are incorporated into
the Master Agreement as if set forth in full, and the terms of this Restated
Supplement will, with respect to the Program identified below ("Program"),
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supersede and control over any conflicting terms of the Master Agreement and the
original Supplement. Capitalized terms used herein shall have the same meanings
given in the Master Agreement.
Program Designation: Strategic Alliance Lease Program
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Program Applicable to:
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Equipment Model/Configuration;
QDR4500C Acclaim Series (Model C) ["QDR 4500C"]
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Model QDR1000 Plus Series ["QDR1000"]
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Contract Summary:
Term: 60 months
Non-refundable deposit: $5,000 for Model QDR4500C; $3,000 for Model
QDR1000
Free initial scans (during trial period): 100
Fee per scan (in excess of free scans during trial period and for all
scans after trial period): $50.00
Trial period: 6 months
Cancellation by Obligor: At any time during trial period; no fee;
deposit retained.
Conversion options (exercisable by Obligor):
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(1) Purchase Equipment for not less than Investment Balance
[NOTE: IN CERTAIN INSTANCES, AN OBLIGOR MAY PURCHASE QDR1000
EQUIPMENT FOR LESS THAN THE INVESTMENT BALANCE. SELLER AGREES
THAT IN CONNECTION WITH SUCH PURCHASES; IT WILL IMMEDIATELY PAY
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THE DIFFERENCE BETWEEN THE OBLIGOR'S PURCHASE PRICE AND THE
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INVESTMENT BALANCE TO BUYER. ]
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(2) Convert to fixed monthly payment for term, with nominal
purchase option ($1,750.00 minimum monthly rental amount for
Model QDR 4500C; $1,500.00 minimum monthly rental amount for
Model QDR 1000)
(3) Convert to fixed monthly payment for term, with fair market
value purchase option ($1,500.00 minimum monthly rental amount
for Model QDR 4500C; $1,250.00 minimum monthly rental amount for
Model QDR1000)
Cancellation by Seller: Permitted after trial period, but prior to
conversion, if billable scans are less than 35 per one month period
for Model QDR4500C or less than 30 per one month period for Model QDR
1000, and Obligor does not make rental payment of the minimum monthly
rental amount for such month.
All specified minimums may be adjusted by mutual agreement of Buyer
and Seller.
Fair Market Value Purchase Price for Equipment/Contracts Covered by Program:
- ----------------------------------------------------------------------------
QDR4500C: $70,000.00 per unit
QDR1000: $56,000.00 per unit
Attributed Rent for Equipment/Contracts Covered by Program:
- -----------------------------------------------------------
Model QDR 4500C: $5,000.00 non-refundable deposit (paid at closing); $0.00
months 1 - 6; $1,500.00 months 7-60.
Model QDR 1000: $3,000.00 non-refundable deposit (paid at closing); $0.00
months 1-6; $1,250.00 months 7-60.
As-Placed Investment Schedule:
- ------------------------------
Model QDR 4500C
Model QDR 1000
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Residual Investment:
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Model QDR 4500C $17,500.00 per unit
Model QDR 1000 $5,600.00 per unit
Additional/Superseding Provisions Applicable to Program:
- --------------------------------------------------------
1 . Additional Definitions.
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"Excess Rentals" has the meaning given in this Supplement. (Excess
rentals are for the account of Hologic).
"Fee Per Scan Contract" means any Contract purchased pursuant to this
Restated Supplement under which the Obligor has not exercised a conversion
option consistent with the Contract Summary section of this Restated
Supplement.
"Non-Performing Contract" means a Fee Per Scan Contract under which
the average amount of Rent due over any three (3) month period occurring
after the trial period is less than $1,750.00 per month for Model QDR4500C
or less than $1,500.00 per month for Model QDR1000.
"Off-Lease" has the meaning given in this Restated Supplement.
"Remarket" or "Remarketing" has the meaning given in this Restated
Supplement.
"Remarketing Proceeds" has the meaning given in this Restated
Supplement.
2. Additional Eligibility Provisions. The following additional
---------------------------------
requirements apply with respect to the Contracts, Payments and
Equipment subject to this Program.
Contract Provisions. The Contract [is in the form of Exhibit A hereto,
-------------------
has not been modified or amended from such form, and] unconditionally
provides that:
1 . The terms of the Contract conform to the terms specified in the
Contract Summary section of this Restated Supplement;
2. All taxes, governmental charges, fines and fees will be paid by
the Obligor;
3. The Obligor will maintain casualty and theft insurance with
respect to the Equipment in an amount not less than the greater of the
replacement cost of or Investment Balance of such Equipment. The
insurance will either be separate policies that name Hologic and its
assignees as loss payee or be blanket policies sufficient to cover the
Equipment.
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3. Fee Per Scan Information. Hologic agrees to provide SBCC with meter
------------------------
counts and information upon which billings may be rendered for Fee Per Scan
Contracts. Hologic acknowledges that SBCC may rely upon such information
in billing for and allocating Payments due under Fee Per Scan Contracts.
SBCC may use whatever means as are available to it to obtain and verify
such information if not so provided by Hologic, and Hologic will reimburse
SBCC for all costs and expenses incurred in connection therewith.
4. Non-Performing and Terminated Contracts, Repositioning. If a Contract
--------------------------------------------------------
becomes a Non-Performing Contract or the Contract is terminated prior to
its initial scheduled term (but not terminated in connection with a
prepayment in full or conversion to a Converted Contract) and upon Buyer's
request or at Seller's option, with Buyer's consent (which will not be
unreasonably withheld), Seller will "Reposition" the Equipment
------------
covered by the Contract by (i) recovering possession of the Equipment and
(ii) attempting to place such Equipment with a different lessee, user or
purchaser in the same manner as if the Seller were Remarketing the
Equipment under paragraph 5 of this Restated Supplement. Upon Seller's
successful Repositioning of Equipment, any resulting lease or rental
contract will constitute a replacement for the Contract originally relating
to the Equipment and any payments under the new contract will be treated
and applied as Payments with respect to the Equipment (any payments in
excess of the applicable Attributed Rentals will however, be applied first
against any future Attributed Rentals for which there is no corresponding
required payment under the replacement contract). Upon the successful
Repositioning of any Equipment by sale, the proceeds of such sale will be
applied in an inverse order of maturity against the unpaid Investment
Balance for the Equipment.
5. Remarketing. The following provisions will apply with respect to
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Contracts and Equipment covered by this Restated Supplement:
(a) Appointment, Priority. Buyer hereby appoints Seller as its
---------------------
agent, to Remarket Equipment covered by this Restated Supplement for a
term commencing with the date of this Restated Supplement and
continuing until each item of Equipment subject to Remarketing is sold
to the then Obligor or other end user, and the provisions of this
Section will apply with respect to the Remarketing of Equipment during
such term. The terms "Remarket" or "Remarketing" as used herein will
---------- -------------
mean the re-lease, rental, lease and sale of Equipment as provided in
this Section 3, on prices, terms and conditions acceptable to Buyer.
Seller shall use its best efforts to Remarket Equipment. No priority
is required to be given by Seller to Remarket Equipment owned by
Buyer, but Seller shall not discriminate against Buyer in favor of any
new or used equipment or upgrades owned managed or remarketed by
Seller. Seller will not replace any Equipment owned by Buyer with
Equipment owned by Seller or any other third party that performs,
substantially the same functions as Buyer's Equipment (e.g. no "like
for like" replacements).
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(b) Off-Lease Equipment, Duties. At such time as the
---------------------------
Contract or-other agreement covering any item of equipment
covered by this Restated Supplement ceases to be subject to a
Contract, renewal or extension. of a Contract or a rental or
lease agreement, the Equipment covered by such Contract or
agreement will be deemed "Off-Lease" and Seller will diligently
perform the following Remarketing services with respect to each
such item of Equipment:
(i) Take possession of Off-Lease Equipment as it
becomes Off-Lease and exercise such of the lessor's remedies
under the appropriate Contract as Buyer may request.
(ii) Transport, store, refurbish, perform such service and
repairs as necessary to place the Equipment in proper working
order, and otherwise perform such duties as set forth in Section
3(d);
(iii) Certify the Equipment to the Remarketing lessee or
purchaser for inclusion under the Equipment manufacturer's
standard maintenance policy;
(iv) Seek new rental customers or purchasers for the
Equipment (including, but not limited to, arranging for the
transportation, storage, maintenance and installation of the
Equipment, and making available to any Obligor or such operating
and other software, service, and maintenance, spare parts, and
training as necessary).
(c) Reporting. Seller will provide periodic market reports to
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Buyer, which will be prepared to the best of Seller's knowledge and
will show summaries of market information for goods comparable to any
Equipment which were offered, represented, sold or brokered by Seller
during the previous period, including average sale price information
by model and the number of units held for disposition and number of
units actually disposed of in such period. Seller also will provide to
Buyer, for any month in which Seller Remarkets Equipment, a monthly
Remarketing report, which will cover in detail (i) a listing of
Equipment which became Off-Lease Equipment and Equipment which was
Remarketed during the prior month, and (ii) an inventory description
showing as of the last day of the prior month, the number of and
model(s) of all units of Off-Lease Equipment covered by this Restated
Supplement.
(d) Removal, Refurbishing. Seller's refurbishment duties
---------------------
hereunder a duty to return the Equipment to an attractive shall
include, but are not limited to, appearance suitable for Remarketing,
and a duty to cause such Equipment to perform in accordance with
applicable product and certification specifications for new equipment
of the same model. Seller shall update all Equipment subject to
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Remarketing to incorporate changes or new version releases of software
and/or microcode which affects the Equipment's value, compatibility,
performance, ability to be upgraded, or ability to accept
interchangeable parts. Seller shall also provide all engineering
changes made to substantially all other equipment of the same model
for which Buyer shall not pay greater charges than Seller's reasonable
and customary charges for any such services and products for equipment
similar to the Equipment and for customers similar to Obligors. Seller
shall refurbish Off-Lease Equipment on a schedule sufficient to make
items of refurbished Equipment available to satisfy orders for
Equipment of the same type as the same are received by Buyer or
Seller. Upon the re-lease of Off-Lease Equipment, Seller shall
install, or cause to be installed, such Equipment at the Obligor's
place of business. Hologic's total costs to refurbish/remarket, the
Equipment is limited to what's recoverable to Hologic.
(e) Terms of Remarketing. Any proposed Remarketing of Equipment
--------------------
will be with parties and upon terms (including but not limited to
price or rental term) and conditions satisfactory to Buyer in its
discretion. Prior to any proposed Remarketing, Seller will transmit to
Buyer for approval:
(i) The identity of those prospective lessees, users or
purchasers who are considered reasonable prospects to lease or
purchase Equipment, setting forth the name (and address if
reasonably available) of each such party;
(ii) A copy of each proposed lease, renewal, extension or
contract for the sale of the Equipment, as the case may be,
together with a copy of any other agreement that may exist or be
under consideration between Seller and each proposed lessee,
user or purchaser, as the case may be, relating to the Equipment
or the leasing or sale thereof; and
(iii) Sufficient credit information (as may be reasonably
requested by Buyer and which can be reasonably provided by
Seller) with respect to each proposed lessee, user or purchaser
to enable Buyer to make an informed judgment as to the
prospective lessee's, user's or purchaser's creditworthiness, it
being understood that any such information will be provided
without any warranty as to the accuracy of such information.
Buyer will notify Seller in writing prior to the seventh (7th)
business day after Buyer receives the information described above of
its approval of any or all of the transaction proposed by Seller.
Failure to so notify Seller within such period of its approval of any
proposed transaction will constitute disapproval of any transaction
will be in Buyer's sole discretion.
(f) Documentation. Upon the Remarketing of any Equipment, Seller
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will deliver promptly to Buyer, in the case of a cash sale, the
executed contract for the sale of the Equipment and all other
documents effecting or evidencing such
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sale, and the collected sale proceeds immediately following such date
of sale, and in the case of a re-lease or an installment sale:
(i) Each original executed lease, installment sale agreement
or document of extension or renewal with respect to the
Equipment;
(ii) All other documents, including executed financing
statements in appropriate form for filing and releases of any
Liens, necessary or appropriate to evidence and record Buyers
title and interest in the Equipment, the Contract, all monies
due under the Contract and all proceeds of all of the foregoing;
(iii) An executed assignment to Buyer of each lease or
installment sale agreement
(iv) An installation certificate to the effect that such
Equipment has been installed, is ready for use and has been
unqualifiedly accepted by the lessee purchaser or user;
(v) A letter in the form attached hereto to the Agreement as
Exhibit A to each purchaser or lessee signed by an authorized
representative of Seller notifying such purchaser or lessee of
the assignment to Buyer of Seller's rights under the lease or
installment sales agreement.
(g) Rates. In establishing rental or sales rates for the
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Remarketing of any item of Equipment, Seller shall apply rates that,
in its best commercial judgment, are the most favorable rates
obtainable for equipment of the same type. Seller shall not offer any
credits or discounts to lessees or purchasers of Off-Lease Equipment.
(h) Remarketing Proceeds. All proceeds of any Remarketing, net
--------------------
of sales, use, property, excise, ad valorem, or similar taxes
("Remarketing Proceeds") shall be Buyer's property and shall, if
------------------------
received by Seller, be immediately remitted to Buyer by Seller, in the
form in which they were received. However, Seller will be entitled to
receive such of its documented out-of-pocket costs as have been
approved by Buyer and incurred in connection with the Remarketing of
such Equipment, but in no event will the aggregate of such amounts
(exclusive of Equipment transportation costs) recoverable by Seller
with respect to any item of Equipment exceed thirty percent (30%) of
the Remarketing Proceeds for such Equipment.
(i) Communications With Obligors. Buyer may communicate directly
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with an Obligor, lessee or user of Equipment if Seller fails to
perform any of its Remarketing duties with respect to the Equipment.
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(j) Brokers, Termination of Remarketing. With respect to any
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Off-Lease Equipment and with prior notice to Seller, Buyer may arrange
sales to brokers or dealers. If Buyer arranges a sale of such
Equipment and notifies Seller before Seller Remarkets such Equipment
to an end-user, Buyer will be free to conclude such sale. Further, if
any item of Equipment subject to Remarketing due to the occurrence of
an Obligor Default is Off-Lease for a period of ninety (90) days or
more, or if any item of Equipment subject to Remarketing due to any
other reason is Off-Lease for a period of sixty (60) days or more,
Buyer may, upon ten (10) days prior written notice, notify Seller of
Buyer's intention to Remarket such Equipment. If Seller fails to
Remarket the item within such ten (10) days, Buyer or its designee may
remarket such item of Equipment on its own behalf. In the event Buyer
arranges a sale of Equipment to a broker or dealer or undertakes to
remarket any Equipment, Seller shall only be entitled to receive
payment of its permitted costs and expenses as provided under Section
3(h). Seller will not be entitled to any other compensation in
connection with the Remarketing of such Equipment and all Remarketing
Proceeds will be for the Buyer's account. Notwithstanding any sale to
a broker or dealer or any undertaking to remarket by Buyer, Seller
agrees that it will make available to Buyer and to any lessee,
purchaser or user of Equipment, at prevailing commercial rates, all
services, parts, attachments, maintenance and upgrades as it generally
makes available to owners or users of similar equipment.
(k) Overseas Transactions. If conversion of the Equipment to a
---------------------
different model or modification of the Equipment to allow its use in
any country other than the United States is required in connection
with any remarketing, Seller will undertake such conversion, with
Buyer's prior written approval, but the cost thereof will be paid by
Buyer. Buyer may require that some or all of such Off-Lease Equipment
be transported by Seller to destinations outside the United States. In
the event Buyer requests that Equipment be transported outside the
United States, then Buyer will be responsible for the costs of such
transportation.
4. Application of Remarketing Proceeds: Revenue Sharing. All REMARKETING
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PROCEEDS DERIVED FROM THE REMARKETING OF EQUIPMENT COVERED BY THIS RESTATED
SUPPLEMENT net of any costs payable to Seller under Section 5(h), will be
applied in an inverse order of maturity against the unpaid Investment
Balance for the Equipment. Provided that Seller continues to Remarket
Equipment which is subject to this Restated Supplement; after the
Investment Balance for such Equipment has been reduced to zero, all
Remarketing Proceeds, and other proceeds received by Buyer from or on
account of such Equipment and/or related Contracts shall be payable as
follows and in the following order:
(a) To the payment of all unpaid sums due and payable to Buyer from
Seller; then
(b) 30% to Buyer and 70% to Seller.
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BINDING EFFECT; RATIFICATION. This Restated Supplement shall be binding upon and
- ----------------------------
inure to the benefit of Buyer and Seller and their respective permitted
successors and assigns. Buyer and Seller each acknowledge that the Master
Agreement is in full force and effect and ratify the same. Except as
specifically provided to the contrary under this Restated Supplement, the Master
Agreement shall apply to and govern all purchases made under this Restated
Supplement.
HOLOGIC INC. SANWA BUSINESS CREDIT CORPORATION
("Seller") ("Buyer")
By: /s/ Glenn P. Muir By: /s/ Thomas P. McGlinch
- ---------------------- ----------------------
Title: Vice President/Treasurer Title: Vice President
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