EXHIBIT 1
SECURITIES PURCHASE AGREEMENT
TABLE OF CONTENTS
Page No.
ARTICLE IDEFINITIONS............................................................................... 1
1.1 Certain Defined Terms................................................................... 1
1.1.1 Application...................................................................... 1
ARTICLE IIPURCHASE AND SALE........................................................................ 9
2.1 Sale of DR Holdco Stock................................................................. 9
2.2 Purchase Price.......................................................................... 9
2.3 Closing................................................................................. 10
2.3.1 Closing and Closing Date.......................................................... 10
2.3.2 Payments at Closing............................................................... 10
ARTICLE IIISEVERAL REPRESENTATIONS AND WARRANTIES OF............................................... 10
3.1 Organization, General Authority and Qualification....................................... 10
3.1.1 Entities.......................................................................... 10
3.1.2 Ownership of Stock................................................................ 10
3.1.3 Ownership of Company Stock........................................................ 11
3.1.4 Authority......................................................................... 11
3.1.5 No Conflicts or Consents.......................................................... 11
3.1.6 Brokerage Arrangements............................................................ 11
ARTICLE IVREPRESENTATIONS AND WARRANTIES OF SDI REGARDING DR HOLDCO AND THE COMPANY................ 11
4.1 Due Incorporation, Etc................................................................... 11
4.2 Qualification as Foreign Corporation..................................................... 11
4.3 Capital Stock of DR Holdco and the Company............................................... 12
4.4 Absence of Subsidiaries.................................................................. 12
4.5 No Conflicts or Consents................................................................. 12
4.5.1 Charter Documents................................................................. 12
4.5.2 Agreements........................................................................ 12
4.5.3 Laws.............................................................................. 12
4.5.4 Governmental Agencies............................................................. 12
4.6 Financial Statements and Related Matters................................................ 13
4.6.1 Financial Statements.............................................................. 13
4.6.2 Undisclosed Liabilities; Absence of Certain Changes............................... 13
4.6.3 DR Holdco......................................................................... 13
4.7 Compliance With Laws; Litigation........................................................ 13
4.7.1 Compliance With Laws.............................................................. 13
4.7.2 Litigation........................................................................ 14
4.7.3 Judgments......................................................................... 14
4.7.4 No Condemnation................................................................... 14
4.7.5 Permits........................................................................... 14
4.8 Title To and Condition of Tangible Assets............................................... 14
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Page No.
4.8.1 Title To Tangible Assets.......................................................... 14
4.8.2 Condition of Tangible Assets...................................................... 14
4.9 Certain Agreements...................................................................... 14
4.9.1 Scheduled Agreements.............................................................. 14
4.9.2 Defaults Under Scheduled Agreements............................................... 15
4.9.3 Customer Film Credits............................................................. 15
4.10 Taxes................................................................................... 15
4.10.1 Reports and Payments; Tax Attributes............................................. 15
4.10.2 Tax Sharing Agreement and Tax Elections.......................................... 15
4.11 Plans................................................................................... 16
4.12 Intellectual Property................................................................... 16
4.12.1 Intellectual Property............................................................ 16
4.12.2 Claims........................................................................... 16
4.13 Insurance............................................................................... 16
4.14 Labor Relations......................................................................... 16
4.15 Brokers................................................................................. 16
4.16 Environmental Matters................................................................... 16
4.17 Hologic Stock Representations........................................................... 17
ARTICLE VREPRESENTATIONS AND WARRANTIES OF BUYER................................................... 17
5.1 Due Incorporation, Etc.................................................................. 17
5.2 Corporate Power and Authority........................................................... 17
5.3 No Conflicts or Consents................................................................ 17
5.3.1 Charter Documents................................................................. 17
5.3.2 Agreements........................................................................ 17
5.3.3 Laws.............................................................................. 17
5.3.4 Governmental Agencies............................................................. 18
5.4 Company Stock Representation............................................................ 18
5.5 Buyer Reports and Financial Statements.................................................. 18
5.6 Brokerage Arrangements.................................................................. 18
ARTICLE VI SEVERAL COVENANTS OF SDI................................................................ 18
6.1 Voting of Company Stock, Etc............................................................ 18
6.1.1 Amendments........................................................................ 19
6.1.2 Mergers, Etc...................................................................... 19
6.1.3 Changes in Capitalization......................................................... 19
6.2 No Sale or Transfers.................................................................... 19
ARTICLE VIIADDITIONAL AGREEMENTS................................................................... 19
7.1 Expenses................................................................................ 19
7.2 Publicity............................................................................... 19
7.3 Designation of Company Employees........................................................ 19
7.3.1 Designation....................................................................... 19
7.3.2 Other Employees................................................................... 20
7.4 Update of Schedules..................................................................... 20
7.5 HSR Act................................................................................. 20
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Page No.
ARTICLE VIIICERTAIN AGREEMENTS OF SDI.............................................................. 21
8.1 Conduct of Business, Other Matters...................................................... 21
8.1.1 Conduct of Business............................................................... 21
8.1.2 Dividends, etc.................................................................... 21
8.1.3 Sale of Assets; Mergers........................................................... 21
8.1.4 Acquisition of Assets............................................................. 21
8.1.5 No Amendments or Plan Contributions............................................... 21
8.1.6 Compensation...................................................................... 21
8.1.7 No Agreements to Breach Covenants................................................. 21
8.1.8 Access to Information and Premises................................................ 21
8.2 Injunctions............................................................................. 22
8.3 Conditions.............................................................................. 22
8.4 Notice.................................................................................. 22
8.5 DR Holdco............................................................................... 22
8.6 Environmental Remediation Costs......................................................... 22
8.7 Access to Records....................................................................... 23
ARTICLE IXAGREEMENTS OF BUYER...................................................................... 23
9.1 Employee Benefit Plans.................................................................. 23
9.1.1 Termination of Participation...................................................... 24
9.1.2 COBRA............................................................................. 24
9.1.3 Full Vesting...................................................................... 24
9.1.4 No Third Party Beneficiary Rights................................................. 24
9.2 Certain Covenants of Buyer.............................................................. 24
9.2.1 Conditions........................................................................ 24
9.2.2 Notice............................................................................ 24
9.2.3 Confidentiality................................................................... 24
9.2.4 Access to Records................................................................. 24
9.3 Tax Returns............................................................................. 25
9.4 Injunctions............................................................................. 25
9.5 Registration of the Hologic Shares...................................................... 25
9.5.1 Required Registration............................................................. 25
9.5.2 Piggyback Registration............................................................ 25
9.5.3 Expenses.......................................................................... 30
9.5.4 Indemnification with Respect to Registration...................................... 30
9.6 Price Guarantees........................................................................ 31
9.6.1 Call During the Guarantee Period.................................................. 31
9.6.2 Call at the End of the Guarantee Period........................................... 32
9.6.3 Sale of Hologic Shares prior to and during the Guarantee Period;
Reporting and Accounting................................................................ 32
9.6.4 Early Expiration of Price Guarantee............................................... 33
9.7 Non-Transferable Rights................................................................. 33
9.8 Certain Agreements...................................................................... 33
ARTICLE XCONDITIONS................................................................................ 34
10.1 Conditions to Obligations of Buyer...................................................... 34
10.1.1 No Order or Injunction........................................................... 34
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Page No.
10.1.2 Representations and Warranties................................................... 34
10.1.3 Performance of Covenants......................................................... 34
10.1.4 Documentation.................................................................... 34
10.1.5 Stock Certificates and Stock Powers.............................................. 34
10.1.6 Series A Preferred Stock......................................................... 34
10.1.7 Sale of Real Property............................................................ 35
10.1.8 Environmental Remediation Costs.................................................. 35
10.1.9 Scheduled Agreements............................................................. 35
10.1.10 HSR............................................................................. 35
10.2 Conditions to Obligations of SDI andPermitted Transferee................................ 35
10.2.1 No Order or Injunction........................................................... 35
10.2.2 Representations and Warranties................................................... 35
10.2.3 Performance of Covenants......................................................... 35
10.2.4 Documentation.................................................................... 35
10.2.5 Funding of Purchase.............................................................. 36
10.2.6 Series A Preferred Stock......................................................... 36
10.2.7 Sale of Real Property............................................................ 36
10.2.8 Environmental Remediation Costs.................................................. 36
10.2.9 Scheduled Agreements............................................................. 36
10.2.10 HSR............................................................................. 36
ARTICLE XITERMINATION, AMENDMENTS AND WAIVER....................................................... 36
11.1 Termination............................................................................. 36
11.1.1 By Mutual Consent................................................................ 36
11.1.2 At Option of Buyer or SDI or thePermitted Transferee............................. 36
11.1.3 Environmental Costs.............................................................. 37
11.2 Effect of Termination................................................................... 37
11.3 Amendments.............................................................................. 37
11.4 Waivers................................................................................. 37
ARTICLE XIIGENERAL PROVISIONS...................................................................... 37
12.1 Notices................................................................................. 37
12.2 Entire Agreement........................................................................ 38
12.3 No Post-Closing or Post-Termination Liability........................................... 38
12.4 Rules of Construction................................................................... 38
12.5 No Recourse............................................................................. 39
12.6 Confirmatory Agreement, Release and Assumption.......................................... 39
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LIST OF ANNEXES AND SCHEDULES
ANNEXES
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Annex Name
----- ----
Annex I Ownership of DR Holdco Stock and Company Stock
Annex II Documentation To Be Delivered to SDI or the Permitted
Transferee
Annex III Documentation To Be Delivered to Buyer
SCHEDULES
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Schedule Name
-------- ----
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Schedule 1.1 Scheduled Agreements
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Schedule 3.1.5 Conflicts or Consents
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Schedule 3.1.6 Brokerage Arrangements
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Schedule 4.5 No Conflicts or Consents
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Schedule 4.6.2 Financial Statements and Related Matters
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Schedule 4.7.2 Litigation
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Schedule 4.8 Title to and Condition of Tangible Assets
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Schedule 4.9.2 Defaults Under Scheduled Agreements
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Schedule 4.10.1 Reports and Payments
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Schedule 4.12.2 Claims
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Schedule 4.16 Environmental Matters
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Schedule 7.3 Designated Employees
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Schedule 8.1 Conduct of Business, Other Matters
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Schedule 9.5.2.1 Buyer's Existing Piggyback Registration Rights
Agreements
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of this
28th day of April, 1999 by and between Hologic, Inc., a Delaware corporation
("Buyer") and Sterling Diagnostic Imaging, Inc., a Delaware corporation ("SDI").
W I T N E S S E T H:
WHEREAS, SDI is the owner of that number of issued and outstanding shares
of capital stock of Direct Radiography Corp., a Delaware corporation (the
"Company"), set forth on Annex I; and
WHEREAS, SDI is the owner of all of the issued and outstanding shares of
capital stock of DRC Holding Corp., a Delaware corporation ("DR Holdco"), as set
forth on Annex I; and
WHEREAS, it is the intent of the parties hereto that, subject to the terms
and conditions hereof, at the Closing (as defined below) SDI or the Permitted
Transferee (as defined below) will hold of record and beneficially all of the
issued and outstanding capital stock of DR Holdco (the "DR Holdco Stock") and
that DR Holdco will hold of record and beneficially all of the issued and
outstanding shares of capital stock of the Company (the "Company Stock") and
that all of the issued and outstanding shares of DR Holdco Stock will be sold by
SDI or the Permitted Transferee to Buyer at the Closing.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions contained in
this Agreement, and intending to be legally bound, Buyer and SDI agree as
follows:
ARTICLE I
DEFINITIONS
I.1 Certain Defined Terms.
---------------------
I.1.1 Application. For purposes of this Agreement, the following
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terms shall have the following meanings. Capitalized terms used in the Annexes
and Schedules hereto and all documents executed pursuant to this Agreement
without definition shall also have the following meanings.
(i) "Affiliate" shall mean, with reference to any specified Person,
any other Person which Controls, is Controlled By or Under Common Control With
such specified Person.
(ii) "Affiliate Agreement" shall mean each Business Agreement between
the Company and any Affiliate of the Company pursuant to which the Company is
obligated to make annual payments aggregating more than $25,000 to such
Affiliate and which is not terminable by the Company without penalty on notice
of 90 days or less.
(iii) "Agreement" shall mean this Agreement, as it may be
amended from time to time.
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(iv) "Aggregate Market Value of the Eligible Hologic Shares" shall
mean the amount obtained by multiplying (i) the aggregate number of Eligible
Hologic Shares held by the Eligible Hologic Stockholders as of the close of
business on the last day of the Guarantee Period by (ii) the average closing
price of Buyer's common stock as reported by the NASDAQ National Market for the
20 consecutive trading days ending on the last trading day of the Guarantee
Period.
(v) "Business Agreement" shall mean any evidence of indebtedness,
indenture, deed of trust, security agreement, lease, license, permit, franchise,
note, contract or agreement of any kind to which the Company is a party or by
which it or any of its assets are bound and which is currently in effect and
with any obligations thereunder of any party thereto still to be performed.
(vi) "Buyer" shall mean Hologic, Inc. and its permitted
successors and assigns.
(vii) "Buyer Related Documents" shall have the meaning ascribed
to such term in Section 5.2.
(viii) "Capital Commitment Agreement" shall mean each binding
commitment of the Company currently in effect imposing any obligations on the
Company to make any capital or maintenance expenditure in the future exceeding
$100,000.
(ix) "Capitalized Lease Obligations" shall mean capitalized lease
obligations as determined in accordance with GAAP.
(x) "Closing" shall have the meaning ascribed to such term in
Section 2.3.1.
(xi) "Closing Date" shall have the meaning ascribed to such term
in Section 2.3.1.
(xii) "COBRA" shall mean the Consolidated Budget Reconciliation
Act of 1985, as amended.
(xiii) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
(xiv) "Commercial Agreement" shall mean each Business Agreement to
which the Company is a party involving the receipt or expenditure of $50,000 or
more over the term thereof and not terminable by the Company without penalty on
notice of 90 days or less, other than any Affiliate Agreement, Debt Agreement,
Deposit Agreement, Capital Commitment Agreement or Employment Agreement.
(xv) "Commission" shall mean the Securities and Exchange
Commission and any successor agency.
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(xvi) "Company" shall mean Direct Radiography Corp., a Delaware
corporation.
(xvii) "Company Common Stock" shall have the meaning ascribed to
such term in Section 4.3.
(xviii) "Company Disclosed Information" shall mean all information
respecting DR Holdco or the Company or their respective assets, liabilities,
financial condition, results of operations, properties, employees, contracts,
cash flows, business operations, prospects, employee benefit plans, litigation,
claims or other matters relating to DR Holdco or the Company (a) known to Buyer
or any of its representatives on or prior to the date hereof; (b) disclosed in
any document or instrument delivered to or made available to Buyer or any of its
representatives in the Company's data room or otherwise prior to the date
hereof; or (c) disclosed or referred to in any of the Company Financial
Statements or the Current Financial Statements or in any Schedule attached to
this Agreement.
(xix) "Common Equity Securities" shall mean common stock of Buyer,
any option, warrant or right to subscribe for, acquire or purchase common stock
of Buyer (whether or not currently exercisable), and any security convertible
into or exchangeable for common stock of Buyer (whether or not currently
convertible or exchangeable).
(xx) "Company Financial Statements" shall mean the audited financial
statements of the Company for the fiscal years ended December 31, 1997 and
December 31, 1998, together with the related notes and schedules thereto and
the Current Financial Statements.
(xxi) "Company Preferred Stock" shall have the meaning ascribed
to such term in Section 4.3.
(xxii) "Company Stock" shall have the meaning ascribed to such
term in the third "Whereas" clause of this Agreement.
(xxiii) "Control" (including, with correlative meanings, the terms
"Controlling", "Controlled By" and "Under Common Control With") shall mean, with
respect to any specified Person, the possession by another Person, directly or
indirectly, of the power to direct or cause the direction of management or
policies of such specified Person, whether through ownership of voting
interests, by agreement or otherwise.
(xxiv) "Controlled Group" shall mean the Company, any subsidiary of
the Company and any other entity which, together with the Company or any
subsidiary of the Company constitutes a single employer within the meaning of
Section 414 of the Code.
(xxv) "Current Financial Statements" shall mean the unaudited
financial statements of the Company as of and for the three month period ended
April 2, 1999 and the related notes and schedules thereto.
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(xxvi) "Debt Agreement" shall mean each Business Agreement (including
any indenture, note, mortgage, deed of trust, guaranty, letter of credit bond,
financial assurance or evidence of indebtedness, or financing lease) to which
the Company is a party relating to, evidencing or securing any Indebtedness in
excess of $50,000.
(xxvii) "Deposit Agreement" shall mean each power of attorney, safety
deposit box or lock box agreement and bank or brokerage account agreement
currently in effect of the Company.
(xxviii) "Designated Employees" shall have the meaning ascribed
to such term in Section 7.3.1.
(xxix) "DR Holdco" shall mean DRC Holding Corp., a Delaware
corporation.
(xxx) "DR Holdco Stock" shall have the meaning ascribed to such
term in the third "Whereas" clause of this Agreement.
(xxxi) "DuPont" shall mean E. I. du Pont de Nemours and Company,
a Delaware corporation.
(xxxii) "DuPont Share Transfer" means the transfer by SDI or the
Permitted Transferee of Eligible Hologic Shares to DuPont on or within 30 days
after the Closing Date.
(xxxiii) "Eligible Hologic Shares" shall mean all of the Hologic
Shares issued to SDI or the Permitted Transferee at the Closing or transferred
by SDI or the Permitted Transferee to DuPont in the DuPont Share Transfer, if
any (adjusted to reflect subsequent stock dividends, stock splits, reverse stock
splits or other similar changes in Buyer's capitalization), excluding (a) any
Hologic Shares which are sold or transferred in a transaction which is not an
arms-length transaction; provided that Hologic Shares transferred by SDI or the
Permitted Transferee to DuPont in the DuPont Share Transfer, if any, shall be
Eligible Hologic Shares unless subsequently sold or transferred by DuPont in a
transaction which is not an arms-length transaction; and provided further, that
any sale of Hologic Shares at a price which could be obtained on the market on
which shares of Buyer's common stock are traded at the time of such sale shall
be deemed an arm's length transaction, (b) those Hologic Shares sold or
transferred by SDI or the Permitted Transferee prior to the commencement of the
Guarantee Period (other than the DuPont Share Transfer, if any) or sold or
transferred by DuPont prior to the commencement of the Guarantee Period, (c) as
to Hologic Shares originally issued to SDI or the Permitted Transferee, that
number of Hologic Shares, if any, sold or transferred by SDI or the Permitted
Transferee during the period from the commencement of the Guarantee Period to
the first anniversary date of the Closing which exceeds 25% of the total number
of Hologic Shares held by SDI or the Permitted Tranferee immediately after the
DuPont Share Transfer, if any, or, if no DuPont Share Transfer occurs, the total
number of Hologic Shares issued to SDI or the Permitted Transferee at the
Closing, and (d) as to Hologic Shares transferred to DuPont in the DuPont Share
Transfer, if any, the number of Hologic Shares, if any, sold or transferred by
DuPont during the period from the commencement of the Guarantee Period to the
first anniversary date of the Closing which exceeds 25% of the total number of
Hologic Shares received by DuPont in the DuPont Share Transfer, if any.
(xxxiv) "Eligible Hologic Stockholders" shall mean SDI or the Permitted
Transferee and DuPont.
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(xxxv) "Employment Agreement" shall mean each written employment
agreement currently in effect between the Company and any of its employees.
(xxxvi) "Environmental Consultant" shall have the meaning ascribed to
such term in Section 8.6.
(xxxvii) "Environmental Law" shall mean any applicable federal,
state, local, municipal or foreign law, rule, regulation, order, Environmental
Permit, approval, decision, decree or ordinance having the force of law, and all
common and civil laws, related to Environmental Matters.
(xxxviii) "Environmental Matters" shall mean (a) pollution or
destruction of, or loss of or injury to or any adverse effect upon, the
environment, (b) the protection, cleanup or restoration of, or removal,
remediation or mitigation of conditions affecting, the environment, (c) the
release, discharge, emission, generation, handling, transportation, use,
treatment, storage or disposal of any Hazardous Substance, (d) the regulation of
the manufacture, processing, distribution or use, for commercial purposes, of
chemical substances or radioactive materials, by-products or waste and (e)
safety and matters relating to health of employees, contractors and other
Persons.
(xxxix) "Environmental Permit" shall mean any permit, authorization,
license, registration or approval issued or granted by any Governmental Agency
necessary for the operation of the businesses of the Company or the ownership or
operation of its properties in compliance with Environmental Law.
(xl) "Environmental Remediation Costs" shall mean the estimated costs
of remediation or cleanup of environmental conditions at the Real Property or
otherwise for which the Company is responsible and which are required to be
expended under current Environmental Law, not exceeding the lesser of (a) the
discounted present value of the sum of the estimated costs or estimated maximum
costs of each matter, if any, identified by the Environmental Consultant in its
opinion and report delivered by the Environmental Consultant pursuant to Section
8.6 or (b) the amount claimed as Environmental Remediation Costs by Buyer by
written notice to SDI or the Permitted Transferee as provided in Section 8.6.
(xli) "Equity Rights" shall mean with respect to a Person other than
an individual any capital stock, convertible or exchangeable securities,
subscriptions, calls, options, warrants, rights (contractual or arising by
operation of law, including, without limitation, rights of first refusal and
preemptive rights), or other agreements or commitments of any character relating
to the issuance, purchase, other acquisition or voting of any shares of the
capital stock of, or other equity or ownership interest in, such Person.
(xlii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(xliii) "Film Credits" shall have the meaning ascribed to such
term in Section 4.9.3.
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(xliv) "GAAP" shall mean United States generally accepted
accounting principles consistently applied.
(xlv) "Governmental Agency" shall mean any governmental, judicial,
administrative or regulatory authority of the United States or of any state,
local or foreign government or any subdivision thereof.
(xlvi) "Guarantee Period" shall mean the period commencing on the
date which is six months after the Closing Date and ending on the later of (a)
third anniversary of the Closing Date, or (b) 30 days after the distribution of
any supplement or amendment to a prospectus which has been delayed under Section
9.5.2.3(i)(e).
(xlvii) "Hazardous Substance" shall mean any "hazardous substance" or
"pollutant or contaminant" as defined under, and any other substances regulated
under, any applicable Environmental Law, including petroleum or petroleum
products, and any other substance considered or alleged to be toxic, hazardous
or a potential threat to human health or the environment under any Environmental
Law.
(xlviii) "Hologic Shares" shall mean 2,500,000 shares of Buyer's
common stock, $.01 par value, to be issued by Buyer as part of the SDI Purchase
Price.
(xlix) "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder.
(l) "Indebtedness" shall mean the indebtedness for borrowed money
or Capitalized Lease Obligations of the Company.
(li) "Intellectual Property" shall mean trademarks, trade names,
licenses (including software licenses), service marks, patents, patent
applications, inventions, trade secrets and copyrights owned by or licensed by
the Company and used in connection with its business.
(lii) "Law" shall mean any order, writ, injunction, decree, judgment,
ruling, arbitration award, law (including fiduciary or trust law), statute or
rule or regulation of any Governmental Agency.
(liii) "Lien" shall mean any lien, security interest, charge, claim,
option, preferential right of purchase as to tangible property other than
inventory, restriction, encumbrance, legend or rights of any third party of any
kind (except for restrictions or legends under applicable securities laws and,
as to the Company Stock, restrictions under existing buy-sell or rights of first
refusal agreements which will be terminated prior to the Closing).
(liv) "Litigation" shall mean any action, suit, claim, proceeding,
investigation or inquiry by or before any Governmental Agency or arbitrator.
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(lv) "Material Adverse Effect"shall mean any effect, change,
development, circumstance or state of facts which, taken together, is or could
reasonably be expected to be both material and adverse with respect to the
assets, properties, business, results of operations or financial condition of
the a Person or which would, or could reasonably be expected to, prevent or
materially delay the consummation of the transactions contemplated hereby or
impair a Person's ability to perform its obligations under this Agreement;
provided, however, that any adverse change or changes in the assets, properties,
business, results of operations or financial condition of the Company
attributable principally to (i) general economic conditions, (ii) local,
regional, national or international conditions generally affecting companies in
the industry in which the Company operates, (iii) acts of Buyer or any direct or
indirect parent or Affiliate of Buyer (other than acts taken pursuant to or to
enforce this Agreement) or (iv) a decline in revenue with respect to the
Company's products or services resulting from the announcement or disclosure of
this Agreement or the Parent Agreement shall not be deemed to constitute a
Material Adverse Effect with respect to the Company; and provided further, that
a Material Adverse Effect shall not include a change in any law, rule, or
regulation or generally accepted accounting principles.
(lvi) "Minimum DuPont Net Proceeds Amount" shall mean the amount
obtained by multiplying $20,000,000 by a fraction, the numerator of which shall
be the number of Eligible Hologic Shares held by DuPont immediately after the
DuPont Share Transfer, if any, and the denominator of which shall be the number
of Hologic Shares issued to SDI or the Permitted Transferee at the Closing
(adjusted to reflect any stock dividends, stock splits, reverse stock splits or
other similar changes in Buyer's capitalization following the Closing).
(lvii) "Minimum SDI Net Proceeds Amount" shall mean the amount
obtained by multiplying $20,000,000 by a fraction, the numerator of which shall
be the number of Eligible Hologic Shares held by SDI or the Permitted Transferee
immediately after the DuPont Share Transfer, if any, or if no DuPont Share
Transfer is made, immediately after the Closing, and the denominator of which
shall be the number of Hologic Shares issued to SDI or the Permitted Transferee
at the Closing (adjusted to reflect any stock dividends, stock splits, reverse
stock splits or other similar changes in Buyer's capitalization following the
Closing).
(lviii) "Net Proceeds to DuPont" shall mean the aggregate of any and
all consideration received directly or indirectly by DuPont upon the sale or
transfer of any Eligible Hologic Shares transferred to it in the DuPont Share
Transfer, if any, net of any commissions or underwriting discounts, but
including, without limitation, the fair market value of any securities or other
property or rights received upon any such sale or transfer.
(lix) "Net Proceeds to SDI" shall mean the aggregate of any and all
consideration received directly or indirectly by SDI or the Permitted Transferee
upon the sale or transfer of any Eligible Hologic Shares (other than the DuPont
Share Transfer, if any), net of any commissions or underwriting discounts, but
including, without limitation, the fair market value of any securities or other
property or rights received upon any such sale or transfer.
(lx) "NLRB" shall mean the National Labor Relations Board.
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(lxi) "Parent Agreement" shall mean the Agreement and Plan of Merger
dated as of January 10, 1999, by and among SDI Holding Corp., a Delaware
corporation and the indirect parent of the Company, and the other parties
thereto
(lxii) "Permitted Liens" shall mean (a) UCC financing statements
filed in connection with leases of office equipment entered into in the normal
course of business to the extent otherwise constituting Liens; (b) minor
imperfections of title, if any, which do not materially detract from the value,
impair the marketability or impair the use or operation of the property subject
thereto, (c) Liens for current Taxes, assessments and other governmental charges
not yet due, or which may thereafter be paid without penalty, or which are being
contested in good faith by the Company, (d) mechanics', carriers', repairmen's
or other like Liens arising in the ordinary course of business; and (e) Liens
granted in connection with Debt Agreements.
(lxiii) "Permitted Transferee" shall mean SDI Investments, L.L.C., a
Delaware limited liability company.
(lxiv) "Person" shall mean an individual, corporation, partnership,
joint venture, group, firm, trust, foundation, limited liability company,
Governmental Agency or other entity.
(lxv) "Piggyback Notice" shall have the meaning ascribed to such
term in Section 9.5.2.
(lxvi) "Piggyback Registration" shall have the meaning ascribed
to such term in Section 9.5.2.
(lxvii) "Plan" shall mean each "employee benefit plan" (within the
meaning of section 3(3) of ERISA) and each stock purchase, stock option,
severance, employment, change-in-control, fringe benefit, collective bargaining,
bonus, incentive, deferred compensation and other employee benefit plans or
written agreements or policies, whether or not subject to ERISA, under which any
employee or former employee of the Company, or any employee or former employee
of SDI currently or previously assigned to the Company, has any present or
future right to any material benefits or under which the Company has any
material liability for present or future payments or benefits.
(lxviii) "Qualified Holder" shall have the meaning ascribed to
such term in Section 9.5.2.
(lxix) "Qualified Registration" shall mean a registration statement
of Buyer under the Securities Act in connection with an underwritten public
offering of Common Equity Securities.
(lxx) "Real Property" shall mean the real property to be sold
pursuant to that certain Contract of Sale of even date herewith by and between
Glasgow Land Company, L.L.C. and Buyer.
(lxxi) "Registration Statement" shall have the meaning ascribed
to such term in Section 9.5.1.
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(lxxii) "Return" shall mean any material federal, state, local or
foreign report, estimate, declaration of estimated Tax, information statement or
return relating to, or required to be filed in connection with, any material
Taxes, including any material information return or report with respect to
backup withholding or other payments to third parties.
(lxxiii) "Scheduled Agreements" shall mean the Affiliate Agreements,
the Commercial Agreements, the Debt Agreements, the Deposit Agreements, the
Capital Commitment Agreements and the Employment Agreements listed and disclosed
on Schedule 1.1.
(lxxiv) "SDI" shall mean Sterling Diagnostic Imaging, Inc. and
its successors and assigns.
(lxxv) "SDI Purchase Price" shall mean (a) the cash amount of
$1,500,000, plus (b) the Hologic Shares.
(lxxvi) "Securities Act" shall mean the federal Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
(lxxvii) "Series A Preferred Stock" shall have the meaning
ascribed to such term in Section 4.3.
(lxxviii) "Taxes" shall mean all material taxes, charges, fees,
levies or other assessments imposed by any federal, state, local or foreign
taxing authority, including without limitation income, gross receipts, excise,
real or personal property, sales, occupation, use, service, service use,
leasing, leasing use, environmental, value added, transfer, payroll and
franchise taxes (and including any interest, penalties or additions to tax
attributable to or imposed on or with respect to any such assessment).
(lxxix) "Unestimated Environmental Costs" shall have the meaning
ascribed to such term in Section 8.6.
ARTICLE II
PURCHASE AND SALE
II.1 Sale of DR Holdco Stock. Upon the terms and conditions set forth
-----------------------
in this Agreement, SDI or the Permitted Transferee agrees to sell or cause to be
sold to Buyer at the Closing, and Buyer agrees to purchase from SDI or the
Permitted Transferee at the Closing, all of the DR Holdco Stock.
II.2 Purchase Price. The purchase price for the DR Holdco Stock being
--------------
sold by SDI or the Permitted Transferee to Buyer at the Closing shall be the SDI
Purchase Price; provided, however, that the SDI Purchase Price shall be
adjusted, and the $1,500,000 cash portion of the SDI Purchase Price shall be
reduced on a dollar-for-dollar basis (i) by the amount of the repurchase or
redemption price paid by the Company for any of its shares of Series A Preferred
Stock if prior to the Closing Date the Company repurchases or redeems any of its
Series A Preferred Stock pursuant to Section 10.1.6 hereof, but no such
adjustment or reduction shall occur in the event such Series A Preferred Stock
is acquired by SDI or the Permitted Transferee and contributed to the capital of
DR Holdco or the Company or such Series A Preferred
-9-
Stock is acquired by the Company solely with cash contributed by SDI or the
Permitted Transferee to the Company (through DR Holdco or otherwise) for such
purpose after the date hereof; and (ii) either (a) if the Environmental
Remediation Costs, if any, are more than $50,000, and not more than $250,000 and
there are no Unestimated Environmental Costs asserted by Buyer pursuant to
Section 8.6, by the amount of the Environmental Remediation Costs in excess of
$50,000, or (b) if the Environmental Remediation Costs, if any, are more than
$250,000 or Unestimated Environmental Costs are asserted by Buyer pursuant to
Section 8.6, by the amount, if any, agreed to by SDI or the Permitted Transferee
and Buyer as provided in Section 8.6.
II.3 Closing.
-------
II.3.1 Closing and Closing Date. The Closing (the "Closing") of
------------------------
the purchase and sale of the DR Holdco Stock to be purchased and sold at the
Closing will be held at the offices of Bracewell & Xxxxxxxxx, L.L.P., 000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, commencing at 9:00 a.m. central
daylight time on the second business day after the first to occur of (i) the
occurrence of the closing under the Parent Agreement, or (ii) the termination of
the Parent Agreement, or such other date as may be agreed to by Buyer and SDI or
the Permitted Transferee (the "Closing Date"), at which time representatives of
Buyer and SDI or the Permitted Transferee shall meet for the purpose of
delivering the documents and consideration described in this Article II and
Article X and, subject to the satisfaction or waiver of each of the conditions
set forth in Article X, causing such purchase and sale to occur. At the
Closing, SDI or the Permitted Transferee shall deliver to Buyer stock
certificates representing the DR Holdco Stock held by it with duly executed
stock powers attached, and in proper form for transfer on the stock records of
DR Holdco.
II.3.2 Payments at Closing. On the Closing Date, Buyer will pay,
-------------------
by wire transfer of immediately available funds to the account designated by SDI
or the Permitted Transferee, if any, at least five days prior to the Closing
Date, the $1,500,000 cash portion of the SDI Purchase Price (as the same may be
adjusted pursuant to Section 2.2) and shall deliver to SDI or the Permitted
Transferee stock certificates representing the Hologic Shares included in the
SDI Purchase Price, registered in the name of SDI or the Permitted Transferee.
It is agreed by the parties that no amount shall be required to be withheld from
any payment made under this Section 2.3.2 to SDI or the Permitted Transferee, if
any, so long as SDI or the Permitted Transferee, if any, provides to Buyer a
properly completed Internal Revenue Service Form W-9 or Substitute Form W-9 or
if SDI or the Permitted Transferee, if any, is otherwise exempt from federal
income tax backup withholding and provided adequate proof thereof.
ARTICLE III
SEVERAL REPRESENTATIONS AND WARRANTIES OF SDI REGARDING SDI
SDI hereby represents and warrants to Buyer as follows:
III.1 Organization, General Authority and Qualification.
-------------------------------------------------
III.1.1 Entities. SDI is duly organized, validly existing and in
--------
good standing under the laws of its jurisdiction of organization or
incorporation, with full power and authority to own the assets
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owned by it and to sell and lease the assets owned and leased by it, and to
carry on the business or activities in which it is now engaged.
III.1.2 Ownership of Stock. SDI holds of record and beneficially
------------------
and is the sole registered and beneficial owner of the DR Holdco Stock set forth
beside its name on Annex I to this Agreement, free and clear of all Liens.
Either SDI or the Permitted Transferee will have immediately prior to the
Closing the full and exclusive right, power and authority to sell and transfer
to Buyer as provided in this Agreement all of the issued and outstanding shares
of the DR Holdco Stock, free and clear of all Liens, and, upon delivery of such
DR Holdco Stock to Buyer at the Closing, Buyer will have good and valid title to
such DR Holdco Stock, free and clear of all Liens.
III.1.3 Ownership of Company Stock. DR Holdco will have
--------------------------
immediately prior to the Closing good and valid title to all of the issued and
outstanding shares of the Company Stock.
III.1.4 Authority. SDI has the right, power, legal capacity and
---------
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and to consummate the transactions contemplated in this
Agreement; the execution and delivery by it of this Agreement and the
performance by it of its obligations under this Agreement have been duly and
validly authorized by all necessary actions on its part; and this Agreement has
been duly executed and delivered by it and constitutes its legal, valid and
binding agreement, enforceable against it in accordance with its terms, except
as limited by bankruptcy, insolvency, moratorium and similar laws affecting
creditors rights and except as limited by equitable principles.
III.1.5 No Conflicts or Consents. Except for the Scheduled
------------------------
Agreements, the filings, notices and reports referred to in Section 7.5 and the
matters disclosed in Schedule 3.1.5, neither the execution, delivery or
performance by SDI of this Agreement nor the consummation of the transactions
contemplated hereby will: (i) conflict with or result in a breach of any
provision of its charter, by-laws or other organizational document; (ii) violate
or breach, constitute an event of default under, or otherwise conflict with any
evidence of indebtedness, contract or other agreement to which it is a party or
by which it or any of its assets are bound; (iii) violate any Law applicable to
it; or (iv) require it to obtain any consent, order, authorization or other
action of, or to give notice to, or make any declaration, filing or registration
with, any third party or Governmental Agency (including any court order).
III.1.6 Brokerage Arrangements. Except with regard to the
----------------------
arrangement between the Company and Bear Xxxxxxx and Co. and except as disclosed
in Schedule 3.1.6, neither SDI nor any of its Affiliates has entered (directly
or indirectly) into any agreement with any Person that would obligate Buyer, DR
Holdco or the Company to pay any commission, brokerage or "finder's fee" in
connection with the transactions contemplated herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SDI REGARDING
DR HOLDCO AND THE COMPANY
SDI hereby represents and warrants to Buyer as follows:
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IV.1 Due Incorporation, Etc. Each of DR Holdco and the Company is a
----------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with all such corporate power and authority to own,
operate, sell and lease its properties and to carry on its business as it is now
being conducted. The Company Disclosed Information includes true and accurate
copies of the certificates of incorporation and bylaws of DR Holdco and the
Company and all amendments to each of such documents.
IV.2 Qualification as Foreign Corporation. DR Holdco is not licensed or
------------------------------------
qualified to do business as a foreign corporation in any jurisdiction. The
Company is currently duly licensed or qualified to do business as a foreign
corporation and is in good standing in the States of North Carolina and South
Carolina.
IV.3 Capital Stock of DR Holdco and the Company. The authorized capital
------------------------------------------
stock of DR Holdco consists solely of 10,000 shares of Common Stock, par value
$.01 per share, and as of the date hereof 1,000 shares of such Common Stock are
issued and outstanding, and no such shares of Common Stock are held in treasury.
All of the issued and outstanding shares of Common Stock of DR Holdco are duly
authorized, validly issued, fully paid and nonassessable and as of the date
hereof are held beneficially of record by SDI. Except as set forth above, DR
Holdco does not have any other shares of its capital stock issued or outstanding
and DR Holdco does not have any other outstanding Equity Rights. The authorized
capital stock of the Company consists solely of 2,000 shares of Common Stock,
par value $.01 per share ("Company Common Stock") and 1,500,000 shares of
preferred stock, par value $.01 per share ("Company Preferred Stock") As of
the date hereof 1,000 shares of Company Common Stock and 1,000,000 shares of
Company Preferred Stock, designated as Series A Preferred Stock ("Series A
Preferred Stock"), are issued and outstanding, and no shares of Company Common
Stock and no shares of Series A Preferred Stock are held in treasury. All of
the issued and outstanding shares of Company Common Stock and Series A Preferred
Stock are duly authorized, validly issued, fully paid and nonassessable. The
Persons listed on Annex I to this Agreement are all of the holders of record of
issued and outstanding Company Stock as of the date hereof. Except as set forth
above, the Company does not have any other shares of its capital stock issued or
outstanding and except for the Stock Related Agreements listed under Subsection
I of Section II of Schedule 1.1 and except for obligations of the parent
corporation of SDI to cause SDI to transfer Company Common Stock to the
Permitted Transferee or DR Holdco prior to the closing under the Parent
Agreement, the Company does not have any other outstanding Equity Rights.
IV.4 Absence of Subsidiaries. DR Holdco owns no equity interest in any
-----------------------
Person and as of the Closing Date will own no equity interest in any Person
other than the Company. The Company owns no equity interest in any other
Person.
IV.5 No Conflicts or Consents. Except for the Scheduled Agreements, the
------------------------
filings, notices and reports referred to in Section 7.5 and the matters
disclosed in Schedule 4.5, and assuming the accuracy of Buyer's representations
and warranties in this Agreement, neither the execution, delivery or performance
of this Agreement nor the consummation of the transactions contemplated thereby
will:
IV.5.1 Charter Documents. Conflict with or result in a breach of
-----------------
any provision of the Certificate of Incorporation or Bylaws of DR Holdco or the
Company;
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IV.5.2 Agreements. Violate or breach, constitute an event of
----------
default or unmatured event of default under, or otherwise conflict with any
Scheduled Agreement, or result in the creation of any Lien upon any asset of DR
Holdco or the Company;
IV.5.3 Laws. Violate any Law or any private arbitration award
----
applicable to DR Holdco or the Company or by which it or its assets are bound;
or
IV.5.4 Governmental Agencies. Except as disclosed in the Company
---------------------
Disclosed Information and except for Environmental Permits which are exclusively
addressed in Section 4.16, require any consent, authorization or other order or
action of, or notice to, or declaration, filing or registration with, any third
party or any Governmental Agency.
IV.6 Financial Statements and Related Matters.
----------------------------------------
IV.6.1 Financial Statements. The Company Financial Statements
--------------------
present fairly the financial position of the Company as of the dates thereof and
the results of its operations and changes in financial position and cash flows
for the periods then ended, in accordance with GAAP in all material respects.
IV.6.2 Undisclosed Liabilities; Absence of Certain Changes. Except
---------------------------------------------------
as disclosed in Schedule 4.6.2, the Company had no assets or liabilities as of
April 2, 1999 required under GAAP to be reflected in the Current Financial
Statements which were not so reflected. Since March 31, 1999, the Company has
conducted its business only in the ordinary course and in a manner consistent
with past practice, and has made both a required deposit of approximately
$500,000 to Xxxxxxx Imaging Corporation with respect to certain inventory and a
required payment of approximately $300,000 to LG LCD Inc. for certain non-
recurring engineering services. Since April 2, 1999, there has not been (i) any
change in the financial condition, results of operations, assets, business or
operations of the Company which has had, or could reasonably be expected to
have, a Material Adverse Effect on the Company, (ii) any condition, event or
occurrence which, individually or in the aggregate, would have a Material
Adverse Effect on the Company, (iii) any damage, destruction or loss (whether or
not covered by insurance) with respect to any assets of the Company which has
had, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company, (iv) any material change by the
Company in its accounting methods, principles or practices, (v) any revaluation
by the Company of any of its material assets, including but not limited to
writing down the value of inventory to any material extent or writing off
material notes or accounts receivable other than in the ordinary course of
business, (vi) except for the Scheduled Agreements, any entry into any material
agreement or commitment, or any amendment of any existing material agreement or
commitment which is not subject to termination or cancellation by the Company
without penalty, default or breach on 30 days notice, (vii) any entry outside
the ordinary course of business by the Company into any commitments or
transactions material, individually or in the aggregate, to the Company, or
(viii) any increase in, establishment of or amendment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, or other
employee benefit plan or agreement or arrangement, or any other increase in the
compensation payable or to become payable to any present or former directors,
officers or key employees of the Company, except for increases in compensation
in the ordinary course of business consistent with past practice, or, any entry
into, or amendment of, any
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employment, consulting or severance agreement or arrangement with any such
present or former directors, officers or key employees.
IV.6.3 DR Holdco. DR Holdco is a newly-formed corporation formed
---------
solely for the purpose of holding the outstanding Company Common Stock and an
account receivable owed to it by the Company and as of the Closing Date will
have no other assets, no liabilities, no employees, no Plans, no contractual
obligations and will not have engaged in any active business.
IV.7 Compliance With Laws; Litigation.
--------------------------------
IV.7.1 Compliance With Laws. Neither DR Holdco nor the Company nor
--------------------
any of their respective properties is in material violation of, and DR Holdco
and the Company and their respective properties are in material compliance with,
all applicable Laws, other than Environmental Laws, which are exclusively
addressed in Section 4.16.
IV.7.2 Litigation. Except as disclosed in Schedule 4.7.2, no
----------
Litigation is pending as to which DR Holdco or the Company has been notified or
served, or to the actual knowledge of the officers of DR Holdco or the Company
is otherwise pending or threatened, to which DR Holdco or the Company is a party
or by which any of their respective assets or the Company's business may be
bound or affected which involve a claim against DR Holdco or the Company of
$75,000 or more which is not insured. No Litigation is pending as to which DR
Holdco or the Company has been notified or served, or to the actual knowledge of
the officers of DR Holdco or the Company is otherwise pending or threatened,
which seeks to prevent the consummation of or otherwise challenges this
Agreement or any of the transactions contemplated hereby.
IV.7.3 Judgments. Neither DR Holdco nor the Company is a party to
---------
any unsatisfied judgment, ruling, order, decree or arbitration award applicable
to its assets or the Company's business.
IV.7.4 No Condemnation. No condemnation proceeding has been
---------------
instituted as to which DR Holdco or the Company has been notified or served, and
to the actual knowledge of the officers of DR Holdco or the Company no such
condemnation proceeding is otherwise pending or threatened, with respect to any
property owned by DR Holdco or the Company.
IV.7.5 Permits. Except for Environmental Permits which are
-------
exclusively addressed in Section 4.16 and except as disclosed in Schedule 4.5,
DR Holdco and the Company have obtained, maintained and complied with all
permits, authorizations, licenses, registrations, and approvals issued or
granted by any Governmental Agency necessary for the operation of the Company's
business or the ownership or operation of their respective assets or properties,
and all of the same are held in the name of the Company or DR Holdco, and none
of which shall expire, terminate, be subject to review or cancellation or be
otherwise adversely affected as a consequence of the sale of the DR Holdco Stock
to Buyer.
IV.8 Title To and Condition of Tangible Assets.
-----------------------------------------
IV.8.1 Title To Tangible Assets. Except for Liens under the
------------------------
Scheduled Agreements, and as disclosed in Schedule 4.8, the Company has and will
have as of the Closing Date good title to all of its tangible personal property,
free and clear of all Liens other than Permitted Liens.
-14-
IV.8.2 Condition of Tangible Assets. EXCEPT FOR SUCH
----------------------------
REPRESENTATIONS AND WARRANTIES, IF ANY, AS ARE EXPRESSLY SET FORTH IN THIS
AGREEMENT, NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, IS MADE
REGARDING THE CONDITION, FITNESS OR SERVICEABILITY OF TANGIBLE PERSONAL ASSETS,
INCLUDING, WITHOUT LIMITATION, (A) ANY EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR (B) ANY EXPRESS OR
IMPLIED WARRANTY REGARDING THE DESIGN, ENGINEERING, CONSTRUCTION OR CONDITION OF
ANY OF THE IMPROVEMENTS LOCATED ON ANY REAL PROPERTY, ANY FIXTURES OR ANY
PERSONAL PROPERTY. ALL SUCH ASSETS ARE BEING ACCEPTED BY BUYER "AS-IS", "WHERE-
IS" AND "WITH ALL FAULTS."
IV.9 Certain Agreements.
------------------
IV.9.1 Scheduled Agreements. True, correct and complete copies of
--------------------
the Scheduled Agreements are included in the Company Disclosed Information.
IV.9.2 Defaults Under Scheduled Agreements. Except as disclosed in
-----------------------------------
Schedule 4.9.2, the Company is not in default under any Scheduled Agreement,
except for past due payables of not more than $50,000 in the aggregate, nor to
the actual knowledge of the officers of DR Holdco and the Company has any such
default been asserted by any other party to any such Scheduled Agreement.
Except as disclosed in Section 4.9.2, to the actual knowledge of the officers of
DR Holdco and the Company, no other party to any Scheduled Agreement is in
default under such Scheduled Agreement. Except as disclosed in the Company
Disclosed Information, neither DR Holdco nor the Company has received any
written claim by any other party to any Scheduled Agreement that any such
Scheduled Agreement is not its valid and binding obligation.
IV.9.3 Customer Film Credits. SDI has granted certain SDI
---------------------
customers "credits" ("Film Credits") based on those customers' x-ray film
purchases. These Film Credits were granted by SDI in contemplation of purchases
of digital radiography products sold by SDI. Buyer recognizes that these Film
Credits were granted by SDI, are the sole property and responsibility of SDI,
neither DR Holdco, the Company nor Buyer have any interest in or right to those
Film Credits or any obligation with respect thereto and the execution and
performance of this Agreement shall not affect the rights of SDI and SDI's
customers in and to such Film Credits.
IV.10 Taxes.
-----
IV.10.1 Reports and Payments; Tax Attributes. Except as disclosed
------------------------------------
in Schedule 4.10.1, as of the Closing Date all Returns required to be filed by
or on behalf of the Company relating to Taxes will have been duly filed on a
timely basis (including extensions) and such Returns are and will to all
material extents be true, complete and correct; and all Taxes shown to be
payable on the Returns or on subsequent assessments with respect thereto will
have been paid in full on a timely basis and no other Taxes will be payable by
the Company with respect to items or periods covered by such Returns or with
respect to any period prior to the Closing Date, except in each case to the
extent of (i) reserves reflected in the Current Financial Statements (including
reserves for current Taxes not yet due), (ii) Taxes that have become due (and
are not overdue) with respect to periods since the date of the Current Financial
Statements, (iii) Taxes that
-15-
are being contested in good faith as described in the Company Disclosed
Information, or (iv) Taxes which are not material to the Company. The reserves
for accrued Taxes reflected in the Current Financial Statements are adequate in
the aggregate for the payment of all unpaid Taxes, whether or not disputed, for
the period ended as of the date thereof and for any period prior thereto, and
for which the Company may be liable in its own right, as a withholding agent or
as a transferee of the assets of, or successor to, any Person. All payroll Taxes
that the Company is required to withhold have been withheld and duly deposited.
The aggregate amount of all net operating loss carry forwards of the Company as
of the date hereof for federal income Tax purposes is approximately $29 million.
IV.10.2 Tax Sharing Agreement and Tax Elections. Except for the
---------------------------------------
tax sharing agreement between the Company and SDI as disclosed in the Company
Disclosed Information, the Company is not a party to any tax sharing agreement
and has not assumed the Tax liability of any other Person under contract, and
the Company is not a party to any safe harbor lease within the meaning of
Section 168(f)(8) of the Internal Revenue Code, as in effect prior to amendment
by the Tax Equity and Fiscal Responsibility Act of 1982.
IV.11 Plans. There are no liabilities, breaches, violations or defaults
-----
under any Plans sponsored or maintained by SDI which would subject DR Holdco or
the Company to any taxes, penalties or other liabilities. Neither DR Holdco nor
the Company is a sponsor of any Plan.
IV.12 Intellectual Property.
---------------------
IV.12.1 Intellectual Property. The Company Disclosed Information
---------------------
describes all significant Intellectual Property. The Company has sufficient
rights in such Intellectual Property so as to permit it to conduct its business
and own and operate its properties and assets as currently conducted.
IV.12.2 Claims. Except as disclosed in Schedule 4.12.2, to the
------
actual knowledge of the officers of DR Holdco and the Company no significant
Intellectual Property infringes on any patent or other significant proprietary
right of any Person.
IV.13 Insurance. The Company Disclosed Information includes a
---------
description of all policies of insurance currently in effect held by or on
behalf of or providing coverage for DR Holdco and the Company. All premiums
currently due on such policies have been paid. To the actual knowledge of the
officers of DR Holdco and the Company, no notice of cancellation or termination
prior to the date of any current policy's expiration has been given by the
issuer of such policy.
IV.14 Labor Relations. Neither DR Holdco nor the Company is a party to
---------------
any collective bargaining agreement or other agreement with a labor union. The
Company Disclosed Information includes copies of all published personnel
policies currently in effect generally applicable to Designated Employees. Each
of SDI and the Company has complied in all material respects with applicable
Laws relating to the employment of its personnel, including without limitation
those relating to wages, hours, unfair labor practices and discrimination. To
the actual knowledge of the officers of DR Holdco and the Company, there is no
labor strike or organized dispute, slowdown or work stoppage pending or
threatened against or affecting the Company. To the actual knowledge of the
officers of DR Holdco and the Company, there is no union
-16-
representation claim or petition pending before the NLRB with respect to
Designated Employees. The Company has not experienced any organized work
stoppage.
IV.15 Brokers. Except as disclosed in Section 3.1.6 of this Agreement
-------
or in Schedule 3.1.6, neither DR Holdco nor the Company has retained any broker
or finder, and no broker or finder has acted on behalf of DR Holdco or the
Company in connection with the sale of the DR Holdco Stock, this Agreement, or
any of the transactions contemplated hereby.
IV.16 Environmental Matters. To the actual knowledge of the officers of
---------------------
DR Holdco and the Company, except as disclosed in Schedule 4.16, (i) the Company
and its properties, operations and activities are in substantial compliance with
all applicable Environmental Laws, (ii) no current or formerly owned or operated
property of the Company has been the site of any release of Hazardous Substances
while owned or operated by the Company, and (iii) all Environmental Permits
required for the ownership or operation of the properties of the Company have
been obtained by the Company, are in full force and effect and are not subject
to any appeals or further proceedings or to any unsatisfied conditions. Except
as disclosed in Schedule 4.16, no modification, suspension, recission,
relocation or cancellation of any such Environmental Permit is pending or, to
the actual knowledge of the officers of DR Holdco and the Company, threatened.
IV.17 Hologic Stock Representations. SDI or the Permitted Transferee
-----------------------------
and DuPont will be acquiring the Hologic Shares for their own accounts for
investment and not with a view to the distribution of any of the Hologic Shares
in violation of applicable federal or state securities Laws. SDI, the Permitted
Transferee and DuPont each is a sophisticated investor capable of evaluating the
risks of acquisition of the Hologic Shares. Each of SDI and DuPont is, and any
Permitted Transferee will be, an "accredited investor" within the meaning of
Rule 501(a)(3) promulgated under the Securities Act.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to SDI and the Permitted Transferee that:
V.1 Due Incorporation, Etc. Buyer is a corporation duly organized,
----------------------
validly existing and in good standing under the laws of the state of its
incorporation, with all requisite corporate power and authority to own, operate,
sell and lease its properties and to carry on its business as it is now being
conducted and to carry out the transactions to be carried out by it as provided
for herein.
V.2 Corporate Power and Authority. Buyer has the requisite corporate
-----------------------------
power to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. Buyer has the requisite corporate power to
execute, deliver and perform the other agreements and instruments required to be
executed by it pursuant hereto (the "Buyer Related Documents") and to consummate
the transactions contemplated thereby. The execution, delivery and performance
of this Agreement and the Buyer Related Documents by Buyer and the consummation
of the transactions contemplated hereby and thereby by Buyer have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly and validly executed and delivered by Buyer. The Buyer
Related Documents, when executed and delivered by Buyer, will be duly and
validly executed and delivered by Buyer. This Agreement constitutes,
-17-
and the Buyer Related Documents, when executed and delivered by Buyer will
constitute, the valid and binding obligations of Buyer, enforceable against
Buyer in accordance with their respective terms, except as limited by
bankruptcy, insolvency, moratorium and similar laws affecting creditors' rights
and except as limited by equitable principles.
V.3 No Conflicts or Consents. Except for the filings, notices and
------------------------
reports referred to in Section 7.5, neither the execution, delivery or
performance of this Agreement or any of the Buyer Related Documents by Buyer,
nor the consummation of the transactions contemplated hereby or thereby will:
V.3.1 Charter Documents. Conflict with or result in a breach of
-----------------
any provision of the certificate of incorporation or bylaws of Buyer;
V.3.2 Agreements. Violate or breach, constitute an event of
----------
default under, or otherwise conflict with any evidence of indebtedness, contract
or other agreement to which Buyer is a party or by which Buyer or any of its
assets are bound;
V.3.3 Laws. Violate any Law applicable to Buyer; or
----
V.3.4 Governmental Agencies. Require any consent, authorization or
---------------------
other action of, or notice to, or declaration, filing or registration with, any
third party or any Governmental Agency.
V.4 Company Stock Representation. Buyer is acquiring the DR Holdco
----------------------------
Stock hereunder for its own account for investment and not with a view to the
distribution of any of such DR Holdco Stock in violation of applicable federal
or state securities Laws. Buyer is a sophisticated investor capable of
evaluating the risks of Buyer's investment in DR Holdco, and Buyer has had
access to, and an opportunity to examine, such records and ask such questions of
representatives of DR Holdco and the Company as it has deemed necessary for
purposes of the execution, delivery and performance by it of this Agreement.
Buyer is an "accredited investor" within the meaning of Rule 501(a)(3)
promulgated under the Securities Act.
V.5 Buyer Reports and Financial Statements. Buyer has previously
--------------------------------------
furnished to SDI complete and accurate copies, as amended or supplemented, of
its (i) Annual Report on Form 10-K for the fiscal year ended September 26, 1998,
as filed with the Securities and Exchange Commission, (ii) proxy statements
relating to all meetings of its stockholders (whether annual or special) since
September 26, 1998 and (iii) all other reports or registration statements filed
by Buyer with the Securities and Exchange Commission since September 26, 1998
(such reports, registration statements and other filings, together with any
amendments or supplements thereto, are collectively referred to herein as the
"Buyer Reports"). The Buyer Reports constitute all of the documents filed or
required to be filed by Buyer with the Securities and Exchange Commission since
September 26, 1998. As of their respective dates, the Buyer Reports did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited financial statements and unaudited interim financial statements of Buyer
included in the Buyer Reports (i) comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the Securities and Exchange Commission with respect thereto, (ii) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered hereby (except as may be indicated therein or in the notes
thereto, and in the case of quarterly financial
-18-
statements, as permitted by Form 10-Q under the Securities Exchange Act of
1934), (iii) fairly present the consolidated financial condition, results of
operations and cash flows of Buyer as of the respective dates thereof and for
the periods referred to therein, and (iv) are consistent with the books and
records of Buyer.
V.6 Brokerage Arrangements. Neither Buyer nor any of its affiliated
----------------------
corporations has entered (directly or indirectly) into any agreement with any
Person that would obligate SDI or the Permitted Transferee or any of their
Affiliates to pay any commission, brokerage or "finder's fee" in connection with
the transactions contemplated herein.
ARTICLE VI
SEVERAL COVENANTS OF SDI
During the period from the date of this Agreement to the Closing Date or
the termination of this Agreement, whichever first occurs, unless otherwise
agreed to in writing by Buyer or otherwise provided by this Agreement, SDI
agrees that it will:
VI.1 Voting of Company Stock, Etc. Not vote nor permit the Permitted
---------------------------- -
Transferee to vote its shares of Company Stock or DR Holdco Stock or permit DR
Holdco to vote its shares of Company Stock in favor of, or execute or permit the
Permitted Transferee or DR Holdco to execute any consent in favor of, any of the
following:
VI.1.1 Amendments. Any amendment to the Certificate of
----------
Incorporation or By-Laws of DR Holdco or the Company;
VI.1.2 Mergers, Etc.. Any sale or exchange or other disposition of
-------------
all or a substantial portion of the assets of DR Holdco or the Company, taken as
a whole, or any merger, consolidation, reorganization, recapitalization, share
exchange, dissolution or liquidation involving DR Holdco or the Company, other
than any such action necessary to effect the purchase or redemption of the
Series A Preferred Stock;
VI.1.3 Changes in Capitalization. Any split, combination or
-------------------------
reclassification of shares of issued and outstanding capital stock of DR Holdco
or the Company, or any other change in the capital structure of DR Holdco or the
Company or the granting or issuing of any Equity Rights in DR Holdco or the
Company, other than any such action necessary to effect the purchase or
redemption of the Series A Preferred Stock;
VI.2 No Sale or Transfers. Except (i) for the sale and transfer of the
--------------------
DR Holdco Stock to Buyer as provided hereby, and (ii) the transfer of DR Holdco
Stock to the Permitted Transferee, not transfer, sell or dispose of, directly or
indirectly, any interest in the DR Holdco Stock held by it as set forth on Annex
I attached hereto or hereafter acquired by SDI or the Permitted Transferee. In
addition, SDI shall not transfer any Company Stock held by it to any Person
other than DR Holdco nor permit DR Holdco to transfer any Company Stock now
owned or hereafter acquired by it.
-19-
ARTICLE VII
ADDITIONAL AGREEMENTS
VII.1 Expenses. SDI agrees to pay its own costs and expenses incurred
--------
by it in connection with this Agreement and the transactions contemplated
hereby, the fees and expenses of Bear Xxxxxxx and Co. payable by the Company in
connection with the transactions contemplated herein and the payments described
in Schedule 3.1.6. Buyer agrees to pay the costs and expenses incurred by
Buyer in connection with this Agreement and the transactions contemplated
hereby.
VII.2 Publicity. SDI and Buyer agree that at all times prior to the
---------
Closing, each shall consult with and obtain the approval of the others prior to
issuing, or permitting any of its subsidiaries, directors, officers, employees
or agents, to issue any press release or make any public announcement with
respect to this Agreement or the transactions contemplated hereby (except that,
after such consultation, any party may make such press releases and public
announcements as it deems to be required by applicable Law).
VII.3 Designation of Company Employees.
--------------------------------
VII.3.1 Designation. SDI and Buyer agree that at the Closing only
-----------
those SDI employees listed on Schedule 7.3 annexed hereto (the "Designated
Employees") shall be assigned and transferred by SDI or the Permitted Transferee
to the Company. SDI agrees that it and the Permitted Transferee shall use their
reasonable efforts to encourage the Designated Employees to accept continued
employment at the Company following Closing. Buyer shall reimburse SDI or the
Permitted Transferee at Closing for all severance and termination costs for the
Designated Employees.
VII.3.2 Other Employees. SDI acknowledges and agrees that, subject
---------------
to reimbursement from Buyer as provided in Section 7.3.1, SDI or the Permitted
Transferee shall bear and promptly discharge any and all obligations and
liabilities, whether arising prior to or following Closing, with respect to any
employees who are not Designated Employees, including without limitation
obligations and liabilities for salaries, accrued vacation, accrued sick time or
other employee benefits, and any obligations or liabilities under any applicable
severance plans or programs, COBRA or any other applicable Law.
VII.4 Update of Schedules. Buyer and SDI agree that SDI or the
-------------------
Permitted Transferee may amend the Schedules hereto at any time prior to Closing
or add additional Schedules hereto by delivering any such amended or new
Schedules to Buyer, so long as any such amendment or addition does not reflect a
material change to this Agreement.
VII.5 HSR Act. Each party hereto shall use its commercially reasonable
-------
efforts to obtain all authorizations, consents, orders and approvals of, and to
give all notices and to make all filings with, all Governmental Agencies and
other third parties that may be or become necessary for its execution and
delivery of, and the performance of its obligations pursuant to, this Agreement,
and each party will cooperate fully, to the extent commercially reasonable, with
the other party in promptly seeking to obtain all such authorizations, consents,
orders and approvals, giving such notices, and making such filings. Each party
hereto agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions contemplated hereby
within five days of the date of this Agreement and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act. The parties hereto agree not to take any
action that will have the effect of
-20-
unreasonably delaying, impairing or impeding the receipt of any required
authorizations, consents, orders or approvals; provided that in no event shall
--------
the foregoing provisions of this sentence require the parties to act in a manner
that is not commercially reasonable. Each party shall promptly notify the other
party of any material communication to that party from any Governmental Agency
and consult with the other party regarding any proposed communication to any
Governmental Agency in respect of any filings, investigation or other inquiry
and to the extent appropriate give the other party the opportunity to attend and
participate thereat. Subject to the Confidentiality Agreement referred to in
Section 9.2.3, and the joint defense privilege, each party will coordinate and
cooperate fully with the other in providing and exchanging such information
(either directly or through counsel) and providing such assistance as the other
may reasonably request in connection with the foregoing. Each party agrees to
use its commercially reasonable efforts to respond promptly to and comply fully
with any request for additional information or documents under the HSR Act or
other applicable Laws. Subject to the Confidentiality Agreement referred to in
Section 9.2.3 and the joint defense privilege, counsel for the parties may
exchange correspondence, filings or communications (or memoranda setting forth
the substance thereof) between such party or any of its representatives, on the
one hand, and any Governmental Agency or members of its staff, on the other
hand, with respect to this Agreement and the transactions contemplated hereby.
ARTICLE VIII
CERTAIN AGREEMENTS OF SDI
SDI agrees with Buyer as follows:
VIII.1 Conduct of Business, Other Matters. During the period from the
----------------------------------
date of the Agreement to the Closing or the termination of this Agreement,
whichever first occurs, except as otherwise disclosed in Schedule 8.1, or as
contemplated by this Agreement or the Parent Agreement, or as consented to by
Buyer in writing, SDI or the Permitted Transferee will cause the Company to:
VIII.1.1 Conduct of Business. Conduct its business, operations,
-------------------
activities and practices only in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and use its reasonable
efforts to preserve its present business organization, keep available the
services of its present management and employees, and preserve its relationships
with customers, suppliers and others having business dealings with it;
VIII.1.2 Dividends, etc. Not declare, set aside, make or pay any
--------------
dividend or other distribution (whether in cash, stock or property) in respect
of its capital stock, or purchase or redeem, directly or indirectly, any shares
of its capital stock;
VIII.1.3 Sale of Assets; Mergers. Not, directly or indirectly,
-----------------------
pledge, lease, dispose of or encumber all or a substantial part of its assets,
whether tangible or intangible (except for inventory sold and raw materials used
and assets replaced in the ordinary course of business) or enter into any
merger, consolidation or share exchange; or dissolve or liquidate;
VIII.1.4 Acquisition of Assets. Other than any such action
---------------------
necessary to effect the purchase or redemption of the Series A Preferred Stock,
not acquire or agree to acquire, directly or indirectly, by direct
-21-
purchase, merger or consolidation or otherwise, substantially all of the assets,
stock or business of any Person for a purchase price in excess of $10,000;
VIII.1.5 No Amendments or Plan Contributions. Not amend in any
-----------------------------------
material respect any Scheduled Agreement, or adopt or materially amend any Plan
or make any discretionary or voluntary contribution to any Plan;
VIII.1.6 Compensation. Not grant to any officer, director or any
------------
group of employees as a class any extraordinary increase in compensation, or any
severance or termination pay, or enter into any employment agreement or other
agreement relating to personal services not terminable at will without any
payment or penalty, or grant to any employee any extraordinary compensation,
other than annual salary adjustments consistent with past practices;
VIII.1.7 No Agreements to Breach Covenants. Not enter into any
---------------------------------
agreement to do any of the things described in Sections 8.1.2 through 8.1.6;
VIII.1.8 Access to Information and Premises. For the reasonable
----------------------------------
purposes of the Agreement and subject to the terms of the Confidentiality
Agreement referred to in Section 9.3.3, (i) provide Buyer and its accountants,
counsel and other authorized representatives full access to any and all
premises, properties, agreements, books, records and other information
(including Tax returns filed and those in preparation) of DR Holdco and the
Company, and (ii) cause its officers to furnish to Buyer and its authorized
representatives any and all financial, technical and operating data and
other information pertaining to DR Holdco or the business of the Company as
Buyer may from time to time request; provided, however, that (a) such access
------------------
shall not unreasonably interfere with DR Holdco or the business of the Company
and shall be subject to customary safety standards, (b) such access shall only
be with prior notice to the Company, (c) in the reasonable judgment of the
Company, the furnishing of such information will not cause DR Holdco or the
Company to be in violation of any Law, and (d) no information subject to a
requirement of confidentiality on the part of DR Holdco or the Company shall be
provided to Buyer except in a manner which complies with applicable
confidentiality agreements.
VIII.2 Injunctions. If prior to the Closing Date any Governmental
-----------
Agency having jurisdiction over DR Holdco or the Company issues or otherwise
promulgates any restraining order, injunction, decree or similar order which
prohibits the consummation of any of the transactions contemplated by this
Agreement, SDI or the Permitted Transferee shall cause DR Holdco and the Company
to use their commercially reasonable efforts to have such restraining order,
injunction, decree or similar order dissolved or otherwise eliminated as
promptly as possible and to pursue the underlying Litigation diligently and in
good faith. Nothing contained in this Section 8.2 shall limit the respective
rights of the parties to terminate the Agreement pursuant to Article XI hereof
or shall limit or otherwise affect the respective conditions to the obligations
of the parties set forth in Article X of this Agreement.
VIII.3 Conditions. Between the date hereof and the Closing Date or the
----------
termination of this Agreement, whichever first occurs, SDI or the Permitted
Transferee shall not permit DR Holdco or the Company to knowingly take any
action which will cause the conditions to the obligations of Buyer to consummate
the Closing not to be fulfilled.
-22-
VIII.4 Notice. From the date hereof to the Closing Date or the
------
termination of this Agreement, whichever first occurs, SDI or the Permitted
Transferee shall promptly notify Buyer in writing of, and shall furnish any
information that it may reasonably request with respect to, any event or
condition of which any officer of DR Holdco or the Company has actual knowledge
that would cause any of the conditions to the obligations of Buyer to consummate
the Closing not to be fulfilled.
VIII.5 DR Holdco. From the date hereof to the Closing Date or the
---------
termination of this Agreement, whichever first occurs, SDI or the Permitted
Transferee will not permit DR Holdco to engage in any active business, enter
into any contract, hire any employee or incur any liability.
VIII.6 Environmental Remediation Costs. Buyer has previously engaged,
-------------------------------
with SDI's consent and at Buyer's expense GZA Geoenvironmental, Inc. (the
"Environmental Consultant") to undertake a "Phase One" environmental review with
respect to Environmental Matters relating to the businesses conducted by the
Company and the Real Property and to provide a written report of its findings
and recommendations to Buyer and SDI or the Permitted Transferee as soon as
possible prior to the Closing. Such findings and recommendations shall include
the Environmental Consultant's opinion which shall set forth (a) the discounted
present value of the estimated costs, if any, of remediation and cleanup of
environmental conditions at the Real Property or otherwise for which the Company
is responsible under current Environmental Law, if the Environmental Consultant
is in a position to give such opinion, (b) if any such costs cannot be estimated
as provided in clause (a), then the discounted present value of the maximum
costs of such remediation and cleanup, if the Environmental Consultant is in a
position to give such opinion, and (c) as to any identified possible remediation
or cleanup matter as to which the Environmental Consultant cannot opine as to
the discounted present value of the estimated costs or the maximum estimated
costs thereof, if any, ("Unestimated Environmental Costs"), a description of
each such matter and a statement of the Environmental Consultant that it cannot
opine as to the estimated costs of such matter. SDI or the Permitted Transferee
will cooperate with such Environmental Consultant in connection with such review
and report. Within five days after receipt of such report and opinion, Buyer
shall deliver written notice to SDI or the Permitted Transferee of the
Environmental Remediation Costs, if any which it desires to assert and the
Unestimated Environmental Costs, if any, which it desires to assert. If the
Environmental Remediation Costs as set forth in such notice are in excess of
$50,000 but not more than $250,000, and there are no Unestimated Environmental
Costs asserted in such notice, the SDI Purchase Price shall be adjusted as set
forth in Section 2.2. If the Environmental Remediation Costs as set forth in
such notice are in excess of $250,000, or there are Unestimated Environmental
Costs asserted in such notice, the parties shall, for the five-day period after
delivery of such notice, attempt in good faith to negotiate a settlement of the
responsibility for the matters asserted in such notice. If the parties are
unable to reach a settlement of such matters within such five-day period (as the
same may be extended by written agreement of the parties), either party may
terminate this Agreement pursuant to Section 11.1.3.
VIII.7 Access to Records. Within the first twelve months after the
-----------------
Closing, if Buyer certifies in writing to SDI's or the Permitted Transferee that
access to the books and records of SDI or the Permitted Transferee is required
for a proper purpose and that any information so obtained will not be utilized
to compete with SDI, the Permitted Transferee or their Affiliates, then Buyer
shall be entitled to access to such books and records relating to DR Holdco and
the Company or its business for the period prior to the Closing Date upon
reasonable advance notice during normal business hours for a period of one year
following the Closing Date.
-23-
ARTICLE IX
AGREEMENTS OF BUYER
IX.1 Employee Benefit Plans. At the Closing Date or as soon thereafter
-----------------------
as administratively practicable, Buyer shall cause the Designated Employees to
be covered by the benefit plans and programs of Buyer and its Affiliates with
substantially equivalent benefits in respect of future service that accrue in
respect of future services to the employees of Buyer and its Affiliates who are
employed in comparable positions; provided, however, that nothing herein shall
relieve Buyer, SDI or the Permitted Transferee of its obligations under Section
7.3 hereof or under any severance or termination program or under any employment
agreement or similar contractual obligation. Designated Employees shall be
credited for their service with SDI, the Company and any of its Affiliates and
their predecessors for purposes of participation, eligibility and vesting under
the benefit plans and programs provided by Buyer or its Affiliates and benefit
accrual purposes for vacation, severance, pension and retirement benefits only,
and Buyer shall cause its group health plan that will provide coverage to
Designated Employees to waive any limitations regarding pre-existing conditions
of Designated Employees and their eligible dependents (except to the extent that
such limitations would have applied to any such individual under the group
health plan of SDI in effect immediately prior to January 11, 1999). Designated
Employees shall also be entitled to participation in Buyer's equity incentive
plan and will receive stock options issued by Buyer promptly following Closing.
IX.1.1 Termination of Participation. As of, or prior to, the
----------------------------
Closing Date, SDI or the Permitted Transferee will take such action as is
necessary to terminate the participation by DR Holdco and the Company in all
Plans of the SDI Controlled Group and SDI or the Permitted Transferee will
indemnify DR Holdco, the Company and Buyer from any claims or liabilities with
respect to any Plans (including withdrawal liability under any multiemployer
plans); provided that neither SDI nor the Permitted Transferee shall have any
indemnification obligation hereunder unless a claim is made therefor on or
before either (i) the later to occur of (a) the expiration of the Guarantee
Period, or (b) the second anniversary of the Closing Date, if the closing occurs
under the Parent Agreement, or (ii) the third anniversary of the Closing Date,
if the closing has not occurred under the Parent Agreement, and in either such
case such obligation shall be limited to claims made on or before such time.
IX.1.2 COBRA. SDI or the Permitted Transferee will assume all
-----
responsibilities for COBRA continuation coverage for employees who are not
Designated Employees and neither Buyer, DR Holdco nor the Company shall provide
such coverage.
IX.1.3 Full Vesting. SDI or the Permitted Transferee will take
------------
such action as is necessary to fully vest Designated Employees in all accrued
benefits as of the Closing Date in the qualified defined contribution and
defined benefit plans in which the Designated Employees participate, with
accrual credit granted through the Closing Date.
IX.1.4 No Third Party Beneficiary Rights. Designated Employees and
---------------------------------
their beneficiaries and spouses do not have third party beneficiary rights under
this Agreement and shall have no standing to claim benefits hereunder.
-24-
IX.2 Certain Covenants of Buyer. Buyer covenants and agrees as follows:
--------------------------
IX.2.1 Conditions. Between the date hereof and the Closing Date or
----------
the termination of this Agreement, whichever first occurs, Buyer shall not
knowingly take any action which will cause the conditions to the obligations of
SDI or the Permitted Transferee to consummate the Closing not to be fulfilled.
IX.2.2 Notice. From the date hereof to the Closing Date, Buyer
------
shall promptly notify SDI or the Permitted Transferee in writing of, and shall
furnish any information that they may reasonably request with respect to, any
event or condition of which any officer of Buyer has actual knowledge that
would cause any of the conditions to the obligations of SDI or the Permitted
Transferee to consummate the Closing not to be fulfilled.
IX.2.3 Confidentiality. The terms and conditions of the
---------------
Confidentiality Agreement between Buyer and the Company shall apply to all
information with respect to DR Holdco or the Company supplied to Buyer and its
representatives pursuant to the terms of this Agreement.
IX.2.4 Access to Records. After the Closing, if SDI or the
-----------------
Permitted Transferee certifies in writing to Buyer that access to the books and
records of DR Holdco or the Company is required for a proper purpose and that
any information so obtained will not be utilized to compete with DR Holdco or
the Company, then SDI or the Permitted Transferee shall be entitled to access to
such books and records relating to the period prior to the Closing Date upon
reasonable advance notice during normal business hours for a period of seven
years following the Closing Date.
IX.3 Tax Returns. Buyer shall cause to be filed in a timely manner all
-----------
Returns which relate to any Taxes of DR Holdco or the Company for the fiscal
year ended December 31, 1999 or any subsequent period or any prior period not
yet due.
IX.4 Injunctions. If prior to the Closing Date any Governmental Agency
-----------
having jurisdiction over Buyer issues or otherwise promulgates any restraining
order, injunction, decree or similar order which prohibits the consummation of
any of the transactions contemplated by this Agreement, Buyer shall use its
commercially reasonable efforts to have such restraining order, injunction,
decree or similar order dissolved or otherwise eliminated as promptly as
possible and to pursue the underlying Litigation diligently and in good faith.
Nothing contained in this Section 9.4 shall limit the respective rights of the
parties to terminate the Agreement pursuant to Article XI hereof or shall limit
or otherwise affect the respective conditions to the obligations of the parties
set forth in Article X of this Agreement.
IX.5 Registration of the Hologic Shares.
----------------------------------
IX.5.1 Required Registration. Buyer shall file with the Commission
---------------------
a registration statement under the Securities Act on Form S-3 (or any successor
short form registration involving a similar amount of disclosure) for a public
offering of all the Hologic Shares to be made on a continuous basis pursuant to
Rule 415 of the Securities Act (the "Registration Statement") and, as soon as
practicable after the execution of this Agreement, will use its reasonable
efforts to cause such Registration Statement to become effective and, subject to
the limitations and qualifications set forth in Section 9.5.2.3(i)(e) below,
-25-
to remain continuously effective until the earlier of (i) the date upon which
SDI or the Permitted Transferee and DuPont become eligible to sell Hologic
Shares under Rule 144(k) of the Securities Act or (ii) the third anniversary of
the Closing Date or, if any delay occurs pursuant to Section 9.5.2.3(i)(e)
below, the date which is the later of (i) three years after the Closing Date or
(ii) 30 days after the distribution of any supplement or amendment to a
prospectus which has been delayed under Section 9.5.2.3(i)(e).
IX.5.2 Piggyback Registration. Whenever during the period from
----------------------
the Closing Date to the third anniversary of the Closing Date Buyer proposes to
register any of its Common Equity Securities in a Qualified Registration,
whether or not for sale for its own account, Buyer shall give prompt written
notice (the "Piggyback Notice") to SDI or the Permitted Transferee and DuPont
(each, a "Qualified Holder") of its intention to effect such Qualified
Registration. Upon written request of any Qualified Holder made within 20 days
after delivery of any Piggyback Notice (which request shall specify the Hologic
Shares requested to be included in such Qualified Registration by such Qualified
Holder), Buyer shall, subject to Sections 9.5.2.1 and 9.5.2.2, use its
reasonable efforts to include in such Qualified Registration all Hologic Shares
that the Qualified Holders have so requested be included in such Qualified
Registration, to permit the disposition by such Qualified Holders of such
Hologic Shares; provided, however, that (i) if, at any time after giving the
Piggyback Notice and before the effective date of the registration statement
filed in connection with such Qualified Registration, Buyer determines for any
reason not to register such Common Equity Securities (other than the Hologic
Shares requested to be included therein pursuant to this Section 9.5.2), Buyer,
at its election, may give written notice of such determination to all Qualified
Holders requesting the inclusion of their Hologic Shares therein and, thereupon,
shall be relieved of its obligation to register any Hologic Shares in connection
with such registration (without prejudice, however, to the rights of the
Qualified Holders under Section 9.5.1 or the future rights of the Qualified
Holders under this Section 9.5.2); (ii) if, at any time after giving the
Piggyback Notice and before the effective date of the registration statement
filed in connection with such Qualified Registration, Buyer determines for any
reason to delay such registration of the Common Equity Securities (other than
the Hologic Shares requested to be included therein pursuant to this Section
9.5.2), Buyer shall be permitted to delay the registration of such Hologic
Shares for the same period as the delay in registering such other Common Equity
Securities; and (iii) Buyer shall not be required to effect any registration
pursuant to this Section 9.5.2 unless it shall have received reasonable
assurances that the Qualified Holders of any Hologic Shares included therein
will pay any expenses required to be paid by them as provided in Section 9.5.3.
As used herein, the term "Piggyback Registration" shall mean any registration of
Hologic Shares requested pursuant to this Section 9.5.2.
IX.5.2.1 Priority on Piggyback Registrations. If a Piggyback
-----------------------------------
Registration is an underwritten offering and the managing underwriter thereof
advises Buyer in writing that, in its opinion, the number of shares of Common
Equity Securities requested or proposed to be included in such offering exceeds
the number that can be sold in such offering without materially affecting the
offering price of such securities, Buyer shall include in such registration (i)
first, to the extent that such securities of Buyer may be included in such
registration without materially affecting the offering price thereof, in the
opinion of such managing underwriter, (a) if such registration is initiated by
Buyer proposing to register any of its Common Equity Securities, such Common
Equity Securities proposed to be sold by Buyer and (b) the securities of Buyer
held by persons (other than the Qualified Holders of Hologic Shares with respect
to such Hologic Shares) who otherwise have preferential registration rights to
include such securities in such Piggyback Registration in preference to the
Qualified Holders and which have been duly requested to be included in such
Piggyback Registration in accordance with the agreements with respect to such
registration rights between Buyer and such holders, all such agreements being
listed on Schedule 9.5.2.1 attached hereto; and (ii) second, to the extent that
such Hologic Shares may be included in such Qualified Registration without
materially affecting the offering price of the securities referred to in clause
(i), in the opinion of such managing underwriter, the Hologic Shares requested
by the Qualified Holders to be included in
-26-
such Piggyback Registration pursuant to Section 9.5.2 and any other securities
of Buyer held by persons other than the Qualified Holders having rights to
participate in such Piggyback Registration that are non-preferential to the
Qualified Holders, pro rata among all such holders on the basis of the total
number of shares of securities of Buyer, including Hologic Shares, requested by
each such holder to be included therein. Buyer agrees not to grant any
registration rights to any other Person with respect to Common Equity Securities
which are preferential to those of the Qualified Holders set forth herein.
IX.5.2.2 Selection of Underwriters. Except as otherwise provided
-------------------------
in any registration rights agreement with respect to any other securities of
Buyer, Buyer shall have the sole right to select the managing underwriter or
underwriters in connection with any Piggyback Registration.
IX.5.2.3 Registration Procedures. If and when Buyer is required by
-----------------------
this Agreement to use its reasonable efforts to effect the registration of any
Hologic Shares:
(i0 Buyer's Actions. Buyer shall, as soon as reasonably
---------------
practicable:
(10prepare and file with the Commission under the Securities Act a
registration statement with respect to such Hologic Shares which shall state
that the Hologic Shares are covered thereby, and subject to Section 9.5.2 use
its reasonable efforts to cause such registration statement to become effective
and, to remain effective as provided herein;
(20prepare and file with the Commission such amendments and
supplements, if any, to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective until the completion of the distribution under such registration
statement, and comply with the provisions of the Securities Act applicable to it
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the Qualified Holders set forth in such registration statement;
(30furnish to each Qualified Holder of such Hologic Shares or other
Common Equity Securities and each underwriter (if any) such number of copies of
such registration statement (including exhibits), each amendment and supplement
thereto, the prospectus included in such registration statement or filed with
the Commission (including each preliminary prospectus), and each amendment and
supplement thereto as such Qualified Holder and underwriter may reasonably
request to facilitate the disposition of the Hologic Shares owned by such
Qualified Holder and covered by such registration statement;
(40use its reasonable efforts to (1) register or qualify such Hologic
Shares under the securities or "blue sky" laws of such jurisdictions as any
Qualified Holder of such Hologic Shares representing more than 15% of the total
number of shares of Hologic Shares covered by such registration statement or the
managing underwriter (if any) may reasonably request; (2) keep such
registrations
-27-
or qualifications in effect for so long as such registration statement is in
effect; and (3) take any and all other reasonable actions that may be necessary
or appropriate to enable each Qualified Holder of Hologic Shares and each
underwriter (if any) to consummate the disposition in such jurisdictions of the
relevant Hologic Shares; provided, however, that Buyer shall not be required to
(x) qualify generally to transact business as a foreign corporation in any
jurisdiction where it would not otherwise be required to qualify but for the
requirements of this Section; (y) subject itself to taxation in any such
jurisdiction; or (z) consent to general service of process in any such
jurisdiction;
(50(1) at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, notify each Qualified Holder of Hologic
Shares when it becomes aware of the occurrence of any event as a result of which
the prospectus (as then amended or supplemented) contains any untrue statement
of a material fact or omits any fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and (2) at the request of any such Qualified Holder, as promptly as practicable
thereafter, prepare in sufficient quantities and furnish to such Qualified
Holder and each underwriter (if any) a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
offerees or purchasers of such Hologic Shares, such prospectus will not contain
any untrue statement of a material fact or omit to state any fact necessary to
make the statements therein, in the light of the circumstances then existing,
not misleading; provided, however, that Buyer may delay preparing, filing and
distributing any such supplement or amendment if Buyer determines in good faith
that such supplement or amendment might, in the reasonable judgment of Buyer,
(i) interfere with or affect the negotiation or completion of a transaction that
is being contemplated by Buyer (whether or not a final decision has been made to
undertake such transaction) or (ii) involve initial or continuing disclosure
obligations that are not in the best interests of Buyer at such time; provided
further, that any such delay may not extend for more than thirty (30)
consecutive days or sixty (60) days in any twelve (12) month period after such
registration statement becomes effective. Each Qualified Holder agrees, upon
receipt of a notice of the foregoing it shall forthwith cease making offers and
sales of the Hologic Shares pursuant to the registration statement or deliveries
of the prospectus contained therein and to return to the Buyer for modification
and exchange, the copies of such prospectus not theretofore delivered by such
Qualified Holder.
(60comply with all applicable rules and regulations of
the Commission;
(70use its reasonable efforts to cause all such Hologic Shares covered
by such registration statement to be listed on any securities exchange or
automated quotation system, if any, on which similar securities of Buyer are
then listed, if the listing of such Hologic Shares is then permitted under the
rules of such exchange or automated quotation system;
(80subject to the execution of confidentiality agreements, in form and
substance reasonably satisfactory to Buyer, (1) make reasonably available for
inspection by any Qualified Holder of such Hologic Shares, any underwriter (if
any), their representative legal counsel, and any accountant or other agent
retained by any of them, all financial and other records, relevant corporate
documents, and properties of Buyer, and (2) cause Buyer's directors, officers,
employees, counsel and independent public accountants to supply all information
reasonably requested by, and to respond to inquiries from,
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any such seller, underwriter, legal counsel, attorney, accountant or agent in
connection with such registration statement, in each instance to the extent that
such information is reasonably necessary to satisfy any of its obligations under
applicable law;
(90provide (1) each Qualified Holder of such Hologic Shares, (2) each
underwriter (which, for purposes of this Agreement, shall include any person
deemed to be an underwriter within the meaning of Section 2(11) of the
Securities Act), if any, of the securities being sold, (3) counsel of such
underwriters, and (4) the counsel of such Qualified Holder the opportunity to
participate in the preparation of such registration statement, each amendment or
supplement thereto, each prospectus included therein or filed with the
Commission, and each amendment or supplement thereto;
(100promptly notify each Qualified Holder of Hologic Shares and each
managing underwriter (if any) and, upon request by any such person, confirm such
advice in writing, (1) when such registration statement, the prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to such registration statement or any post-effective amendment thereto,
when the same has become effective, (2) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration statement or the
initiation of any proceeding for such purpose, or (3) of the receipt by Buyer of
any notification with respect to the suspension of the registration or
qualification of such Hologic Shares for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(110use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any post-
effective amendment thereto.
(ii0 Withdrawal. If any Qualified Holder participating in a
----------
registration hereunder disapproves of the terms of any Piggyback Registration,
the sole remedy of such Qualified Holder shall be, in its discretion, to
withdraw such Qualified Holder's Hologic Shares therefrom by giving written
notice to Buyer and any managing underwriter (if any). The Qualified Holder's
Hologic Shares so withdrawn from the offering also shall be withdrawn from
registration. If the Qualified Holders participating in such registration
withdraw all Hologic Shares from the offering, Buyer may withdraw the
registration.
(iii0 Information. The obligation of Buyer to complete the
-----------
registration of Hologic Shares pursuant to this Section 9.5 shall be subject to,
and conditioned upon, the obligation of each Qualified Holder registering
Hologic Shares to furnish Buyer, upon Buyer's written request, with all
information regarding such Qualified Holder and the intended distribution of
such Qualified Holder's Hologic Shares included in such registration for the
purpose of preparing the registration statement, to the extent that such
information is required to comply with applicable legal requirements. If any
such registration statement refers to any Qualified Holder by name or otherwise
as the holder of any securities of Buyer, then such Qualified Holder shall have
the right to require (a) the insertion therein of language, in form and
substance satisfactory to such Qualified Holder, to the effect that the holding
by such Qualified Holder of such securities is not to be construed as a
recommendation by such Qualified Holder of the investment quality of the
securities covered thereby and that such holding does not imply that such
Qualified Holder will assist in meeting any future financial requirements of
Buyer, or (b) the deletion of such reference
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to such Qualified Holder if, in the judgment of Buyer, as advised by counsel,
such reference is not required by the Securities Act or any similar federal
statute or any state securities of blue sky law then in effect.
(iv) Participation in Underwritten Registrations. In the case of a
-------------------------------------------
Piggyback Registration, (a) all Hologic Shares and Common Equity Securities or
other securities of Buyer to be included in such registration shall be subject
to such underwriting agreement, which shall be in customary form and contain
such terms as are customarily contained in such agreements, and (b) no Person
may participate in any such registration unless such Person (1) agrees to sell
such Person's securities on the basis provided in such underwriting arrangement
and (2) completes and executes all questionnaires, powers-of-attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
(v) Limitations on Sale or Distribution of Other Securities. If
-------------------------------------------------------
requested in writing by the managing underwriter of a Piggyback Registration,
each Qualified Holder hereby agrees not to effect any public offering, sale or
distribution (including any sale pursuant to Rule 144 under the Securities Act)
of any Hologic Shares or any other Common Equity Securities or any other
security of Buyer (other than as part of such underwritten public offering)
within such period as such managing underwriter may request, if such Qualified
Holder was given the opportunity to include in the Piggyback Registration any
Hologic Shares or any other Common Equity Securities or any other security of
Buyer held by such Qualified Holder, and if such restriction applies to all
holders of securities being offered in such Piggyback Registration.
IX.5.2.4 Delivery Requirements. Each Qualified Holder shall comply
---------------------
with the requirements of delivering a current prospectus to the purchaser of
Hologic Shares in any sale, to the extent such requirement is applicable under
federal and state securities Laws.
IX.5.3 Expenses. The expenses of registration of Hologic Shares
--------
pursuant to Sections 9.5.1 and 9.5.2 will be paid by Buyer. For purposes of
this Section 9.5.3, the term "expenses" shall include federal, state and other
registration and qualification fees and legal fees and expenses for Buyer's
counsel (but excluding the fees and expenses, if any, of counsel or other
advisers to the Qualified Holders), auditing and accounting expenses incurred by
Buyer in connection with the registration and printing and other related
expenses including salary and related overhead expenses of employees of Buyer
for time expended by such employees.
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IX.5.4 Indemnification with Respect to Registration.
--------------------------------------------
IX.5.4.1 Indemnification By Buyer. To the extent permitted by law,
------------------------
Buyer will indemnify and hold harmless each Qualified Holder, its officers and
directors, and each Person who Controls such Qualified Holder against any
losses, claims, damages or liabilities, joint or several, to which any of them
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained or expressly incorporated by reference in any registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, and will reimburse such Qualified Holder, its officers and
directors and Controlling Persons for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, as such expenses are incurred; provided,
however, that the indemnity agreement contained in this Section 9.5.4.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without Buyer's consent nor
shall Buyer be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in connection any Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement thereto in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by such Qualified Holder, its officers and directors, any
Controlling Person or agent.
IX.5.4.2 Indemnification by Qualified Holders. To the extent
------------------------------------
permitted by law, each Qualified Holder which has included Hologic Shares in a
registration statement hereunder will agree, prior to the filing of such
registration statement, to indemnify and hold harmless Buyer, each of its
directors, each of its officers, each Person, if any, who Controls Buyer and
each agent for Buyer (within the meaning of the Securities Act), as the case may
be, against any losses, claims, damages or liabilities to which Buyer or any
such director, officer, Controlling Person or agent may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained or expressly
incorporated by reference in a registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendment or supplement
thereto, or arise out of or based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Qualified Holder expressly
for use in connection with such registration; and such Qualified Holder shall
agree, prior to the filing of such registration statement, to reimburse any
legal or other expenses reasonably incurred by Buyer or any such director,
officer, Controlling Person or agent, as the case may be, in connection with
investigating or defending any such loss, claim, damage, liability or action.
It is agreed that the indemnity agreement contained in this Section 9.5.4.2
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
Qualified Holder. Notwithstanding the foregoing, no Qualified Holder shall have
any indemnification obligation hereunder with respect to any loss, claim,
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damage, liability or action respecting (i) any registration statement filed
under Section 9.5.1 unless a claim is made therefor within thirty-six (36)
months after the Closing Date, and such obligation shall be limited to claims
made during such 36-month period; or (ii) any Piggyback Registration, unless a
claim is made therefor within twenty-four (24) months after the registration
statement filed in connection with each Piggyback Registration becomes
effective, and such obligation shall be limited to claims made during such 24-
month period.
IX.5.4.3 Registration Indemnity Claims. Promptly after receipt by
-----------------------------
a party indemnified under this Section 9.5.4 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 9.5.4, notify the
indemnifying party in writing of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually satisfactory to the
parties. The failure to notify any indemnifying party promptly of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 9.5.4, but the omission so to notify the
indemnifying party will not relieve it of any liability which it may have to any
indemnified party other than under this Section 9.5.4.
IX.6 Price Guarantees. Buyer covenants and agrees that, as to the
----------------
Eligible Hologic Shares held by SDI or the Permitted Transferee after giving
effect to the DuPont Share Transfer, if any, on the earlier of (i) that date
during the Guarantee Period on which SDI or the Permitted Transferee has sold
all of such Eligible Hologic Shares or (ii) the last day of the Guarantee
Period, SDI or the Permitted Transferee shall be entitled to make a call upon
Buyer's price guarantee in the following manner, and upon such call, Buyer shall
be obligated as follows. Buyer also covenants and agrees that on the earlier of
(i) that date during the Guarantee Period on which DuPont has sold all of the
Eligible Hologic Shares transferred to it in the DuPont Share Transfer, if any,
or (ii) the last day of the Guarantee Period, DuPont shall be entitled to make a
call upon Buyer's price guarantee in the following manner, and upon such call,
Buyer shall be obligated as follows.
IX.6.1 Call During the Guarantee Period. In the event that SDI or
--------------------------------
the Permitted Transferee sells all of its Eligible Hologic Shares held
immediately after giving effect to the DuPont Share Transfer, if any, during the
Guarantee Period in one or more transactions and SDI or the Permitted Transferee
has received Net Proceeds from such sale(s) of less than the Minimum SDI Net
Proceeds Amount, then SDI or the Permitted Transferee may, on the date of its
last sale of such Eligible Hologic Shares or at any time within 30 days
thereafter, give notice to Buyer that SDI or the Permitted Transferee has
elected to make a call upon Buyer's price guarantee. Within 30 days following
delivery of such notice by SDI or the Permitted Transferee, Buyer shall pay to
SDI or the Permitted Transferee by wire transfer of immediately available funds
an amount equal to the difference between (i) the Minimum SDI Net Proceeds
Amount and (ii) the Net Proceeds received by SDI or the Permitted Transferee.
In the event that DuPont sells all of its Eligible Hologic Shares during the
Guarantee Period in one or more transactions and DuPont has received Net
Proceeds from such sale(s) of less than the Minimum DuPont Net Proceeds Amount,
then DuPont may, on the date of its last sale of Eligible Hologic Shares or at
any time within 30 days thereafter, give notice to Buyer that DuPont has elected
to make a call upon Buyer's price guarantee. Within 30 days following delivery
of such notice by DuPont, Buyer shall pay to DuPont by wire transfer of
immediately available
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funds an amount equal to the difference between (i) the Minimum DuPont Net
Proceeds Amount and (ii) the Net Proceeds received by DuPont.
IX.6.2 Call at the End of the Guarantee Period. In the event that
---------------------------------------
on the last day of the Guarantee Period SDI or the Permitted Transferee
continues to hold of record and beneficially any Eligible Hologic Shares and SDI
or the Permitted Transferee has received, with respect to Eligible Hologic
Shares, if any, sold by SDI or the Permitted Transferee prior to such date, Net
Proceeds of less than the Minimum SDI Net Proceeds Amount, then SDI or the
Permitted Transferee may, on the last day of the Guarantee Period or at any time
within 30 days thereafter, give notice to Buyer that SDI or the Permitted
Transferee has elected to make a call upon Buyer's price guarantee. Within 30
days following delivery of such notice by SDI or the Permitted Transferee, Buyer
shall pay to SDI or the Permitted Transferee by wire transfer of immediately
available funds an amount equal to the difference between (i) the Minimum SDI
Net Proceeds Amount and (ii) the sum of (x) the Net Proceeds received by SDI or
the Permitted Transferee and (y) Aggregate Market Value of the Eligible Hologic
Shares held by SDI or the Permitted Transferee as of the close of business on
the last day of the Guarantee Period. In the event that on the last day of the
Guarantee Period DuPont continues to hold of record and beneficially any
Eligible Hologic Shares and DuPont has received, with respect to Eligible
Hologic Shares, if any, sold by DuPont prior to such date, Net Proceeds of less
than the Minimum DuPont Net Proceeds Amount, then DuPont may, on the last day of
the Guarantee Period or at any time within 30 days thereafter, give notice to
Buyer that DuPont has elected to make a call upon Buyer's price guarantee.
Within 30 days following delivery of such notice by DuPont, Buyer shall pay to
DuPont by wire transfer of immediately available funds an amount equal to the
difference between (i) the Minimum DuPont Net Proceeds Amount and (ii) the sum
of (x) the Net Proceeds received by DuPont and (y) Aggregate Market Value of the
Eligible Hologic Shares held by DuPont as of the close of business on the last
day of the Guarantee Period.
IX.6.3 Sale of Hologic Shares prior to and during the Guarantee
--------------------------------------------------------
Period; Reporting and Accounting. In order to enable the parties to confirm
--------------------------------
the number of Eligible Hologic Shares and properly account for Net Proceeds
received by SDI or the Permitted Transferee or DuPont from any sale of Eligible
Hologic Shares, SDI or the Permitted Transferee and DuPont shall report to Buyer
in writing within 30 days after the end of each calendar quarter, commencing
with the calendar quarter ending June 30, 1999 and ending with the calendar
quarter in which the Guarantee Period terminates, any sale or transfer of
Hologic Shares which it may make at any time during such calendar quarter, which
report shall include the number of Hologic Shares sold or transferred, the
manner of sale or transfer and the amount received upon such sale or transfer
net of commissions and underwriting discounts. SDI acknowledges and agrees that
the obligations of Buyer under this Section 9.6 to SDI or the Permitted
Transferee shall be subject to, and conditioned upon, the fulfillment by SDI or
the Permitted Transferee of the reporting obligations under this Section 9.6.3
and that, in the event that SDI or the Permitted Transferee fails in any
material respect to meet such obligations, and such failure continues for 30
days following notice thereof from Buyer, then Buyer's price guarantee in favor
of SDI or the Permitted Transferee shall terminate and Buyer shall be relieved
of any further obligation to SDI or the Permitted Transferee under this Section
9.6. SDI also acknowledges and agrees that the obligations of Buyer under this
Section 9.6 to DuPont shall be subject to, and conditioned upon, the fulfillment
by DuPont of the reporting obligations under this Section 9.6.3 and that, in the
event that DuPont fails in any material respect to meet such obligations, and
such failure continues for 30 days
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following notice thereof from Buyer, then Buyer's price guarantee in favor of
DuPont shall terminate and Buyer shall be relieved of any further obligation to
DuPont under this Section 9.6.
IX.6.4 Early Expiration of Price Guarantee. Notwithstanding any
-----------------------------------
other provision of this Section 9.6 to the contrary, Buyer's price guarantee in
favor if SDI or the Permitted Transferee shall expire and the obligations of
Buyer to SDI or the Permitted Transferee under this Section 9.6 shall terminate
in the event that the average closing price of Buyer's common stock as reported
by the NASDAQ National Market for any 20 consecutive trading days during the
Guarantee Period equals or exceeds $20.00 per share (as adjusted to reflect any
stock dividends, stock splits, reverse stock splits or other similar changes in
Buyer's capitalization following the Closing) and SDI or the Permitted
Transferee then holding Eligible Hologic Shares are legally permitted to sell
all of such shares on a recognized U.S. securities exchange or in the U.S. over
the counter market at all times such exchange or market is open for trading
during such period. Notwithstanding any other provision of this Section 9.6 to
the contrary, Buyer's price guarantee in favor of DuPont shall expire and the
obligations of Buyer to DuPont under this Section 9.6 shall terminate in the
event that the average closing price of Buyer's common stock as reported by the
NASDAQ National Market for any 20 consecutive trading days during the Guarantee
Period equals or exceeds $20.00 per share (as adjusted to reflect any stock
dividends, stock splits, reverse stock splits or other similar changes in
Buyer's capitalization following the Closing) and DuPont is permitted to sell
all of the Eligible Hologic Shares held by it on a recognized U.S. Securities
exchange in the U.S. over the counter market at all times such exchange or
market is open for trading during such period.
IX.7 Non-Transferable Rights. Except with the consent of Buyer, no
-----------------------
rights of SDI, the Permitted Transferee or DuPont under Sections 9.5 or 9.6
shall be assignable by SDI or the Permitted Transferee or DuPont, and such
rights shall terminate with respect to the Hologic Shares upon assignment of
such Hologic Shares by SDI, the Permitted Transferee or DuPont; provided,
however, that SDI may assign such rights to the Permitted Transferee as provided
in Section 12.2, and upon such assignment the Permitted Transferee shall succeed
to such rights; and provided further, that SDI or the Permitted Transferee may
assign to DuPont such rights which are applicable to the Hologic Shares
transferred to DuPont in the DuPont Share Transfer, if any, and upon such
assignment DuPont shall succeed to such rights.
IX.8 Certain Agreements. Buyer agrees to cause the Company to perform
------------------
all of its obligations under the Sales and Services Agreement to be entered into
by the Company, SDI, SDI Investments, L.L.C., SDI Holding Corp. and SDI
Investments Liquidating Trust in substantially the form attached hereto as
Schedule 9.8(a), the Maintenance and Facilities Agreement between SDI and the
Company, the Glasgow Facilities Lease between Glasgow Land Company, L.L.C. and
SDI, the Lease Agreement between the Company and Glasgow Land Company, L.L.C.
and the Transitional Services Agreement between the Company and SDI Holding
Corp. in substantially the form attached hereto as Schedule 9.8(b).
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ARTICLE X
CONDITIONS
X.1 Conditions to Obligations of Buyer. Notwithstanding any other
----------------------------------
provisions of this Agreement, the obligations of Buyer to consummate the
transactions contemplated hereby shall be subject to the satisfaction, or the
waiver in writing by Buyer, of the following conditions:
X.1.1 No Order or Injunction. No order shall have been entered in
----------------------
any action or proceeding before any Governmental Agency, and no preliminary or
permanent injunction by any court of competent jurisdiction shall have been
issued and remain in effect, which would have the effect of (i) making the
purchase of, or payment for, some or all of the DR Holdco Stock pursuant to this
Agreement illegal, or (ii) otherwise making consummation of the transactions
contemplated hereby illegal;
X.1.2 Representations and Warranties. (i) the representations and
------------------------------
warranties of SDI set forth in Article III of this Agreement shall be true and
correct in all material respects as of the date hereof and at the Closing as if
made at that time; and (ii) the representations and warranties of SDI in Article
IV of this Agreement shall be true and correct in all material respects as of
the date hereof and at the Closing (except for representations and warranties
that are made as of a specified date, which shall be true and correct in all
material respects as of such date) except for such inaccuracies which, taken
together, could not reasonably be expected to result in a Material Adverse
Effect on the Company;
X.1.3 Performance of Covenants. Each of the covenants required to
------------------------
be performed by SDI prior to the Closing pursuant to the terms of this Agreement
shall have been performed, except where the failure to perform same could not
reasonably be expected to result in a Material Adverse Effect;
X.1.4 Documentation. Buyer shall have received the resignations of
-------------
any of the officers and directors of DR Holdco and the Company as it may have
requested prior to Closing and the certificates and documents described on Annex
II attached hereto;
X.1.5 Stock Certificates and Stock Powers. Stock certificates
-----------------------------------
evidencing the DR Holdco Stock to be sold to Buyer at the Closing shall have
been delivered by SDI or the Permitted Transferee to Buyer accompanied by duly
executed stock powers as required by Section 2.3.1.
X.1.6 Series A Preferred Stock. Prior to the Closing Date, one of
------------------------
the following events shall have occurred and evidence of the occurrence of such
event shall have been made available to Buyer for review: (i) SDI or the
Permitted Transferee or DR Holdco (by capital contribution) shall have become
the holder of record of all of the outstanding shares of Series A Preferred
Stock, or (ii) all of the outstanding shares of Series A Preferred Stock shall
have become treasury stock or shall have been canceled or otherwise eliminated
and, in either case, the obligations of SDI and the Company to DuPont under the
agreements and instruments disclosed in Schedules 3.1.5 and 4.5 shall have been
released and terminated.
X.1.7 Sale of Real Property. Glasgow Land Company, L.L.C. shall be
---------------------
prepared to consummate the transactions contemplated by that certain Contract of
Sale of even date herewith and to convey the Real Property to Buyer
simultaneously with the Closing.
X.1.8 Environmental Remediation Costs. The Environmental
-------------------------------
Remediation Costs, if any, asserted by Buyer pursuant to Section 8.6 are not
more than $250,000 and there are no Unestimated
-35-
Environmental Costs asserted by Buyer pursuant to Section 8.6, or, if
Environmental Remediation Costs asserted by Buyer pursuant to Section 8.6 are
more than $250,000 or there are Unestimated Environmental Costs asserted by
Buyer pursuant to Section 8.6, Buyer and SDI or the Permitted Transferee have
agreed as to the responsibility therefor as provided in Section 8.6.
X.1.9 Scheduled Agreements. All Scheduled Agreements prohibiting
--------------------
the transaction contemplated thereby shall have been terminated or such
prohibitions waived, all obligations of DR Holdco or the Company under the Debt
Agreements shall have been released and all Liens on the DR Holdco Stock or the
Company Stock or any of the assets of DR Holdco or the Company shall have been
released.
X.1.10 HSR. Any waiting period under the HSR Act applicable to the
---
transaction contemplated hereby shall have expired or been terminated.
The consummation of the Closing shall constitute a waiver by Buyer of all
unsatisfied conditions.
X.2 Conditions to Obligations of SDI and Permitted Transferee.
---------------------------------------------------------
Notwithstanding any other provisions of this Agreement, the obligations of SDI
and any Permitted Transferee to effect the transactions contemplated hereby at
the Closing shall be subject to the satisfaction, or the waiver in writing by
SDI or such Permitted Transferee, of the following conditions:
X.2.1 No Order or Injunction. No order shall have been entered in
----------------------
any action or proceeding before any Governmental Agency, and no preliminary or
permanent injunction by a United States court of competent jurisdiction shall
have been issued and remain in effect, which would have the effect of (i)making
the purchase of, or payment for, some or all of the DR Holdco Stock pursuant to
this Agreement illegal, or (ii) otherwise making consummation of the
transactions contemplated hereby illegal;
X.2.2 Representations and Warranties. The representations and
------------------------------
warranties of Buyer set forth in this Agreement shall be true and correct in all
material respects as of the date hereof and at the Closing as if made at that
time;
X.2.3 Performance of Covenants. Each of the covenants required to
------------------------
be performed by Buyer prior to the Closing pursuant to the terms of this
Agreement shall have been substantially performed;
X.2.4 Documentation. SDI or such Permitted Transferee shall have
-------------
received the certificates described on Annex III attached hereto;
X.2.5 Funding of Purchase. Buyer shall have delivered the purchase
-------------------
price for all of the DR Holdco Stock as required by Article II; and
X.2.6 Series A Preferred Stock. Prior to the Closing Date, one of
------------------------
the following events shall have occurred: (i) SDI or the Permitted Transferee
or DR Holdco (by capital contribution) shall have become the holder of record of
all of the outstanding shares of Series A Preferred Stock, or (ii) all of the
outstanding shares of Series A Preferred Stock shall have become treasury stock
or shall have been canceled or otherwise eliminated, and, in either case the
obligations of SDI and the Company to DuPont under the agreements and
instruments disclosed in Schedules 3.1.5 and 4.5 shall have been released and
terminated.
-36-
X.2.7 Sale of Real Property. Buyer shall be prepared to consummate
---------------------
the transactions contemplated by that certain Contract of Sale of even date
herewith and to purchase the Real Property from Glasgow Land Company, L.L.C.
simultaneously with the Closing.
X.2.8 Environmental Remediation Costs. The Environmental
-------------------------------
Remediation Costs, if any, asserted by Buyer pursuant to Section 8.6 are not
more than $250,000 and there are no Unestimated Environmental Costs asserted by
Buyer pursuant to Section 8.6, or, if Environmental Remediation Costs asserted
by Buyer pursuant to Section 8.6 are more than $250,000 or there are Unestimated
Environmental Costs asserted by Buyer pursuant to Section 8.6, SDI or the
Permitted Transferee and Buyer have agreed as to the responsibility therefor as
provided in Section 8.6.
X.2.9 Scheduled Agreements. All Scheduled Agreements prohibiting
--------------------
the transaction contemplated hereby shall have been terminated or such
prohibitions waived, all obligations of DR Holdco or the Company under the Debt
Agreements shall have been released and all Liens on the DR Holdco Stock or the
Company Stock or any of the assets of DR Holdco or the Company shall have been
released.
X.2.10 HSR. Any waiting period under the HSR Act applicable to the
---
transaction contemplated hereby shall have expired or been terminated.
The consummation of the Closing shall constitute a waiver by SDI or the
Permitted Transferee of all unsatisfied conditions.
ARTICLE XI
TERMINATION, AMENDMENTS AND WAIVER
XI.1 Termination. This Agreement may be terminated at any time prior to
-----------
the time of the Closing:
XI.1.1 By Mutual Consent. By written consent of Buyer and SDI or
-----------------
the Permitted Transferee; or
XI.1.2 At Option of Buyer or SDI or the Permitted Transferee. Upon
----------------------------------------------------
written notice at any time after May 31, 1999 by either Buyer or SDI or the
Permitted Transferee, if the Closing Date has not occurredby that date;
XI.1.3 Environmental Costs. Upon written notice by either Buyer or
--------------------
SDI or the Permitted Transferee as permitted in Section 8.6.
XI.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement by Buyer, SDI or the Permitted Transferee as provided in Section
11.1, all obligations of the parties under this Agreement shall terminate and
there shall be no liability of SDI or the Permitted Transferee to Buyer or Buyer
to SDI or the Permitted Transferee except the obligations of such parties with
respect to the payment of their expenses set forth in Section 7.1; provided,
that nothing in this Section 11.2 shall relieve Buyer of any
-37-
liability for a breach of this Agreement or shall relieve Buyer of its
obligations under the Confidentiality Agreement referred to in Section 9.2.3.
XI.3 Amendments. This Agreement may not be amended except by an
----------
instrument in writing signed by Buyer and SDI or the Permitted Transferee.
XI.4 Waivers. Any term or provision of this Agreement may be waived in
-------
writing at any time by written instrument executed and delivered by Buyer and
SDI or the Permitted Transferee.
ARTICLE XII
GENERAL PROVISIONS
XII.1 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be delivered or sent by delivery or courier service, or
personal delivery, as follows:
If to Buyer, to: Hologic, Inc.
00 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: S. Xxxxx Xxxxxxxxxx
Chairman and Chief Executive Officer
With a copy to: Brown, Rudnick, Freed & Gesmer
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esquire
If to SDI or its Permitted
Transferee, to: SDI Investments, L.L.C.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Manager
With a copy to: Bracewell & Xxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxx
or to such other address as shall be furnished in writing by such parties, and
such notice or communication shall be effective and be deemed to have been given
as of the date actually delivered.
XII.2 Entire Agreement. This Agreement, any supplements hereto, the
----------------
Annexes, Schedules and the documents and instruments referred to herein or
therein, including the Confidentiality Agreement referred to in Section 9.2.3,
but not including the descriptive headings of the several Articles and Sections
of this Agreement and the table of contents (each of which is included for
convenience only and shall not constitute a part of this Agreement) (i)
constitutes the entire agreement among the parties hereto with respect
-38-
to the subject matter hereof and thereof, and supersedes all prior agreements,
arrangements and understandings with respect thereto; (ii) except as otherwise
expressly set forth herein, is not intended to confer upon any Person other than
Buyer, SDI, its Permitted Tranferee and DuPont any rights or remedies hereunder;
(iii) shall not be assigned or transferred by operation of law or otherwise
prior to the Closing Date; provided, however, that, notwithstanding anything in
this Agreement to the contrary, (a) SDI may, without the consent of Buyer,
assign this Agreement, any supplements hereto, the Annexes, Schedules and the
documents and instruments referred to herein or therein, including the
Confidentiality Agreement referred to in Section 9.2.3, to the Permitted
Transferee and upon such assignment and the assumption by the Permitted
Transferee of SDI's obligations hereunder, SDI shall be released of all
liability hereunder, and (b) SDI or the Permitted Transferee may assign to
DuPont their rights hereunder as to the registration, resale and price guarantee
attributable to the Eligible Hologic Shares transferred to DuPont in the DuPont
Share Transfer, if any, and (iv) SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING
VALIDITY, INTERPRETATION AND EFFECT, BY, AND INTERPRETED IN ACCORDANCE WITH THE
PROVISIONS OF, THE LAWS OF THE STATE OF DELAWARE. Buyer expressly represents and
warrants that no promise or agreement which is not expressed herein has been
made and that it is not relying upon any statement or representation of any
agent of the parties hereto, but is relying solely on its own judgment upon the
advice of counsel with respect to the transactions contemplated hereby. This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and each of which shall be deemed an
original.
XII.3 No Post-Closing or Post-Termination Liability. The several
---------------------------------------------
representations, warranties and covenants of SDI or the Permitted Transferee in
this Agreement shall expire and terminate on the earlier to occur of the Closing
Date or the date of termination of this Agreement under Section 11.1 and neither
SDI nor the Permitted Transferee shall have any liability thereafter for any
breach or inaccuracy thereof , except for its obligations to pay expenses as
provided in Section 7.1, and, if the Closing occurs, the indemnification
covenants in Section 9.1.1 and 9.5.4.2 (subject to the limitations therein), the
covenant as to access in Section 8.7 (subject to the limitations therein) and
the reporting covenant in Section 9.6.3.
XII.4 Rules of Construction. Unless the context otherwise requires "or"
---------------------
is disjunctive but not necessarily exclusive, and words in the singular include
the plural and in the plural include the singular. No provision of this
Agreement or any other document contemplated hereby shall be construed in favor
of, or against, any of the parties hereto by reason of the extent to which any
such party or its counsel participated in its drafting or by reason of the
extent to which this Agreement or any such provision hereof is inconsistent with
any prior draft hereof or thereof.
-39-
XII.5 No Recourse. No recourse for the payment of any amounts due
-----------
hereunder or any claim based on this Agreement, the transactions contemplated
hereby, or otherwise, and no recourse upon any representation, warranty or
covenant in this Agreement shall be had against any past, present or future
incorporator, organizer, promoter, stockholder, member, manager, trustee,
director, officer, employee, agent, representative, advisor, consultant,
attorney or auditor of DR Holdco, the Company or SDI or the Permitted Transferee
or any of their respective Affiliates or any lender, underwriter or placement
agent of DR Holdco, the Company or SDI or the Permitted Transferee or any of
their Affiliates or any of their respective stockholders, directors, officers,
employees, agents, representatives, advisors, consultants, attorneys or
auditors.
XII.6 Confirmatory Agreement, Release and Assumption. If requested by
----------------------------------------------
SDI or the Permitted Tranferee, DuPont or Buyer, SDI or the Permitted
Transferee, Buyer and DuPont shall execute and deliver any consent or agreement
reasonably requested by any of them in connection with the DuPont Share
Transfer, if any, in order to evidence the rights of DuPont hereunder with
respect to the registration and resale of the Eligible Hologic Shares
transferred to DuPont in the DuPont Share Transfer, if any, and indemnification
with respect thereto and the price guarantee with respect thereto, such rights
being subject to the obligations hereunder with respect thereto. If requested
by SDI or the Permitted Transferee, Buyer shall (i) in the event this Agreement
is assigned by SDI to the Permitted Transferee, execute and deliver to SDI and
the Permitted Transferee any confirmatory release and acknowledgment reasonably
requested by SDI to evidence Buyer's release of all obligations of SDI hereunder
or in connection with the transactions contemplated hereby and the vesting of
all of SDI's rights hereunder in the Permitted Transferee; and (ii) execute and
deliver to SDI and the other parties to the agreements referred to in Section
9.8 any agreement reasonably requested by SDI to evidence Buyer's obligation to
cause the Company to perform its obligations under such agreements.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by duly authorized officers as of the date first written above.
"BUYER"
Hologic, Inc.
By:/s/ Xxxxx X. Xxxx
---------------------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, Finance and Chief Financial
Officer
"SDI"
STERLING DIAGNOSTIC IMAGING, INC.
By:/s/ Xxxxxx Xxxxxx
---------------------------------------------------
Name: R. Xxxxxx Xxxxxx
Title: Vice President and Assistant General Counsel
FIRST AMENDMENT
TO
SECURITIES PURCHASE AGREEMENT
This First Amendment to Securities Purchase Agreement (the "First
Amendment"), dated as of June 3, 1999, is entered into by and between Hologic,
Inc., a Delaware corporation ("Buyer") and SDI Investments, L.L.C., a Delaware
limited liability company ("Permitted Assignee) and the assignee of Sterling
Diagnostic Imaging, Inc., a Delaware corporation ("SDI").
W I T N E S S E T H:
WHEREAS, Buyer and SDI are parties to that certain Securities Purchase
Agreement dated April 28, 1999 (the "Agreement"); and
WHEREAS, pursuant to the Assignment and Assumption Agreement dated May 14,
1999, by and among SDI, Permitted Assignee and Buyer, SDI assigned all of its
rights and obligations under the Agreement to Permitted Assignee; and
WHEREAS, Buyer and Permitted Transferee wish to amend the Agreement in the
manner set forth in this First Amendment;
NOW THEREFORE, in consideration of the mutual covenants contained herein
and in the Agreement, Buyer and Permitted Assignee execute this First Amendment
and agree as set forth below:
1. DEFINITIONS AND CONFIRMATION
-- ----------------------------
Unless otherwise defined herein, capitalized terms shall have the meaning
set out in the Agreement. All the terms and provisions of the Agreement not
expressly amended hereby shall remain in full force in effect and are hereby
ratified and confirmed by each of the parties hereto.
II. AMENDMENTS
----------
A. Section 1.1.1.
-------------
1. Subsections (xxxii) (xlviii), (lxiii) and (lxxv) of Section 1.1.1
are hereby deleted in their entirety and are hereby replaced in
their entirety with the following:
(xxxii) "DuPont Share Transfer" means the transfer by SDI or
the Permitted Transferee of Hologic Shares to DuPont on
or within 30 days after the Closing Date.
(xlviii) "Hologic Shares" shall mean 1,285,714 shares of Buyer's
common stock, $.01 par value, to be issued by Buyer as
part of the SDI Purchase Price and 571,428 shares of
Buyer's common stock, $.01 par value, to be issued to
Glasgow Land Company, L.L.C. ("GLC"), pursuant to that
certain Contract of Sale of even date herewith by and
between GLC and Buyer.
(lxiii) "Permitted Transferee" shall mean SDI Investments,
L.L.C., a Delaware limited liability company, and, for
purposes of Sections 9.5, 9.7 and 9.12 only, shall also
include SDI Investments Liquidating Trust, a Texas
trust, and each Designated Holder (as hereinafter
defined).
(lxxv) "SDI Purchase Price" shall mean (a) the cash amount of
$3,000,002, plus (b) the Hologic Shares.
2. Subsections (iv), (xxxiii), (xxxiv), (xlvi), (lvi), (lvii),
(lviii), (lix) of Section 1.1.1 are hereby deleted in their
entirety.
B. Section 2.2. Section 2.2 is hereby deleted in its entirety and is
-----------
hereby replaced in its entirety with the following:
2.2. Purchase Price. The purchase price for the DR
--------------
Holdco Stock being sold by SDI or the Permitted Transferee to
Buyer at the Closing shall be the SDI Purchase Price; provided,
however, that the SDI Purchase Price shall be adjusted, and the
$3,000,002 cash portion of the SDI Purchase Price shall be
reduced on a dollar-for-dollar basis (i) by the amount of the
repurchase or redemption price paid by the Company for any of its
shares of Series A Preferred Stock if prior to the Closing Date
the Company repurchases or redeems any of its Series A Preferred
Stock pursuant to Section
10.1.6 hereof, but no such adjustment or reduction shall occur in
the event such Series A Preferred Stock is acquired by SDI or the
Permitted Transferee and contributed to the capital of DR Holdco
or the Company or such Series A Preferred Stock is acquired by
the Company solely with cash contributed by SDI or the Permitted
Transferee to the Company (through DR Holdco or otherwise) for
such purpose after the date hereof; and (ii) either (a) if the
Environmental Remediation Costs, if any, are more than $50,000,
and not more than $250,000 and there are no Unestimated
Environmental Costs asserted by Buyer pursuant to Section 8.6, by
the amount of the Environment Remediation Costs in excess of
$50,000, or (b) if the Environmental Remediation Costs, if any,
are more than $250,000 or Unestimated Environmental Costs are
asserted by Buyer pursuant to Section 8.6, by the amount, if any,
agreed to by SDI or the Permitted Transferee and Buyer as
provided in Section 8.6.
C. Section 2.3.1. Section 2.3.1 is hereby deleted in its entirety and is
-------------
hereby replaced in its entirety with the following:
2.3.1 Closing and Closing Date. The Closing (the
------------------------
"Closing") of the purchase and sale of the DR Holdco Stock to be
purchased and sold at the Closing will be held at the offices of
Bracewell & Xxxxxxxxx, L.L.P., 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx, commencing at 9:00 a.m.central daylight time on
such date as may be agreed to by Buyer and SDI or the Permitted
Transferee (the "Closing Date"), at which time representatives of
Buyer and SDI or the Permitted Transferee shall meet for the
purpose of delivering the documents and consideration described
in this Article II and Article X and, subject to the satisfaction
or waiver of each of the conditions set forth in Article X,
causing such purchase and sale to occur. At the Closing, SDI or
the Permitted Transferee shall deliver to Buyer stock
certificates representing the DR Holdco Stock held by it with
duly executed stock powers attached, and in proper form for
transfer on the stock records of DR Holdco.
D. Section 2.3.2 . Section 2.3.2 is hereby deleted in its entirety and is
--------------
hereby replaced in its entirety with the following:
2.3.2 Payments at Closing. On the Closing Date, Buyer
-------------------
will pay, by wire transfer of immediately available funds to the
account designated by SDI or the Permitted Transferee, if any, at
least five days prior to the Closing Date, the $3,000,002 cash
portion of the SDI Purchase Price (as the same may be adjusted
pursuant to Section 2.2) and shall deliver to SDI or the
Permitted Transferee stock
certificates representing the Hologic Shares included in the SDI
Purchase Price, registered in the name of SDI or the Permitted
Transferee. It is agreed by the parties that no amount shall be
required to be withheld from any payment made under this Section
2.3.2 to SDI or the Permitted Transferee, if any, so long as SDI
or the Permitted Transferee, if any, provides to Buyer a properly
completed Internal Revenue Service Form W-9 or Substitute Form W-
9 or if SDI or the Permitted Transferee, if any, is otherwise
exempt from federal income tax backup withholding and provided
adequate proof thereof.
E. Section 9.1.1. Section 9.1.1 is hereby deleted in its entirety and is
-------------
hereby replaced in its entirety with the following:
9.1.1 Termination of Participation. As of, or prior
----------------------------
to, the Closing Date, SDI or the Permitted Transferee will take
such action as is necessary to terminate the participation by DR
Holdco and the Company in all Plans of the SDI Controlled Group
and SDI or the Permitted Transferee will indemnify DR Holdco,
the Company and Buyer from any claims or liabilities with
respect to any Plans (including withdrawal liability under any
multiemployer plans); provided that neither SDI nor the Permitted
Transferee shall have any indemnification obligation hereunder
unless a claim is made therefor on or before either (i) the
later to occur the second anniversary of the Closing Date, if the
closing occurs under the Parent Agreement, or (ii) the third
anniversary of the Closing Date, if the closing has not occurred
under the Parent Agreement, and in either such case such
obligation shall be limited to claims made on or before such
time.
F. Subsections 9.5.1. Subsections 9.5.1 and 9.5.2 are hereby deleted in
-----------------
their entirety and are hereby replaced in their entirety with the
following:
9.5.1 Required Registration. Buyer shall file, as soon
---------------------
as practicable after the date of the receipt by Buyer of a plan
of distribution as described below, but no later than 30 days
thereafter, with the Commission one or more (but in no event more
than three (3) in the aggregate) registration statements under
the Securities Act on Form S-3 for (i) a public offering of all
the Hologic Shares, and/or (ii) a re-offering of all the Hologic
Shares held by up to twenty (20) Persons who are beneficiaries of
the SDI Investments Liquidating Trust and who are designated by
such trust in the plans of distribution (the "Trust"),
(collectivelly, the "Designated Holders"), each pursuant to plans
of distribution submitted to Buyer by the Qualified Holders (the
"Registration Statement") and, as soon as practicable after the
date such plans of distribution are received by Buyer, will use
its reasonable efforts to cause such Registration Statement to
become effective and, subject to the limitations and
qualifications set forth in Section 9.5.2.3(i)(e) below, to
remain continuously effective until the earlier of (i) the date
upon which SDI, any Permitted Transferee (other than a Designated
Holder who is an officer or director of Buyer or any of its
subsidiaries after the Closing Date), GLS and DuPont, (each a
"Qualified Holder"; provided, however that for purposes of
Section 9.5.2, the term Qualified Holder shall not include any
Designated Holder) become eligible to sell Hologic Shares under
Rule 144(k) of the Securities Act or (ii) the third anniversary
of the Closing Date or, if any delay occurs pursuant to Section
9.5.2.3(i)(e) below, the date which is the later of (i) three
years after the Closing Date or (ii) 30 days after the
distribution of any supplement or amendment to a prospectus which
has been delayed under Section 9.5.2.3(i)(e).
9.5.2 Piggyback Registration. Whenever during the
----------------------
period from the Closing Date to the third anniversary of the
Closing Date Buyer proposes to register any of its Common Equity
Securities in a Qualified Registration, whether or not for sale
for its own account, Buyer shall give prompt written notice (the
"Piggyback Notice") to the Qualified Holders of its intention to
effect such Qualified Registration. Upon written request of any
Qualified Holder made within 20 days after delivery of any
Piggyback Notice (which request shall specify the Hologic Shares
requested to be included in such Qualified Registration by such
Qualified Holder), Buyer shall, subject to Sections 9.5.2.1 and
9.5.2.2, use its reasonable efforts to include in such Qualified
Registration all Hologic Shares that the Qualified Holders have
so requested be included in such Qualified Registration, to
permit the disposition by such Qualified Holders of such Hologic
Shares; provided, however, that (i) if, at any time after giving
the Piggyback Notice and before the effective date of the
registration statement filed in connection with such Qualified
Registration, Buyer determines for any reason not to register
such Common Equity Securities (other than the Hologic Shares
requested to be included therein pursuant to this Section 9.5.2),
Buyer, at its election, may give written notice of such
determination to all Qualified Holders requesting the inclusion
of their Hologic Shares therein and, thereupon, shall be relieved
of its obligation to register any Hologic Shares in connection
with such registration (without prejudice, however, to the rights
of the Qualified Holders under Section 9.5.1 or the future rights
of the Qualified Holders under this Section 9.5.2); (ii) if, at
any time after giving the Piggyback Notice and before the
effective
date of the registration statement filed in connection with such
Qualified Registration, Buyer determines for any reason to delay
such registration of the Common Equity Securities (other than the
Hologic Shares requested to be included therein pursuant to this
Section 9.5.2), Buyer shall be permitted to delay the
registration of such Hologic Shares for the same period as the
delay in registering such other Common Equity Securities; and
(iii) Buyer shall not be required to effect any registration
pursuant to this Section 9.5.2 unless it shall have received
reasonable assurances that the Qualified Holders of any Hologic
Shares included therein will pay any expenses required to be paid
by them as provided in Section 9.5.3. As used herein, the term
"Piggyback Registration" shall mean any registration of Hologic
Shares requested pursuant to this Section 9.5.2.
G. Section 9.6. Section 9.6 and all subsections thereunder are hereby
-----------
deleted in their entirety and are replaced in their entirety with the
following:
9.6 [Intentionally Omitted.]
H. Section 9.7. Section 9.7 is hereby deleted in its entirety and is
-----------
hereby replaced in its entirety with the following:
9.7 Non-Transferable Rights. Except with the consent
-----------------------
of Buyer, no rights of SDI, any Permitted Transferee, GLS or
DuPont under Section 9.5 shall be assignable by SDI or any
Permitted Transferee, GLS or DuPont, and such rights shall
terminate with respect to the Hologic Shares upon assignment of
such Hologic Shares by SDI, the Permitted Transferee, GLS or
DuPont; provided, however, that SDI may assign such rights to any
Permitted Transferee, GLS may assign such rights to SDI or any
Permitted Transferee and any Permitted Transferee may assign such
rights to any other Permitted Transferee, each as provided in
Section 12.2, and upon such assignment such Permitted Transferee
shall succeed to such rights; and provided further, that SDI or
any Permitted Transferee may assign to DuPont such rights which
are applicable to the Hologic Shares transferred to DuPont in the
DuPont Share Transfer, if any, and upon such assignment DuPont
shall succeed to such rights.
I. Section 12.2. Section 12.2 is hereby deleted in its entirety and is
------------
hereby replaced in its entirety with the following:
12.2 Entire Agreement. This Agreement, any
----------------
supplements hereto, the Annexes, Schedules and the documents and
instruments referred to herein or therein, including the
Confidentiality Agreement referred to in Section 9.2.3, but not
including the descriptive headings of the several Articles and
Sections of this Agreement and the table of contents (each of
which is included for convenience only and shall not constitute a
part of this Agreement) (i) constitutes the entire agreement
among the parties hereto with respect to the subject matter
hereof and thereof, and supersedes all prior agreements,
arrangements and understandings with respect thereto; (ii) except
as otherwise expressly set forth herein, is not intended to
confer upon any Person other than Buyer, SDI, GLS, any Permitted
Transferee and DuPont any rights or remedies hereunder; (iii)
shall not be assigned or transferred by operation of law or
otherwise prior to the Closing Date; provided, however, that,
notwithstanding anything in this Agreement to the contrary, (a)
SDI may, without the consent of Buyer, assign this Agreement, any
supplements hereto, the Annexes, Schedules and the documents and
instruments referred to herein or therein, including the
Confidentiality Agreement referred to in Section 9.2.3, to the
Permitted Transferee and upon such assignment and the assumption
by the Permitted Transferee of SDI's obligations hereunder, SDI
shall be released of all liability hereunder, and (b) SDI, GLS or
any Permitted Transferee may make the assignments contemplated in
Section 9.5 of this Agreement, including, without limitation, the
assignment to DuPont of their rights hereunder as to registration
and resale attributable to the Hologic Shares transferred to
DuPont in the DuPont Share Transfer, if any, and, upon the
assignment of any Hologic Shares by SDI, GLS or any Permitted
Transferee (other than the Trust) to the Trust, the Trust shall
automatically and without any further action of the parties
hereto guarantee the obligations of SDI and the Permitted
Transferee pursuant to Sections 7.1, 9.1.1, 9.5.4.2 and 8.7 of
the Agreement, and (iv) SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY, AND
INTERPRETED IN ACCORDANCE WITH THE PROVISIONS OF, THE LAWS OF THE
STATE OF DELAWARE. Each of Buyer, SDI and SDI Investments,
L.L.C., as a Permitted Transferee, expressly represents and
warrants that no promise or agreement which is not expressed
herein has been made and that it is not relying upon any
statement or representation of any agent of the parties hereto,
but is relying solely on its own judgment upon the advice of
counsel with respect to the transactions contemplated hereby.
This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
J. Section 12.3. Section 12.3 shall be deleted in its entirety and shall
------------
be replaced in its entirety with the following:
12.3 No Post-Closing or Post-Termination Liability.
---------------------------------------------
The several representations, warranties and covenants of SDI or
the Permitted Transferee in this Agreement shall expire and
terminate on the earlier to occur of the Closing Date or the date
of termination of this Agreement under Section 11.1 and neither
SDI nor the Permitted Transferee shall have any liability
thereafter for any breach or inaccuracy thereof , except for its
obligations to pay expenses as provided in Section 7.1, and, if
the Closing occurs, the indemnification covenants in Section
9.1.1 and 9.5.4.2 (subject to the limitations therein) and the
covenant as to access in Section 8.7 (subject to the limitations
therein).
III. EFFECTIVE DATE OF AMENDMENTS
----------------------------
Notwithstanding anything in the Agreement or this First Amendment to the
contrary, each of the amendments to the Agreement contained in Section II. of
this First Amendment shall be effective as of 12:01 a.m., Houston, Texas time,
on June 2, 1999.
IV. MISCELLANEOUS
-------------
A. Entire Agreement. This First Amendment and the Agreement constitute
----------------
the entire agreement of the parties hereto relating to the matters set forth
herein, whether oral or written.
B. Binding Effect. This First Amendment is binding on and inures to the
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benefit of the parties hereto and their respective heirs, legal representatives,
successors, and assigns.
C. Further Assurances. In connection with the Agreement, this First
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Amendment and the transactions contemplated hereby, each of Permitted Transferee
and Buyer shall execute and deliver any additional documents and instruments and
perform any additional acts that may be necessary or appropriate to effectuate
and perform the provisions of the Agreement, the First Amendment and those
transactions.
D. Counterparts. This First Amendment may be executed in any number of
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counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
IN WITNESS WHEREOF, this First Amendment has been duly executed and
delivered on the date first hereinabove written.
SDI INVESTMENTS, L.L.C.
By:/s/ Xxxxxxx X. xx Xxxxxxxxx
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Name: Xxxxxxx X. xx Xxxxxxxxx
Title: Manager
HOLOGIC, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President and Chief Financial Officer
The undersigned is executing this First Amendment for the limited purpose of
acknowledging its agreement to be bound by the provisions of Section
12.2(iii)(b).
SDI INVESTMENTS LIQUIDATING TRUST
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
