SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended June 29, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-9567
THERMEDICS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2788806
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
470 Wildwood Street, P.O. Box 2999
Woburn, Massachusetts 01888-1799
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock, as of the latest practicable
date.
Class Outstanding at July 26, 1996
---------------------------- ----------------------------
Common Stock, $.10 par value 36,790,196
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMEDICS INC.
Consolidated Balance Sheet
(Unaudited)
Assets
June 29, December 30,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $131,356 $ 37,370
Short-term available-for-sale
investments, at quoted market
value (amortized cost of $84,957 and
$76,682) (includes $2,088 and $2,052
of related party investments) 85,823 77,916
Accounts receivable, less allowances
of $4,747 and $3,982 51,080 41,327
Unbilled contract costs and fees 1,147 1,582
Inventories:
Raw materials and supplies 21,651 21,517
Work in process and finished goods 27,955 21,162
Prepaid income taxes and expenses 8,579 8,645
-------- --------
327,591 209,519
-------- --------
Property, Plant and Equipment, at Cost 33,242 30,302
Less: Accumulated depreciation and
amortization 20,235 17,369
-------- --------
13,007 12,933
-------- --------
Long-term Available-for-sale Investments,
at Quoted Market Value (amortized cost
of $29,293 and $39,795) 29,013 39,953
-------- --------
Other Assets 6,100 4,171
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 4) 111,113 101,574
-------- --------
$486,824 $368,150
======== ========
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THERMEDICS INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
June 29, December 30,
(In thousands except share amounts) 1996 1995
--------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities
of long-term obligations (includes $53,000
and $38,000 due to parent company) (Note 4) $ 59,530 $ 47,420
Accounts payable 17,748 16,336
Accrued payroll and employee benefits 8,081 8,893
Deferred revenue 2,054 1,705
Customer deposits 1,885 2,162
Accrued income taxes 3,575 2,340
Accrued warranty costs 3,786 3,637
Other accrued expenses 16,264 15,307
Due to parent company 1,677 1,606
-------- --------
114,600 99,406
-------- --------
Deferred Income Taxes and Other Deferred Items 2,173 2,173
-------- --------
Long-term Obligations:
Subordinated convertible
obligations (Notes 3 and 6) 87,742 44,919
Other 331 282
-------- --------
88,073 45,201
-------- --------
Minority Interest 85,155 54,360
-------- --------
Shareholders' Investment:
Common stock, $.10 par value, 100,000,000
shares authorized; 36,794,197 and
33,986,050 shares issued 3,679 3,399
Capital in excess of par value 137,093 120,665
Retained earnings 56,114 42,187
Treasury stock at cost, 5,001 and 2,146
shares (143) (42)
Cumulative translation adjustment (294) (88)
Net unrealized gain on available-for-sale
investments 374 889
-------- --------
196,823 167,010
-------- --------
$486,824 $368,150
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMEDICS INC.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
--------------------
June 29, July 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Revenues $62,630 $43,268
------- -------
Costs and Operating Expenses:
Cost of revenues 32,977 23,715
Selling, general and administrative expenses 19,840 11,522
Expenses for research and development 4,441 2,849
Nonrecurring costs (Note 7) 12,728 -
------- -------
69,986 38,086
------- -------
Operating Income (Loss) (7,356) 5,182
Interest Income 2,855 2,233
Interest Expense (includes $743 to parent company
in 1996) (1,259) (923)
Gain on Issuance of Stock by Subsidiaries (Note 5) 17,969 455
------- -------
Income Before Provision for Income Taxes
and Minority Interest 12,209 6,947
Provision for Income Taxes 995 2,261
Minority Interest Expense 2,040 1,020
------- -------
Net Income $ 9,174 $ 3,666
======= =======
Earnings per Share $ .24 $ .11
======= =======
Weighted Average Shares 38,166 33,616
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMEDICS INC.
Consolidated Statement of Income
(Unaudited)
Six Months Ended
--------------------
June 29, July 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Revenues $122,912 $ 87,126
-------- --------
Costs and Operating Expenses:
Cost of revenues 64,696 48,001
Selling, general and administrative expenses 38,789 23,717
Expenses for research and development 8,464 5,230
Nonrecurring costs (Note 7) 12,728 -
-------- --------
124,677 76,948
-------- --------
Operating Income (Loss) (1,765) 10,178
Interest Income 4,961 4,430
Interest Expense (includes $1,412 to parent company
in 1996) (2,537) (1,861)
Gain on Issuance of Stock by Subsidiaries (Note 5) 20,485 455
Gain on Sale of Investments 68 -
Other Income - 14
-------- --------
Income Before Provision for Income Taxes
and Minority Interest 21,212 13,216
Provision for Income Taxes 3,691 4,581
Minority Interest Expense 3,594 1,707
-------- --------
Net Income $ 13,927 $ 6,928
======== ========
Earnings per Share $ .38 $ .21
======== ========
Weighted Average Shares 36,177 33,461
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMEDICS INC.
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
--------------------
June 29, July 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Operating Activities:
Net income $ 13,927 $ 6,928
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,671 2,690
Provision for losses on accounts receivable 606 396
Nonrecurring costs (Note 7) 12,728 -
Gain on issuance of stock by subsidiaries
(Note 5) (20,485) (455)
Gain on sale of investments (68) -
Minority interest expense 3,594 1,707
Other noncash expenses 478 629
Decrease in deferred income taxes - (36)
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (6,502) (267)
Inventories and unbilled contract
costs and fees (2,881) (6,406)
Prepaid income taxes and expenses (26) (858)
Accounts payable 462 2,270
Other current liabilities (5,857) (1,420)
Other (27) 16
-------- --------
Net cash provided by operating
activities 1,620 5,194
-------- --------
Investing Activities:
Acquisitions, net of cash acquired (Note 4) (26,432) (4,000)
Acquisition of product line (2,621) -
Proceeds from sale and maturities of
available-for-sale investments 64,595 59,913
Purchases of available-for-sale investments (62,300) (53,158)
Purchases of property, plant and equipment (2,846) (2,330)
Increase in other assets (64) (22)
-------- --------
Net cash provided by (used in)
investing activities $(29,668) $ 403
-------- --------
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THERMEDICS INC.
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Six Months Ended
--------------------
June 29, July 1,
(In thousands) 1996 1995
-------------------------------------------------------------------------
Financing Activities:
Purchases of subsidiary common stock $ (2,648) $ (179)
Net proceeds from issuance of Company
and subsidiary common stock (Note 5) 46,793 378
Proceeds from issuance of note payable to
parent company (Note 4) 15,000 -
Net proceeds from issuance of subordinated
convertible debentures (Note 6) 63,250 -
Repayment and repurchase of long-term obligations (257) (132)
-------- --------
Net cash provided by financing
activities 122,138 67
-------- --------
Exchange Rate Effect on Cash (104) (21)
-------- --------
Increase in Cash and Cash Equivalents 93,986 5,643
Cash and Cash Equivalents at Beginning of Period 37,370 37,043
-------- --------
Cash and Cash Equivalents at End of Period $131,356 $ 42,686
======== ========
Noncash Activities (Note 4):
Fair value of assets of acquired companies $ 31,546 $ 5,042
Cash paid for acquired companies (27,215) (4,000)
-------- --------
Liabilities assumed of acquired companies $ 4,331 $ 1,042
======== ========
Conversions of Company and subsidiaries'
subordinated convertible obligations $ 21,920 $ 11,265
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMEDICS INC.
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermedics Inc. (the Company) without audit and, in the opinion
of management, reflect all adjustments of a normal recurring nature
necessary for a fair statement of the financial position at June 29, 1996,
the results of operations for the three- and six-month periods ended
June 29, 1996 and July 1, 1995, and the cash flows for the six-month
periods ended June 29, 1996 and July 1, 1995. Interim results are not
necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 30, 1995, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q and
do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial statements
and notes included herein should be read in conjunction with the financial
statements and notes included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 30, 1995, filed with the Securities and
Exchange Commission.
2. Transfer of Common Stock
In January 1996, the Company issued 1,688,161 shares of its common
stock to Thermo Electron Corporation (Thermo Electron) in exchange for
315,199 shares of common stock of its Thermo Voltek Corp. (Thermo Voltek)
subsidiary and 794,947 shares of common stock of its Thermo Cardiosystems
Inc. (Thermo Cardiosystems) subsidiary.
In April 1996, the Company issued 299,112 shares of its common stock
to Thermo Electron in exchange for 107,500 shares of Thermo Voltek common
stock and 135,000 shares of Thermo Cardiosystems common stock.
The shares of common stock were exchanged at their respective fair
market values on the dates of the transactions. Share information for
Thermo Cardiosystems has been restated to reflect a three-for-two stock
split effected in May 1996.
3. Redemption of Convertible Debentures
In February 1996, the Company called for redemption on March 11, 1996,
all of the outstanding principal amount of its 6 1/2% subordinated
convertible debentures due 1998. During the three months ended March 30,
1996, approximately $7,780,000 of the outstanding principal amount of the
debentures was converted into the Company's common stock.
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THERMEDICS INC.
4. Acquisitions
In January 1996, the Company's Thermedics Detection Inc. (Thermedics
Detection) subsidiary acquired the assets of Moisture Systems Corporation,
based in Hopkington, Massachusetts, and certain affiliated companies
(collectively, Moisture Systems), and the stock of Netherlands-based Rutter
& Co. (Rutter) for a total purchase price of $22.7 million in cash, which
included the repayment of $2.0 million of debt. In connection with these
acquisitions, the Company borrowed $15.0 million from Thermo Electron
pursuant to a promissory note due February 1997, and bearing interest at
the 90-day Commercial Paper Composite Rate plus 25 basis points, set at the
beginning of each quarter.
During the first six months of 1996, the Company made other
acquisitions for approximately $8.5 million in cash, of which $1.4 million
was paid in July 1996, subject to post-closing adjustments.
These acquisitions have been accounted for using the purchase method
of accounting and their results of operations have been included in the
accompanying financial statements from their respective dates of
acquisition. The aggregate cost of these acquisitions exceeded the
estimated fair value of the acquired net assets by $22.2 million, which is
being amortized over 40 years. Allocation of the purchase price for these
acquisitions was based on estimates of the fair value of the net assets
acquired and is subject to adjustment upon finalization of the purchase
price allocation. Pro forma data is not presented since these acquisitions
were not material to the Company's results of operations and financial
position.
5. Issuance of Stock by Subsidiaries
In March 1996, Thermedics Detection issued 300,000 shares of its
common stock in a private placement for net proceeds of $3.0 million,
resulting in a gain of $2.5 million. Following the private placement, the
Company owned 97% of Thermedics Detection's outstanding common stock.
In April 1996, the Company's Thermo Sentron Inc. (Thermo Sentron)
subsidiary issued 2,875,000 shares of its common stock in an initial public
offering for net proceeds of approximately $42.4 million, resulting in a
gain of $18.0 million. Following the initial public offering, the Company
owned 71% of Thermo Sentron's outstanding common stock.
6. Subordinated Convertible Debentures
In May 1996, the Company issued and sold $65 million principal amount
of noninterest-bearing subordinated convertible debentures due 2003, for
net proceeds of $63.3 million. The debentures are convertible into shares
of the Company's common stock at a price of $32.68 per share.
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THERMEDICS INC.
7. Nonrecurring Costs
The primary growth focus of the Company has become technology for
improved product quality and implantable left ventricular-assist systems.
The Company no longer expects to reinvest in its enteral nutrition-delivery
business. The Company's analysis indicates that the expected future
undiscounted cash flow from this business will be insufficient to recover
the Company's investment. Accordingly, the Company recorded nonrecurring
expenses of $12.7 million in the second quarter of 1996 for the write-off
of cost in excess of net assets of acquired company and certain other
intangible assets associated with its Corpak subsidiary.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The Company's business can be divided into two segments: Instruments
and Other Equipment, and Biomedical Products. The Instruments and Other
Equipment segment includes Thermo Sentron Inc. (Thermo Sentron), which
designs, develops, manufactures, and sells high-speed precision-weighing
and inspection equipment for industrial production and packaging lines. The
Instruments and Other Equipment segment also includes the former Orion
laboratory products division (Orion) of Analytical Technology, Inc., which
was acquired in December 1995. Orion is a manufacturer of electrochemistry,
microweighing, process, and other instruments used to analyze the chemical
compositions of foods, beverages, and pharmaceuticals, and to detect
contaminants in environmental and high-purity water samples. The
Instruments and Other Equipment segment, through the Company's Thermedics
Detection Inc. (Thermedics Detection) subsidiary, also develops,
manufactures, and markets high-speed detection instruments, including the
Alexus (R) system, a process-detection instrument used in product quality
assurance applications in the beverage industry, and the EGIS (R) system, a
security instrument used to detect explosives at airports and other
locations. As a result of the January 1996 acquisition of Moisture Systems
Corporation and certain affiliated companies (collectively, Moisture
Systems) and Rutter & Co. (Rutter) by Thermedics Detection, the Company now
offers a full range of infrared moisture analyzers for the food, forest,
paper, pharmaceutical, and chemical industries. Through the Company's
Thermo Voltek Corp. (Thermo Voltek) subsidiary, the Instruments and Other
Equipment segment also includes a line of electronic test instruments and
high-voltage power conversion systems.
As part of its Biomedical Products segment, the Company's Thermo
Cardiosystems Inc. (Thermo Cardiosystems) subsidiary has developed two
implantable left ventricular-assist systems (LVAS), a pneumatic, or
air-driven, system and an electric version. In October 1994, the Company
announced that the U.S. Food and Drug Administration (FDA) granted approval
for the commercial sale in the U.S. of the air-driven LVAS for use as a
bridge to heart transplant. With this approval, the air-driven system is
available for sale to cardiac centers throughout the U.S. The electric
version of the LVAS, which is currently being used in clinical trials in
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THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
the U.S. for patients awaiting heart transplants, received the European
Conformity Mark (CE Mark) in August 1995, allowing commercial sale in all
European Community countries. The air-driven LVAS was granted the CE Mark
in early 1994. In late 1995, the FDA approved the protocol for conducting
clinical trials of the electric LVAS as an alternative to conventional
medical therapy in the U.S. In April 1996, the first implant under this
clinical trial was performed using the LVAS as an alternative for
nontransplant candidates. Until the Company's electric LVAS receives FDA
commercial approval, sales of the electric LVAS will fluctuate depending
upon the number of implants performed in ongoing studies at approved
clinical sites and the number of implementation programs sold. The Company
also develops, manufactures, and markets enteral nutrition-delivery systems
and a line of polymers used in medical disposables and for nonmedical,
industrial applications, including safety glass and automotive coatings.
Results of Operations
Second Quarter 1996 Compared With Second Quarter 1995
Total revenues in the second quarter of 1996 were $62.6 million,
compared with $43.3 million in the second quarter of 1995. Instruments and
Other Equipment segment revenues increased to $51.6 million in 1996 from
$32.8 million in 1995 due to the inclusion of $16.7 million in revenues
from acquired businesses, primarily Orion, which was acquired in December
1995, and Moisture Systems and Rutter, which were acquired in January 1996.
Thermedics Detection sales of process-detection instruments to the beverage
industry declined to $3.7 million in 1996 from $4.2 million in 1995. This
decline is primarily due to a decrease in demand from Thermedics
Detection's principal customer, which has substantially completed its
deployment of Alexus product quality assurance systems. Revenues from
Thermo Voltek increased $3.3 million due to an increase in revenues at its
Comtest subsidiary from sales of electrostatic discharge test equipment and
its introduction of a new product line in 1995 and, to a lesser extent,
increased demand for electromagnetic compatibility test equipment at its
Keytek subsidiary. The Company's Kalmus subsidiary increased shipments
during the quarter, relative to prior periods, due to the implementation of
manufacturing efficiencies.
Biomedical Products segment revenues increased slightly to $11.0
million in the second quarter of 1996 from $10.5 million in the second
quarter of 1995, primarily due to an increase of $1.8 million in revenues
from Thermo Cardiosystems as a result of a 140% increase in the number of
LVAS implementation programs sold and, to a lesser extent, a 26% increase
in the number of air-driven and electric LVAS units shipped during the
second quarter of 1996 for subsequent implant. This increase in revenues
was offset in part by a decline of $1.3 million in revenues from Scent Seal
fragrance samplers. In June 1995, the Company entered into an agreement
with a third party granting an exclusive license to all of its patents and
know-how relating to the Scent Seal fragrance samplers. The Company
recorded royalty income of $97,000 in the second quarter of 1996 related to
this agreement.
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THERMEDICS INC.
Second Quarter 1996 Compared With Second Quarter 1995 (continued)
The gross profit margin was 47% in the second quarter of 1996,
compared with 45% in the second quarter of 1995. The gross profit margin
for the Instruments and Other Equipment segment increased to 46% in 1996
from 44% in 1995, primarily due to the inclusion of higher-margin revenues
at Orion, Moisture Systems, and Rutter, offset in part by a write down of
certain Thermedics Detection inventory due to planned product changes.
The gross profit margin for the Biomedical Products segment increased
to 52% in the second quarter 1996 from 50% in the second quarter of 1995,
reflecting higher margins at Thermo Cardiosystems resulting from an
increase in revenues from higher-margin implementation programs, an
increase in sales volume and, to a lesser extent, improvements in
manufacturing efficiencies. These increases were offset in part by
inventory write-offs at the Company's Corpak subsidiary associated with
discontinued product lines. In addition, the second quarter of 1995
included lower-margin revenues from Scent Seal fragrance samplers.
Selling, general and administrative expenses as a percentage of
revenues increased to 32% in the second quarter of 1996 from 27% in the
second quarter of 1995. The increase was primarily a result of higher
expenses as a percentage of revenues at the newly acquired Orion, Moisture
Systems and Rutter subsidiaries and, to a lesser extent, at Thermedics
Detection for costs related to a reduction in personnel and a reduction in
leased space in response to the lower sales volume of process-detection
instruments to the beverage industry. Research and development expenses as
a percentage of revenues increased to 7.1% in the second quarter of 1996
from 6.6% in the second quarter of 1995, primarily due to increased
research and development expenses at Thermedics Detection.
The primary growth focus of the Company has become technology for
improved product quality and implantable left ventricular-assist systems.
The Company no longer expects to reinvest in its enteral nutrition-delivery
business. The Company's analysis indicates that the expected future
undiscounted cash flow from this business will be insufficient to recover
the Company's investment. Accordingly, the Company recorded nonrecurring
expenses of $12.7 million in the second quarter of 1996 for the write-off
of cost in excess of net assets of acquired company and certain other
intangible assets associated with its Corpak subsidiary.
Interest income increased to $2.9 million in the second quarter of
1996 from $2.2 million in the second quarter of 1995, primarily due to
higher invested balances following the Company's May 1996 issuance of $65
million principal amount of noninterest-bearing subordinated convertible
debentures (Note 6) and Thermo Sentron's April 1996 initial public offering
of common stock (Note 5). Interest expense increased to $1.3 million in
1996 from $0.9 million in 1995 as a result of additional borrowings by the
Company to fund acquisitions, offset in part by a decrease in interest
expense due to conversions of subordinated convertible obligations.
Gain on issuance of stock by subsidiaries of $18.0 million in the
second quarter of 1996 resulted from Thermo Sentron's April 1996 initial
public offering of shares of its common stock (Note 5).
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THERMEDICS INC.
Second Quarter 1996 Compared With Second Quarter 1995 (continued)
The effective tax rate in the second quarter of 1996 was below the
statutory federal income tax rate primarily due to the nontaxable gain on
the issuance of stock by subsidiary, offset in part by the nondeductible
write-off of intangible assets at the Company's Corpak subsidiary (Note 7),
as well as the impact of state income taxes and nondeductible amortization
of cost in excess of net assets of acquired companies.
Minority interest expense increased to $2.0 million in the second
quarter of 1996 from $1.0 million in the second quarter of 1995 due to
higher profits at the Company's 54%-owned Thermo Cardiosystems subsidiary
and 53%-owned Thermo Voltek subsidiary, and to a lesser extent, the
minority interest associated with the Company's newly public Thermo Sentron
subsidiary.
First Six Months 1996 Compared With First Six Months 1995
Total revenues in the first six months of 1996 were $122.9 million,
compared with $87.1 million in the first six months of 1995. Instruments
and Other Equipment segment revenues increased to $101.4 million in 1996
from $65.6 million in 1995 due to the inclusion of $32.8 million in
revenues from acquired businesses, primarily Orion, which was acquired in
December 1995, and Moisture Systems and Rutter, which were acquired in
January 1996. Thermedics Detection process-detection instrument sales to
the beverage industry declined to $6.6 million in 1996 from $10.6 million
in 1995, primarily due to the reasons discussed in the results of
operations for the second quarter. Revenues from Thermo Voltek increased
$5.8 million due to the reasons discussed in the results of operations for
the second quarter and $1.1 million due to the inclusion of revenues from
its Kalmus Engineering subsidiary, which was acquired in March 1995, for
the full six months.
Biomedical Products segment revenues remained unchanged at $21.5
million in the first six months of 1996 and 1995. In the first six months
of 1996, the Company experienced a decline of $4.2 million in revenues from
Scent Seal fragrance samplers. In June 1995, the Company entered into an
agreement with a third party granting an exclusive license to all of its
patents and know-how relating to the Scent Seal fragrance samplers. The
Company recorded royalty income of $169,000 in the first six months of 1996
related to this agreement. This decrease in revenues was substantially
offset by an increase of $4.1 million in revenues from Thermo Cardiosystems
primarily due to a 59% increase in the number of LVAS implementation
programs sold and a 38% increase in the number of air-driven and electric
LVAS units shipped during the first six months of 1996 for subsequent
implant.
The gross profit margin was 47% in the first six months of 1996,
compared with 45% in the first six months of 1995. The gross profit margin
for the Instruments and Other Equipment segment increased to 46% in 1996
from 44% in 1995, primarily due to the reasons discussed in the results of
operations for the second quarter.
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THERMEDICS INC.
First Six Months 1996 Compared With First Six Months 1995 (continued)
The gross profit margin for the Biomedical Products segment increased
to 54% in the first six months of 1996 from 48% in the first six months of
1995, reflecting higher margins at Thermo Cardiosystems due to the reasons
discussed in the results of operations for the second quarter. These
increases were offset in part by inventory write-offs at the Company's
Corpak subsidiary associated with discontinued product lines. In addition,
the first six months of 1995 included lower-margin revenues from Scent Seal
fragrance samplers.
Selling, general and administrative expenses as a percentage of
revenues increased to 32% in the first six months of 1996 from 27% in the
first six months of 1995, primarily due to the reasons discussed in the
results of operations for the second quarter. Research and development
expenses as a percentage of revenues increased to 6.9% in the first six
months of 1996 from 6.0% in the first six months of 1995, primarily due to
increased research and development expenses at Thermedics Detection.
As discussed in the results of operations for the second quarter, the
Company recorded nonrecurring expenses of $12.7 million in 1996 for the
write-off of cost in excess of net assets of acquired company and certain
other intangible assets associated with its Corpak subsidiary (Note 7).
Interest income increased to $5.0 million in the first six months of
1996 from $4.4 million in the first six months of 1995, primarily due to
higher invested balances following the Company's May 1996 issuance of $65
million principal amount of noninterest-bearing subordinated convertible
debentures (Note 6) and Thermo Sentron's April 1996 initial public offering
of its common stock (Note 5). Interest expense increased to $2.5 million in
1996 from $1.9 million in 1995 as a result of additional borrowings by the
Company to fund acquisitions, offset in part by a decrease in interest
expense due to conversions of subordinated convertible obligations.
Gain on issuance of stock by subsidiaries of $20.5 million in the
first six months of 1996 resulted primarily from Thermo Sentron's April
1996 initial public offering of shares of its common stock, and to a lesser
extent, Thermedics Detection's March 1996 private placement of shares of
its common stock (Note 5).
The effective tax rate in the first six months of 1996 was below the
statutory federal income tax rate primarily due to the nontaxable gain on
the issuance of stock by subsidiaries, offset in part by the nondeductible
write-off of intangible assets at the Company's Corpak subsidiary (Note 7),
as well as the impact of state income taxes and nondeductible amortization
of cost in excess of net assets of acquired companies.
Minority interest expense increased to $3.6 million in the first six
months of 1996 from $1.7 million in the first six months of 1995 due to the
reasons discussed in the results of operations for the second quarter.
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THERMEDICS INC.
Liquidity and Capital Resources
Consolidated working capital, including cash, cash equivalents, and
short-term available-for-sale investments, was $213.0 million at June
29, 1996, compared with $110.1 million at December 30, 1995. Cash, cash
equivalents, and short- and long-term available-for-sale investments were
$246.2 million at June 29, 1996, compared with $155.2 million at December
30, 1995. Of the $246.2 million balance at June 29, 1996, $90.8 million was
held by Thermo Cardiosystems, $34.6 million by Thermo Sentron, $34.3
million by Thermo Voltek, $7.3 million by Thermedics Detection, and the
remainder by the Company and its wholly owned subsidiaries. During the
first six months of 1996, $1.6 million of cash was provided by operating
activities. The Company used cash of $6.5 million and $2.9 million to fund
increases in accounts receivable and inventories, respectively. The
increases in accounts receivable and inventories resulted primarily from
increased sales at Thermo Voltek and Thermo Cardiosystems. The Company also
used cash of $5.9 million to reduce current liabilities resulting from the
repayment of a note payable by Thermo Sentron and the payment of previously
escrowed purchase price for an acquisition completed in 1995.
In January 1996, the Company acquired the assets of Moisture Systems
and the stock of Rutter, for a total purchase price of $22.7 million in
cash, which included the repayment of $2.0 million of debt. In connection
with these acquisitions, the Company borrowed $15.0 million from Thermo
Electron Corporation (Thermo Electron) pursuant to a promissory note due
February 1997 (Note 4). Thermo Electron has indicated its intention to
require the Company's indebtedness to Thermo Electron be repaid to the
extent that the Company's liquidity and cash flow permit. During the first
six months of 1996, the Company made other acquisitions for approximately
$8.5 million in cash, of which $1.4 million was paid in July 1996, subject
to post-closing adjustments.
In March 1996, Thermedics Detection issued shares of its common stock
in a private placement for net proceeds of $3.0 million (Note 5).
In April 1996, Thermo Sentron issued shares of its common stock in an
initial public offering for net proceeds of approximately $42.4 million.
Thermo Sentron used part of the proceeds from the offering to repay $12.6
million in short-term borrowings from Thermo Electron and third parties
(Note 5).
In May 1996, the Company issued and sold $65 million principal amount
of noninterest-bearing subordinated convertible debentures due 2003, for
net proceeds of $63.3 million (Note 6).
The Company intends, for the foreseeable future, to maintain at least
50% ownership of Thermo Cardiosystems, Thermo Voltek, and Thermo Sentron.
This may require the purchase by the Company of additional shares of common
stock or, if applicable, convertible debentures (which are then converted)
of these companies from time to time, as the number of the companies'
outstanding shares increases, whether as a result of conversion of
convertible notes or exercise of stock options issued by them, or
otherwise. These or any other purchases may be made either in the open
market or directly from Thermo Cardiosystems, Thermo Voltek, Thermo
15PAGE
<PAGE>
THERMEDICS INC.
Liquidity and Capital Resources (continued)
Sentron, or Thermo Electron, or pursuant to the conversion of all or part
of Thermo Voltek's subordinated convertible notes held by the Company. The
Company's Board of Directors has authorized the repurchase, through June 1,
1997, of up to $10.0 million of its own securities and those of Thermo
Cardiosystems, Thermo Voltek, and Thermo Sentron. Any such purchases would
be funded from working capital. Through June 29, 1996, the Company had
expended $2.6 million under this authorization. In January 1996, the
Company issued 1,688,161 shares of its common stock to Thermo Electron in
exchange for 315,199 shares of Thermo Voltek common stock and 794,947
shares of Thermo Cardiosystems common stock. In April 1996, the Company
issued 299,112 shares of its common stock to Thermo Electron in exchange
for 107,500 shares of Thermo Voltek common stock and 135,000 shares of
Thermo Cardiosystems common stock. The shares of common stock were
exchanged at their respective fair market values on the dates of the
transactions. Share information for Thermo Cardiosystems has been restated
to reflect a three-for-two stock split effected in May 1996.
During the first six months of 1996, the Company expended
$2.8 million on purchases of property, plant and equipment. During the
remainder of 1996, the Company expects to make capital expenditures of
approximately $3.8 million. The Company expects to continue to pursue its
strategy of expanding its business both through the continued development,
manufacture, and sale of new products, and through the possible acquisition
of companies that will provide additional marketing or manufacturing
capabilities and new products. The Company expects that it will finance
these acquisitions through a combination of internal funds, additional debt
or equity financing from the capital markets, or short-term borrowings from
Thermo Electron. The Company believes its existing resources are sufficient
to meet the capital requirements of its existing operations for the
foreseeable future.
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On May 20, 1996, at the Annual Meeting of Shareholders, the
shareholders reelected eight incumbent directors to a one-year term
expiring in 1997. The directors elected at the meeting were Peter O. Crisp,
Paul F. Ferrari, Dr. George N. Hatsopoulos, John N. Hatsopoulos, Robert C.
Howard, Arvin H. Smith, John W. Wood Jr., and Dr. Nicholas T. Zervas. Mr.
Crisp received 30,972,505 shares voted in favor of election and 149,219
shares voted against; Mr. Ferrari received 30,972,523 shares voted in favor
of election and 149,201 shares voted against; Dr. Hatsopoulos received
30,972,273 shares voted in favor of election and 149,451 shares voted
against; Mr. Hatsopoulos received 30,972,223 shares in favor of election
and 149,501 shares voted against; Mr. Howard received 30,972,323 shares
voted in favor of election and 149,401 shares voted against; Mr. Smith
received 30,972,745 shares voted in favor of election and 148,979 shares
voted against; Mr. Wood received 30,973,323 shares voted in favor of
election and 148,401 shares voted against; and Dr. Zervas received
30,973,173 shares voted in favor of election and 148,551 shares voted
16PAGE
<PAGE>
THERMEDICS INC.
Item 4 - Submission of Matters to a Vote of Security Holders (continued)
against. No abstentions or broker nonvotes were recorded on the election of
directors.
The shareholders also approved a proposal to amend the Company's
Articles of Organization to increase the Company's authorized common stock,
$.10 par value per share, from 50 million shares to 100 million shares as
follows: 29,923,564 shares voted in favor, 1,176,959 shares voted against,
and 21,201 shares abstained. No broker nonvotes were recorded on the
proposal.
The shareholders also approved a proposal to extend the term of the
Company's employee stock purchase plan to December 31, 2004 as follows:
31,018,360 shares voted in favor, 68,657 shares voted against, and 34,707
shares abstained. No broker nonvotes were recorded on the proposal.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
17PAGE
<PAGE>
THERMEDICS INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized as of the 5th day of August 1996.
THERMEDICS INC.
Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
------------------------
John N. Hatsopoulos
Vice President and
Chief Financial Officer
18PAGE
<PAGE>
THERMEDICS INC.
EXHIBIT INDEX
Exhibit
Number Document Page
------- ----------------------------------------------------- ----
3(i) Amended and Restated Articles of Incorporation of the
Registrant.
4 Fiscal Agency Agreement dated as of June 3, 1996
among Thermedics Inc., Thermo Electron Corporation
and Chemical Bank, as fiscal agent.
11 Statement re: Computation of earnings per share.
27 Financial Data Schedule.
Exhibit 3(i)
FEDERAL IDENTIFICATION
NO. 04-2788806
THE COMMONWEALTH OF MASSACHUSETTS
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We, John W. Wood, , President/XXXXXXXXXXXXXX
-------------------------------------
and Sandra L. Lambert, , Clerk/XXXXXXXXX
------------------------------------------------------
of Thermedics Inc.
-------------------------------------------------
(Exact name of corporation)
located at 470 Wildwood Street, Woburn, MA 01888
----------------------------------------------------
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment affecting articles numbered:
III
---------------------------------------------------------------------
(Number those articles 1, 2, 3, 4, 5, and/or being amended)
of the Articles of Organization were duly adopted at a meeting held on May
20, 1996, by vote of:
29,923,566 shares of Common of 31,121,724 shares outstanding,
---------- --------- ----------
(type class & series, if any)
shares of of shares outstanding,
--------- ---------- -----------
(type class & series, if any)
shares of of shares outstanding,
--------- ---------- -----------
(type class & series, if any)
1** being at least a majority of each type, class or series outstanding and
entitled to vote thereon:/or 2**XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX:
VOTED: That the proposal to amend the Articles of Organization of the
Corporation and to increase the authorized shares of Common Stock par value
$.10 per share from 50,000,000 to 100,000,000 shares as set forth in the
Proxy Statement dated April 19, l996 be, and it hereby is, approved and
adopted.
* Delete the inapplicable words. ** Delete the inapplicable clause
1 For amendments adopted pursuant to Chapter 156B, Section 70.
2 For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate 8
1/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions
to more than one article may be made on a single sheet so long as each
article requiring each addition is clearly indicated.
(MASS. 1636 - 9/25/95)
PAGE
<PAGE>
To change the number of shares and the par value (if any) of any type,
class or series of stock which the corporation is authorized to issue fill
in the following:
The total presently authorized is:
WITHOUT PAR VALUE STOCK WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
Common: Common: 50,000,000 $.10
Preferred: Preferred:
Change the total authorized to:
WITHOUT PAR VALUE STOCK WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
Common: Common: 100,000,000 $.10
Preferred: Preferred:
PAGE
<PAGE>
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter, 156B, Section
6 unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such
filing, in which event the amendment will become effective on such later
date.
Later effective date:______________________________
SIGNED UNDER THE PENALTIES OF PERJURY this 21st day of May, 1996,
/s/John W. Wood, Jr., *President/XXXXXXXXXXXXXXX
--------------------------------------
John W. Wood, Jr.
/s/Sandra L. Lambert, *Clerk/XXXXXXXXX
----------------------------------------
Sandra L. Lambert
*Delete the inapplicable words.
(MASS. - 1636)
PAGE
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within Articles of Amendment and, the filing fee in
the amount of $50,000 having been paid, said articles are deemed to have
been filed with me this 29th day of May, 1996.
Effective date:_____________________________
/s/William Francis Galvin
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
CT Corporation System
2 Oliver Street
Boston, Massachusetts 02109
Attn: Amy
EXHIBIT 4
FISCAL AGENCY AGREEMENT
among
THERMEDICS INC.
as Issuer,
THERMO ELECTRON CORPORATION,
as Guarantor
and
CHEMICAL BANK,
as Fiscal Agent
______________________
Dated as of June 3, 1996
______________________
U.S. $55,000,000 Principal Amount
Non-Interest Bearing Convertible Subordinated Debentures Due 2003
----------------------------------------------------------------
PAGE
<PAGE>
CONTENTS
--------
Heading Page
------- ----
1. The Securities 1
2. Appointment of Agents and Security Registrar 3
3. Registration of Transfer and Exchange;
Restrictions on Transfer 4
4. Closing Date; Exchange of Regulation S
Global Security 7
5. Payment 9
6. Redemption 11
7. Conversion of Securities 13
8. Surrendered Securities 19
9. Mutilated, Destroyed, Stolen or Lost
Securities 19
10. Signatures 19
11. Agreements Concerning Agents 20
12. Offices, Resignation, Successors, Etc. of
Agents, Paying, Conversion and Transfer Agencies 23
13. Taxes 26
14. Meetings and Votes of Holders 26
15. Merger, Consolidation or Sale of Assets 29
16. Governing Law 31
17. Amendments 31
18. Agent for Service of Process 31
19. Notices 32
20. Counterparts 33
iPAGE
<PAGE>
Exhibit A- Form of Registered Security
Form of Bearer Security
Exhibit B- Form of Regulation S Global Security
Exhibit C- Form of Certificate to be given by the
Euroclear Operator or Cedel with respect
to the exchange of all or a portion of
the Regulation S Global Security for
Bearer Securities
Exhibit D- Form of Certificate of Beneficial
Ownership for Bearer Securities to be
provided to the Euroclear Operator or
Cedel
Exhibit E- Form of Certificate of Beneficial
Ownership for Registered Securities to
be provided to the Euroclear Operator or
Cedel
Exhibit F- Form of Certificate to be given by the
Euroclear Operator or Cedel with respect
to the exchange of all or a portion of
the Regulation S Global Security for
Registered Regulation S Securities
iiPAGE
<PAGE>
FISCAL AGENCY AGREEMENT, dated as of June 3, 1996 (this
"Agreement"), among THERMEDICS INC., a corporation duly organized
and validly existing under the laws of the State of Massachusetts
(the "Company"), THERMO ELECTRON CORPORATION, a corporation duly
organized and validly existing under the laws of the State of
Delaware (the "Guarantor"), and CHEMICAL BANK, a banking
corporation duly organized and validly existing under the laws of
the State of New York (the "Fiscal Agent").
1. The Securities.
(a) The Company has, by a Subscription Agreement,
dated May 24, 1996 (the "Subscription Agreement"), among the
Company, the Guarantor and the managers named therein (the
"Managers"), agreed to issue and sell to the Managers U.S.
$55,000,000 aggregate principal amount of its Non-Interest
Bearing Convertible Subordinated Debentures Due 2003 (hereinafter
referred to as the "Initial Securities" and together with the
Over-Allotment Securities (as defined below), if any, the
"Securities"). In addition, the Company has granted an option to
the Managers to subscribe for up to an additional U.S.
$10,000,000 principal amount of Securities (the "Over-Allotment
Securities") solely to cover over-allotments, if any. The amount
of Securities that may be issued hereunder may be increased by
agreement among Lehman Brothers International (Europe) (the "Lead
Manager"), the Company, the Guarantor and the Fiscal Agent, and
such additional securities shall be "Securities" hereunder. The
due and punctual payment of principal and Additional Amounts (as
defined in Section 2 of the Securities) on the Securities when
and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, are unconditionally
guaranteed on a subordinated basis by the Guarantor. The
Securities shall not bear interest.
(b) Pursuant to the Subscription Agreement, the
Managers (or their affiliates) may sell the Securities to persons
who are not "U.S. Persons" (as such term is defined in Regulation
S promulgated by the United States Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as
amended (the "Securities Act")) in transactions that meet the
requirements of Regulation S.
(c) The Securities will initially be issued in the
form of a temporary global debenture in bearer form without
conversion rights having endorsed thereon the guarantee of the
Guarantor (the "Guarantee"), which will be deposited with a
depository in London for Cedel and Euroclear for the accounts of
the subscribers of such Securities on the Closing Date (as
defined herein). Upon deposit of the temporary global debenture,
Cedel or Euroclear, as the case may be, will credit each
subscriber with a principal amount of Securities equal to the
principal amount thereof for which it has subscribed and paid,
substantially in the form of Exhibit B hereto (the "Regulation S
PAGE
<PAGE>
Global Security"). As hereinafter provided, the Regulation S
Global Security may subsequently be exchanged for Securities
(i) in printed definitive form with the Guarantees endorsed
thereon either as bearer Securities ("Bearer Securities") in
denominations of U.S. $1,000 and U.S. $10,000, or fully
registered Securities ("Registered Regulation S Securities") in
denominations of U.S. $1,000 and integral multiples thereof, in
accordance with the provisions of Section 3(c). Bearer
Securities shall be substantially in the form of Exhibit A
hereto. Registered Regulation S Securities also shall be
substantially in the form of Exhibit A hereto. The Securities
which are not Bearer Securities or the Regulation S Global
Security are hereinafter collectively referred to as the
"Registered Securities."
(d) During the period beginning on the Closing Date
and ending on the date which is three years (or the then
applicable holding period under Rule 144(k) under the Securities
Act (or successor provision)) after the later of the date of
original issuance thereof and the last date on which the Company
or any affiliate of the Company was the owner thereof (or any
predecessor), all Registered Securities and all Securities issued
upon registration of transfer of or in exchange for such
Securities, shall be "Restricted Securities" and shall be subject
to the restrictions on transfer in Section 3 hereof; provided,
however, that the term "Restricted Securities" shall not include
Registered Securities as to which such restrictions on transfer
have been terminated in accordance with Section 3(e) hereof. All
Restricted Securities shall bear the legend required by
Section 3(d) hereof.
(e) The Securities will be convertible as provided in
Section 4 of the Registered Securities and the Bearer Securities
and Section 7 hereof. The Securities may be redeemed by the
Company as provided in Section 3 of the Registered Securities and
the Bearer Securities and Section 6 hereof. The Securities will
be subordinated as provided in Section 7 of the Registered
Securities and the Bearer Securities. The Registered Securities,
the Bearer Securities and the Regulation S Global Security shall
contain such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement
and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as
may, consistent herewith, be determined by the officer of the
Company executing such Securities, as evidenced by his execution
of such Securities.
(f) The Company in issuing the Securities shall use
CUSIP numbers, and the Fiscal Agent may use such CUSIP numbers in
any notice of redemption with respect to the Securities. The
Company shall obtain a CUSIP number for the Registered Regulation
S Securities. In addition, the Company shall obtain an ISIN
number and a Common Code for the Regulation S Global Security,
the Bearer Securities and the Registered Regulation S Securities.
2PAGE
<PAGE>
(g) Pursuant to the Subscription Agreement, the
Managers (or their affiliates) may sell the Securities to persons
who are not persons within the United States or its possessions
or "United States persons" as defined in the Internal Revenue
Code except as provided in U.S. Treasury Regulation Section
1.163-5 (c) (2) (i) (D). In compliance with United States tax
laws and regulations, Bearer Securities may not be offered or
sold during the 40-day period beginning on the Closing Date, or
at any time if part of a Manager's unsold allotment, to a person
who is within the United States or to a United States person
other than (a) foreign branches of United States financial
institutions if such institutions agree in writing to comply with
the requirements of Section 165(j)(3)(A), (B), or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations
thereunder, (b) United States offices of exempt distributors, or
(c) United States offices of international organizations or
foreign central banks. United States tax laws and regulations
also require that Bearer Securities not be delivered within the
United States or its possessions.
(h) The Company will use its reasonable best efforts
to have the Securities approved for listing on the Luxembourg
Stock Exchange or such other exchange as shall be agreed upon by
the Managers and the Company, as soon as practicable after the
date hereof.
2. Appointment of Agents and Security Registrar.
(a) The Company and the Guarantor hereby appoint
Chemical Bank, at present having its principal corporate trust
office at 450 West 33rd Street, New York, New York 10001, and
having its main office in London at Chemical Bank House, 125
London Wall, London EC2Y 5AJ, England, as their fiscal agent in
respect of the Securities and the Guarantees upon the terms and
subject to the conditions herein set forth. (Chemical Bank and
its successor or successors as such fiscal agent qualified and
appointed in accordance with Section 12 hereof are herein called
the "Fiscal Agent.") The Fiscal Agent shall have the powers and
authority granted to and conferred upon it herein and in the
Securities, and such further powers and authority, acceptable to
it, to act on behalf of the Company and the Guarantor as the
Company and the Guarantor may hereafter grant to or confer upon
it.
(b) The Company and the Guarantor hereby appoint
Chemical Bank, at present located at 450 West 33rd Street, New
York, New York 10001, and having its main office in London at
Chemical Bank House, 125 London Wall, London EC2Y 5AJ, England,
as their paying agent in respect of the Securities and the
Guarantees upon the terms and subject to the conditions herein
set forth. (Chemical Bank and its successor or successors as such
paying agent qualified and appointed in accordance with Section
12 hereof are herein called the "Paying Agent.") The Paying Agent
3PAGE
<PAGE>
shall have the powers and authority granted to and conferred upon
it herein and in the Securities, and such further powers and
authority, acceptable to it, to act on behalf of the Company and
the Guarantor as the Company and the Guarantor may hereafter
grant to or confer upon it. As used herein, "paying agencies"
shall mean paying agencies maintained by the Company as provided
in Section 12(f) hereof.
(c) The Company hereby appoints Chemical Bank, at
present located at 450 West 33rd Street, New York, New York
10001, and having its main office in London at Chemical Bank
House, 125 London Wall, London EC2Y 5AJ, England, as its
conversion agent in respect of the Securities upon the terms and
subject to the conditions herein set forth. (Chemical Bank and
its successor or successors as such conversion agent qualified
and appointed in accordance with Section 12 hereof are herein
called the "Conversion Agent," and the Paying Agent, the
Conversion Agent, the Transfer Agents (as herein defined) and the
Fiscal Agent are sometimes herein referred to severally as an
"Agent" and, collectively, as the "Agents."). The Conversion
Agent shall have the powers and authority granted to and
conferred upon it herein and in the Securities, and such further
powers and authority, acceptable to it, to act on behalf of the
Company as the Company may hereafter grant to or confer upon it.
As used herein, "conversion agencies" shall mean conversion
agencies maintained by the Company as provided in Section 12(f)
hereof.
(d) The Company shall cause to be kept at the
principal corporate trust office of the Fiscal Agent a register
(the registers maintained in such office and in any other office
or agency designated for such purpose (which office shall be
located outside of the United Kingdom) being herein sometimes
collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as the Fiscal Agent may
prescribe, the Company shall provide for the registration of
Registered Securities and of transfers of Registered Securities.
The Fiscal Agent is hereby appointed "Security Registrar" for the
purpose of registering Registered Securities and transfers of
Registered Securities as herein provided.
3. Registration of Transfer and Exchange; Restrictions on
Transfer
(a) Upon surrender for registration of transfer of any
Registered Security at any office or agency designated for such
purpose by the Company pursuant to Section 12(g) hereof, the
Company shall execute, and the Fiscal Agent shall authenticate,
register and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of any
authorized denominations and of a like aggregate principal
amount, having endorsed thereon a Guarantee duly executed by the
Guarantor, and bearing such restrictive legends as may be
required by this Agreement; provided, however, that, with respect
4PAGE
<PAGE>
to any Registered Security that is a Restricted Security, the
Fiscal Agent shall not register the transfer of such Security
unless the conditions in Sections 3(b) hereof shall have been
satisfied. The holder of each Restricted Security, by such
holder's acceptance thereof, agrees to be bound by the transfer
restrictions set forth herein and in the legend on such
Restricted Security.
(b) Whenever any Restricted Security is presented or
surrendered for registration of transfer or exchange for a
Registered Security registered in a name other than that of the
holder, no registration of transfer or exchange shall be made
unless the Fiscal Agent has received transfer documentation
indicating that the transfer is being made pursuant to an
exemption from, or a transaction not otherwise subject to, the
registration requirements of the Securities Act. For purposes of
this Section 3(b), the Transfer Notice set forth on the reverse
of such Security shall be completed and delivered to the Fiscal
Agent. In addition, the Company and the Fiscal Agent may require
that the registered holder deliver an opinion of counsel,
certifications or other information acceptable to them in form
and substance. The Fiscal Agent shall notify the Company upon
receipt of such Transfer Notice and the Company shall immediately
advise the Fiscal Agent as to whether an opinion of counsel,
certifications or other information as described herein shall be
required for such transfer.
(c) Bearer Securities may, at the option of the holder
thereof, be exchanged at, subject to applicable laws and
regulations, the offices of the paying agencies in London and, if
the Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon, Luxembourg or as designated by the
Company for such purposes pursuant to Section 12(g), for an equal
aggregate principal amount of Registered Securities in
denominations of $1,000 and integral multiples thereof and/or
Bearer Securities of authorized denominations. Bearer Securities
are transferable upon delivery.
Registered Securities may, at the option of the holder
thereof, be exchanged at the Corporate Trust Office of the Fiscal
Agent in New York City, or subject to applicable laws and
regulations, the offices of the paying agencies in London and, if
the Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon, Luxembourg or as designated by the
Company for such purposes pursuant to Section 12(g), for an equal
aggregate principal amount of Registered Securities of different
denominations. Registered Securities shall not be exchangeable
for Bearer Securities. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the
Fiscal Agent shall authenticate and deliver, the Registered
Securities which the holder making the exchange is entitled to
receive, having endorsed thereon a Guarantee duly executed by the
Guarantor.
5PAGE
<PAGE>
(d) Each certificate evidencing Restricted Securities
shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN
THE "UNITED STATES" OR TO "U.S. PERSONS" (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY OFFER,
SALE OR OTHER DISPOSITION IS SUBJECT TO THE RIGHT OF THE
ISSUER OF THIS SECURITY AND THE FISCAL AGENT FOR SUCH ISSUER
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE.
(e) The restrictions imposed by Section 3(b) upon the
transferability of any particular Restricted Security shall cease
and terminate when such Restricted Security has been transferred
pursuant to Rule 144 under the Securities Act (or any successor
provision thereto), unless the holder is an affiliate of the
Company within the meaning of said Rule 144 (or such successor
provision). Any Restricted Security as to which such
restrictions on transfer shall have expired in accordance with
their terms or shall have terminated may, upon surrender of such
Restricted Security for exchange to the Fiscal Agent in
accordance with the provisions of this Section 3(e), by an
opinion of counsel reasonably acceptable to the Company,
addressed to the Company and the Fiscal Agent and in form and
scope satisfactory to the Company, to the effect that the
transfer of such Restricted Security has been made in compliance
with Rule 144 (or such successor provision)), be exchanged for a
new Registered Security, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by
Section 3(d) hereof.
(f) All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid obligations
of the Company, and the Guarantees endorsed thereon shall be the
valid obligations of the Guarantor, evidencing the same
obligations, and entitled to the same benefits under this
Agreement, as the Securities surrendered upon such registration
of transfer or exchange.
(g) Every Registered Security presented for
registration of transfer or surrendered for exchange shall be
duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Fiscal Agent
and the Transfer Agent to which such Security is presented or
surrendered and the Security Registrar, duly executed by the
holder thereof or his attorney duly authorized in writing. All
such instruments shall comply with the applicable provisions of
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this Section 3. The registration of the transfer of a Registered
Security by the Security Registrar shall be deemed to be the
written acknowledgment of such transfer on behalf of the Company.
(h) No service charge shall be made for any
registration of transfer or exchange (other than the cost of
delivery), but the Company or the Transfer Agent may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 4 hereof or not involving any
registration of transfer.
(i) Neither the Company nor the Fiscal Agent nor any
of the offices or agencies designated for the purposes specified
in Section 12(f) nor any Transfer Agent shall be required (i) to
exchange any Bearer Security (or portion thereof) for a
Registered Security if the Company shall determine and inform the
Fiscal Agent in writing that, as a result thereof, the Company
would incur adverse consequences under the United States Federal
income tax laws at the time of such exchange, or (ii) in the
event of a redemption in part, (A) to register the transfer of
Registered Securities or to exchange any Bearer Securities for
Registered Securities for a period of 15 days immediately
preceding the date notice is given pursuant to Section 3(f) of
the Registered Securities and the Bearer Securities identifying
the serial numbers of any Securities to be redeemed, or (B) to
register the transfer of or exchange of any Registered Security
so selected for redemption in whole or in part, except portions
not being redeemed of Securities being redeemed in part, or (C)
to exchange any Bearer Security called for redemption; provided,
however, that a Bearer Security called for redemption may be
exchanged, on the terms and conditions set forth above, for a
Registered Security that is simultaneously surrendered, with
written instruction for payment on the date fixed for redemption.
4. Closing Date; Exchange of Regulation S Global Security.
(a) At any time and from time to time after the
execution and delivery of this Agreement, the Company may deliver
Securities executed by the Company in accordance with this
Agreement bearing the Guarantees of the Guarantor endorsed
thereon to the Fiscal Agent for authentication together with an
officer's certificate of the Company directing such
authentication, and the Fiscal Agent shall thereupon authenticate
and make such Securities available for delivery upon and in
accordance with the written order of the Company. No Security
shall be valid or enforceable for any purpose unless and until
the certificate of authentication thereon shall have been
manually signed by a duly authorized signatory of the Fiscal
Agent and such duly executed certificate of authentication on any
Security shall be conclusive evidence that the Security has been
duly authenticated and delivered hereunder. The Regulation S
Global Security will be issued upon payment to the Company or its
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order in United States dollars in same-day funds by check or wire
transfer to a United States dollar account designated by the
Company, at 3:00 p.m., London time, on June 3, 1996, or at such
other time on the same or such other date, not later than 5:00
p.m., London time, on the fourth Business Day (as such term is
defined in Section 5(h) hereof) in London thereafter, as the
Managers and the Company may agree (the "Closing Date"). Such
payment will be made (1) upon authorization from the Managers,
and (2) against delivery of the Regulation S Global Security for
the Securities to The Chase Manhattan Bank, N.A., London office,
as depositary (the "Common Depositary") for Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the
Euroclear System (the "Euroclear Operator"), and Cedel Bank
societe anonyme ("Cedel"). The Regulation S Global Security
shall be held on deposit with the Common Depositary for the
accounts of the Euroclear Operator and Cedel, for credit to the
Managers' respective Securities Clearance Accounts (or to such
other accounts as the Lead Manager may have specified) with the
Euroclear Operator or Cedel.
(b) On or before the Exchange Date, the Company will
execute and deliver to the Fiscal Agent, at its office in London,
definitive Registered Regulation S Securities and Bearer
Securities bearing the Guarantees of the Guarantor endorsed
thereon in the aggregate principal amount outstanding in the
Regulation S Global Security and in such proportion of Registered
Regulation S Securities to Bearer Securities as the Fiscal Agent
may specify. "Exchange Date" means the date following the
expiration of the 40-day period commencing on the Closing Date.
On or after the Exchange Date, the Regulation S Global Security
may be surrendered to the Fiscal Agent to be exchanged, as a
whole or in part, for definitive Bearer Securities without
charge, and the Fiscal Agent shall authenticate and deliver, in
exchange for such Regulation S Global Security or the portions
thereof to be exchanged, an equal aggregate principal amount of
definitive Bearer Securities, but only upon presentation to the
Fiscal Agent at its office in London of a certificate of the
Euroclear Operator or Cedel with respect to the Regulation S
Global Security or portions thereof being exchanged,
substantially in the form of Exhibit C hereto, to the effect that
it has received a certificate or certificates in substantially
the form set forth in Exhibit D hereto dated no earlier than 15
days prior to the Exchange Date and signed by the person
appearing in its records as the owner of the Regulation S Global
Security or portions thereof being exchanged. Similarly, on or
after the Exchange Date, portions of the Regulation S Global
Security may be exchanged for an equal aggregate principal amount
of definitive Registered Regulation S Securities upon
presentation to the Fiscal Agent of a certificate substantially
in the form of Exhibit F hereto, to the effect that it has
received a certificate or certificates in substantially the form
set forth in Exhibit E hereto dated no earlier than 15 days prior
to the Exchange Date and signed by the person appearing in its
records as the owner of the Regulation S Global Security or
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portions thereof being exchanged.
(c) The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of these
methods or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such
Securities, as evidenced by such execution.
(d) Only Bearer Securities may be issued upon receipt
by the Euroclear Operator or Cedel of a certificate or
certificates in the form of Exhibit D hereto. Bearer Securities
will be delivered only outside the United States, its territories
or its possessions. Only Registered Securities may be issued
upon receipt by the Euroclear Operator or Cedel of a certificate
or certificates in the form of Exhibit E hereto.
(e) The delivery to the Fiscal Agent by the Euroclear
Operator or Cedel of any certificate referred to above may be
relied upon by the Company and the Fiscal Agent as conclusive
evidence that a corresponding certificate or certificates has or
have been delivered to the Euroclear Operator or Cedel pursuant
to the terms of this Agreement. The Fiscal Agent shall receive
such certificate on behalf of the Company and shall promptly
deliver the original certificate to the Company, retaining a copy
of such certificate for its records.
(f) Upon any such exchange of a portion of the
Regulation S Global Security for a definitive Bearer Security or
Securities or a definitive Registered Regulation S Security or
Securities, the Regulation S Global Security shall be endorsed by
the Fiscal Agent to reflect the reduction of its principal amount
by an amount equal to the aggregate principal amount of such
definitive Security or Securities. Until so exchanged in full,
the Regulation S Global Security shall in all respects be
entitled to the same benefits under this Agreement as definitive
Securities authenticated and delivered hereunder.
5. Payment.
(a) The Company will pay or cause to be paid to the
Paying Agent the amounts, at the times and for the purposes, set
forth herein and in the text of the Securities, and the Company
hereby authorizes and directs the Paying Agent to make payment of
the principal of and Additional Amounts (as defined in Section 2
of the Registered Securities and the Bearer Securities), if any,
on the Securities from such payments.
(b) At least 15 days prior to the date on which any
payment of Additional Amounts shall be required to be made
pursuant to Section 2 of the Registered Securities and the Bearer
Securities, the Company will furnish the Paying Agent, each other
paying agency of the Company and the Fiscal Agent with a
certificate of one of its duly authorized officers instructing
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the Paying Agent and each other paying agency of the Company as
to the amounts required (i) to be deducted or withheld for or on
account of any taxes described in Section 2 of the Registered
Securities and the Bearer Securities from a payment to be made on
that date and (ii) to be paid to each holder of Securities as
Additional Amounts pursuant to that Section. If the foregoing
amounts are not uniform for all holders, then the Company's
certificate shall specify by country of residence or other factor
the amounts required to be deducted or withheld and to be paid as
Additional Amounts for each holder or class of holders of the
Securities. In the absence of its receipt of any such
certificate from the Company, the Paying Agent may make payment
without deduction or withholding. The Company and the Guarantor
hereby agree to indemnify the Paying Agent, each other paying
agency of the Company and the Fiscal Agent for, and to hold them
harmless against, any loss, liability or expense reasonably
incurred without gross negligence or bad faith on their part,
arising out of or in connection with actions taken or omitted by
any of them in reliance on any certificate furnished pursuant to
this Section.
(c) In order to provide for the payment of the
principal of the Securities as the same shall become due and
payable, the Company shall pay to the Paying Agent at its office
in London, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment
of public and private debts therein, and in same day funds, the
following amounts (and the Company shall give notice to the
Fiscal Agent at least one full Business Day prior to the date
payment is due to the Paying Agent as to the means of such
payment), to be held and applied by the Paying Agent as
hereinafter set forth:
(i) If the Company shall elect, or shall be required,
to redeem the Securities in accordance with Section 6
hereof, the Company will pay to the Paying Agent on the
Business Day immediately prior to the date fixed for
redemption thereof in same day funds an amount sufficient
(with any amount then held by the Paying Agent and available
for the purpose) to pay the redemption price of the
Securities called for redemption on the redemption date or
entitled to be redeemed, together with Additional Amounts,
if any, thereon and the Paying Agent shall apply such amount
to the payment of the redemption price and Additional
Amounts, if any, thereon in accordance with the terms of the
Securities.
(ii) On the Business Day immediately prior to the
maturity date of the Securities, the Company shall pay to
the Paying Agent in same day funds an amount which, together
with any amounts then held by the Paying Agent, and
available for payment thereof, shall be equal to the entire
amount of principal (and Additional Amounts, if any) to be
due on such maturity date on all the Securities then
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outstanding, and the Paying Agent shall apply such amount to
each payment of the principal of (and Additional Amounts, if
any, on) the Securities in accordance with the terms of the
Securities.
(d) Notwithstanding anything in this Section to the
contrary, if any payment of principal (or Additional Amounts, if
any) is due on a day that is not a Business Day, payment shall be
made on the next succeeding Business Day, with the same effect as
if made on the day such payment was due. A "Business Day" is
defined, with respect to any act to be performed pursuant hereto
or to the Securities, as any day which is not a Saturday, Sunday
or a day on which banking institutions in the place where such
act is to occur are authorized or obligated by applicable law,
regulation or executive order to close.
6. Redemption.
(a) If, under the circumstances described in Section 3
of the Registered Securities and Bearer Securities, the Company
shall elect or be required to redeem outstanding Securities, the
following provisions shall be applicable:
(i) The Company shall, at least 45days in the case of
a redemption in whole or 75 days in the case of a redemption
in part (or such shorter period as shall be reasonably
acceptable to the Fiscal Agent) before the date designated
for such redemption, give written notice to the Agents of
its election to redeem the Securities on the redemption date
specified in such notice and state in such notice that the
conditions precedent to such redemption have occurred and
describe them, and in case of redemptions pursuant to
Section 3(b) of the Registered Securities and the Bearer
Securities, shall provide to the Fiscal Agent an opinion of
counsel satisfactory to the Fiscal Agent stating that the
legal conditions precedent to the right of the Company to
effect such redemption have occurred, and shall request the
Fiscal Agent to arrange for publication and mailing of the
notice specified in clause (a) (ii) below.
(ii) In case the Company shall give notice to the
Agents of its election to redeem the Securities, the Fiscal
Agent shall cause to be published on behalf of and at the
expense of the Company a notice of redemption in accordance
with the provisions of Section 3 of the Registered
Securities and Bearer Securities and shall mail by
first-class mail a copy of the notice to each holder of a
Registered Security at the address of such holder as it
shall appear in the Security Register. The Fiscal Agent
shall send a copy of such notice of redemption to the
Company, the Guarantor, the Paying Agent (if different from
the Fiscal Agent) and each other paying agency of the
Company.
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(iii) Such notice shall be published on behalf and at
the expense of the Company in an Authorized Newspaper (as
defined in Section 19 hereof) on a Business Day in New York
City and in London and, if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon, in
an Authorized Newspaper in Luxembourg, or, if publication in
either London or Luxembourg is not practical, in an
Authorized Newspaper in any country in Western Europe, as
set forth in Section 19 of this Agreement and Section 3 of
the Registered Securities and Bearer Securities. In the
case of a redemption in whole, notice will be given once not
more than 60 nor less than 30 days prior to the date fixed
for redemption. In the case of partial redemption, notice
will be given twice, the first such notice to be given not
more than 75 nor less than 60 days prior to the date fixed
for redemption and the second such notice to be given not
more than 60 and not less than 30 days prior to the date
fixed for redemption. The Fiscal Agent shall notify the
Company promptly of the portions of outstanding Securities
to be called for redemption as determined pursuant to
Section 3(a) of the Registered Securities and Bearer
Securities.
(b) Under the circumstances described in Section 3(d)
of the Registered Securities and Bearer Securities concerning the
redemption of outstanding Securities at the option of the holders
thereof, the following provisions shall be applicable:
(i) The Company shall give notice to the Fiscal Agent
of the occurrence of a Redemption Event (as defined in
Section 3(d) of the Registered Securities and Bearer
Securities) immediately upon the occurrence of such
Redemption Event. Such notice shall state:
(A) The nature of the Redemption Event;
(B) The Holder Redemption Date (as defined in
Section 3(d) of the Registered Securities and Bearer
Securities) in respect of such Redemption Event; and
(C) The redemption price as set forth in Section
3(d) of the Registered Securities and Bearer
Securities.
(ii) The Fiscal Agent shall cause to be published on
behalf of the Company a notice of entitlement to redeem in
accordance with the provisions of Section 3 of the
Registered Securities and Bearer Securities and shall mail
by first-class mail a copy of such notice to each holder of
a Registered Security at the address of such holder as it
shall appear in the Security Register. The Fiscal Agent
shall send a copy of such notice of entitlement to redeem to
the Company, the Guarantor, the Paying Agent (if different
from the Fiscal Agent) and each other paying agency of the
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Company hereunder. Such notice shall be published on behalf
and at the expense of the Company in Authorized Newspapers
on a Business Day in New York City and in London and, if the
Securities are listed on the Luxembourg Stock Exchange and
so long as listed thereon, in an Authorized Newspaper in
Luxembourg, or, if either publication in London or
Luxembourg is not practical, in an Authorized Newspaper in
any country in Western Europe, as set forth in Section 19 of
this Agreement. Notice shall be given not later than 10
days after the later of the Exchange Date or the date of the
occurrence of a Redemption Event.
(iii) Upon the deposit of any of the Registered
Securities or Bearer Securities with the agency designated
by the Company as the place for payment of the Registered
Securities and Bearer Securities together with a duly signed
and completed redemption notice in the form set forth on the
reverse of the Bearer Securities and Registered Securities,
all in accordance with the provisions of Section 3 of the
Registered Securities and Bearer Securities, the holder of
such Registered Security and Bearer Security shall be
entitled to receive a non-transferable receipt evidencing
such deposit.
(iv) The Fiscal Agent shall notify the Company on each
Business Day in the five Business Days prior to the Holder
Redemption Date for outstanding Securities to be redeemed
under this Section 6(b) of the amount required to redeem
such Securities.
7. Conversion of Securities.
(a) Subject to and upon compliance with the provisions
of this Section 7, at the option of the holder thereof, any
outstanding Registered Security or Bearer Security or, in the
case of any outstanding Registered Security or Bearer Security of
a denomination other than $1,000, any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000,
may be converted into shares of the Company's common stock, par
value $.10 per share ("Common Stock"), issuable upon conversion
of the Securities, at the principal amount thereof, or of such
portion thereof, into fully paid and nonassessable shares of
Common Stock ("Conversion Shares") as set forth in the Registered
Securities and Bearer Securities. Such Registered Securities or
Bearer Securities may be converted on or after the date which is
the later of: (i) the Exchange Date and (ii) August 15, 1996, and
in any event prior to redemption or maturity. The right to
convert Securities called for redemption will terminate at the
close of business on the fifteenth day next preceding the date
fixed for redemption (or if such date is not a Business Day, then
the next succeeding Business Day), and will be lost if not
exercised prior to that time. No payment or adjustment shall be
made upon any conversion on account of any dividends on the
Common Stock issued upon conversion. The price at which
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Conversion Shares shall be delivered upon conversion (herein
called the "Conversion Price") shall be initially U.S. $32.68 per
share of Common Stock. The Conversion Price shall be adjusted in
certain instances as provided in paragraphs (c)(i), (ii), (iii),
(iv), (vi) and (vii) of Section 4 of the Registered Securities
and Bearer Securities.
(b) In order to exercise the conversion privilege, the
holder of any Security to be converted shall surrender such
Security, or, if less than the entire principal amount of a
Registered Security or Bearer Security of a denomination other
than $1,000 is to be converted, the portion thereof to be
converted, at the office of the Conversion Agent or any office or
agency of the Company maintained for that purpose pursuant to
Section 12(f) hereof, accompanied by a duly signed and completed
Conversion Notice, in substantially the form set forth in the
Registered Securities and Bearer Securities, to the Company, at
such office or agency that the holder elects to convert such
Security (or specified portion thereof).
(c) Securities shall be deemed to have been converted
immediately prior to the close of business on the day of
surrender of such Securities for conversion in accordance with
the foregoing provisions, and at such time the rights of the
holders of such Securities as holders shall cease, and the person
or persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder
or holders of such Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall
cause to be issued or delivered at such office or agency a
certificate or certificates for the number of full shares of
Common Stock issuable or deliverable upon conversion, together
with payment, in lieu of any fraction of a share, as provided
below. The Paying Agent shall, within five business days after
the conversion date, make a payment for the Additional Amounts,
if any, thereon.
(d) In the case of any Registered Security or Bearer
Security of a denomination other than $1,000 which is converted
in part only, upon such conversion the Company shall execute and
the Fiscal Agent shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Security or
Securities of any authorized kind or denomination as requested by
such holder, in aggregate principal amount equal to the
unconverted portion of the principal amount of such Security,
having endorsed thereon a Guarantee duly executed by the
Guarantor.
(e) No fractional shares of Common Stock shall be
issued or delivered upon conversion of Securities. If more than
one Security shall be surrendered for conversion at one time by
the same holder, the number of full shares of Common Stock which
shall be issuable or deliverable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the
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Securities (or, in the case of Registered Securities or Bearer
Securities of a denomination other than $1,000, specified
portions thereof) so surrendered. Instead of any fractional
share of Common Stock which would otherwise be issuable or
deliverable upon conversion of any Security or Securities (or, in
the case of Registered Securities or Bearer Securities of a
denomination other than $1,000, specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction
in an amount equal to the same fraction of the Closing Price (as
defined in Section 4(c)(v) of the Registered Securities and
Bearer Securities) for a share of Common Stock at the close of
business on the day preceding the day of conversion.
(f) Whenever the Conversion Price is adjusted as
provided in the Registered Securities and Bearer Securities:
(i) the Company shall compute the adjusted
Conversion Price in accordance with the terms of the
Registered Securities and Bearer Securities and shall
prepare a certificate signed by the President, any Vice
President or the Treasurer of the Company setting forth the
adjusted Conversion Price and showing in reasonable detail
the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Conversion
Agent and at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section
12(f) hereof; and
(ii) a notice stating that the Conversion Price
has been adjusted and setting forth the adjusted Conversion
Price shall forthwith be prepared, and, as soon as
practicable after it is prepared, the Company shall promptly
cause a notice setting forth the adjusted Conversion Price
to be given to the holders of the Securities. Such notice
shall be published on behalf and at the expense of the
Company in Authorized Newspapers on a Business Day in New
York City and in London and, if the Securities are listed on
the Luxembourg Stock Exchange and so long as listed thereon,
in an Authorized Newspaper in Luxembourg, or, if publication
in either London or Luxembourg is not practical, in an
Authorized Newspaper in any country in Western Europe, as
set forth in Section 19 of this Agreement and Section 4 of
the Registered Securities and Bearer Securities.
(g) In case:
(i) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise
than in cash out of its retained earnings (excluding
dividends payable in stock for which adjustment is made
pursuant to the terms of the Registered Securities and
Bearer Securities); or
(ii) the Company shall authorize the granting to
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the holders of its Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any
class or of any other rights; or
(iii) of any reclassification of the Common Stock
of the Company (other than a subdivision or combination of
its outstanding shares of Common Stock), or of any
consolidation with, or merger of the Company into, any other
corporation, or of any merger of another corporation into
the Company (other than a merger which does not result in
any reclassification, conversion, exchange or cancellation
of outstanding shares of Common Stock of the Company), or of
any sale or transfer of all or substantially all of the
assets of the Company (which shall not include the sale or
transfer of any portion of the assets of the Company to any
corporation which, immediately following such transfer is at
least 51% owned by the Company, provided that such sale or
transfer does not result in the reclassification,
conversion, exchange or cancellation of outstanding shares
of Common Stock of the Company); or
(iv) of the involuntary dissolution, liquidation
or winding up of the Company; or
(v) the Company proposes to take any other action
which would require an adjustment of the Conversion Price
pursuant to the Registered Securities and Bearer Securities;
then the Company shall cause to be filed with the Conversion
Agent and at each office or agency maintained for the
purpose of conversion of Securities a notice setting forth
the adjusted Conversion Price and shall cause notice to be
given as provided in Section 19 except that notice need be
given once at least 20 days (or 10 days in any case
specified in clause (i) or (iii) above) prior to the
applicable record date hereinafter specified, stating (x)
the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants or, if a
record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants is to be determined, or (y)
the date on which a reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for the
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. The failure to give
notice required by this Section or any defect therein shall
not affect the legality or validity of any dividend,
distribution, rights, warrants, reclassification,
consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or the vote on any such action.
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(h) The Company shall, at all times, have reserved and
available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock, for the purpose of effecting the
conversion of Securities, the full number of Conversion Shares
then issuable upon the conversion of all Securities (based on the
aggregate principal amount of Securities outstanding).
(i) The Company shall in good faith use its best
efforts to (i) cause all registrations with, and to obtain any
approvals by, any governmental authority under any Federal or
state law of the United States that may be required in connection
with the conversion of the Securities into Common Stock and the
resale thereof, and (ii) to list the shares of Common Stock
required to be issued or delivered upon conversion of Securities
(or other securities issuable upon conversion of the Securities)
prior to such issue or delivery on such national securities
exchange or automated over-the-counter trading market where such
Common Stock is listed or traded at the time of such delivery.
(j) The Company covenants that all shares of Common
Stock which may be issued or delivered upon conversion of
Securities (or other securities issuable upon conversion of the
Securities) will upon issuance be fully paid and nonassessable
and, except as provided in Section 13 hereof, the Company will
pay all stamp, excise or similar taxes or duties, liens and
charges with respect to the issue thereof.
(k) All converted Securities shall be held by the
Company, and may, at any time, be delivered to the Fiscal Agent
for cancellation, which shall hold or dispose of the same in
accordance with its policy for disposal of canceled securities or
as otherwise directed by the Company. Converted Securities shall
not be transferred. The Conversion Agent shall give the Company
prompt notice of all Securities which have been converted, and if
the Fiscal Agent is not also the Conversion Agent, the Company
will promptly give, or cause to be given, written notice to the
Fiscal Agent of the serial numbers of all Securities which have
been converted.
(1) In case of any consolidation with, or merger of
the Company into, any other corporation, or in case of any merger
of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company (which shall not
include the sale or transfer of any portion of the assets of the
Company to any corporation which, immediately following such
transfer is at least 51% owned by the Company, provided that such
sale or transfer does not result in the reclassification,
conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), the corporation formed by such
consolidation or resulting from such merger, or which acquires
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such assets, as the case may be, shall execute and deliver to the
Fiscal Agent an amendment to the Fiscal Agency Agreement
providing that the holder of each Registered Security and Bearer
Security shall have the right during the period such Security
shall be convertible as specified in the Registered Securities
and Bearer Securities to convert such Security only into the kind
and amount of securities, cash and other property receivable upon
such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such
consolidation, merger, sale or transfer, assuming, if such
consolidation, merger, sale or transfer is prior to the period
such Security shall be convertible as specified in the Registered
Securities and Bearer Securities, that the Securities were
convertible at such time at the initial Conversion Price as
adjusted pursuant to the terms of the Registered Securities and
Bearer Securities. Such amendment shall provide for adjustments
which, for events subsequent to the effective date of such
amendment, shall be as nearly equivalent as may be practicable to
the adjustments provided for in the Registered Securities and the
Bearer Securities. The above provisions of this Section shall
similarly apply to successive consolidations, mergers, sales or
transfers.
(m) Subject to Section 11(j) hereof, neither the
Fiscal Agent nor the Conversion Agent or conversion agency
appointed by the Company shall at any time be under any duty or
responsibility to any holder of Securities to determine whether
any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method
employed, or herein or in the Registered Securities and Bearer
Securities provided to be employed, in making the same. Neither
the Fiscal Agent nor the Conversion Agent or conversion agency
appointed by the Company shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common
Stock or of any securities or property which may at any time be
issued or delivered upon the conversion of any Security; and
neither the Fiscal Agent nor the Conversion Agent or conversion
agency appointed by the Company makes any representation with
respect thereto. Neither the Fiscal Agent nor the Conversion
Agent or conversion agency appointed by the Company shall be
responsible for any acts or omissions of the Company including
without limitation any failure of the Company to issue, transfer
or deliver any certificates representing shares of Common Stock
or other securities or property or to make any cash payment upon
the delivery of any Security for the purpose of conversion or to
comply with any of the covenants contained in this Section 7.
(n) Any Common Stock issued upon conversion of a
Restricted Security ("Restricted Common Stock") at any time prior
to the date which is three years (or the then applicable holding
period under Rule 144(k) under the Securities Act (or successor
provision)) after the date of original issuance of such
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Restricted Security and the last date on which the Company or any
affiliate of the Company was the owner thereof (or any
predecessor), shall be subject to the restrictions on transfer
set forth in Section 3 hereof to the same extent as such
Restricted Securities which were so converted. All shares of
Restricted Common Stock shall bear the legend and transfer
requirements set forth in Section 3(f) hereof, with such
modifications thereto as the Company shall deem appropriate.
8. Surrendered Securities.
All Securities surrendered for payment, redemption,
retirement, transfer or exchange and all Securities purchased by
the Company or any subsidiary shall be delivered to the Fiscal
Agent. In any such case the Fiscal Agent shall cancel all
Securities and coupons not previously canceled and destroy all
such Securities and coupons so delivered and shall furnish to the
Company and the Guarantor a certificate with respect to such
destruction. Such certificate shall state, in the case of
destruction of the Regulation S Global Security, that all
certificates of the Euroclear Operator or Cedel as to beneficial
ownership required by Section 4 hereof have been duly presented
by the Euroclear Operator or Cedel.
9. Mutilated, Destroyed, Stolen or Lost Securities.
The Fiscal Agent is hereby authorized, in accordance with
the provisions of the Securities and this Section, from time to
time to authenticate and deliver Securities in exchange for or in
lieu of Securities that become mutilated, destroyed, stolen or
lost, upon receipt of indemnity and such other documents or proof
as may be required in form and substance satisfactory to the
Fiscal Agent, the Company and the Guarantor. Every Security
authenticated and delivered in exchange for or in lieu of any
such Security shall have endorsed thereon a Guarantee and shall
be considered obligations of the Company and the Guarantor.
10. Signatures.
(a) Securities shall be executed on behalf of the
Company by its President, its Secretary, any Vice President or
its Treasurer, any of whose signatures may be manual or in
facsimile. Any signature in facsimile may be imprinted or
otherwise reproduced on the Securities. The Company may adopt
and use the signature or facsimile signature of any person who
shall be a President, Secretary, Vice President or Treasurer at
the time of the execution of the Securities, notwithstanding the
fact that at the time the Securities shall be authenticated and
delivered, or disposed of, such person shall have ceased to have
held such office by virtue of which such person so executed such
security.
(b) The Guarantees shall be executed on behalf of the
Guarantor by its President, any Vice President, or its Treasurer,
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manually or in facsimile, and a facsimile of its corporate seal
shall be impressed, imprinted or engraved thereon and shall be
attested by its Secretary or one of its Assistant Secretaries,
whose signature may be manual or in facsimile, prior to the
authentication of the Securities on which they are endorsed. Any
signature in facsimile may be imprinted or otherwise reproduced
on the Guarantees. The Guarantor may adopt and use the signature
or facsimile signature of any person who shall be any such
officer of the Guarantor at the time of the execution of the
Guarantee, notwithstanding the fact that at the time the
Securities shall be authenticated and delivered, or disposed of,
such person shall have ceased to be such officer of the
Guarantor.
11. Agreements Concerning Agents.
Each of the Agents accepts its obligations herein and in the
Securities, upon the terms and conditions hereof and thereof,
including the following, to all of which the Company and the
Guarantor agree and to all of which the rights hereunder of the
holders from time to time of the Securities and coupons shall be
subject:
(a) Each of the Agents shall be entitled to reasonable
compensation for all services rendered by such Agent, as
separately agreed by the Company and the Agent, and the
Company and the Guarantor agree promptly to pay such
compensation and to reimburse each of the Agents for the
reasonable out-of-pocket expenses (including, but not
limited to, counsel fees) incurred by such Agent in
connection with the services rendered by it hereunder. The
Company and the Guarantor also agree to indemnify each of
the Agents and each other paying agency and conversion
agency of the Company for, and to hold it harmless against,
any loss, liability or expense (including the costs and
expenses of defending against any claim of liability)
incurred without negligence or bad faith on the part of such
Agent or other paying agency and conversion agency of the
Company hereunder. The obligations of the Company and the
Guarantor under this clause (a) shall survive payment of the
Securities or the resignation or removal of any Agent or
paying agency or conversion agency.
(b) In acting under this Agreement and in connection
with the Securities, each of the Agents and each other
paying agency and conversion agency of the Company is acting
solely as agent of the Company, and does not assume any
obligation, or relationship of agency or trust, for or with
any of the owners or holders of the Securities or coupons,
except that all funds held by the Paying Agent or any other
paying agency of the Company for payment of principal of (or
Additional Amounts, if any, on) the Securities shall be held
in trust but need not be segregated from other funds except
as required by law and as set forth herein and in the
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Securities, and shall be applied as set forth herein and in
the Securities; provided, however, that monies paid by the
Company or the Guarantor to the Paying Agent or any other
paying agency of the Company for the payment of principal of
or interest on (or Additional Amounts, if any, on)
Securities remaining unclaimed at the end of two years after
such principal or interest (or Additional Amounts, if any)
shall have become due and payable shall be repaid to the
Company or the Guarantor, as provided and in the manner set
forth in the Securities, whereupon the aforesaid trust shall
terminate and all liability of the Paying Agent or such
other paying agency or the Company with respect thereto
shall cease.
(c) Each of the Agents and each other paying agency
and conversion agency of the Company may consult with one or
more counsel satisfactory to it (including counsel to the
Company or the Guarantor), and the written opinion of such
counsel shall be full and complete authorization and
protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the opinion of such counsel.
(d) Each of the Agents and each other paying agency
and conversion agency of the Company shall be protected and
shall incur no liability for or in respect of any action
taken, omitted or suffered by it in reliance upon any
Security, Guarantee, notice, direction, consent,
certificate, affidavit, statement or other paper or document
believed in good faith by such Agent or such other paying
agency and conversion agency of the Company to be genuine
and to have been signed by the property parties.
(e) Each of the Agents and each other paying agency
and conversion agency of the Company, its officers,
directors and employees may become the owner of, or acquire
any interest in, any Securities with the same rights that it
or they would have if it were not an Agent or such other
paying agency of the Company hereunder, and may engage or be
interested in any financial or other transaction with the
Company, the Guarantor and their affiliates and may act on,
or as depositary, trustee or agent for, any committee or
body of holders of Securities or other obligations of the
Company or the Guarantor, as freely as if it were not an
Agent or a paying agency or conversion agency of the Company
hereunder.
(f) Neither the Paying Agent nor any other paying
agency of the Company shall be under any liability for
interest on any monies at any time received by it pursuant
to any of the provisions of this Agreement or of the
Securities.
(g) The recitals contained herein and in the
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Securities (except in the Fiscal Agent's certificates of
authentication), shall be taken as the statements of the
Company or the Guarantor, as the case may be, and the Agents
assume no responsibility for the correctness of the same.
None of the Agents makes any representation as to the
validity or sufficiency of this Agreement or the Securities
or the Guarantees, except for such Agent's due authorization
to execute this Agreement. Neither the Agents nor any other
paying agency or conversion agency of the Company shall be
accountable for the use or application by the Company of the
proceeds of any Securities authenticated and delivered by
the Fiscal Agent in conformity with the provisions of this
Agreement.
(h) The Agents and each other paying agency and
conversion agency of the Company shall be obligated to
perform such duties and only such duties as are herein and
in the Securities specifically set forth and no implied
duties or obligations shall be read into this Agreement or
the Securities against the Agents or any other paying agency
of the Company. The Agents shall not be under any
obligation to take any action hereunder which may tend to
involve them in any expense or liability, the payment of
which, within a reasonable time, is not, in their reasonable
opinion, assured to them.
(i) Unless herein or in the Securities otherwise
specifically provided, any order, certificate, notice,
request, direction, or other communication, from the Company
or the Guarantor made by or given by it under any provision
of this Agreement shall be sufficient if signed by the
President, the Secretary, any Vice President or the
Treasurer of the Company or the Guarantor, as the case may
be.
(j) Anything in this Agreement to the contrary
notwithstanding, none of the Agents shall incur any
liability hereunder, except as a result of negligence or bad
faith attributable to it or its officers or employees, and
shall incur no liability for the negligence or bad faith of
its agents appointed by it with due care; provided that the
Agent shall notify the Company and the Guarantor of the
appointment of any such agents.
(k) The Agents shall not be liable for any loss caused
by events beyond the reasonable control of the Agents,
including any malfunction, interruption of or error in the
transmission of information caused by any machines or
systems or interruption of communication facilities,
abnormal operating conditions or acts of God. The Agents
shall have no liability whatsoever for any consequential,
special, indirect or speculative losses or damages.
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12. Offices, Resignation, Successors, Etc. of Agents,
Paying, Conversion and Transfer Agencies.
(a) The Company agrees that, until none of the
Securities are outstanding or until monies for the payment of all
principal of (and Additional Amounts, if any, on) all outstanding
Securities shall have been made available at the office of the
Paying Agent and shall have been returned to the Company as
provided in the Securities, there shall at all times be a Fiscal
Agent in the Borough of Manhattan, New York City, which shall be
a bank or trust company organized and doing business under the
laws of the United States of America or of any State of the
United States of America, in good standing and authorized under
such laws to exercise corporate trust powers, a Paying Agent, a
Conversion Agent and a Transfer Agent having offices in New York
City, which shall be a bank or trust company organized, in good
standing and doing business under the laws of the United States
of America or of any State of the United States of America, and a
paying agency, a conversion agency and a transfer agency in at
least one city in Western Europe, which shall be Luxembourg if
the Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon.
(b) Each of the Agents may at any time resign as such
Agent by giving written notice to the Company and to the
Guarantor of such intention on its part, specifying the date on
which its desired resignation shall become effective; provided,
however, that such date shall not be less than 90 days after
receipt of such notice by the Company and the Guarantor unless
the Company and the Guarantor agree to accept less notice. Each
of the Agents hereunder may be removed at any time by the filing
with it of any instrument in writing signed on behalf of the
Company and the Guarantor and specifying such removal and the
date when it is intended to become effective. Such resignation
or removal shall take effect upon the date of the appointment by
the Company and the Guarantor, as hereinafter provided, of a
successor Fiscal Agent, Conversion Agent or Paying Agent, as the
case may be, and the acceptance of such appointment by such
successor Agent. Upon its resignation or removal, each of the
Agents shall be entitled to the payment by the Company and the
Guarantor of its compensation for the services rendered hereunder
and to the reimbursement of all reasonable out-of-pocket expenses
incurred in connection with the services rendered hereunder by
such Agent.
(c) In case at any time any of the Agents shall
resign, or shall be removed, or shall be incapable of acting, or
shall file a voluntary petition as a debtor under Chapter 7 or 11
of Title 11 of the United States Code or have an order for relief
entered against it as a debtor under Chapter 7 or 11 of Title 11
of the United States Code or make an assignment for the benefit
of its creditors or consent to the appointment of a receiver of
all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or
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if an order of any court shall be entered approving any petition
filed by or against the Fiscal Agent under any legislation
similar to the provisions of Title 11 of the United States Code
or against any of the Agents under the provisions of any
legislation similar to the provisions of Title 11 of the United
States Code, or if a receiver of it or of all or any substantial
part of its property shall be appointed, or if any public officer
shall take charge or control of it or of its property or affairs,
for the purpose of rehabilitation, conservation or liquidation, a
successor Agent, qualified as aforesaid, shall be appointed by
the Company and the Guarantor by an instrument in writing. Upon
the appointment as aforesaid of a successor Agent and acceptance
by it of such appointment, the Agent so superseded shall cease to
be such Agent hereunder. If no successor Agent shall have been
so appointed by the Company and the Guarantor and shall have
accepted appointment as hereinafter provided, any holder of a
Security, on behalf of itself and all others similarly situated,
or any Agent may petition any court of competent jurisdiction for
the appointment of a successor Agent and shall promptly notify
the Company and the Guarantor of such action.
(d) Any successor Fiscal Agent, Conversion Agent,
Transfer Agent or Paying Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company and
the Guarantor an instrument accepting such appointment hereunder,
and thereupon such successor Agent, without any further act, deed
or conveyance, shall become vested with all the authority,
rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as such
Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become
obligated to transfer, deliver and pay over, and such successor
Agent shall be entitled to receive, all monies, securities or
other property on deposit with or held by such predecessor, as
such Agent hereunder.
(e) Any corporation or bank into which any of the
Agents hereunder may be merged or converted, or any corporation
or bank with which such Agent may be consolidated, or any
corporation or bank resulting from any merger, conversion or
consolidation to which such Agent shall be a party, or any
corporation or bank to which such Agent shall sell or otherwise
transfer all or substantially all the assets and business of such
Agent, or any corporation to which the Fiscal Agent shall sell or
otherwise transfer all or substantially all of its corporate
trust business, provided that it shall be qualified as aforesaid,
shall be the successor to such Agent under this Agreement without
the execution or filing of any document or any further act on the
part of any of the parties hereto.
(f) So long as there shall be a Fiscal Agent and
Paying Agent hereunder, the Company shall maintain agencies (i)
where Registered Securities (but not Bearer Securities) may be
presented for surrender for payment (and for the payment of
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Additional Amounts on the Registered Securities, if any) and
where Securities may be surrendered for conversion in the Borough
of Manhattan, New York City, and (ii) where Bearer Securities and
coupons may be surrendered for payment (and for the payment of
Additional Amounts (pursuant to Section 2 of the Bearer
Securities) on Bearer Securities, if any) and where Bearer
Securities may be surrendered for conversion in at least one city
in Western Europe, which shall be Luxembourg if the Securities
are listed on the Luxembourg Stock Exchange and so long as listed
thereon. The Company now intends to maintain additional agencies
(subject to applicable laws and regulations) where Bearer
Securities may be surrendered for payment (and for the payment of
Additional Amounts (pursuant to Section 2 of the Bearer
Securities) on Bearer Securities, if any), where Registered
Securities may be surrendered for payment and where Securities
may be surrendered for conversion in London, England and, if the
Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon, Luxembourg, and during such period to
keep the Agents advised of the names and locations of such
agencies. Unless the Company shall otherwise notify each of the
Agents in writing, the sole such paying agencies and conversion
agencies shall be the agencies specified in the Securities. The
Company authorizes the Paying Agent to pay to or to the order of
the aforesaid agencies, upon demand by such agencies, funds for
the payment of the principal of (and Additional Amounts pursuant
to Section 2 of the Registered Securities and Bearer Securities,
if any, on) the Securities. Except as otherwise arranged by the
Company, the Fiscal Agent shall arrange for the payment of the
compensation of such paying agencies for their services as such,
and the Company and the Guarantor shall pay to the Fiscal Agent
from time to time sufficient funds to make such payments.
(g) So long as there shall be a Fiscal Agent, Paying
Agent and Conversion Agent hereunder, the Company shall maintain
a Security Registrar and additional transfer agencies (the
"Transfer Agents") (i) where Registered Securities may be
surrendered for exchange for other Registered Securities in New
York City and (ii) in at least one city in Western Europe, which
shall be Luxembourg if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon, where
Bearer Securities may be delivered in exchange for Bearer
Securities or for Registered Securities. Consistent with
applicable laws and regulations, including the provisions of the
federal income tax laws of the United States, such agencies may
be the same agencies as or different agencies from those
maintained by the Company pursuant to Section 12(f).
The Company hereby appoints, subject to the listing of the
Securities on the Luxembourg Stock Exchange, Banque
Internationale a Luxembourg, 69, route d'Esch, L-1470 Luxembourg
Ville, Luxembourg, as Transfer Agent for such exchanges. The
transfer, exchange and registration of transfer or exchange of
Registered Securities shall be made by the Fiscal Agent in New
York City.
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13. Taxes.
The Company will pay all stamp taxes and other similar
duties, if any, that may be imposed by the United States of
America or the United Kingdom, or any state or political
subdivision thereof or taxing authority therein, with respect to
the execution or delivery of this Agreement, or the issuance of
the Regulation S Global Security or the Guarantees, or the
exchange from time to time of the Regulation S Global Security
for Registered Securities and Bearer Securities, or with respect
to the issue or delivery of shares of Common Stock on conversion
of Securities; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect
of any transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the holder of the
Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the person requesting
such issue has paid to the Company the amount of any such tax or
duty or has established to the satisfaction of the Company that
such tax or duty has been paid.
14. Meetings and Votes of Holders.
(a) A meeting of holders of Securities may be called
at any time and from time to time pursuant to this Section for
any of the following purposes: (i) to give any notice to the
Company, to the Guarantor or to the Fiscal Agent, or to give any
directions to the Fiscal Agent, or to consent to the waiving of
any default hereunder or under the Registered Securities and
Bearer Securities and its consequences, or to take any other
action authorized to be taken by holders of Securities pursuant
to Section 9 of the Registered Securities and Bearer Securities;
or (ii) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount
of the Securities under any other provision of this Agreement,
the Registered Securities and Bearer Securities or under
applicable law.
(b) Meetings of holders of Securities may be held at
such place or places in New York City or London as the Fiscal
Agent or, in case of its failure to act, the Company, the
Guarantor or the holders calling the meeting shall from time to
time determine.
(c) The Fiscal Agent may at any time call a meeting of
holders of Securities to be held at such time and at such place
in any of the locations designated in Section 14(b) hereof as the
Fiscal Agent shall determine. Notice of every meeting of holders
shall be made as specified in Section 19 hereof, except that such
notice shall set forth the time and the place of such meeting, in
general terms the action proposed to be taken at such meeting and
a general description of regulations applicable to such meeting,
and shall be published at least three times in the publications
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specified in such Section 19, the first publication to be not
less than 21 nor more than 180 days prior to the date fixed for
the meeting.
(d) In case at any time the Company, the Guarantor or
the holders of at least 25% in aggregate principal amount of the
Securities shall have requested the Fiscal Agent to call a
meeting of the holders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting,
and the Fiscal Agent shall not have given the first notice of
such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company, the Guarantor or the holders
of Securities in the amount above specified may determine the
time and the place in either of the locations designated in
Section 14(b) hereof for such meeting and may call such meeting
to take any action authorized in Section 14(a) hereof by giving
notice thereof as provided in Section 14(c) hereof.
(e) To be entitled to vote at any meeting of holders
of Securities, a person shall be (i) a holder of one or more
Securities, or (ii) a person appointed by an instrument in
writing as proxy for a holder or holders of Securities by such
holder or holders, which proxy need not be a holder of
Securities. The only persons who shall be entitled to be present
or to speak at any meeting of holders shall be the persons
entitled to vote at such meeting and their counsel and any
representatives of the Fiscal Agent and its counsel and any
representatives of the Company and its counsel and any
representatives of the Guarantor and its counsel.
(f) The persons entitled to vote a majority in
principal amount of the outstanding Securities shall constitute a
quorum for the transaction of all business specified in Section
14(a) hereof. No business shall be transacted in the absence of a
quorum unless a quorum is represented when the meeting is called
to order. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if
convened at the request of the holders of Securities (as provided
in Section 14(d) hereof), be dissolved. In any other case the
meeting shall be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in Section
14(c) hereof except that such notice need be published only once
but must be given not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Subject to the
foregoing, at the reconvening of any meeting adjourned for a lack
of a quorum the persons entitled to vote 25% in principal amount
of the Securities outstanding shall constitute a quorum for the
taking of any action set forth in the notice of the original
meeting. Notice of the reconvening of an adjourned meeting shall
state expressly the percentage of the aggregate principal amount
of the Securities that shall constitute a quorum. At a meeting
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or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid, any resolution and all matters (except as
limited by Section 9 of the Registered Securities and Bearer
Securities) shall be effectively passed and decided if passed or
decided by the persons entitled to vote a majority in principal
amount of the Securities represented and voting at such meeting,
provided that such amount shall be not less than 25% in principal
amount of the Securities outstanding. Any holder of a Security
who has executed an instrument in writing appointing a person as
his proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided,
however, that such holder shall be considered as present or
voting only with respect to the matters covered by such
instrument in writing. Any resolution passed or decision taken
at any meeting of the holders of Securities duly held in
accordance with this Section 14 shall be binding on all the
holders of Securities whether or not present or represented at
the meeting.
(g) Notwithstanding any other provision of this
Agreement, the Fiscal Agent may make such reasonable regulations
as it may deem advisable for any meeting of holders of Securities
in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer
Securities shall be proved by the production of the Bearer
Securities or by a certificate executed, as depositary, by, and
the appointment of any proxy shall be proved by having the
signature of the person executing the proxy witnessed or
guaranteed by, in each case, any trust company, bank or banker
satisfactory to the Fiscal Agent. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified herein or other proof. The holding of Registered
Securities shall be proved by the registry books maintained in
accordance with Section 2(d) hereof or by a certificate or
certificates of the Fiscal Agent in its capacity as Company's
agent for the maintenance of such books.
(h) The Fiscal Agent shall, by an instrument in
writing, appoint a temporary chairperson and a temporary
secretary of the meeting, unless the meeting shall have been
called by the Company, the Guarantor or by the holders of
Securities or the Fiscal Agent at the request of the Company, the
Guarantor or the holders of Securities as provided in Section
14(d) hereof and in the Securities, in which case the Company,
the Guarantor or the holders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairperson and a
temporary secretary. A permanent chairperson and a permanent
secretary of the meeting shall be elected by vote of the holders
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of a majority in principal amount of the Securities represented
at the meeting and entitled to vote.
(i) At any meeting each holder or proxy shall be
entitled to one vote for each U.S. $1,000 principal amount of
Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any
Securities challenged as not outstanding and ruled by the
chairperson of the meeting to be not outstanding. The
chairperson of the meeting shall have no right to vote, except as
a holder or proxy.
(j) Any meeting of holders of Securities duly called
pursuant to Section 14(c) or 14(d) hereof at which a quorum is
present may be adjourned from time to time by vote of the holders
(or proxies for the holders) of a majority in principal amount of
the Securities represented at the meeting and entitled to vote;
and the meeting may be held as so adjourned without further
notice.
(k) The vote upon any resolution submitted to any
meeting of holders of Securities shall be by written ballots on
which shall be subscribed the signatures of the holders of
Securities or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.
The permanent chairperson of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record, at least
in triplicate, of the proceedings of each meeting of holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was published as provided in Section 14(c) or
14(d) hereof and, if applicable, Section 14(f) hereof. Each copy
shall be signed and verified by the affidavits of the permanent
chairperson and secretary of the meeting, and one such copy shall
be delivered to the Company, another to the Guarantor and another
to the Fiscal Agent to be preserved by the Fiscal Agent, the copy
delivered to the Fiscal Agent to have attached thereto the
ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
15. Merger, Consolidation or Sale of Assets.
(a) If at any time there shall be a merger,
consolidation, sale or conveyance of assets or assumption of
obligations to which any of the covenants contained in Section 6
of the Registered Securities and Bearer Securities or Section 3
of the Guarantees, is applicable, then in any such event the
successor or assuming corporation referred to therein will
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promptly deliver to the Fiscal Agent:
(i) a certificate signed by an executive officer of
such successor or assuming corporation stating that as of the
time immediately after the effective date of any such
transaction, the covenants of the Company or the Guarantor, as
the case may be, contained in the Registered Securities and
Bearer Securities or the Guarantees, as applicable, have been
complied with and the successor or assuming corporation is not in
default under the provisions of this Agreement or the Securities
or the Guarantees, as applicable; and
(ii) a written opinion of legal counsel (who may be an
employee of or counsel to the successor or assuming corporation)
stating that, in such counsel's opinion, such covenants have been
complied with and that any instrument or instruments executed in
the performance of such covenants comply with the requirements
thereof.
In case of any such merger, consolidation, sale, conveyance
or assumption, such successor or assuming corporation shall
succeed to and be substituted for the Company or the Guarantor,
as the case may be, with the same effect, subject to (in the case
of a merger to which the Company is a party) Section 6(b) of the
Registered Securities and Bearer Securities, as if such successor
or assuming corporation had been named herein and in the
Registered Securities and Bearer Securities or the Guarantees, as
applicable, as the Company or the Guarantor, as the case may be;
the Company or the Guarantor, as the case may be, shall thereupon
be relieved of any further obligation or liability hereunder or
upon the Securities or the Guarantees, as applicable, provided
that any successor or assuming corporation shall have the right
to redeem the Securities, pursuant to Section 3(b) of the
Registered Securities and Bearer Securities, only as a result of
circumstances which occur subsequent to such merger,
consolidation, sale, conveyance or assumption and as a result of
which the Company would have had such right if the Company had
remained the obligor on the Securities. The Company or the
Guarantor, as the case may be, as the predecessor corporation may
thereupon or at any time thereafter be dissolved, wound up or
liquidated. If applicable, such successor or assuming
corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company any or all
of the Securities issuable hereunder which theretofore shall not
have been executed on behalf of the Company and delivered to the
Fiscal Agent; and, upon the order of such successor or assuming
corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed,
the Fiscal Agent shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered
by the officers of the Company to the Fiscal Agent for
authentication, and any Securities which such successor or
assuming corporation thereafter shall cause to be signed and
delivered to the Fiscal Agent for that purpose. If applicable,
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<PAGE>
such successor or assuming corporation may cause to be endorsed
either in its own name or in the name of the Guarantor,
Guarantees on any or all of the Securities issuable hereunder
which theretofore shall not have been so endorsed and delivered
to the Fiscal Agent. All the Securities so issued shall in all
respects have the same legal rank and benefit under this
Agreement as the Securities theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such
Securities had been issued at the date of the execution hereof.
In case of any merger, consolidation, sale, conveyance or
assumption, such changes in phraseology and form (but not in
substance) may be made in the Securities or the Guarantees
thereafter to be issued as may be appropriate.
(b) The Fiscal Agent may rely on the documents
delivered pursuant to this Agreement by any successor or assuming
corporation pursuant to this Section 15 as conclusive evidence
that any such merger, consolidation, sale, conveyance or
assumption complies with the provisions of this Section and the
Securities.
16. Governing Law.
THIS AGREEMENT, THE SECURITIES AND THE GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, UNITED STATES OF AMERICA, WITHOUT
GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.
17. Amendments.
This Agreement may be amended by the parties hereto, and
certain provisions hereof may be waived, in the manner provided
in Section 9 of the Registered Securities and Bearer Securities.
This Agreement may also be amended by the parties hereto, without
the consent of the holder of any Security, for the purposes set
forth in Section 9 of the Registered Securities and Bearer
Securities and for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision
contained herein or in any manner that the parties may mutually
deem necessary or desirable, and that shall not materially
adversely affect the interests of the holders of the Securities.
18. Agent for Service of Process.
As long as any of the Securities remain outstanding, the
Company and the Guarantor will at all times have an authorized
agent in the City of New York, upon whom process may be served in
any legal action or proceeding arising out of or relating to this
Agreement or any Security or any Guarantee. Service of process
upon such agent and written notice of such service mailed or
delivered to the Company or the Guarantor, as the case may be,
shall to the extent permitted by law be deemed in every respect
effective service of process upon the Company or the Guarantor,
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<PAGE>
as the case may be, in any such legal action or proceeding. Each
of the Company and the Guarantor hereby appoints the Fiscal Agent
as its agent for such purpose, and covenants and agrees that
service of process in any legal action or proceeding may be made
upon it at the office of such agent located at 450 West 33rd
Street, 15th Floor, New York, New York 10001 (or such other
address in the City of New York, as may be the principal
corporate trust office of such agent), unless and until the
Company or the Guarantor, as the case may be, shall designate
another agent for such purpose by written notice to the Fiscal
Agent. If the Fiscal Agent receives any such service of process,
it shall promptly notify the Company and the Guarantor of such
service.
19. Notices.
All notices hereunder shall be deemed to have been given
when deposited in the mail as first-class mail, registered or
certified, return receipt requested, postage prepaid, addressed
to any party hereto as follows:
The Company: 470 Wildwood Street
P.O. Box 2999
Woburn, MA 01888-1799
with a copy to the
Guarantor and the
General Counsel of
the Guarantor
The Guarantor: 81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
Attn: Secretary,
with a copy to the General Counsel
The Fiscal Agent: 450 West 33rd Street
15th Floor
New York, New York 10001
Attn: Corporate Trust Department
Chemical Bank House
125 London Wall
London EC2Y 5AJ
England
Attn: Corporate Agency
The Paying Agent: 450 W. 33rd Street
15th Floor
New York, New York 10001
Attn: Corporate Trust Department
Chemical Bank House
125 London Wall
London EC2Y 5AJ
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<PAGE>
England
Attn: Corporate Agency
The Transfer Agent: Banque Internationale a
Luxembourg, S.A.
69, Route d'Esch
L-1470 Luxembourg Ville, Luxembourg
or at any other address of which any of the foregoing shall have
notified the others in writing.
Notices to holders of the Securities shall be given by
publication on a Business Day in an Authorized Newspaper. For
purposes of this Agreement, the term "Authorized Newspaper" means
an English language newspaper, customarily published on each
business day in morning editions, whether or not it shall be
published in Saturday, Sunday or holiday editions, such as The
Wall Street Journal (Eastern edition) in New York City, the
Financial Times in London and the Luxemburger Wort in Luxembourg.
If by reason of the temporary or permanent suspension of
publication of any newspaper or by reason of any other cause it
shall be impossible to make publication of such notice in an
Authorized Newspaper as herein provided, then such publication or
other notice in lieu thereof as shall be made by the Fiscal Agent
shall constitute sufficient publication of such notice, if such
publication or other notice shall, so far as may be possible,
approximate the terms and conditions of the publication in lieu
of which it is given. Notices will be mailed by the Fiscal
Agent, on behalf of and at the expense of the Company, by
first-class mail to registered holders of Registered Securities
at their registered address as the same shall appear on the books
of the Fiscal Agent on the day 15 days prior to such mailing.
The Fiscal Agent shall promptly furnish to the Company and to
each other paying agency of the Company a copy of each notice so
published or mailed.
20. Counterparts.
This Agreement may be executed in separate counterparts, and
by each party separately in a separate counterpart, each such
counterpart, when so executed and delivered, to be an original.
Such counterparts shall together constitute but one and the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Fiscal Agency Agreement as of the date first above written.
THERMEDICS INC.
By: /s/ Jonathan Painter
------------------------
Name: Jonathan Painter
Title: Treasurer
THERMO ELECTRON CORPORATION
By: /s/ Jonathan Painter
------------------------
Name: Jonathan Painter
Title: Treasurer
CHEMICAL BANK,
as Fiscal Agent
By: /s/ John B. Bryan
-----------------------
Name: John B. Bryan
Title: Operations Officer
PAGE
<PAGE>
EXHIBIT A
(FORM OF FACE OF REGISTERED SECURITY)
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED WITHIN THE "UNITED STATES" OR TO
"U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE SECURITIES
ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. ANY OFFER, SALE OR OTHER DISPOSITION IS SUBJECT TO THE
RIGHT OF THE ISSUER OF THIS SECURITY AND THE FISCAL AGENT FOR
SUCH ISSUER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM
AND SUBSTANCE.
A-1PAGE
<PAGE>
THERMEDICS INC.
(Incorporated in the State of Massachusetts)
NON-INTEREST BEARING CONVERTIBLE SUBORDINATED DEBENTURE DUE 2003
GUARANTEED ON A SUBORDINATED BASIS BY
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
No. R-________ U.S.$_______
Thermedics Inc., a corporation duly incorporated and
existing under the laws of the State of Massachusetts (the
"Company"), for value received, hereby promises to pay to
__________________, or registered assigns, the principal sum of
__________________ United States Dollars on June 1, 2003 upon
presentation and surrender hereof. This Security shall not bear
interest.
Reference is hereby made to the further provisions of this
Security set forth under Terms and Conditions of the Securities
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Security shall not become valid or enforceable for any
purpose unless and until the certificate of authentication hereon
shall have been manually signed by a duly authorized signatory of
the Fiscal Agent.
IN WITNESS WHEREOF, the Company has caused this Security to
be duly executed in its corporate name by the manual or facsimile
signature of a duly authorized officer.
Dated:
THERMEDICS INC.
By:____________________________
Name:
Title:
Attest:
_______________________
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<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-
mentioned Fiscal Agency Agreement.
CHEMICAL BANK,
as Fiscal Agent
By:__________________________
Authorized Signatory
Dated:
A-3PAGE
<PAGE>
(FORM OF FACE OF BEARER SECURITY)
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a)
OF THE UNITED STATES INTERNAL REVENUE CODE.
THERMEDICS INC.
(Incorporated in the State of Massachusetts)
NON-INTEREST BEARING CONVERTIBLE SUBORDINATED DEBENTURE DUE 2003
GUARANTEED ON A SUBORDINATED BASIS BY
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
No. B-________ U.S.$______
Thermedics Inc., a corporation duly incorporated and
existing under the laws of the State of Massachusetts (the
"Company"), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Security the principal
sum of __________ United States Dollars on June 1, 2003. This
Security shall not bear interest. Such payment shall be made in
such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public
and private debts, subject to any laws or regulations applicable
thereto and to the right of the Company (limited as provided in
the Fiscal Agency Agreement (as defined on the reverse hereof))
to terminate the appointment of any paying agency, at the London
office of Chemical Bank located at Chemical Bank House, 125
London Wall, London EC2Y 5AJ, England, or, if the Securities are
listed on the Luxembourg Stock Exchange and so long as listed
thereon, Banque Internationale a Luxembourg S.A., 69, Route
d'Esch, L-1470 Luxembourg or at such other offices or agencies
outside the United States of America, its territories and its
possessions as the Company may designate, by United States dollar
check drawn on a bank in the City of New York, or (if
arrangements satisfactory to the Company and the Fiscal Agent (as
defined on the reverse hereof) are made) by wire transfer to a
United States dollar account maintained by the holder at a bank
outside the United States, its territories and its possessions.
No payment on this Security will be made at the corporate trust
office of the Fiscal Agent or any other paying agency maintained
by the Company in the United States, its territories or
A-4PAGE
<PAGE>
possessions, nor will any payment be made by transfer to an
account in, or by mail to an address in, the United States, its
territories or possessions, except as may be permitted by United
States tax laws and regulations in effect at the time of such
payment without detriment to the Company. Notwithstanding the
foregoing, payment of this Security may be made at the office of
the Fiscal Agent in the City of New York if full payment at all
paying agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar
restrictions.
Reference is hereby made to the further provisions of this
Security set forth under Terms and Conditions of the Securities
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Security shall not become valid or enforceable for any
purpose unless and until the certificate of authentication hereon
shall have been manually signed by a duly authorized signatory of
the Fiscal Agent.
IN WITNESS WHEREOF, the Company has caused this Security to
be duly executed in its corporate name by the manual or facsimile
signature of a duly authorized signatory and coupons bearing the
facsimile signature of a duly authorized signatory to be annexed
hereto.
Dated: June 3, 1996
THERMEDICS INC.
By:____________________________
Name:
Title:
Attest:
____________________
A-5PAGE
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-
mentioned Fiscal Agency Agreement.
CHEMICAL BANK,
as Fiscal Agent
By:____________________________
Authorized Signatory
Dated:
A-6PAGE
<PAGE>
(FORM OF REVERSE OF REGISTERED AND BEARER SECURITIES)
Terms and Conditions of the Securities
1. General.
(a) This Security is one of a duly authorized issue of
Securities of the Company designated as its Non-Interest Bearing
Convertible Subordinated Debentures Due 2003 (herein called the
"Securities"). The Company, for the benefit of the holders from
time to time of the Securities, has entered into a Fiscal Agency
Agreement dated as of June 3, 1996 (the "Fiscal Agency
Agreement") among the Company, Thermo Electron Corporation, a
corporation duly organized and existing under the laws of the
State of Delaware, as Guarantor (the "Guarantor") and Chemical
Bank, as Fiscal Agent, Paying Agent, Security Registrar and
Conversion Agent (the "Fiscal Agent"), to which Fiscal Agency
Agreement reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Guarantor, the Fiscal Agent, and
the holders of Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The
holders of the Securities will be entitled to the benefits of, be
bound by, and be deemed to have notice of, all of the provisions
of the Fiscal Agency Agreement. A copy of the Fiscal Agency
Agreement is on file and may be inspected at the office of paying
agencies appointed by the Company.
(b) The Securities are issuable as bearer securities
(the "Bearer Securities"), in the denominations of U.S. $1,000
and U.S. $10,000, and as registered securities (the "Registered
Securities"), in denominations of U.S. $1,000 and integral
multiples thereof. The Registered Securities, and transfers
thereof, shall be registered as provided in Section 8 hereof and
in the Fiscal Agency Agreement. The holder of any Bearer
Security and the registered holder of a Registered Security shall
(to the fullest extent permitted by applicable law) be treated at
all times, by all persons and for all purposes as the absolute
owner of such Security, regardless of any notice of ownership,
theft or loss or of any writing thereon.
(c) The Securities are direct and unsecured
obligations of the Company, subordinated as set forth in Section
7 hereof. There are no restrictions herein on other indebtedness
or securities which may be incurred or issued by the Company.
2. Additional Amounts. The Company will pay to the holder
of this Security who is a United States Alien (as defined below)
such additional amounts ("Additional Amounts") as may be
necessary in order that every net payment of the principal of
this Security, after withholding for or on account of any
present or future tax, assessment or governmental charge imposed
upon or as a result of such payment by the United States or any
political subdivision or taxing authority thereof or therein,
A-7PAGE
<PAGE>
will not be less than the amount provided herein to be then due
and payable; provided, however, that the foregoing obligation to
pay Additional Amounts shall not apply to any one or more of the
following:
(a) any tax, assessment or other governmental charge
which would not have been so imposed but for (i) the existence of
any present or former connection between such holder (or between
a fiduciary, settlor, beneficiary, member or stockholder of, or a
person holding a power over, such holder, if such holder is an
estate, trust, partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary,
settlor, beneficiary, member, stockholder or person holding a
power) being or having been a citizen or resident or treated as a
resident thereof or being or having been engaged in a trade or
business therein or being or having been present therein or
having or having had a permanent establishment therein, or (ii)
such holder's present or former status as a personal holding
company, foreign personal holding company, passive foreign
investment company, foreign private foundation or other foreign
tax-exempt entity or controlled foreign corporation for United
States tax purposes or a corporation which accumulates earnings
to avoid United States Federal income tax, or (iii) such holder's
status as a bank extending credit pursuant to a loan agreement
entered into in the ordinary course of business;
(b) any tax, assessment or other governmental charge
which would not have been so imposed but for the presentation by
the holder of this Security for payment on a date more than 10
days after the date on which such payment became due and payable
or on the date on which payment thereof is duly provided,
whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer or
personal property tax or any similar tax, assessment or other
governmental charge;
(d) any tax, assessment or other governmental charge
which would not have been imposed but for the failure to comply
with certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
present or former connection with the United States of the holder
or beneficial owner of such Security or any related coupon if
such compliance is required by statute, regulation or ruling of
the United States or any political subdivision or taxing
authority thereof as a precondition to relief or exemption from
such tax, assessment or other governmental charge;
(e) any tax, assessment or other governmental charge
which is payable otherwise than by deduction or withholding from
payments of principal of this Security; or
(f) any tax, assessment or other governmental charge
required to be withheld by any paying agent from any payment of
A-8PAGE
<PAGE>
principal of this Security if such payment can be made without
such withholding by any other paying agent; nor will Additional
Amounts be paid with respect to any payment of the principal of
this Security (or cash in lieu of issuance of shares of Common
Stock upon conversion) to a person other than the sole beneficial
owner of such payment, or that is a partnership or fiduciary to
the extent such beneficial owner, member of such partnership or
beneficiary or settlor with respect to such fiduciary would not
have been entitled to the payment of Additional Amounts had such
beneficial owner, member, beneficiary or settlor been the holder
of this Security.
The term "United States Alien" means any person who, for
United States Federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a foreign
partnership, or an estate or trust subject to United States
Federal income tax on net income basis, and the term "United
States" means the United States of America (including the several
States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
Except as specifically provided herein and in the Fiscal
Agency Agreement, the Company shall not be required to make any
payment with respect to any tax, assessment or other governmental
charge imposed by any government or any political subdivision or
taxing authority thereof or therein.
Whenever any Additional Amounts are to be paid on the
Securities, the Company will give notice to the Guarantor, the
Fiscal Agent, the Paying Agent and any paying agency of the
Company, all as provided in the Fiscal Agency Agreement.
3. Redemption.
(a) The Company, at its option, may redeem the
Securities, in whole or in part, at any time on or after June 1,
1999, upon notice as hereinafter prescribed, at a redemption
price equal to 100% of the principal amount thereof. In the
event of a partial redemption, the Securities to be redeemed will
be selected by the Fiscal Agent not more than 75 days before the
date fixed for redemption by such method as the Fiscal Agent
shall deem fair and appropriate. Provisions of this Security that
apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Fiscal Agent shall
notify the Company promptly of the Securities or portions of
Securities to be called for redemption.
(b) If, at any time, the Company shall determine that
as a result of any change in or amendment to the laws or any
regulations or rulings of the United States or any political
subdivision or taxing authority thereof or therein affecting
taxation, or any amendment to, or change in, an official
application or interpretation of such laws, regulations or
rulings, which amendment or change is announced or becomes
A-9PAGE
<PAGE>
effective on or after May 24 1996, the Company has or will become
obligated to pay to the holder of any Security (other than the
Registered Securities) Additional Amounts and such obligation
cannot be avoided by the Company taking reasonable measures
available to it, then the Company may, at its election exercised
at any time when such conditions continue to exist, redeem such
Securities as a whole but not in part, upon notice as hereinafter
prescribed, at a redemption price equal to 100% of the principal
amount; provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the
Company would be obligated to pay such Additional Amounts were a
payment in respect of such Securities then due; and provided
further that, at the time such notice is given, such obligations
to pay such Additional Amounts remains in effect.
Prior to any redemption of the Securities pursuant to the
preceding paragraph, the Company shall provide the Fiscal Agent
with one or more certificates (signed by the President or any
Vice President and the Treasurer or the Secretary) of the Company
on which the Fiscal Agent may conclusively rely to the effect
that the Company is entitled to redeem such Securities pursuant
to such paragraph and that the conditions precedent to the right
of the Company to redeem such Securities pursuant to such
paragraph have occurred and a written opinion of counsel (who may
be an employee of the Company or the Guarantor) stating that all
legal conditions precedent to the right of the Company to redeem
such Securities pursuant to such paragraph have occurred.
(c) Except as set forth in the next succeeding
paragraph, the Company shall redeem the Bearer Securities as a
whole but not in part, upon notice as hereinafter prescribed, at
100% of their principal amount, less applicable withholding
taxes, if any, plus any applicable Additional Amounts payable, in
the event that the Company determines that payment of principal
of a Bearer Security made outside the United States by the
Company or a paying agent, based on a written opinion of counsel,
would under any present or future laws or regulations of the
United States be subject to any certification, identification or
information reporting requirement with regard to the nationality,
residence or identity of a beneficial owner of a Bearer Security
who is a United States Alien (other than a requirement (a) that
would not be applicable to a payment made by the Company or any
one of its paying agents (i) directly to the beneficial owner or
(ii) to a custodian, nominee or other agent of the beneficial
owner, or (b) that can be satisfied by the custodian, nominee or
other agent certifying that the beneficial owner is a United
States Alien, provided, however, in each case referred to in
clauses (a)(ii) and (b), payment by such custodian, nominee or
other agent of the beneficial owner is not otherwise subject to
any such requirement). The Company shall make such determination
on the basis of a written opinion of counsel and will notify the
Fiscal Agent thereof in writing as soon as practicable, stating
in the notice the effective date of such certification,
identification, or information reporting requirement and the
A-10PAGE
<PAGE>
dates within which the redemption shall occur, and the Fiscal
Agent shall give prompt notice thereof to the holders of the
Securities in accordance with the Fiscal Agency Agreement. The
Company shall determine the redemption date by notice to the
Fiscal Agent at least 75 days before the redemption date, unless
shorter notice is acceptable to the Fiscal Agent. Such
redemption of the Bearer Securities must take place on such date,
not later than one year after the publication of the initial
notice of the Company's determination of the existence of such
certification, identification or information reporting
requirement. The Company shall not so redeem the Bearer
Securities, however, if the Company, based on a written opinion
of counsel, determines not less than 30 days prior to the date
fixed for redemption, that no such payment would be subject to
any requirement described above, in which case the Company shall
notify the Fiscal Agent, which shall give prompt notice of that
determination in accordance with the Fiscal Agency Agreement and
any earlier redemption notice shall thereupon be revoked and of
no further effect.
Notwithstanding the next preceding paragraph, if and so long
as the certification, identification or information reporting
requirement referred to in the next preceding paragraph would be
fully satisfied by payment of United States withholding, backup
withholding or similar taxes, the Company may elect, prior to
publication of the notice of redemption and in lieu of redemption
of the Bearer Securities, to have the provisions of this
paragraph apply in lieu of the provisions of the next preceding
paragraph. In that event, the Company will pay such Additional
Amounts (without regard to Section 2 hereof) as are necessary in
order that, following the effective date of such requirements,
every net payment made outside the United States by the Company
or a paying agent of the principal of a Bearer Security to a
holder who is a United States Alien (without regard to a
certification, identification or information reporting
requirement as to the nationality, residence or identity of such
holder), after deduction for United States withholding, backup
withholding or similar taxes (other than a tax (i) that would not
be applicable in the circumstances referred to in the
parenthetical clause of the first sentence of the next preceding
paragraph or (ii) are imposed as a result of presentation of such
Bearer Security for payment more than 10 days after the date on
which such payment becomes due and payable or on which payment
thereof is duly provided for, whichever occurs later), will not
be less than the amount provided in the Bearer Security to be
then due and payable. If the Company elects to pay such
Additional Amounts and as long as it is obligated to pay such
Additional Amounts, the Company may subsequently redeem the
Bearer Securities, at any time, in whole but not in part, upon
not more than 60 days nor less than 30 days notice, given as
hereinafter prescribed, at 100% of their principal amount, plus
Additional Amounts, if any.
(d) Each Security is subject to redemption in whole or
A-11PAGE
<PAGE>
in part (which shall be in a principal amount hereof which is
U.S. $1,000 or an integral multiple thereof) at the option of the
holder thereof on any Holder Redemption Date (as defined below)
at a redemption price equal to 100% of the principal amount
thereof, if a Redemption Event shall occur or have occurred. For
purposes hereof a "Redemption Event" shall have occurred if the
Company's Common Stock (or other equity securities into which the
Securities are then convertible) is neither listed for trading on
a United States national securities exchange nor approved for
trading on an established automated over-the-counter trading
market in the United States. The "Holder Redemption Date" with
respect to any Redemption Event shall be the ninetieth day after
the later of the Exchange Date or the date a Redemption Event has
occurred.
Notwithstanding the fact that a Security or a portion
thereof is called for redemption by the Company, each holder of a
Security desiring to exercise the option for redemption set forth
in this Section 3(d) shall, as a condition to such redemption, on
or before the close of business on the fifth day prior to the
Holder Redemption Date, surrender the Security to be redeemed in
whole or in part together with the redemption notice hereon duly
executed at the place or places specified in the notice required
by Section 3(e) and otherwise comply with the provisions of
Section 3(f). A holder of a Security who has tendered a
redemption notice (i) will be entitled to revoke its election by
delivering a written notice of such revocation together with the
holder's non-transferable receipt for such Security to the office
or agency of the Company designated as the place for the payment
of the Securities to be so redeemed on or before the Holder
Redemption Date and (ii) will retain the right to convert its
Securities into shares of Common Stock of the Company to the
extent set forth in Section 4.
(e) Notice of redemption will be given by publication
in Authorized Newspapers (as defined in the Fiscal Agency
Agreement) on a Business Day (as defined in the Fiscal Agency
Agreement) in New York City and in London and, if the Securities
are listed on the Luxembourg Stock Exchange and so long as listed
thereon, in an Authorized Newspaper in Luxembourg, or, if either
publication in London or Luxembourg is not practical, in an
Authorized Newspaper in any country in Western Europe, and by
mail to holders of Registered Securities, all as provided in the
Fiscal Agency Agreement. In the case of a redemption in whole at
the option of the Company, notice will be given once not more
than 60 nor less than 30 days prior to the date fixed for
redemption. In the case of a partial redemption at the option of
the Company, notice will be given twice, the first such notice to
be given not more than 75 nor less than 60 days prior to the date
fixed for redemption and the second such notice to be given not
more than 60 nor less than 30 days prior to the date fixed for
redemption. In the case of a redemption by the Company at the
option of a holder of a Security pursuant to Section 3(d) hereof,
notice will be given by the Fiscal Agent setting forth the
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information described below not later than 10 days after the
later of the Exchange Date or the occurrence of a Redemption
Event. Neither the failure to give notice nor any defect in any
notice given to any particular holder of a Security shall affect
the sufficiency of any notice with respect to other Securities.
Notices relating to the redemption of Securities whether at
the option of the Company or the holder hereof shall specify: the
date fixed for redemption or the Holder Redemption Date, as the
case may be; the redemption price; the date the conversion
privilege expires; the place or places of payment; and that
payment will be made upon presentation and surrender of the
Securities to be redeemed. In the case of a redemption by the
Company at the option of the holder of a Security pursuant to
Section 3(d), the notices given by the Fiscal Agent informing a
holder of such holder's entitlement to redeem shall also specify
that a holder electing redemption will be entitled to revoke its
election by delivering a written notice of such revocation,
together with the holder's non-transferable receipt for such
Security, to the agency designated by the Company as the place
for the payment of the Securities to be so redeemed not later
than the fifth day prior to the Holder Redemption Date. In the
case of a redemption in part at the option of the Company,
notices shall specify the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities outstanding after such partial redemption. The first
notice shall specify the last date on which exchanges or
transfers of Securities may be made, and the second notice shall
specify the serial numbers of the Securities and the portions
thereof called for redemption. In the case of a redemption in
whole or in part by the Company, notices shall specify the date
the conversion privilege expires in accordance with Section 4(a)
hereof. Such notices shall also state that the conditions
precedent, if any, to such redemption have occurred.
(f) If (i) notice of redemption has been given in the
manner set forth in Section 3(e) hereof with respect to
Securities to be redeemed at the option of the Company, or (ii)
notice of redemption has been given by the holder of a Security
to be redeemed pursuant to Section 3(d) hereof, the Securities so
to be redeemed shall become due and payable on the applicable
redemption date specified in such notice and upon presentation
and surrender of the Securities at the place or places specified
in the notices given by the Company with respect to such
redemption, the Securities shall be paid and redeemed by the
Company, at the places and in the manner and currency herein
specified and at the redemption price
4. Conversion.
(a) Subject to and upon compliance with the provisions
of the Fiscal Agency Agreement, a holder of Securities is
entitled, at its option, at any time on or after the date that is
the later of (i) the Exchange Date and (ii) August 15, 1996 and
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on or before the close of business on June 1, 2003, or in the
case of a Security or portion thereof that is called for
redemption by the Company, or the holder thereof elects to have
such Security or portion thereof redeemed by the Company pursuant
to Section 3(d) hereof, then in respect of such Security or such
portion thereof until and including, but (unless the Company and
the Guarantor default in making the payment due upon redemption)
not after, the close of business on the 15th day next preceding
the date fixed for redemption (or if such date is not a business
day, as described in Section 11 hereof in New York City, then the
next succeeding business day), to convert such Security (or any
portion of the principal amount thereof which is U.S. $1,000 or
an integral multiple thereof), at the principal amount thereof,
or of such portion, into fully paid and nonassessable shares
("Conversion Shares") (calculated as to each conversion to the
nearest 1/1000 of a share) of common stock, par value $.10 per
share of the Company ("Common Stock"), at a Conversion Price
equal to U.S. $32.68 aggregate principal amount of Securities for
each Conversion Share (the "Conversion Price") (or at the current
adjusted Conversion Price if an adjustment has been made as
provided herein) by surrender of the Security, or in the case of
a Security submitted for redemption pursuant to Section 3(d)
hereof, satisfactory evidence of such submission, together with
(i) if a Registered Security (if so required by the Company or
the Fiscal Agent), instruments of transfer in form satisfactory
to the Company and the Fiscal Agent, duly executed by the
registered holder or by his duly authorized attorney, and (ii)
the conversion notice hereon duly executed (x) at the principal
corporate trust office of the Fiscal Agent, or at such other
office or agency of the Company as may be designated by it for
such purpose in New York City, or (y) subject to any laws or
regulations applicable thereto and subject to the right of the
Company to terminate the appointment of any such conversion
agency, at Chemical Bank, Chemical Bank House, 125 London Wall,
London EC2Y 5AJ, England, and if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon, Banque
Internationale a Luxembourg, S.A., 69, Route d'Esch, L-1470
Luxembourg, or at such other offices or agencies as the Company
may designate.
(b) No payment or adjustment shall be made upon any
conversion for dividends on the Common Stock delivered on
conversion. Additional Amounts, if any, thereon will be paid to
the holder five business days after presentment for conversion.
No fractions of shares or scrip representing fractions of shares
will be issued or delivered on conversion, but instead of any
fractional interest the Company shall pay a cash adjustment as
provided in the Fiscal Agency Agreement. Such conversion shall
be so affected by the Company, except payment of Additional
Amounts, if any, thereon which will be paid by the Paying Agent.
(c) (i) In case at any time the Company shall pay or
make a dividend or other distribution on any class of capital
stock of the Company in shares of Common Stock, the Conversion
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Price in effect at the opening of business on the day following
the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced so
that the same shall equal the price determined by multiplying
such Conversion Price by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the
total number of shares of Common Stock constituting such dividend
or other distribution, such adjustment to become effective
immediately after the opening of business on the day following
the date fixed for such determination.
(ii) In the case at any time the Company shall (A)
subdivide its outstanding shares of Common Stock, (B) combine its
outstanding shares of Common Stock into a smaller number of
shares, or (C) issue by reclassification of its shares of Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation) any shares of capital stock, the Conversion Price in
effect at the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the
holder of any Security surrendered for conversion after such time
shall be entitled to receive the aggregate number and kind of
shares which, if such Security had been converted immediately
prior to such time, the holder would have owned upon such
conversion and been entitled to receive upon such subdivision,
combination or reclassification. Such adjustment shall become
effective immediately after the effectiveness of such
subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall
occur.
(iii) In case at any time the Company shall fix a
record date for the issuance of rights or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase
Common Stock at a price per share less than the current market
price per share of Common Stock (determined as provided in
paragraph (v) of this subsection (c)) on such record date, the
Conversion Price in effect at the opening of business on the day
following such record date shall be reduced so that the same
shall equal the price determined by multiplying such Conversion
Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on
such record date plus the number of shares of Common Stock which
the aggregate of the offering price of the total number of shares
so offered for subscription or purchase would purchase at such
current market price per share of Common Stock and the
denominator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus the
number of shares so offered for subscription or purchase, such
reduction to become effective immediately after the opening of
business on the day following such record date. Such reduction
shall be made successively whenever such a record date is fixed;
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and in the event that such rights or warrants are not so issued,
the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such record date had not
been fixed.
(iv) In case at any time the Company shall fix a
record date for the making of a distribution, by dividend or
otherwise, to all holders of its shares if Common Stock, of
evidences of its indebtedness or assets (including securities,
but excluding any dividend or distribution referred to in
paragraph (i) of this subsection (c), any rights or warrants
referred to in paragraph (iii) of this subsection (c), and any
dividend or distribution paid in cash out of the retained
earnings of the Company), then in each such case the Conversion
Price in effect after such record date shall be determined by
multiplying the Conversion Price in effect immediately prior to
such record date by a fraction, of which numerator shall be the
total number of outstanding shares of Common Stock multiplied by
the current market price per share of Common Stock (determined as
provided in paragraph (v) of this subsection (c)) on such record
date, less the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive
and described in a statement filed with the Fiscal Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed, and of which denominator shall be the total number
of outstanding shares of Common Stock multiplied by such current
market price per share of Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the Conversion
Price shall again be adjusted to be the Conversion Price which
would then be in effect if such record date has not been fixed.
(v) For the purpose of any computation under
paragraphs (iii) and (iv) of this subsection (c), the current
market price per share of Common Stock on any date shall be
deemed to be the average of the Closing Prices (as defined below)
for the 15 consecutive trading days upon which the principal
trading market for the Common Stock is open and selected by the
Company commencing not less than 20 nor more than 30 days before
the day in question. The "Closing Price" for any day shall be
the last reported sales prices regular way or, in case no such
reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case
on the American Stock Exchange or, if the Common Stock is not or
admitted to trading on such exchange, on the principal national
securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on
any national securities exchange, the closing sale price quoted
on the Nasdaq National Market, or if not so quoted, as determined
by the Company.
(vi) The Company may make such adjustments in the
Conversion Price, in addition to those required by paragraphs
(i), (ii) and, (iii) selected by the Company of this section, as
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it considers to be advisable in order that any event treated for
United States Federal income tax purposes as a dividend of stock
or stock rights shall not be taxable to the recipients.
(vii) No adjustment in the Conversion Price shall
be required unless such adjustment would require an increase or
decrease of at least U.S. $.25 in such Conversion Price;
provided, however, that any adjustment which by reason of this
paragraph (vii) is not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this subsection (c) shall be made to the
nearest cent or to the nearest 1/1000 of a share, as the case may
be.
(d) Whenever the Conversion Price is adjusted and in
the event of certain other corporate actions, as herein provided,
the Company shall give notice, all as provided in the Fiscal
Agency Agreement.
(e) The Company shall in good faith use its best
efforts to (i) cause all registrations with, and to obtain any
approvals by, any governmental authority under any Federal or
state law of the United States that may be required in connection
with the conversion of the Securities into Common Stock and the
resale thereof and (ii) to list the shares of Common Stock
required to be issued or delivered upon conversion of Securities
(or other securities issuable upon conversion of the Securities)
prior to such issue or delivery on such national securities
exchange or automated over-the-counter trading market where such
Common Stock is listed or traded at the time of such delivery.
(f) The Company shall, at all times, have reserved and
available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock, for the purpose of effecting the
conversion of Securities, the full number of shares of Common
Stock then issuable upon the conversion of all Securities (based
on the aggregate principal amount of Securities outstanding).
The Company covenants that all shares of Common Stock which may
be issued or delivered upon conversion of Securities will upon
issuance be fully paid and nonassessable.
(g) In case of any consolidation with, or merger of
the Company into, any other corporation, or in case of any merger
of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company (which shall not
include the sale or transfer of any portion of the assets of the
Company to any corporation which, immediately following such
transfer is at least 51% owned by the Company, provided that such
sale or transfer does not result in the reclassification,
conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), the corporation formed by such
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consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the
Fiscal Agent an amendment to the Fiscal Agency Agreement
providing that the holder of each Security shall have the right
during the period such Security shall be convertible as specified
in section (a) hereof to convert such Security only into the kind
and amount of securities, cash and other property receivable upon
such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such
consolidation, merger, sale or transfer assuming, if such
consolidation, merger, sale or transfer is prior to the period
such Security shall be convertible as specified in subsection (a)
hereof, that the Securities were convertible at such time at the
initial Conversion Price as adjusted from May 24, 1996 to such
time pursuant to paragraphs (i), (ii), (iii), (iv) and (vi) of
subsection (c) hereof. Such amendment shall provide for
adjustments which, for events subsequent to the effective date of
such amendment, shall be as nearly equivalent as may be
practicable to the adjustments provided for herein. The above
provisions of this subsection shall similarly apply to successive
consolidations, mergers, sales or transfers.
5. Events of Default. In the event that any of the
following ("Events of Default") shall occur and be continuing:
(a) the Company shall fail to pay when due the
principal of any of the Securities whether at maturity or upon
redemption or otherwise; or
(b) the Company shall fail to pay any required payment
of any Additional Amounts (as described in Section 2 hereof) on
any of the Securities for a period of 10 days after the date when
due; or
(c) the Company shall fail duly to perform or observe
any other term, covenant or agreement contained in any of the
Securities or in the Fiscal Agency Agreement or the Guarantor
shall fail to perform or observe any term, covenant or agreement
contained in a Guarantee endorsed on any of the Securities or in
the Fiscal Agency Agreement, for a period of 60 days after the
date on which written notice of such failure, requiring the
Company or the Guarantor, as the case may be, to remedy the same,
shall first have been given to the Company and the Fiscal Agent
by the holders of at least 25% in aggregate principal amount of
the Securities at the time outstanding; provided, however, that
in the event the Company or the Guarantor shall within the
aforesaid period of 60 days commence legal action in a court of
competent jurisdiction seeking a determination that the Company
or the Guarantor, as the case may be, had not failed duly to
perform or observe the term or terms, covenant or covenants or
agreement or agreements specified in the aforesaid notice, such
failure shall not be an Event of Default unless the same
continues for a period of 10 days after the date of any final
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determination to the effect that the Company or the Guarantor had
failed to duly perform or observe one or more of such terms,
covenants or agreements; or
(d) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company or
the Guarantor in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or the Guarantor or for any
substantial part of the property of either of them or ordering
the winding-up or liquidation of the affairs of either of them
and such decree or order shall remain unstayed and in effect for
a period of 20 consecutive days; or
(e) the Company or the Guarantor shall commence a
voluntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or
similar official) of the Company or the Guarantor, as the case
may be, or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts as they
become due or shall take any corporate action in furtherance of
any of the foregoing; or
(f) an event of default, as defined in any indenture
or instrument evidencing or under which the Company shall have at
least $25,000,000 outstanding (or its equivalent in another
currency), in aggregate principal amount of indebtedness for
borrowed money, shall happen and be continuing and such default
shall involve the failure to pay the principal of such
indebtedness (or any part thereof), when due and payable after
the expiration of any applicable grace period with respect
thereto, or such indebtedness shall have been accelerated so the
same shall be or become due and payable prior to the date on
which the same would otherwise have become due and payable, and
failure to pay shall not have been cured by the Company within 20
days after such failure or such acceleration shall not be
rescinded or annulled within 20 days after notice thereof shall
have first been given to the Company; provided that if such event
of default under such indenture or instrument shall be remedied
or cured by the Company or waived by the holders of such
indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of any of
the holders of Securities; then the holder of this Security may,
at such holder's option, declare the principal of this Security
(and Additional Amounts under Section 2 hereof, if any, thereon)
to be due and payable immediately by written notice to the
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Company, the Guarantor and the Fiscal Agent, and if any such
Event of Default shall continue at the time of receipt of such
written notice, the principal of this Security (and Additional
Amounts, if any, hereon) shall become immediately due and
payable, subject to the proviso of subsection (c) of this Section
5. Upon payment of such amount of principal (and Additional
Amounts pursuant to Section 2 hereof, if any), all of the
Company's obligations in respect of payment of principal of (and
Additional Amounts, if any, on) this Security shall terminate.
Interest on overdue principal (and Additional Amounts, if any)
shall accrue from the date on which such principal (and
Additional Amounts, if any) were due and payable to the date such
principal (and Additional Amounts, if any) are paid or duly
provided for, at the rate of 5% per annum (to the extent payment
of such interest shall be legally enforceable). Any acceleration
of this Security pursuant to this Section 5 shall not affect the
subordination provisions of Section 7 hereof.
If an Event of Default, as defined in this Section 5, with
respect to the Securities, or an event which would, with the
passing of time or the giving of notice, or both, be an Event of
Default, shall occur and be continuing, the Company or the
Guarantor, as the case may be, shall within five Business Days of
becoming aware thereof notify the Company or the Guarantor, as
the case may be, and the Fiscal Agent in writing of such Event of
Default, and the Fiscal Agent shall thereupon promptly notify all
of the holders of the Securities of such Event of Default.
6. Merger, Consolidation, Sale, Conveyance or Assumption.
(a) The Company will not merge or consolidate with, or
sell or convey all or substantially all of its assets to, any
other corporation, unless (i) either (A) the Company shall be the
surviving corporation in the case of a merger, (B) the assets
sold or conveyed shall be owned by a corporation which,
immediately following such sale or conveyance, is at least 51%
owned by the Company, provided that such sale or conveyance does
not result in the reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the
Company, or (C) (I) the surviving, resulting or transferee
corporation shall expressly assume the due and punctual payment
(including Additional Amounts pursuant to Section 2 hereof, if
any) of all the Securities, according to their tenor, and the due
and punctual performance of all of the covenants and obligations
of the Company under the Securities and the Fiscal Agency
Agreement, by supplemental agreement reasonably satisfactory to
the Fiscal Agent and (II) the Fiscal Agent shall have received
the documentation required in the context by the Fiscal Agency
Agreement, (ii) the surviving, resulting or transferee
corporation, if not organized and validly existing under the laws
of the United States, shall expressly agree to make payments
under the Securities free of any deduction or withholding for any
and all then existing or future withholding taxes, levies,
imposts and charges whatsoever imposed by or for the account of
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the jurisdiction where such successor corporation is generally
subject to taxation (or any political subdivision or taxing
authority thereof or therein) in a manner equivalent to that set
forth herein, subject to the exceptions contained in such forms
of the Securities, and (iii) the Company or such successor
corporation, as the case may be, shall not, immediately after
such merger, consolidation, sale or conveyance, be in default in
the performance of any covenants or obligations of the Company
under the Securities or the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 6(a), the successor or
assuming corporation shall succeed to and be substituted for, and
may exercise every right and power of and be subject to all the
obligations of, the Company under the Securities and Fiscal
Agency Agreement, with the same effect as if such successor or
assuming corporation had been named as the Company therein and
herein and the Company shall be released from its liability as
obligor under the Securities and Fiscal Agency Agreement;
provided that any successor or assuming corporation shall have
the right to redeem the Securities pursuant to Section 3(b)
hereof only as a result of circumstances which occur subsequent
to such merger, consolidation, sale, conveyance or assumption and
as a result of which the Company would have had such right if the
Company had remained the obligor on the Securities.
7. Agreement of Subordination of Securities.
(a) The Company, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities by
his acceptance thereof, likewise covenants and agrees, that the
payment of the principal of and Additional Amounts (pursuant to
Section 2 hereof) on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness of the Company (as defined
below).
"Senior Indebtedness of the Company" or "Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on and all other amounts due on or with respect to the
following whether outstanding at the date of execution of the
Fiscal Agency Agreement or thereafter incurred or created:
(i) indebtedness of the Company for money borrowed by
the Company (excluding the Securities, but including, without
limitation, purchase money obligations), whether or not evidenced
by debentures, bonds, notes or other corporate debt securities or
similar instruments issued by the Company;
(ii) obligations to reimburse any bank or other person
in respect of amounts paid under letters of credit;
(iii) leases of real property, equipment or other
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assets, which leases are capitalized in the Company's financial
statements in accordance with generally accepted accounting
principles;
(iv) commitment, standby and other fees due and payable
to financial institutions with respect to credit facilities
available to the Company;
(v) obligations of the Company under interest rate and
currency swaps, floors, caps or other similar arrangements
intended to hedge interest rates or currency exposure;
(vi) indebtedness secured by any mortgage, pledge, lien
or other encumbrance on property which is owned or held by the
Company subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby
shall have been assumed by the Company;
(vii) obligations of the Company constituting
guarantees of indebtedness of or joint obligations with another
or others which would be included in the preceding clauses (i),
(ii), (iii), (iv), (v) or (vi); and
(viii) modifications, renewals, extensions or
refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (i), (ii),
(iii), (iv), (v), (vi) or (vii), or debentures, notes or other
evidences of indebtedness issued in exchange therefor;
provided that Senior Indebtedness shall not include any
particular indebtedness, lease, fee, obligation, modification,
renewal, extension, refunding or exchanged securities if, under
the express provisions of the instrument creating or evidencing
the same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification,
renewal, extension, refunding or exchanged security is stated to
be not superior in right to payment to the Securities.
(b) (i) In the event of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to
the Company or to its creditors, in their capacity as such
creditors, or to its property, or in the event of any proceedings
for voluntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy, or in
the event of any assignment for the benefit of creditors of the
Company or any marshalling of assets of the Company, then the
holders of Senior Indebtedness of the Company shall first be
entitled to receive payment in full of the principal of (and
premium, if any, on) and interest, including interest thereon
accruing after the commencement of any such proceeding, and other
amounts due on or with respect to, all Senior Indebtedness of the
Company before the holders of any of the Securities shall be
entitled to receive any payment on account of the principal of,
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premium, if any, or interest and Additional Amounts (pursuant to
Section 2 hereof) on the Securities, and to that end the holders
of Senior Indebtedness of the Company shall be entitled to
receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash, property
or securities, which may be payable or deliverable in any such
proceedings in respect of the Securities, other than securities
of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in this Section 7
with respect to the Securities, to the payment of all Senior
Indebtedness of the Company, provided that the rights of the
holders of Senior Indebtedness of the Company are not altered by
such reorganization or readjustment. For the purposes of this
Section 7, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 6 shall be deemed to be a
liquidation, reorganization, dissolution or other winding up of
the Company.
(ii) If under the circumstances set forth in
paragraph (i) of this subsection, and notwithstanding the
provisions thereof, any payment or distribution of assets of the
Company of any kind, whether in cash, property or securities
(other than securities of the Company as reorganized or
readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the
payment of which is subordinated, at least to the extent provided
in this Section 7 with respect to the Securities, to the payment
of all Senior Indebtedness of the Company, provided that the
rights of the holders of Senior Indebtedness of the Company are
not altered by such reorganization or readjustment), shall be
received by the holders of the Securities before all Senior
Indebtedness of the Company is paid in full, such payment or
distribution shall be paid over to the holders of Senior
Indebtedness of the Company, ratably, for application to the
payment of all Senior Indebtedness of the Company remaining
unpaid until all Senior Indebtedness of the Company shall have
been paid in full, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness of the
Company.
(iii) Upon any distribution of assets of the Company
referred to in this Section, the holders of Securities shall be
entitled to rely upon any final order or decree of a court of
competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and the
holders of Securities shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person
making any distribution to the holders of Securities for the
purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness of the
Company and other indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed
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thereon and all other facts pertinent thereto or to this Section.
(c) (i) Upon the maturity of any Senior Indebtedness
of the Company by lapse of time, acceleration or otherwise, all
principal thereof (and premium, if any) and interest due thereon,
including interest thereon accruing after the commencement of any
proceeding of the type referred to in paragraph (i) of Section
7(b) above, and all other amounts due on or with respect thereto,
shall first be paid in full, or such payment duly provided for in
cash, before any payment, directly or indirectly, is made on
account of the principal of and Additional Amounts (pursuant to
Section 2 hereof) on the Securities.
(ii) Upon the happening of an event of default
with respect to any Senior Indebtedness of the Company, as
defined therein or in the instrument under which it is
outstanding permitting the holders to accelerate the maturity
thereof, then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no payment
shall be made by the Company, directly or indirectly, on account
of the principal of and Additional Amounts (pursuant to Section 2
hereof) on the Securities.
(d) In case cash, securities or other property
otherwise payable or deliverable to the holders of the Securities
shall have been applied, pursuant to Section 7(b) or 7(c), to the
payment of Senior Indebtedness of the Company, then, upon the
payment in full of all Senior Indebtedness of the Company, the
holders of the Securities shall be subrogated to any rights of
any holders of Senior Indebtedness of the Company to receive any
further payment or distributions applicable to Senior
Indebtedness of the Company until the principal of and Additional
Amounts (pursuant to Section 2 hereof) on the Securities shall
have been paid in full, and such payments or distributions
received by the holders of the Securities, by reason of such
subrogation, of cash, securities or other property which
otherwise would be paid or distributed to the holders of Senior
Indebtedness of the Company shall, as between the Company and its
creditors other than the holders of Senior Indebtedness of the
Company, on the one hand, and the holders of the Securities, on
the other hand, be deemed to be a payment by the Company on
account of Senior Indebtedness of the Company and not on account
of the Securities.
(e) No present or future holder of any Senior
Indebtedness of the Company shall be prejudiced in any way in the
right to enforce the subordination of the Securities by any act
or failure to act on the part of the Company. The provisions of
this Section are solely for the purpose of defining the relative
rights of the holders of Senior Indebtedness of the Company, on
the one hand, and the holders of the Securities, on the other
hand, against the Company and its assets, and nothing contained
in this Section shall impair, as between the Company and the
holder of any Security, the obligation of the Company, which is
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unconditional and absolute, to pay to the holder thereof, the
principal thereof and Additional Amounts (pursuant to Section 2
hereof) thereon as and when the same shall become due and payable
in accordance with the terms thereof, or prevent the holder of
any Security, upon default hereunder or under such Security, from
exercising all rights, powers and remedies otherwise provided
herein or therein or by applicable law, all subject to the rights
of the holders of Senior Indebtedness of the Company under this
Section to receive cash, property or securities otherwise payable
or deliverable to the holders of the Securities.
(f) Nothing contained in this Section or in any of the
Securities shall prevent at any time, except under the conditions
described in Sections 7(b) and (c) hereof or during the pendency
of any dissolution, winding up, liquidation or reorganization
proceedings therein referred to, the Company from making payments
at any time of principal of or Additional Amounts (pursuant to
Section 2 hereof) on the Securities. Nothing contained in this
Section shall prevent conversions of Securities.
8. Replacement, Transfer and Exchange of Securities.
(a) In case any Security shall at any time become
mutilated, destroyed, stolen or lost and such Security or
evidence of the loss, theft or destruction thereof (together with
the indemnity hereinafter referred to and such other documents or
proof as may be required) shall be delivered to the Fiscal Agent,
a new Security of like tenor and date and having the Guarantee
endorsed thereon will be issued by the Company in exchange for
the Security so mutilated, or in lieu of the Security so
destroyed, stolen or lost, but, in the case of a destroyed,
stolen or lost Security only upon receipt of evidence
satisfactory to the Fiscal Agent, the Company and the Guarantor
that such Security was destroyed, stolen or lost, and if required
by the Fiscal Agent, the Company or the Guarantor, upon receipt
also of indemnity satisfactory to the Fiscal Agent, the Company
and the Guarantor. All expenses and reasonable charges
associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Security shall
be borne by the owner of the Security so mutilated, destroyed,
stolen or lost.
(b) As provided in the Fiscal Agency Agreement and
subject to certain limitations therein set forth, Bearer
Securities are exchangeable at, subject to applicable laws and
regulations, the offices of the paying agencies in London and, if
the Securities are listed on the Luxembourg Stock Exchange and so
long as listed thereon, Luxembourg or as designated by the
Company for such purpose pursuant to the Fiscal Agency Agreement,
for an equal aggregate principal amount of Registered Securities
in the denominations of $1,000 and integral multiples thereof
and/or Bearer Securities of authorized denominations, and
Registered Securities are exchangeable at the Corporate Trust
Office of the Fiscal Agent in New York City or, subject to
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applicable laws and regulations, the offices of the paying
agencies in London and, if the Securities are listed on the
Luxembourg Stock Exchange and so long as listed thereon,
Luxembourg or as designated by the Company for such purpose
pursuant to the Fiscal Agency Agreement, for an equal aggregate
principal amount of Registered Securities of authorized
denominations as requested by the holder surrendering the same.
Registered Securities will not be exchangeable for Bearer
Securities. The Company shall not be required to (a) exchange
Bearer Securities for Registered Securities, if as a result, the
Company or the Guarantor would incur adverse consequences under
United States Federal income tax laws in effect of the time of
exchange, or (b) in the event of a redemption in part, (i) to
register the transfer of Registered Securities or to exchange
Bearer Securities for Registered Securities for a period of 15
days immediately preceding the date notice is given identifying
the serial numbers of the Securities called for such redemption;
(ii) to register the transfer or exchange of any such Registered
Securities, or portion thereof, called for redemption; or (iii)
to exchange any such Bearer Securities called for redemption;
provided, however, that a Bearer Security called for redemption
may be exchanged for a Registered Security that is simultaneously
surrendered, with written instruction for payment on the date
fixed for redemption. In the event of redemption or conversion
of a Security in part only, a new Security or Securities for the
unredeemed or unconverted portion hereof will be issued in the
name of the holder thereof.
(c) The costs and expenses of effecting any exchange
or registration of transfer pursuant to the foregoing provisions,
except for the expenses of delivery by other than regular mail
(if any) and except, if the Company shall so require, the payment
of a sum sufficient to cover any tax or other governmental charge
or insurance charges that may be imposed in relation thereto,
will be borne by the Company.
(d) The Company has initially appointed as registrar
and transfer agent the Fiscal Agent acting through the Corporate
Trust Office in New York. The Company has also initially
appointed Banque Internationale a Luxembourg as a transfer agent,
subject to the listing of the Securities on the Luxembourg Stock
Exchange. The Company may at any time terminate the appointment
of the registrar and transfer agent and appoint additional or
other registrars and transfer agents or approve any change in an
office through which the registrar and transfer agent acts;
provided that, until all of the Securities have been delivered to
the Fiscal Agent for cancellation, or monies sufficient to pay
the Securities have been made available for payment and either
paid or returned to the Company as provided in the Securities,
the Company will maintain a registrar and transfer agent in the
City of New York in the United States.
(e) For purposes of the provisions of this Security
and the Fiscal Agency Agreement, any Security authenticated and
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delivered pursuant to the Fiscal Agency Agreement shall, as of
any date of determination, be deemed to be "outstanding", except
for:
(i) Securities previously canceled by the Fiscal
Agent or delivered to the Fiscal Agent for cancellation;
(ii) Securities which have been called for
redemption by the Company in accordance with Section 3 hereof or
which have become due and payable at maturity or otherwise and
with respect to which monies sufficient to pay the principal
thereof (including Additional Amounts, if any) shall have been
made available to the Fiscal Agent; or
(iii) Securities in lieu of or in substitution
for which other Securities have been authenticated and delivered
pursuant to the Fiscal Agency Agreement;
provided, however, that in determining whether the holders of the
requisite principal amount of outstanding Securities are present
at a meeting of holders of Securities for quorum purposes or have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or
the Guarantor or any subsidiary thereof shall be disregarded and
deemed not to be outstanding.
9. Modifications and Amendments.
(a) Without the consent of any holders of Securities,
modifications of or amendments to the Fiscal Agency Agreement or
the Terms and Conditions of the Securities may be made for any of
the following purposes:
(i) to evidence the succession of another
corporation to the Company or the Guarantor and the assumption by
any such successor of the covenants of the Company or the
Guarantor, as the case may be, in the Fiscal Agency Agreement,
the Securities or the Guarantees;
(ii) to add to the covenants of the Company or the
Guarantor for the benefit of the holders of Securities, or to
surrender any right or power herein conferred upon the Company or
the Guarantor;
(iii) to permit payment of principal of Bearer
Securities in the United States, provided that such payment is
permitted by United States tax laws and regulations then in
effect;
(iv) to make provision with respect to the
conversion rights of holders of Securities in the event of a
consolidation, merger or sale of substantially all of the assets
of the Company;
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(v) to cure any ambiguity, to correct or
supplement any defective provision in the Fiscal Agency Agreement
which may be inconsistent with any other provision therein, or to
make any other provisions with respect to matters or questions
arising under this Security or the Fiscal Agency Agreement,
provided such action pursuant to this clause (v) will not
materially adversely affect the interests of the holders of
Securities; or
(vi) to increase the principal amount of
Securities that may be issued pursuant to the Fiscal Agency
Agreement.
(b) Modifications and amendments to the Fiscal Agency
Agreement or to the Terms and Conditions of the Securities may be
made, and future compliance with or past default by the Company
under any of the provisions thereof may be waived, with the
written consent of the holders of not less than a majority in
aggregate principal amount of the Securities at the time
outstanding (excluding for purposes of this calculation the
aggregate principal amount of Securities held by the Company or
the Guarantor or any of its subsidiaries), or of such lesser
percentage as may act at a meeting of holders of Securities held
in accordance with the provisions set forth herein; provided that
no such modification, amendment or waiver may, without the
consent of the holder of each such Security affected thereby:
(i) waive a default in the payment of the
principal of any Security;
(ii) change the stated maturity of the principal
of any Security, or reduce the principal amount thereof or change
the obligation of the Company to pay Additional Amounts pursuant
to Section 2 hereof (except as permitted by subsection (a) of
Section 9 or by the Fiscal Agency Agreement), or change the coin
or currency in which any Security is payable, or, except as
otherwise permitted or contemplated by the provisions concerning
corporate reorganizations, adversely affect the right to redeem
(pursuant to Section 3(d) hereof) or convert any Securities as
provided in Sections 3 and 4, respectively, or modify the
provisions of the Guarantees in a manner adverse to the holders;
(iii) reduce the requirements of Section 10
hereof for the adoption of a resolution of the quorum required at
any meeting of holders of Securities at which a resolution is
adopted, or reduce the percentage in principal amount of the
outstanding Securities the consent of whose holders is required
for any amendment or modification of the Fiscal Agency Agreement
or the Terms and Conditions of the Securities or the consent of
whose holders is required for any waiver (of compliance with
certain provisions of the Fiscal Agency Agreement or the
Securities or certain defaults hereunder and thereunder and their
consequences) provided for in the Terms and Conditions of the
Securities;
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(iv) modify the obligation of the Company and the
Guarantor to maintain an office or agency in the City of New York
and outside the United States; or
(v) modify any of the provisions of this section
except to increase any such percentage or to provide that certain
other provisions of the Fiscal Agency Agreement or the Securities
cannot be modified or waived without the consent of the holder of
each outstanding Security affected thereby.
It shall not be necessary for any act of holders of Securities
under this Section to approve the particular form of any proposed
amendment, modification or waiver, but it shall be sufficient if
such act shall approve the substance thereof. Any modifications,
amendments or waivers to the Fiscal Agency Agreement or to these
Terms and Conditions will be conclusive and binding on all
holders of the Securities, whether or not they have given such
consent or were present at such meeting and whether or not
notation of such modifications, amendments or waivers is made
upon the Securities, and on all future holders of Securities.
Any instrument given by or on behalf of any holder of a Security
in connection with any consent to any such modification,
amendment or waiver will be irrevocable once given and will be
conclusive and binding on all subsequent holders of such
Security.
10. Meetings and Votes of Holders.
(a) A meeting of holders of Securities may be called
at any time and from time to time pursuant to this Section for
any of the following purposes: (i) to give any notice to the
Company, to the Guarantor or to the Fiscal Agent, or to give any
directions to the Fiscal Agent, or to consent to the waiving of
any default hereunder and its consequences, or to take any other
action authorized to be taken by holders of Securities pursuant
to these Terms and Conditions; or (ii) to take any other action
authorized to be taken by or on behalf of the holders of any
specified aggregate principal amount of the Securities under any
other provision of the Fiscal Agency Agreement, under applicable
law or under these Terms and Conditions.
(b) Meetings of holders of Securities may be held at
such place or places in New York City or London as the Fiscal
Agent or, in case of its failure to act, the Company, the
Guarantor or the holders calling the meeting shall from time to
time determine.
The Fiscal Agent may at any time call a meeting of holders
of the Securities to be held at such time and at such place in
any of such designated locations as the Fiscal Agent shall
determine. Notice of every meeting of holders shall be made as
specified in the Fiscal Agency Agreement.
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In case at any time the Company, the Guarantor or the
holders of at least 25% in aggregate principal amount of the
Securities shall have requested the Fiscal Agent to call a
meeting of the holders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting,
and the Fiscal Agent shall not have given the first notice of
such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company , the Guarantor or the holders
of Securities in the amount above specified may determine the
time and the place in such designated locations for such meeting
and may call such meeting to take any action authorized herein by
giving notice thereof as provided in the Fiscal Agency Agreement.
(c) To be entitled to vote at any meeting of holders
of Securities, a person shall be (i) a holder of one or more
Securities, or (ii) a person appointed by an instrument in
writing as proxy for a holder or holders of Securities by such
holder or holders, which proxy need not be a holder of
Securities. The only persons who shall be entitled to be present
or to speak at any meeting of holders shall be the persons
entitled to vote at such meeting and their counsel and any
representatives of the Fiscal Agent and its counsel and any
representatives of the Company and its counsel and any
representatives of the Guarantor and its counsel. The persons
entitled to vote a majority in principal amount of outstanding
Securities shall constitute a quorum for the transaction of all
business specified in subsection (a) hereof. No business shall
be transacted in the absence of a quorum unless a quorum is
represented when the meeting is called to order. In the absence
of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of the
holders of Securities, be dissolved. In any other case the
meeting shall be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in the Fiscal
Agency Agreement. Subject to the foregoing, at the reconvening
of any meeting adjourned for a lack of a quorum the persons
entitled to vote 25% in principal amount of the Securities
outstanding shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice
of the reconvening of an adjourned meeting shall state expressly
the percentage of the aggregate principal amount of the
Securities that shall constitute a quorum. At a meeting or an
adjourned meeting duly reconvened and at which a quorum is
present as aforesaid, any resolution and all matters (except as
limited by Section 9 of these Terms and Conditions) shall be
effectively passed and decided if passed or decided by the
persons entitled to vote a majority in principal amount of the
Securities represented and voting at such meeting, provided that
such amount shall not be less than 25 % in principal amount of
the Securities outstanding. Any holder of a Security who has
executed an instrument in writing appointing a person as his
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proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided,
however, that such holder shall be considered as present or
voting only with respect to the matters covered by such
instrument in writing. Any resolution effectively passed or
decision taken at any meeting of the holders of Securities duly
held in accordance with this Section 10 shall be binding on all
the holders of Securities whether or not present or represented
at the meeting.
(d) Notwithstanding any other provision of this
Security, the Fiscal Agent may make such reasonable regulations
as it may deem advisable for any meeting of holders of Securities
in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer
Securities shall be proved by the production of the Bearer
Securities or by a certificate executed, as depositary, by, and
the appointment of any proxy shall be proved by having the
signature of the person executing the proxy witnessed or
guaranteed by, in each case, any trust company, bank or banker
satisfactory to the Fiscal Agent. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified herein or other proof. The holding of Registered
Securities shall be proved by the registry books maintained in
accordance with the Fiscal Agency Agreement or by a certificate
or certificates of the Fiscal Agent in its capacity as the
Company's agent for the maintenance of such books.
(e) The Fiscal Agent shall, by an instrument in
writing, appoint a temporary chairperson and a temporary
secretary of the meeting, unless the meeting shall have been
called by the Company, the Guarantor or by the holders of
Securities as provided herein and in the Fiscal Agency Agreement,
in which case the Company, the Guarantor or the holders calling
the meeting, as the case may be, shall in like manner appoint a
temporary chairperson and a temporary secretary. A permanent
chairperson and a permanent secretary of the meeting shall be
elected by vote of the holders of a majority in principal amount
of the Securities represented at the meeting and entitled to
vote. At any meeting each holder or proxy shall be entitled to
one vote for each U.S. $1,000 principal amount of Securities held
or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of the Securities
challenged as not outstanding and ruled by the chairperson of the
meeting to be not outstanding. The chairperson of the meeting
shall have no right to vote, except as a holder or proxy. Any
meeting of holders of Securities duly called at which a quorum is
present may be adjourned from time to time by vote of the holders
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(or proxies for the holders) of a majority in principal amount of
the Securities represented at the meeting and entitled to vote;
and the meeting may be held as so adjourned without further
notice.
(f) The vote upon any resolution submitted to any
meeting of holders of Securities shall be written ballots on
which shall be subscribed the signatures of the holders of
Securities or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.
The permanent chairperson of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record, at least
in triplicate, of the proceedings of each meeting of holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was published as provided in the Fiscal Agency
Agreement. Each copy shall be signed and verified by the
affidavits of the permanent chairperson and secretary of the
meeting, and one of such copy shall be delivered to the Company,
another to the Guarantor and another to the Fiscal Agent to be
preserved by the Fiscal Agent, the copy delivered to the Fiscal
Agent to have attached thereto by ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
11. Business Days. Notwithstanding anything herein or in
the Fiscal Agency Agreement to the contrary, if any payment of
principal (or Additional Amounts, if any) is due on a day that is
not a Business Day, payment shall be made on the next succeeding
Business Day, with the same effect as if made on the day such
payment was due. A "Business Day" is defined, with respect to
any act to be performed pursuant hereto or to the Fiscal Agency
Agreement, as any day which is not a Saturday, Sunday or a day on
which banking institutions in the place where such act is to
occur are authorized or obligated by applicable law, regulation
or executive order to close.
12. Fiscal and Paying Agent.
(a) In acting under the Fiscal Agency Agreement and in
connection with the Securities, the Fiscal Agent is acting solely
as agent of the Company and the Guarantor and does not assume any
obligation, or relationship of agency or trust, for or with the
owner or holder of this Security, except that funds held by the
Fiscal Agent for payment on this Security shall be held in trust
by it and applied as set forth herein, but need not be segregated
from other funds held by it, except as required by law. For a
description of the duties and the immunities and rights of the
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Fiscal Agent under the Fiscal Agency Agreement, reference is made
to the Fiscal Agency Agreement, and the obligations of the Fiscal
Agent to the holder hereof are subject to such immunities and
rights.
(b) Any monies paid by the Company to any paying
agency for payment of principal of any Security (including
Additional Amounts, if any, in respect thereof) and remaining
unclaimed for two years after such payment has been made shall be
repaid to the Company and to the extent permitted by law the
holder of any Security shall thereafter look only to the Company
or the Guarantor for any payment thereof as a general unsecured
obligation thereof and all liability of the Fiscal Agent with
respect thereto shall cease.
(c) No reference herein to the Fiscal Agency Agreement
and no provision of this Security or of the Fiscal Agency
Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and
Additional Amounts, as described above) on this Security at the
times, places and rate, and in the coin or currency, herein
prescribed or to convert or redeem (at the request of a holder)
this Security as provided herein or in the Fiscal Agency
Agreement.
Title to Bearer Securities and coupons shall pass by
delivery. As provided in the Fiscal Agency Agreement and subject
to certain limitations therein set forth, the transfer of
Registered Securities is registrable on the Security Register
upon surrender of a Registered Security for registration of
transfer at the office or agency of the Company in the City of
New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed by, the holder thereof or
his attorney duly authorized in writing, and thereupon one or
more new Registered Securities, of authorized denominations and
for the same aggregate principal amount, having endorsed thereon
a Guarantee executed by the Guarantor, will be issued to the
designated transferee or transferees.
13. Notices. All notices to the holders of Securities will
be published on a Business Day in an Authorized Newspaper (as
defined in the Fiscal Agency Agreement) in New York City and in
London, and, if the Securities are listed on the Luxembourg Stock
Exchange and so long as listed thereon , in Luxembourg or, if
either publication in London or Luxembourg is not practical, in
an Authorized Newspaper in any country in Western Europe. It is
expected that publication in New York City will be made in The
Wall Street Journal (Eastern edition), in London in the Financial
Times and in Luxembourg in the Luxemburger Wort. Notices shall
be deemed to have been given on the date of publication as
aforesaid or, if published on different dates, on the date of the
first such publication. A copy of each such notice will be
mailed by the Fiscal Agent, on behalf of and at the expense of
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the Company, by first-class mail to each holder of a Registered
Security at the registered address of such holder as the same
shall appear in the Security Register (as defined in the Fiscal
Agency Agreement) on the day fifteen days prior to such mailing.
14. Governing Law.
(a) THE FISCAL AGENCY AGREEMENT, THE SECURITIES AND
THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, UNITED
STATES OF AMERICA WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
RULES.
(b) The Company and the Guarantor have appointed the
Fiscal Agent as its agent upon whom process may be served in any
suit, action or proceeding initially at its office located at 450
West 33rd Street, 15th Floor, New York, New York 10001, with a
copy to the Company at 470 Wildwood Street, P.O. Box 2999,
Woburn, MA 01888-1799 and with a copy to the Guarantor at 81
Wyman Street, Waltham, Massachusetts 02254-9046, Attention:
General Counsel.
15. Authentication. This Security shall not become valid
or obligatory for any purpose until the certificate or
authentication hereon shall have been duly signed by the Fiscal
Agent acting under the Fiscal Agency Agreement.
16. Warranty of the Issuer. Subject to Section 15 hereof,
the Company hereby certifies and warrants that all acts,
conditions and things required to be done and performed and to
have happened precedent to the creation and issuance of this
Security, and to constitute the same legal, valid and binding
obligations of the Company enforceable in accordance with their
terms, have been done and performed and have happened in due and
strict compliance with all applicable laws.
17. Accounting Terms. All accounting terms not otherwise
defined herein shall have the meanings assigned to them in
accordance with generally accepted accounting principles as
applied in the United States.
18. Descriptive Headings. The descriptive headings
appearing in these Terms and Conditions are for convenience of
reference only and shall not alter, limit or define the
provisions hereof.
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GUARANTEE OF THERMO ELECTRON CORPORATION
1. FOR VALUE RECEIVED, Thermo Electron Corporation, a
corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Guarantor"), hereby
unconditionally guarantees to the holder of the Security upon
which this Guarantee is endorsed the due and punctual payment of
the principal of and any Additional Amounts (payable in
accordance with Section 2 of such Security) on such Security when
and as the same shall become due and payable, whether at the
stated maturity or by declaration of acceleration, call for
redemption, redemption at the option of the holder thereof or
otherwise, according to the terms of such Security and of the
Fiscal Agency Agreement referred to in the Security upon which
this Guarantee is endorsed. In case of the failure of the
Company referred to in the Security upon which this Guarantee is
endorsed punctually to make any such payment of principal or such
Additional Amounts, if any, the Guarantor hereby agrees to cause
any such payment to be made punctually when and as the same shall
become due and payable, whether at the stated maturity or by
declaration of acceleration, call for redemption, redemption at
the option of the holder thereof or otherwise, and as if such
payment were made by the Company.
2. The Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or the Fiscal
Agency Agreement, the absence of any action to enforce the same,
any waiver or consent by the holder of such Security or by the
Fiscal Agent with respect to any provisions thereof or of the
Fiscal Agency Agreement, the recovery of any judgment against the
Company or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Guarantor
hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against
the Company, protest or notice with respect to such Security or
the indebtedness evidenced thereby and all demands whatsoever,
and covenants that this Guarantee will not be discharged except
by complete performance of the obligations contained in such
Security and in this Guarantee.
3. (a) The Guarantor will not merge or consolidate with,
or sell or convey all or substantially all of its assets to, any
other corporation, unless (i) either (A) the Guarantor shall be
the surviving corporation in the case of a merger, (B) the assets
sold or conveyed shall be owned by a corporation which,
immediately following such sale or conveyance, is at least
51%-owned by the Guarantor, provided that such sale or conveyance
does not result in the reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the
Guarantor, or (C) (I) the surviving, resulting or transferee
A-35PAGE
<PAGE>
corporation shall expressly assume the due and punctual
performance of all of the covenants and obligations of the
Guarantor under the Guarantees and Fiscal Agency Agreement, by
supplemental agreement reasonably satisfactory to the Fiscal
Agent, and (II) the Fiscal Agent shall have received the
documentation required in the context by the Fiscal Agency
Agreement and (ii) the Guarantor or such successor corporation,
as the case may be, shall not, immediately after such merger,
consolidation, sale or conveyance, be in default in the
performance of any covenants or obligations of the Guarantor
under the Guarantees or the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 3(a), the successor or
assuming corporation shall succeed to and be substituted for, and
may exercise every right and power of and be subject to all the
obligations of, the Guarantor under the Guarantees and Fiscal
Agency Agreement, with the same effect as if such successor or
assuming corporation had been named as the Guarantor therein and
herein and the Guarantor shall be released from its obligations
as obligor under the Guarantees and Fiscal Agency Agreement.
4. (a) The Guarantor, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities by
his acceptance thereof, likewise covenants and agrees, that all
obligations of the Guarantor relating to payment of the principal
of and Additional Amounts (pursuant to Section 2 of the
Securities) on each and all of the Securities and coupons is
hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness of the Guarantor (as defined
below).
"Senior Indebtedness of the Guarantor" or "Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on and all other amounts due on or with respect to the
following, whether outstanding at the date hereof or hereafter
created or incurred:
(i) indebtedness of the Guarantor for money
borrowed by the Guarantor (excluding the Guarantees, but
including purchase money obligations) whether or not evidenced by
debentures, bonds, notes or other corporate debt securities or
similar instruments issued by the Guarantor (including the
Guarantor's obligations with respect to its 5% Senior Convertible
Debentures due 2001 and its 4-5/8% Senior Convertible Debentures
due 1997); provided, however, that Senior Indebtedness shall not
include (a) the Guarantor's 4-1/4% Convertible Subordinated
Debentures due 2003 and 4-7/8% Convertible Subordinated
Debentures due 1997, the obligations represented by which shall
rank pari passu with the obligations represented hereby in right
of payment, (b) the Guarantor's subordinated guarantee of the
principal, premium, if any, and interest, if any, on the 6-5/8%
Convertible Subordinated Debentures due 2001 of Thermo Instrument
A-36PAGE
<PAGE>
Systems Inc., on the 4-5/8% Convertible Subordinated Debentures
due 2003 and the 6-1/2% Convertible Subordinated Debentures due
1997 of Thermo TerraTech Inc., on the Non-Interest Bearing
Convertible Subordinated Debentures due 1997 of Thermo
Cardiosystems Inc., on the Non-Interest Bearing Convertible
Subordinated Debentures due 2001 of Thermo Ecotek Corporation, on
the 3-3/4% Convertible Subordinated Debentures due 2000 of Thermo
Voltek Corp., on the 4-7/8% Convertible Subordinated Debentures
due 2000 of Thermo Remediation Inc., on the 5% Convertible
Subordinated Debentures due 2000 of ThermoQuest Corporation, and
on the 5% Convertible Subordinated Debentures due 2000 of Thermo
Optek Corporation, the obligations represented by which shall
rank pari passu with the obligations represented hereby in right
of payment and (c) the Guarantor's subordinated guarantee of the
obligations to redeem the common stock of ThermoLyte Corporation,
the obligations represented by which shall rank pari passu with
the obligations represented hereby in right of payment;
(ii) obligations to reimburse any bank or other
person in respect of amounts paid under letters of credit;
(iii) leases for real property, equipment or
other assets, which leases are capitalized in the Guarantor's
consolidated financial statements in accordance with generally
accepted accounting principles;
(iv) commitment, standby and other fees due and
payable to financial institutions with respect to credit
facilities available to the Guarantor;
(v) obligations of the Guarantor under interest
rate and currency swaps, floors, caps or other similar
arrangements intended to fix or hedge interest rate obligations
or currency exposure;
(vi) indebtedness secured by any mortgage, pledge,
lien or other encumbrance on property which is owned or held by
the Guarantor subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby
shall have been assumed by the Guarantor;
(vii) obligations of the Guarantor constituting
guarantees of indebtedness of or joint obligations with another
or others which would be included in the preceding clauses (i),
(ii), (iii), (iv), (v) or (vi) (including the Guarantor's
guarantee of the principal, premium, if any, and interest on the
3-3/4% Senior Convertible Debentures due 2000 of Thermo
Instrument Systems Inc.); or
(viii) modifications, renewals, extensions or
refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (i), (ii),
(iii), (iv), (v), (vi) and (vii), or debentures, notes or other
evidences of indebtedness issued in exchange therefor;
A-37PAGE
<PAGE>
provided that Senior Indebtedness shall not include any
particular indebtedness, lease, fee, obligation, modification,
renewal, extension, refunding or exchanged security if, under the
express provisions of the instrument creating or evidencing the
same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification,
renewal, extension, refunding or exchanged security is stated to
be not superior in right of payment to the Guarantees.
(b) (i) In the event of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to
the Guarantor or it its creditors, in their capacity as such
creditors, or to its property, or in the event of any proceedings
for voluntary liquidation, dissolution or other winding up of the
Guarantor, whether or not involving insolvency or bankruptcy, or
in the event of any assignment for the benefit of creditors of
the Guarantor or any marshalling of assets of the Guarantor, then
the holders of Senior Indebtedness of the Guarantor shall first
be entitled to receive payment in full of the principal of (and
premium, if any) and interest, including interest thereon
accruing after the commencement of any such proceeding, and other
amounts due on or with respect to, all Senior Indebtedness of the
Guarantor before the holders of any of the Securities shall be
entitled to receive any payment on account of the obligations of
the Guarantor relating to the principal of and Additional Amounts
(pursuant to Section 2 of the Securities) on the Securities, and
to that end the holders of Senior Indebtedness of the Guarantor
shall be entitled to receive for application in payment thereof
any payment or distribution of any kind or character, whether in
cash, property or securities, which may be payable or deliverable
in any such proceedings in respect of the obligations of the
Guarantor relating to the Securities, other than securities of
the Guarantor as reorganized or readjusted or securities of the
Guarantor or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Section 4
with respect to the obligations of the Guarantor relating to the
Securities, to the payment of all Senior Indebtedness of the
Guarantor, provided that the rights of the holders of Senior
Indebtedness of the Guarantor are not altered by such
reorganization or readjustment. For the purposes of this
Section 4, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 3 shall be deemed to be a
liquidation, reorganization, dissolution or other winding up of
the Guarantor.
(ii) If under the circumstances set forth in
paragraph (i) of this subsection, and notwithstanding the
provisions thereof, any payment or distribution of assets of the
Guarantor of any kind, whether in cash, property, or securities
(other than securities of the Guarantor as reorganized or
readjusted or securities of the Guarantor or any other
A-38PAGE
<PAGE>
corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinated, at least to
the extent provided in this Section 4 with respect to the
obligations of the Guarantor relating to the Securities, to the
payment of all Senior Indebtedness of the Guarantor, provided
that the rights of the holders of Senior Indebtedness of the
Guarantor are not altered by such reorganization or
readjustment), shall be received by the holders of the Securities
in respect of the obligations of the Guarantor before all Senior
Indebtedness of the Guarantor is paid in full, such payment or
distribution shall be paid over to the holders of Senior
Indebtedness of the Guarantor, ratably, for application to the
payment of all Senior Indebtedness of the Guarantor remaining
unpaid until all Senior Indebtedness of the Guarantor shall have
been paid in full, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness of the
Guarantor.
(iii) Upon any distribution of assets of the
Guarantor referred to in this Section, the holders of Securities
shall be entitled to rely upon any final order or decree of a
court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are
pending, and the holders of Securities shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other
person making any distribution to the holders of Securities for
the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Senior Indebtedness of the
Guarantor and other indebtedness of the Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Section.
(c) (i) Upon the maturity of any Senior Indebtedness
of the Guarantor by lapse of time, acceleration or otherwise, all
principal thereof (and premium, if any) and interest due thereon,
including interest thereon accruing after the commencement of any
proceeding of the type referred to in paragraph (i) of
Section 4(b) above, and all other amounts due on or with respect
thereto, shall first be paid in full, or such payment duly
provided for in cash, before any payment, directly or indirectly,
is made on account of the obligations of the Guarantor relating
to the principal of and Additional Amounts (pursuant to Section 2
of the Securities) on the Securities.
(ii) Upon the happening of an event of default
with respect to any Senior Indebtedness of the Guarantor, as
defined therein or in the instrument under which it is
outstanding, permitting the holders to accelerate the maturity
thereof, then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no payment
shall be made by the Guarantor, directly or indirectly, on
account of the obligations of the Guarantor relating to the
principal of and Additional Amounts (pursuant to Section 2 of the
A-39PAGE
<PAGE>
Securities) on the Securities.
(d) In case cash, securities or other property
otherwise payable or deliverable to the holders of the Securities
on account of the Guarantees shall have been applied, pursuant to
Section 4(b) or (c), to the payment of Senior Indebtedness of the
Guarantor, then, upon the payment in full of all Senior
Indebtedness of the Guarantor, the holders of the Securities and
coupons shall be subrogated to any rights of any holders of
Senior Indebtedness of the Guarantor, to receive any further
payments or distributions applicable to Senior Indebtedness of
the Guarantor until the obligations of the Guarantor in respect
of the Guarantees shall have been discharged in full, and such
payments or distributions received by the holders of the
Securities, by reason of such subrogation, of cash, securities or
other property which otherwise would be paid or distributed to
the holders of Senior Indebtedness of the Guarantor, shall, as
between the Guarantor and its creditors other than the holders of
Senior Indebtedness of the Guarantor, on the one hand, and the
holders of the Securities on account of the Guarantees, on the
other hand, be deemed to be a payment by the Guarantor on account
of Senior Indebtedness of the Guarantor and not on account of the
Securities.
(e) No present or future holder of any Senior
Indebtedness of the Guarantor shall be prejudiced in any way in
the right to enforce the subordination of the Guarantees by any
act or failure to act on the part of the Guarantor. The
provisions of this Section 4 are solely for the purpose of
defining the relative rights of the holders of Senior
Indebtedness of the Guarantor, on the one hand, and the holders
of the Securities on account of the Guarantees, on the other
hand, against the Guarantor and its assets, and nothing contained
in this Section 4 shall impair, as between the Guarantor and the
holder of any Security, the obligation of the Guarantor, which is
unconditional and absolute, to perform in accordance with the
terms of its Guarantees, or prevent the holder of any Security,
upon default hereunder or under such Security, from exercising
all rights, powers and remedies otherwise provided herein or
therein or by applicable law, all subject to the rights of the
holders of Senior Indebtedness of the Guarantor under this
Section 4 to receive cash, property or securities otherwise
payable or deliverable to the holders of the Securities on
account of the Guarantees.
(f) Nothing contained in this Section 4 or in any
Guarantees shall prevent at any time, except under the conditions
described in Sections 4(b) and (c) hereof or during the pendency
of any dissolution, winding up, liquidation or reorganization
proceedings therein referred to, the Guarantor from performing
its obligations under the Guarantees.
5. The Guarantor shall be subrogated to all rights of the
holders of the Securities against the Company in respect of any
A-40PAGE
<PAGE>
amounts paid by the Guarantor pursuant to the provisions of this
Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of and
Additional Amounts (pursuant to Section 2 of the Securities, if
any, on) all of the Securities shall have been paid in full.
6. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
UNITED STATES OF AMERICA WITHOUT GIVING EFFECT TO ITS CONFLICTS
OF LAWS RULES.
7. All terms used in this Guarantee which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
8. Subject to the next following paragraph, the Guarantor
hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened
precedent to the creation and issuance of this Guarantee and to
constitute the same a legal, valid and binding obligations of the
Guarantor enforceable in accordance with their terms, have been
done and performed and have happened in due and strict compliance
with all applicable laws.
9. This Guarantee shall not become valid or obligatory for
any purpose until the certificate of authentication on the
Security upon which this Guarantee is endorsed shall have been
duly signed by the Fiscal Agent acting under the Fiscal Agency
Agreement.
A-41PAGE
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee
to be duly executed in its corporate name by the manual or
facsimile signature of a duly authorized officer.
Dated:
THERMO ELECTRON CORPORATION
By:
------------------------
Name:
Title:
Attest:
_________________________
A-42PAGE
<PAGE>
TRANSFER NOTICE
Only if a Registered Security is transferred:
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s),
assign(s) and transfer(s) unto ________________________________
________________________________________________________________
________________________________________________________________
________________________ whose taxpayer identification number is
__________________ and whose address including postal/zip code is
____________________________________ the within Security and all
rights thereunder, hereby irrevocably constituting and appointing
_________________________ attorney-in-fact to transfer said
Security on the books of the Fiscal Agent with full power of
substitution in the premises.
In connection with the transfer of this Security, the undersigned
Holder certifies that the transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933 and, in
connection with which transfer, the Company has received, if
requested, an opinion of counsel (satisfactory to it in form and
substance) to the effect that the transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
Dated: Name:
------------------------ ----------------------
By:________________________
Title:_____________________
NOTICE: The signature of the Holder to this
assignment must correspond with the name as
written upon the face of the within instrument in
every particular, without enlargement or any
change whatsoever.
SIGNATURE GUARANTEED
-------------------------
A-43PAGE
<PAGE>
CONVERSION NOTICE
If Bearer Security of denomination U.S. $1,000:
The undersigned holder of this Security hereby (i)
irrevocably exercises the option to convert this Security into
shares of Common Stock of Thermedics Inc. (the "Company") in
accordance with the terms of this Security, and (ii) directs that
such shares be registered in the name of and delivered, together
with a check in payment for any fractional share, to the
undersigned unless a different name has been indicated below. If
shares are to be registered in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto.
Dated:
------------------------
-------------------------------
Signature
[MUST BE GUARANTEED IF STOCK IS TO BE ISSUED
IN A NAME OTHER THAN THE REGISTERED
HOLDER OF THE SECURITY]
If shares are to be
registered in the name of
and delivered to a person
other than the holder,
please print such
person's name and address
and, if this is a
Restricted Security,
complete the Transfer
Notice:
-------------------------
-------------------------
-------------------------
HOLDER
Please print name and address of holder:
-------------------------
-------------------------
-------------------------
A-44PAGE
<PAGE>
CONVERSION NOTICE
If (i) Registered Security or (ii) Bearer Security of
denomination U.S. $10,000:
The undersigned holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Thermedics Inc. (the
"Company") in accordance with the terms of this Security, and
(ii) directs that such shares, together with a check in payment
for any fractional share and any Securities representing any
unconverted principal amount hereof, be delivered to and be
registered (if a Registered Security) in the name of the
undersigned unless a different name has been indicated below. If
shares or Securities are to be registered in the name of a person
other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.
-------------------------------
Signature
[MUST BE GUARANTEED IF STOCK IS TO
BE ISSUED IN A NAME OTHER THAN
THE REGISTERED HOLDER OF THE SECURITY]
Dated:
------------------------
If shares or Securities are to
be registered in the name of a
Person other than the
registered holder, please
print such person's name and
address and, if this is a
Restricted Security, complete
Transfer Notice:
-------------------------
-------------------------
-------------------------
HOLDER
Please print name and address of holder:
-------------------------
-------------------------
-------------------------
A-45
PAGE
<PAGE>
If only a portion of the
Securities is to be converted,
please indicate:
1 . Principal Amount to be
converted: U.S.$________
2. Kind, amount and
denomination of
Securities representing
unconverted principal
amount to be issued:
Bearer U.S. $_____________
(U.S. $1,000 or $10,000)
Registered U.S.$___________
Denominations:
U.S.$__________
(U.S. $1,000 or an integral
multiple thereof)
Registered Securities are not
exchangeable for Bearer
Securities.
A-46PAGE
<PAGE>
REDEMPTION NOTICE UNDER SECTION 3(d)
If Bearer Security of denomination
U.S. $ 1,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security in accordance with
the terms of Section 3(d) of this Security and directs that a
check in payment of the redemption amount be delivered to the
undersigned unless a different name has been indicated below.
The undersigned understands that this request can be revoked by
delivering written notice to the Paying Agent on or before the
Holder Redemption Date, together with the undersigned's
non-transferable receipt for such Security.
Dated:
Signature
[MUST BE GUARANTEED IF CHECK IS TO
BE MADE PAYABLE TO A NAME OTHER
THAN THE REGISTERED HOLDER OF THE SECURITY]
If a check in payment of
the redemption amount is
to be delivered to a
person other than the
holder, please print such
person's name and
address:
-------------------------
-------------------------
-------------------------
HOLDER
Please print name and address of holder:
-------------------------
-------------------------
-------------------------
A-47PAGE
<PAGE>
REDEMPTION NOTICE UNDER SECTION 3(d)
If (i) Registered Security or (ii) Bearer Security of
denomination U.S. $10,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) in
accordance with the terms of Section 3(d) of this Security, and
directs that a check in payment of the redemption amount be
delivered to, and any Securities representing any unredeemed
principal amount hereof be delivered to and be registered in the
name of, the undersigned unless a different name has been
indicated below. If Securities are to be registered in the name
of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto. The undersigned
understands that this request can be revoked by delivering
written notice to the Paying Agent on or before the Holder
Redemption Date, together with the undersigned's non-transferable
receipt for such Security.
Dated:
____________________________
Signature
[MUST BE GUARANTEED IF CHECK IS TO
BE MADE PAYABLE TO A NAME OTHER
THAN THE REGISTERED HOLDER OF THE
SECURITY]
If Securities are to be registered HOLDER
in the name of, or a check in Please print name and address
payment of the redemption of holder:
amount is to be delivered to,
a person other than the holder,
please print such person's name _____________________________
and address, and if this is a
Restricted Security and any _____________________________
Securities representing any
unredeemed principal amount _____________________________
hereof are to be registered in the
name of a person other than the
undersigned, complete Transfer
Notice.
--------------------------
--------------------------
--------------------------
A-48PAGE
<PAGE>
If only a portion of the Securities is to be redeemed, please
indicate:
1. Principal Amount to redeemed: U.S. $
2. Kind, amount and denomination of
Securities representing unredeemed
principal amount to be issued:
Bearer U.S. $_________________
Denominations: U.S.$___________
(U.S. $1,000 or $10,000)
Registered U.S. $______________
Denominations: U.S. $___________
(U.S. $1,000 or an integral multiple thereof)
Registered Securities are not
exchangeable for the Bearer Securities
A-49PAGE
<PAGE>
EXHIBIT B
(FORM OF REGULATION S GLOBAL SECURITY)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OF AMERICA, ITS TERRITORIES, ITS POSSESSION AND OTHER
AREAS SUBJECT TO ITS JURISDICTION (THE "UNITED STATES" ) OR TO
ANY CITIZEN, NATIONAL RESIDENT OF THE UNITED STATES OR TO ANY
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN
OR UNDER THE LAWS OF THE UNITED STATES OR ANY POLITICAL
SUBDIVISION THEREOF, OR TO ANY ESTATE OR TRUST THE INCOME OF
WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION
REGARDLESS OF ITS SOURCE OR TO ANY OTHER PERSON OR ENTITY DEEMED
A U.S. PERSON UNDER REGULATIONS UNDER THE SECURITIES ACT ("UNITED
STATES PERSON").
ANY UNITED STATES PERSON WHO HOLDS THIS SECURITY WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a)
OF THE UNITED STATES INTERNAL REVENUE CODE.
THIS SECURITY IS A TEMPORARY GLOBAL SECURITY, WITHOUT
CONVERSION RIGHTS, EXCHANGEABLE FOR DEFINITIVE BEARER SECURITIES
OR REGISTERED SECURITIES. THE RIGHTS ATTACHING TO THIS GLOBAL
SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR DEFINITIVE SECURITIES, ARE AS SPECIFIED IN THE
FISCAL AGENCY AGREEMENT (AS DEFINED HEREIN).
B-1PAGE
<PAGE>
THERMEDICS INC.
(Incorporated in the State of Massachusetts)
Non-Interest Bearing Convertible Subordinated Debenture Due 2003
Guaranteed on a Subordinated Basis By
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
TEMPORARY GLOBAL DEBENTURE
Thermedics Inc., a corporation duly incorporated and
existing under the laws of the State of Massachusetts (the
"Company"), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Global Security the
principal sum of $_______ United States Dollars on June 1, 2003.
This Global Security is one of a duly authorized issue of
Securities of the Company designated as specified in the title
hereof, issued and to be issued under the Fiscal Agency Agreement
dated as of June 3, 1996 (the "Fiscal Agency Agreement") among
the Company, Thermo Electron Corporation, a corporation duly
incorporated and existing under the laws of the State of
Delaware, as guarantor and Chemical Bank, as fiscal agent (the
"Fiscal Agent", which term includes any successor fiscal agent
under the Fiscal Agency Agreement). This Global Security is a
temporary security and is exchangeable in whole or from time to
time in part without charge upon request of the holder hereof for
definitive Securities in bearer form or in registered form, of
authorized denominations, (a) not earlier than the day following
expiration of the 40-day period that begins on the date hereof
and (b) as promptly as practicable following presentation of
certification, in the forms set forth as Exhibits C and F of the
Fiscal Agency Agreement for such purpose, that the beneficial
owner or owners of this Global Security (or, if such exchange is
only for a part of this Global Security, of such part) are not
United States Persons or other persons who have purchased such
Debenture for resale to United States Persons. Definitive
Securities in bearer form to be delivered in exchange for any
part of this Global Security shall be delivered only outside of
the United States, its territories and its possessions. Upon any
exchange of a part of this Global Security for definitive
Securities, the portion of the principal amount hereof so
exchanged shall be endorsed by the Fiscal Agent or its agents on
the Schedule of Exchanges hereto, and the principal amount hereof
shall be reduced for all purposes by the amount so exchanged.
Until exchanged in full for definitive Securities, this
Global Security shall in all respects be entitled to the same
benefits under, and subject to the same terms and conditions of,
the Fiscal Agency Agreement as definitive Securities
B-2PAGE
<PAGE>
authenticated and delivered thereunder, except that neither the
holder hereof nor the beneficial owners of this Global Security
shall be entitled to convert this Global Security into shares of
Common Stock of the Company or any other security, cash or other
property.
THIS GLOBAL SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO ITS CONFLICTS
OF LAW RULES.
All terms used in this Global Security which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
Unless the certificate of authentication hereon has been
manually executed by an authorized signatory of the Fiscal Agent,
this Global Security shall not be entitled to any benefit under
the Fiscal Agency Agreement or valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this Global
Security to be duly executed in its corporate name by its duly
authorized signatory under its corporate seal.
Dated: June 3, 1996
THERMEDICS INC
By:
-----------------------
Name:
Title:
Attest:
_________________________
B-3PAGE
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-
mentioned Fiscal Agency Agreement.
CHEMICAL BANK
as Fiscal Agent
By:_________________________
Authorized Officer
B-4PAGE
<PAGE>
SCHEDULE OF EXCHANGES
Principal Remaining
amount principal Notation
exchanged for amount made on
Date definitive following behalf of the
made Securities such exchange Fiscal Agent
_______ ____________ _________ _____________
_______ ____________ _________ _____________
_______ ____________ _________ _____________
_______ ____________ _________ _____________
_______ ____________ _________ _____________
_______ ____________ _________ _____________
_______ ____________ _________ _____________
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________________________________________________________________
B-5PAGE
<PAGE>
GUARANTEE OF THERMO ELECTRON CORPORATION
1. FOR VALUE RECEIVED, Thermo Electron Corporation, a
corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Guarantor"), hereby
unconditionally guarantees to the holder of the Security upon
which this Guarantee is endorsed the due and punctual payment of
the principal of and any Additional Amounts (payable in
accordance with Section 2 of such Security) on such Security when
and as the same shall become due and payable, whether at the
stated maturity or by declaration of acceleration, call for
redemption, redemption at the option of the holder thereof or
otherwise, according to the terms of such Security and of the
Fiscal Agency Agreement referred to in the Security upon which
this Guarantee is endorsed. In case of the failure of the
Company referred to in the Security upon which this Guarantee is
endorsed punctually to make any such payment of principal or such
Additional Amounts, if any, the Guarantor hereby agrees to cause
any such payment to be made punctually when and as the same shall
become due and payable, whether at the stated maturity or by
declaration of acceleration, call for redemption, redemption at
the option of the holder thereof or otherwise, and as if such
payment were made by the Company.
2. The Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or the Fiscal
Agency Agreement, the absence of any action to enforce the same,
any waiver or consent by the holder of such Security or by the
Fiscal Agent with respect to any provisions thereof or of the
Fiscal Agency Agreement, the recovery of any judgment against the
Company or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Guarantor
hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against
the Company, protest or notice with respect to such Security or
the indebtedness evidenced thereby and all demands whatsoever,
and covenants that this Guarantee will not be discharged except
by complete performance of the obligations contained in such
Security and in this Guarantee.
3. (a) The Guarantor will not merge or consolidate with,
or sell or convey all or substantially all of its assets to, any
other corporation, unless (i) either (A) the Guarantor shall be
the surviving corporation in the case of a merger, (B) the assets
sold or conveyed shall be owned by a corporation which,
immediately following such sale or conveyance, is at least
51%-owned by the Guarantor, provided that such sale or conveyance
does not result in the reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the
Guarantor, or (C) (I) the surviving, resulting or transferee
corporation shall expressly assume the due and punctual
B-6PAGE
<PAGE>
performance of all of the covenants and obligations of the
Guarantor under the Guarantees and Fiscal Agency Agreement, by
supplemental agreement reasonably satisfactory to the Fiscal
Agent, and (II) the Fiscal Agent shall have received the
documentation required in the context by the Fiscal Agency
Agreement and (ii) the Guarantor or such successor corporation,
as the case may be, shall not, immediately after such merger,
consolidation, sale or conveyance, be in default in the
performance of any covenants or obligations of the Guarantor
under the Guarantees or the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 3(a), the successor or
assuming corporation shall succeed to and be substituted for, and
may exercise every right and power of and be subject to all the
obligations of, the Guarantor under the Guarantees and Fiscal
Agency Agreement, with the same effect as if such successor or
assuming corporation had been named as the Guarantor therein and
herein and the Guarantor shall be released from its obligations
as obligor under the Guarantees and Fiscal Agency Agreement.
4. (a) The Guarantor, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities by
his acceptance thereof, likewise covenants and agrees, that all
obligations of the Guarantor relating to payment of the principal
of and Additional Amounts (pursuant to Section 2 of the
Securities) on each and all of the Securities and coupons is
hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness of the Guarantor (as defined
below).
"Senior Indebtedness of the Guarantor" or "Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on and all other amounts due on or with respect to the
following, whether outstanding at the date hereof or hereafter
created or incurred:
(i) indebtedness of the Guarantor for money
borrowed by the Guarantor (excluding the Guarantees, but
including purchase money obligations) whether or not evidenced by
debentures, bonds, notes or other corporate debt securities or
similar instruments issued by the Guarantor (including the
Guarantor's obligations with respect to its 5% Senior Convertible
Debentures due 2001 and its 4-5/8% Senior Convertible Debentures
due 1997); provided, however, that Senior Indebtedness shall not
include (a) the Guarantor's 4-1/4% Convertible Subordinated
Debentures due 2003 and the 4-7/8% Convertible Subordinated
Debentures due 1997, the obligations represented by which shall
rank pari passu with the obligations represented hereby in right
of payment, (b) the Guarantor's subordinated guarantee of the
principal, premium, if any, and interest, if any, on the 6-5/8%
Convertible Subordinated Debentures due 2001 of Thermo Instrument
Systems Inc., on the 4-5/8% Convertible Subordinated Debentures
B-7PAGE
<PAGE>
due 2003 and the 6-1/2% Convertible Subordinated Debentures due
1997 of Thermo TerraTech Inc., on the Non-Interest Bearing
Convertible Subordinated Debentures due 1997 of Thermo
Cardiosystems Inc., on the Non-Interest Bearing Convertible
Subordinated Debentures due 2001 of Thermo Ecotek Corporation, on
the 3-3/4% Convertible Subordinated Debentures due 2000 of Thermo
Voltek Corp., on the 4-7/8% Convertible Subordinated Debentures
due 2000 of Thermo Remediation Inc., on the 5% Convertible
Subordinated Debentures due 2000 of ThermoQuest Corporation, and
on the 5% Convertible Subordinated Debentures due 2000 of Thermo
Optek Corporation, the obligations represented by which shall
rank pari passu with the obligations represented hereby in right
of payment and (c) the Guarantor's subordinated guarantee of the
obligations to redeem the common stock of ThermoLyte Corporation,
the obligations represented by which shall rank pari passu with
the obligations represented hereby in right of payment;
(ii) obligations to reimburse any bank or other
person in respect of amounts paid under letters of credit;
(iii) leases for real property, equipment or
other assets, which leases are capitalized in the Guarantor's
consolidated financial statements in accordance with generally
accepted accounting principles;
(iv) commitment, standby and other fees due and
payable to financial institutions with respect to credit
facilities available to the Guarantor;
(v) obligations of the Guarantor under interest
rate and currency swaps, floors, caps or other similar
arrangements intended to fix or hedge interest rate obligations
or currency exposure;
(vi) indebtedness secured by any mortgage, pledge,
lien or other encumbrance on property which is owned or held by
the Guarantor subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby
shall have been assumed by the Guarantor;
(vii) obligations of the Guarantor constituting
guarantees of indebtedness of or joint obligations with another
or others which would be included in the preceding clauses (i),
(ii), (iii), (iv), (v) or (vi) (including the Guarantor's
guarantee of the principal, premium, if any, and interest on the
3-3/4% Senior Convertible Debentures due 2000 of Thermo
Instrument Systems Inc.); or
(viii) modifications, renewals, extensions or
refundings of any of the indebtedness, leases, fees or
obligations referred to in the preceding clauses (i), (ii),
(iii), (iv), (v), (vi) and (vii), or debentures, notes or other
evidences of indebtedness issued in exchange therefor;
B-8PAGE
<PAGE>
provided that Senior Indebtedness shall not include any
particular indebtedness, lease, fee, obligation, modification,
renewal, extension, refunding or exchanged security if, under the
express provisions of the instrument creating or evidencing the
same, or pursuant to which the same is outstanding, such
indebtedness, lease, fee or obligation or such modification,
renewal, extension, refunding or exchanged security is stated to
be not superior in right of payment to the Guarantees.
(b) (i) In the event of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to
the Guarantor or it its creditors, in their capacity as such
creditors, or to its property, or in the event of any proceedings
for voluntary liquidation, dissolution or other winding up of the
Guarantor, whether or not involving insolvency or bankruptcy, or
in the event of any assignment for the benefit of creditors of
the Guarantor or any marshalling of assets of the Guarantor, then
the holders of Senior Indebtedness of the Guarantor shall first
be entitled to receive payment in full of the principal of (and
premium, if any) and interest, including interest thereon
accruing after the commencement of any such proceeding, and other
amounts due on or with respect to, all Senior Indebtedness of the
Guarantor before the holders of any of the Securities shall be
entitled to receive any payment on account of the obligations of
the Guarantor relating to the principal of and Additional Amounts
(pursuant to Section 2 of the Securities) on the Securities, and
to that end the holders of Senior Indebtedness of the Guarantor
shall be entitled to receive for application in payment thereof
any payment or distribution of any kind or character, whether in
cash, property or securities, which may be payable or deliverable
in any such proceedings in respect of the obligations of the
Guarantor relating to the Securities, other than securities of
the Guarantor as reorganized or readjusted or securities of the
Guarantor or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Section 4
with respect to the obligations of the Guarantor relating to the
Securities, to the payment of all Senior Indebtedness of the
Guarantor, provided that the rights of the holders of Senior
Indebtedness of the Guarantor are not altered by such
reorganization or readjustment. For the purposes of this
Section 4, no consolidation, merger, conveyance or transfer made
pursuant to the provisions of Section 3 shall be deemed to be a
liquidation, reorganization, dissolution or other winding up of
the Guarantor.
(ii) If under the circumstances set forth in
paragraph (i) of this subsection, and notwithstanding the
provisions thereof, any payment or distribution of assets of the
Guarantor of any kind, whether in cash, property, or securities
(other than securities of the Guarantor as reorganized or
readjusted or securities of the Guarantor or any other
corporation provided for by a plan of reorganization or
B-9PAGE
<PAGE>
readjustment the payment of which is subordinated, at least to
the extent provided in this Section 4 with respect to the
obligations of the Guarantor relating to the Securities, to the
payment of all Senior Indebtedness of the Guarantor, provided
that the rights of the holders of Senior Indebtedness of the
Guarantor are not altered by such reorganization or
readjustment), shall be received by the holders of the Securities
in respect of the obligations of the Guarantor before all Senior
Indebtedness of the Guarantor is paid in full, such payment or
distribution shall be paid over to the holders of Senior
Indebtedness of the Guarantor, ratably, for application to the
payment of all Senior Indebtedness of the Guarantor remaining
unpaid until all Senior Indebtedness of the Guarantor shall have
been paid in full, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness of the
Guarantor.
(iii) Upon any distribution of assets of the
Guarantor referred to in this Section, the holders of Securities
shall be entitled to rely upon any final order or decree of a
court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are
pending, and the holders of Securities shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other
person making any distribution to the holders of Securities for
the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Senior Indebtedness of the
Guarantor and other indebtedness of the Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Section.
(c) (i) Upon the maturity of any Senior Indebtedness
of the Guarantor by lapse of time, acceleration or otherwise, all
principal thereof (and premium, if any) and interest due thereon,
including interest thereon accruing after the commencement of any
proceeding of the type referred to in paragraph (i) of
Section 4(b) above, and all other amounts due on or with respect
thereto, shall first be paid in full, or such payment duly
provided for in cash, before any payment, directly or indirectly,
is made on account of the obligations of the Guarantor relating
to the principal of and Additional Amounts (pursuant to Section 2
of the Securities) on the Securities.
(ii) Upon the happening of an event of default
with respect to any Senior Indebtedness of the Guarantor, as
defined therein or in the instrument under which it is
outstanding, permitting the holders to accelerate the maturity
thereof, then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no payment
shall be made by the Guarantor, directly or indirectly, on
account of the obligations of the Guarantor relating to the
principal of and Additional Amounts (pursuant to Section 2 of the
Securities) on the Securities.
B-10PAGE
<PAGE>
(d) In case cash, securities or other property
otherwise payable or deliverable to the holders of the Securities
on account of the Guarantees shall have been applied, pursuant to
Section 4(b) or (c), to the payment of Senior Indebtedness of the
Guarantor, then, upon the payment in full of all Senior
Indebtedness of the Guarantor, the holders of the Securities and
coupons shall be subrogated to any rights of any holders of
Senior Indebtedness of the Guarantor, to receive any further
payments or distributions applicable to Senior Indebtedness of
the Guarantor until the obligations of the Guarantor in respect
of the Guarantees shall have been discharged in full, and such
payments or distributions received by the holders of the
Securities, by reason of such subrogation, of cash, securities or
other property which otherwise would be paid or distributed to
the holders of Senior Indebtedness of the Guarantor, shall, as
between the Guarantor and its creditors other than the holders of
Senior Indebtedness of the Guarantor, on the one hand, and the
holders of the Securities on account of the Guarantees, on the
other hand, be deemed to be a payment by the Guarantor on account
of Senior Indebtedness of the Guarantor and not on account of the
Securities.
(e) No present or future holder of any Senior
Indebtedness of the Guarantor shall be prejudiced in any way in
the right to enforce the subordination of the Guarantees by any
act or failure to act on the part of the Guarantor. The
provisions of this Section 4 are solely for the purpose of
defining the relative rights of the holders of Senior
Indebtedness of the Guarantor, on the one hand, and the holders
of the Securities on account of the Guarantees, on the other
hand, against the Guarantor and its assets, and nothing contained
in this Section 4 shall impair, as between the Guarantor and the
holder of any Security, the obligation of the Guarantor, which is
unconditional and absolute, to perform in accordance with the
terms of its Guarantees, or prevent the holder of any Security,
upon default hereunder or under such Security, from exercising
all rights, powers and remedies otherwise provided herein or
therein or by applicable law, all subject to the rights of the
holders of Senior Indebtedness of the Guarantor under this
Section 4 to receive cash, property or securities otherwise
payable or deliverable to the holders of the Securities on
account of the Guarantees.
(f) Nothing contained in this Section 4 or in any
Guarantees shall prevent at any time, except under the conditions
described in Sections 4(b) and (c) hereof or during the pendency
of any dissolution, winding up, liquidation or reorganization
proceedings therein referred to, the Guarantor from performing
its obligations under the Guarantees.
5. The Guarantor shall be subrogated to all rights of the
holders of the Securities against the Company in respect of any
amounts paid by the Guarantor pursuant to the provisions of this
B-11PAGE
<PAGE>
Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of and
Additional Amounts (pursuant to Section 2 of the Securities, if
any, on) all of the Securities shall have been paid in full.
6. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
UNITED STATES OF AMERICA WITHOUT GIVING EFFECT TO ITS CONFLICTS
OF LAWS RULES.
7. All terms used in this Guarantee which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
8. Subject to the next following paragraph, the Guarantor
hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened
precedent to the creation and issuance of this Guarantee and to
constitute the same a legal, valid and binding obligations of the
Guarantor enforceable in accordance with their terms, have been
done and performed and have happened in due and strict compliance
with all applicable laws.
9. This Guarantee shall not become valid or obligatory for
any purpose until the certificate of authentication on the
Security upon which this Guarantee is endorsed shall have been
duly signed by the Fiscal Agent acting under the Fiscal Agency
Agreement.
B-12PAGE
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee
to be duly executed in its corporate name by the manual or
facsimile signature of a duly authorized officer.
Dated:
THERMO ELECTRON CORPORATION
By:
-----------------------
Name:
Title:
Attest:
_________________________
B-13PAGE
<PAGE>
EXHIBIT C
Form of Certificate to be Given by
The Euroclear Operator and Cedel Bank, societe anonyme
CERTIFICATION
U.S. $55,000,000
THERMEDICS INC.
Non-Interest Bearing Convertible Subordinated Debentures
due June 1, 2003
(the "Securities")
This is to certify that, based solely on certifications we
have received in writing, by tested telex or electronic
transmission from member organizations appearing in our records
as persons being entitled to a portion of the principal amount
set forth below (our "Member Organizations"), substantially to
the effect set forth in the Fiscal Agency Agreement relating to
the above-captioned Securities, as of the date hereof, U.S.
$_______________ aggregate principal amount of the
above-captioned Securities is owned by persons that are not
citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the
income of which is subject to United States Federal income
taxation regardless of its source or any other person deemed a
"United States person" or a "U.S. person" under the Internal
Revenue Code of 1986, as amended, or Regulation S under the U.S.
Securities Act of 1933, as amended ("United States persons").
The following denominations of Bearer Securities are
requested:
No. of Certificates Amount
$1,000 Denomination ________________ = ______________
$10,000 Denomination ________________ = ______________*
Total Requested ________________ = ______________
We further certify (i) that we are not making available
herewith for exchange any portion of the Regulation S Global
Security excepted in such certifications and (ii) that as of the
date hereof we have not received any notification from any of our
Member Organizations to the effect that the statements made by
__________________
* Must equal the amount stated in the first paragraph of this
certificate.
C-1PAGE
<PAGE>
such Member Organization with respect to any portion of the part
submitted herewith for exchange are no longer true and cannot be
relied upon as of the date hereof. We further certify that under
the rules of the undersigned organization, each Member
Organization has agreed that any electronic certification shall
have the effect of a signed certification and that all
certifications shall be retained for at least four calendar years
following the year in which the certifications are received in
compliance with the rules set forth under Treas. Reg. 1. 163-5
(c) (2) (i) (D) (3) (i).
We understand that this certification is required in
connection with certain tax laws and, if applicable, certain
securities laws of the United States. In connection therewith,
if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or
would be relevant, we irrevocably authorize you to produce this
certification to any interested party in such proceedings.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and
its territories and possessions, including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands. As used herein, "restricted period"
means the period described in Section 1. 163-5(c)(2)(i)(D)(7) of
the Treasury Regulations and "financial institution" means the
persons described in Section 1. 165-12(c)(1)(v) of the Treasury
Regulations.
Dated: ____________________, 1996*
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, BRUSSELS OFFICE, AS OPERATOR OF
THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME**
By:_____________________________
______________________
* To be dated no earlier than the date which is 40 days after
June 3, 1996.
** Delete as appropriate.
C-2PAGE
<PAGE>
EXHIBIT D
Form of Certificate of Beneficial Ownership for
Bearer Securities to be Provided to the
Euroclear Operator or to Cedel Bank, societe anonyme
CERTIFICATION
U.S. $55,000,000
THERMEDICS INC.
Non-Interest Bearing Convertible Subordinated Debentures
due June 1, 2003
(the "Securities")
This is to certify that as of the date hereof and except as
set forth below, $___________ aggregate principal amount of the
above-mentioned Securities held by you for our account are owned,
by or on behalf of, (a) a person (other than a financial
institution for purposes of resale during the restricted period)
who is not a United States person; or (b) a United States person
(other than a financial institution for purposes of resale during
the restricted period) who is (i) a foreign branch of a United
States financial institution or (ii) a United States person
acquiring such Securities through the foreign branch of a United
States financial institution and who for purposes of this
certification holds such Securities through such financial
institution on the date hereof, and, in the case of either (i) or
(ii), such United States financial institution has agreed, for
the benefit of the Company, to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the United States Internal
Revenue Code of 1986, as from time to time amended, and the
regulations thereunder; or (c) a financial institution for
purposes of resale during the restricted period and such
financial institution has not acquired such Securities for
purposes of resale directly or indirectly to a United States
person or to a person within the United States or its
possessions; and the undersigned has obtained a similar
certificate from its member organizations on which this
certificate is based; provided, however, that if the undersigned
has actual knowledge that the information contained in such a
certificate is false (and, absent documentary evidence that the
beneficial owner of such Security is not a United states person,
it will be deemed to have actual knowledge that such certificate
is false if it has a United States address for such beneficial
owner, other than a financial institution described above), the
undersigned will not deliver a Security in temporary or
definitive bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the
undersigned.
D-1PAGE
<PAGE>
No. of Certificates Amount
$1,000 Denomination ________________ = ______________
$10,000 Denomination ________________ = ______________*
Total Requested ________________ = ______________
As used herein, (i) "United States person" means a citizen
or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the
United States and an estate or trust the income of which is
subject to United States Federal income taxation regardless of
its source or any other person deemed a "United States person" or
a "U.S. person" under the Internal Revenue Code of 1986, as
amended, or Regulation S under the U.S. Securities Act of 1933,
as amended, (ii) "United States" means the United States of
America (including the States and the District of Columbia) and
its territories and possessions, including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands, (iii) "restricted period" means the
period described in Section 1.163-5(c)(2)(i)(D)(7) of the
Treasury Regulations, and (iv) "financial institution" means the
persons described in Section 1. 165-12(c)(1)(v) of the United
States Treasury Regulations.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your
certification relating to the Securities held by you for our
account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in
the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to
U.S.$_______________ of such interest in the above Securities in
respect of which we are not able to certify and as to which we
understand exchange and delivery of definitive Securities cannot
be made until we do so certify.
__________________
* Must equal the amount stated in the first paragraph of this
certificate.
D-2PAGE
<PAGE>
We understand that this certification is required in connection
with certain tax laws and, if applicable, certain securities laws
of the United States. In connection therewith, if administrative
or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we
irrevocably authorize you to produce this certification or a copy
hereof to any interested party in such proceedings.
Dated: ___________________, 1996*
[Name]
By:_________________________
Signature
As, or as agent for, the
beneficial owner[s] of
the Securities to which
this certificate relates.
_____________________
* Not earlier than 15 days prior to the date which is 40 days
after June 3, 1996.
D-3PAGE
<PAGE>
EXHIBIT E
Form of Certificate of Beneficial Ownership
for Registered Securities to be Provided to the
Euroclear Operator or to Cedel Bank, societe anonyme
CERTIFICATION
U.S. $55,000,000
THERMEDICS INC.
Non-Interest Bearing Convertible Subordinated Debentures
due June 1, 2003
(the "Securities")
Please issue U. S. $_______ of the U.S. $________ aggregate
principal amount of the Securities held by you for our account in
registered form. We hereby certify to you that we are not a
"U.S. Person" as defined in Regulation S under the United States
Securities Act of 1933, as amended or a "United States person" as
defined under the Internal Revenue Code of 1986, as amended,
except as provided in U.S. Treasury Regulation
Section 1.163-5(c)(2)(i)(D). The exact name of the beneficial
holder that the Securities are to be registered in is as follows:
The following denomination(s) of Registered Securities are
requested (integral multiples of $1,000):
Denominations No. of Certificates Amount
------------- ------------------- ------
$________________ ___________________ = $________________
$________________ ___________________ = $________________
$________________ ___________________ = $________________
$________________ ___________________ = $________________
Total Requested ___________________ = $________________*
_________________
* Must equal the amount stated in the first paragraph of this
certificate.
E-1PAGE
<PAGE>
We irrevocably authorize you to produce this certificate or
a copy hereof to any interested party in any administrative or
proceedings with respect to the matters covered by this
certificate.
Dated: __________________, 1996*
Yours faithfully,
[NAME]
By:
Signature
To be completed by the account
holder as, or as agent for,
the beneficial owner(s) of the
Securities to which this
certificate relates.
______________________
* To be dated not earlier than the date which is 40 days after
June 3, 1996.
E-2PAGE
<PAGE>
EXHIBIT F
Form of Certificate to be Given by
The Euroclear Operator and Cedel Bank, societe anonyme
CERTIFICATION
U.S. $55,000,000
THERMEDICS INC.
Non-Interest Bearing Convertible Subordinated Debentures
due June 1, 2003
(the "Securities")
This is to certify that, based solely on certifications we
have received in writing, by tested telex or electronic
transmission from member organizations appearing in our records
as persons being entitled to a portion of the principal amount
set forth below (our "Member Organizations"), substantially to
the effect set forth in the Fiscal Agency Agreement, as of the
date hereof, U.S. $___________ aggregate principal amount of the
above-captioned Securities is owned by persons that are not
citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the
income of which is subject to United States Federal income
taxation regardless of its source (except as provided in U.S.
Treasury Regulation Section 1.163-5(c)(2)(i)(D)) or any other
person deemed a "U.S. person" under Regulation S under the U.S.
Securities Act of 1933, as amended.
The following denomination(s) of Registered Securities are
requested (integral multiples of $1,000):
No. of Certificates Amount
$1,000 Denomination ________________ = ______________
$10,000 Denomination ________________ = ______________
Total Requested ________________ = ______________*
We further certify (i) that we are not making available
herewith for exchange (or, if relevant, exercise of any rights)
any portion of the Regulation S Global Security excepted in such
certifications and (ii) that as of the date hereof we have not
__________________
* Must equal the amount stated in the first paragraph of this
certificate.
received any notification from any of our Member Organizations to
F-1PAGE
<PAGE>
the effect that the statements made by such Member Organization
with respect to any portion of the part submitted herewith for
exchange (or, if relevant, exercise of any rights) are no longer
true and cannot be relied upon as of the date hereof.
We understand that this certification is required in
connection with certain tax laws and, if applicable, certain
securities laws of the United States. In connection therewith,
if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or
would be relevant, we irrevocably authorize you to produce this
certification to any interested party in such proceedings.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and
its territories and possessions, including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
Dated: __________________, 1996*
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, BRUSSELS OFFICE, AS
OPERATOR OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By:______________________________
_____________________
* To be dated no earlier than the date which is 40 days after
June 3, 1996.
Exhibit 11
THERMEDICS
Computation of Earnings per Share
Three Months Ended Six Months Ended
-------------------------- ----------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
-----------------------------------------------------------------------------
Computation of Primary
Earnings per Share:
Net Income (a) $ 9,174,000 $ 3,666,000 $13,927,000 $ 6,928,000
----------- ----------- ----------- -----------
Shares:
Weighted average shares
outstanding 36,757,308 33,616,346 36,177,374 33,461,149
Add: Shares issuable
from assumed
exercise of
options (as
determined by
the application
of the treasury
stock method) 491,069 - - -
Shares issuable
from assumed
conversion of
subordinated
convertible
debentures 917,993 - - -
----------- ----------- ----------- -----------
Weighted average
shares outstanding,
as adjusted (b) 38,166,370 33,616,346 36,177,374 33,461,149
----------- ----------- ----------- -----------
Primary Earnings per
Share (a) / (b) $ .24 $ .11 $ .38 $ .21
=========== =========== =========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMEDICS
INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 29, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 131,356
<SECURITIES> 85,823
<RECEIVABLES> 55,827
<ALLOWANCES> 4,747
<INVENTORY> 49,606
<CURRENT-ASSETS> 327,591
<PP&E> 33,242
<DEPRECIATION> 20,235
<TOTAL-ASSETS> 486,824
<CURRENT-LIABILITIES> 114,600
<BONDS> 88,073
0
0
<COMMON> 3,679
<OTHER-SE> 193,144
<TOTAL-LIABILITY-AND-EQUITY> 486,824
<SALES> 122,912
<TOTAL-REVENUES> 122,912
<CGS> 64,696
<TOTAL-COSTS> 64,696
<OTHER-EXPENSES> 21,192
<LOSS-PROVISION> 606
<INTEREST-EXPENSE> 2,537
<INCOME-PRETAX> 21,212
<INCOME-TAX> 3,691
<INCOME-CONTINUING> 13,927
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,927
<EPS-PRIMARY> .38
<EPS-DILUTED> 0
</TABLE>
