EXHIBIT 99.1
Draft 2/5/97
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THERMEDICS DETECTION INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
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SUBSCRIPTION AGENCY AGREEMENT
DATED AS OF FEBRUARY __, 1997
SUBSCRIPTION AGENCY AGREEMENT dated as of February __, 1997 by and between
Thermedics Detection Inc., a Massachusetts corporation (the "Company"), and
American Stock Transfer & Trust Company as Subscription Agent (the "Subscription
Agent").
WHEREAS, the Company has caused a Registration Statement on Form S-1
(Registration No. 333-19199) under the Securities Act of 1933, as amended (the
"Act"), to be filed with the Securities and Exchange Commission (the
"Commission") relating to the distribution by the Company of transferable
subscription rights (the "Rights") and sale of newly issued shares of the
Company's common stock, par value $.10 per share (the "Common Stock"), upon the
exercise of such Rights (such Registration Statement, in the form in which it
first becomes effective under the Act, and as it may thereafter be amended from
time to time, is referred to herein as the "Registration Statement"; the
distribution of the Rights and the sale of shares of Common Stock upon the
exercise thereof as contemplated by the Registration Statement is referred to
herein as the "Rights Offering");
WHEREAS, the Rights will be distributed to holders of record of shares of
Common Stock as of the close of business on February 6, 1997 (the "Record
Date") at a rate of approximately .366 Rights for each share of Common Stock
held on the Record Date (except as provided for in the following paragraph);
WHEREAS, a portion of the Rights will be distributed to Thermedics Inc., a
Massachusetts corporation ("Thermedics"), as a holder of record of Common Stock
and redistributed by Thermedics to holders of record of shares of its Common
Stock, par value $.05 per share ("Thermedics Common Stock"), including Thermo
Electron Corporation, a Delaware corporation ("Thermo Electron"), on
_______________ __, 1997 (the "Thermedics Record Date") at a rate of .10 Rights
for each share of Thermedics Common Stock held on the Thermedics Record Date;
WHEREAS, Thermo Electron will not distribute the Rights it receives to the
holders of record of its shares, but may, at its discretion, exercise its Rights
or sell its Rights;
WHEREAS, the Company has reserved for issuance, and has authorized the
issuance of, an aggregate number of authorized and unissued or treasury shares
of Common Stock (the "Underlying Shares") equal to the aggregate number of
Rights to be distributed pursuant to the Rights Offering;
WHEREAS, Rights holders will be entitled to subscribe to purchase, at a per
share price of $______ (the "Subscription Price"), one Underlying Share for each
Right held (the "Basic Subscription Privilege") and may also subscribe to
purchase additional Underlying Shares, to the extent that any such shares are
not purchased due to the non-exercise of Rights (the "Oversubscription
Privilege"); and
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WHEREAS, the Company desires the Subscription Agent to act on its behalf in
connection with the Rights Offering as set forth herein, and the Subscription
Agent is willing so to act.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
SECTION 1. Appointment of Subscription Agent. The Company hereby appoints
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the Subscription Agent to act as agent for the Company in accordance with the
instructions set forth in this Agreement, and the Subscription Agent hereby
accepts such appointment. The Company may from time to time appoint such co-
subscription agents as it may deem necessary or desirable.
SECTION 2. Issue of Securities.
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(a) The Company has distributed or will distribute the Rights to holders of
record of shares of Common Stock as of the close of business on the Record Date
(certain of which Rights are to be distributed by Thermedics as a holder of
Common Stock to holders of record shares of Thermedics Common Stock as of the
close of business on the Thermedics Record Date). The Company will promptly
notify the Subscription Agent upon the effectiveness of the Registration
Statement. As transfer agent and registrar for the shares of Common Stock, the
Subscription Agent shall provide such assistance as the Company may require in
order to effect the distribution of the Rights to holders of record of shares of
Common Stock as of the close of business on the Record Date (or to holders of
record of shares of Thermedics Common Stock on the Thermedics Record Date, as
the case may be) (it being understood that Subscription Certificates (as defined
in Section 3(b) hereof) or International Holder Subscription Forms (as defined
in Section 3(c) hereof), as the case may be, shall be mailed to record holders
(except those located in the United Kingdom, which holders must contact Lehman
Brothers International (Europe)) of (i) the Common Stock together with a copy of
the Prospectus no later than two business days following the [Thermedics] Record
Date and (ii) Thermedics Common Stock together with a copy of the Prospectus no
later than two business days following the date upon which the Subscription
Agent receives a final list of record holders of Thermedics Common Stock as of
the Thermedics Record Date), including assistance in determining the number of
Rights to be distributed to each such record holder and assistance in
distributing the Subscription Certificates evidencing the Rights or
International Holder Subscription Forms, as the case may be.
(b) The Company has authorized the issuance of and will hold in reserve the
Underlying Shares, and upon the valid exercise of Rights, the Company will issue
Underlying Shares to validly exercising Rights holders as set forth in the
Registration Statement.
SECTION 3. Basic Subscription Privilege; Oversubscription Privilege; Form
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of Subscription Certificates.
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(a) Each Right carries with it a Basic Subscription Privilege and an
Oversubscription Privilege.
(i) Pursuant to each Right's Basic Subscription Privilege, the
Right grants to the holder thereof, upon the valid exercise of the Right
pursuant to Section 7 hereof, the right to purchase from the Company one
Underlying Share for the Subscription Price.
(ii) Pursuant to each Right's Oversubscription Privilege, the
Right grants to the holder thereof, upon the valid exercise thereof
pursuant to Section 7 hereof, and subject to the exercise of the Basic
Subscription Privilege represented by such Right, the right, subject to the
availability thereof as set forth below, to purchase from the Company
additional Underlying Shares for the Subscription Price. Underlying Shares
will be available for purchase pursuant to the Oversubscription Privilege
only to the extent that the maximum number of Underlying Shares are not
subscribed for through the exercise of all Basic Subscription Privileges by
the Expiration Date (as defined below). If the Underlying Shares so
available ("Excess Shares") are not sufficient to satisfy all subscriptions
pursuant to the Oversubscription Privilege, the Excess Shares will be
allocated pro rata (subject to the elimination of fractional shares) among
those holders of Rights exercising the Oversubscription Privilege, in
proportion, not to the number of shares requested pursuant to the
Oversubscription Privilege, but to the number of shares they have purchased
pursuant to the Basic Subscription Privilege; provided, however, that if
such pro rata allocation results in any holder being allocated a greater
number of Excess Shares than such holder subscribed for pursuant to the
exercise of such holder's Oversubscription Privilege, then such holder will
be allocated only such number of Excess Shares as such holder subscribed
for and the remaining Excess Shares will be allocated among all other
holders exercising Oversubscription Privileges.
(iii) Banks, brokers and other nominee holders of Rights who
exercise Rights and the Oversubscription Privilege on behalf of beneficial
owners of Rights shall be required to certify to the Subscription Agent and
the Company (by delivery to the Subscription Agent of a Nominee Holder
Certification substantially in the form of Exhibit B hereto), in connection
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with the exercise of the Oversubscription Privilege, as to the aggregate
number of Rights that have been exercised, and the number of
Oversubscription Shares that are being subscribed for by each beneficial
owner of Rights on whose behalf such nominee holder is acting. If more
Underlying Shares are subscribed for pursuant to the Oversubscription
Privilege than are available for sale, Underlying Shares will be allocated
among persons exercising the Oversubscription Privilege in proportion to
such persons' exercise of Rights pursuant to the Basic Subscription
Privilege.
(b) The Rights shall be evidenced by subscription certificates (the
"Subscription Certificates"). The Subscription Certificates (and the form of
election to exercise or transfer Rights to be printed on the reverse thereof)
shall be substantially in the form attached
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as Exhibit A hereto. The Subscription Certificates shall be fully transferable
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in the manner provided for herein.
(c) Subscription Certificates will not be provided to holders of
record whose addresses are outside the United States or who have an APO or FPO
address, but will be held by the Subscription Agent for their account. To
exercise or sell Rights, such international holders must notify the Subscription
Agent by completing an international holder subscription form (the
"International Holder Subscription Form") which will be delivered by the
Subscription Agent to such international holders (except those located in the
United Kingdom ) in lieu of a Subscription Certificate, and sending it by mail
or telecopy to the Subscription Agent. International holders located in the
United Kingdom will not initially be provided with International Holder
Subscription Forms. These international holders who are interested in
participating in the Rights Offering should contact Lehman Brothers
International (Europe).
SECTION 4. Signature and Registration.
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(a) The Subscription Certificates shall be executed on behalf of the
Company by two of its executive officers. Any Subscription Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Subscription Certificate, shall be a proper officer of the
Company to sign such Subscription Certificate, even if at the date of the
execution of this Agreement or the date of the actual issuance of such
certificate any such person is not such an officer.
(b) The Subscription Agent will keep or cause to be kept, at its
principal offices in New York, books for registration and transfer of the Rights
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights and the number of Rights evidenced by each
outstanding Subscription Certificate.
SECTION 5. Division, Combination and Exchange of Subscription
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Certificates; Mutilated, Destroyed, Lost or Stolen Subscription Certificates.
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(a) Subject to the provisions of Section 9 hereof, any Subscription
Certificate, or any two or more Subscription Certificates, may be divided,
combined or exchanged for any number of Subscription Certificates or for a
single Subscription Certificate of different denominations; provided, however,
that the aggregate number of Rights evidenced by the Subscription Certificate or
Subscription Certificates so issued shall not exceed the aggregate number of
Rights evidenced by the Subscription Certificate or Subscription Certificates
surrendered in exchange therefore. The foregoing notwithstanding, a bank, trust
company, securities dealer or broker holding shares of Common Stock on the
Record Date for more than one beneficial owner may, upon proper showing to the
Subscription Agent, exchange its Subscription Certificate to obtain Subscription
Certificates for the number of Rights which each such beneficial owner would
have been entitled to receive pursuant to Section 9(a) hereof had each such
beneficial owner been the holder of record of such beneficial owner's shares on
the Record Date; provided, however, that the Company reserves the right to
refuse to issue any such Subscription Certificate or Subscription Certificates
if such issuance would be inconsistent with
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the principle that each beneficial owner's holding will be rounded down to the
nearest whole Right. No Subscription Certificates evidencing fractional Rights
will be issued upon division, combination or exchange of other Subscription
Certificates, and any instructions to divide, combine or exchange Subscription
Certificates which would result in the issuance of Subscription Certificates
evidencing fractional Rights shall be rejected. Any holder desiring to divide,
combine or exchange any Subscription Certificate or Subscription Certificates
shall make such requests in writing to the Subscription Agent, and shall
surrender the Subscription Certificate or Subscription Certificates (to be
divided, combined or exchanged) to the Subscription Agent. Thereupon the
Subscription Agent shall deliver to the person entitled thereto a Subscription
Certificate or Subscription Certificates, as the case may be, as so requested.
In all cases of transfer by an attorney-in-fact, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited and remain
with the Subscription Agent. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority satisfactory to the Subscription Agent shall be produced and may be
required to be deposited and to remain with the Subscription Agent in its
discretion. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any division,
combination or exchange of Subscription Certificates.
(b) Upon receipt by the Company and the Subscription Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Subscription Certificate, and, in case of loss, theft or destruction, of
indemnity and/or security satisfactory to them which may be in the form of an
open penalty bond, and reimbursement to the Company and the Subscription Agent
of all reasonable expenses incidental thereto, and upon surrender and
cancellation of the Subscription Certificate if mutilated, the Company will make
and deliver a new Subscription Certificate of like tenor to the Subscription
Agent for delivery to the registered owner in lieu of the Subscription
Certificate so lost, stolen, destroyed or mutilated. If required by the Company
or the Subscription Agent, an indemnity bond must be sufficient in the judgment
of both to protect the Company, the Subscription Agent or any agent thereof from
any loss which any of them may suffer if a Subscription Certificate is replaced.
SECTION 6. Subsequent Issue of Subscription Certificates. Subsequent to
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their original issuance, no Subscription Certificates shall be issued except (a)
Subscription Certificates issued upon any transfer, combination, division or
exchange of Rights pursuant to Section 5(a) or 10 hereof, (b) Subscription
Certificates issued in replacement of mutilated, destroyed, lost or stolen
Subscription Certificates pursuant to Section 5(b) hereof and (c) Subscription
Certificates issued pursuant to Section 7(e) hereof upon the partial exercise of
any Subscription Certificate to evidence the unexercised portion of such
Subscription Certificate.
SECTION 7. Exercise of Rights; Exercise Price; Expiration Date.
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(a) The holder of any Subscription Certificate may exercise some or
all of the Rights evidenced thereby (but not in amounts of less than one Right
or an integral multiple thereof) by delivering to the Subscription Agent, on or
prior to 5:00 p.m., Eastern time, on _______________ __, 1997 (the "Expiration
Date"), a properly completed and executed
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Subscription Certificate evidencing such Rights (with signatures guaranteed by
an eligible guarantor institution which is a participant in a securities
transfer association recognized program (each, an "Eligible Guarantor"))
together with payment of the Subscription Price for each Underlying Share
subscribed for pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege. In the case of holders of Rights that are held of
record through The Depository Trust Company ("DTC"), exercises of the Basic
Subscription Privilege (but not the Oversubscription Privilege) may be effected
by instructing DTC to transfer Rights (such Rights being "DTC Exercised Rights")
from the DTC account of such holder to the DTC account of the Subscription
Agent, together with payment of the Subscription Price for each Underlying Share
subscribed for pursuant to the Basic Subscription Privilege. The
Oversubscription Privilege in respect of DTC Exercised Rights may not be
exercised through DTC. The holder of a DTC Exercised Right may exercise the
Oversubscription Privilege in respect of such DTC Exercised Right by properly
executing and delivering to the Subscription Agent at or prior to 5:00 p.m.,
Eastern time, on the Expiration Date, a DTC Participant Oversubscription
Exercise Form, substantially in the form of Exhibit C hereto, together with
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payment of the appropriate Subscription Price for the number of Underlying
Shares for which the Oversubscription Privilege is to be exercised.
Alternatively, the holder of any Subscription Certificate may exercise the
Rights evidenced thereby by effecting compliance with the procedures for
guaranteed delivery set forth in Section 7(b) below.
(b) If a holder wishes to exercise Rights, but time will not permit
such holder to cause the Subscription Certificate or Subscription Certificates
evidencing such Rights to reach the Subscription Agent on or prior to the
Expiration Date, such Rights may nevertheless be exercised if all of the
following conditions (the "Guaranteed Delivery Procedures") are met:
(i) such holder has caused payment in full of the Subscription
Price for each Underlying Share being subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege to be received
(in the manner set forth in Section 7(d) hereof) by the Subscription Agent
on or prior to the Expiration Date;
(ii) the Subscription Agent receives, on or prior to the
Expiration Date, a guarantee notice (a "Notice of Guaranteed Delivery"),
substantially in the form provided with the Instructions as to Use of
Thermedics Detection Inc. Subscription Certificates and International
Holder Subscription Forms (the "Instructions") distributed with the
Subscription Certificates, from a commercial bank or trust company having
an office or correspondent in the United States or a member firm of a
national securities exchange or a member of the National Association of
Securities Dealers, Inc. (each, an "Eligible Institution"), stating the
name of the exercising Rights holder, the number of Rights represented by
the Subscription Certificate or Subscription Certificates held by such
exercising Rights holder, the number of Underlying Shares being subscribed
for pursuant to the Basic Subscription Privilege and the number of
Underlying Shares, if any, being subscribed for pursuant to the
Oversubscription Privilege, and guaranteeing the delivery to the
Subscription Agent of the Subscription Certificate evidencing such Rights
within five American Stock Exchange ("AMEX") trading days following the
date of the Notice of Guaranteed Delivery, provided that if such a Notice
of Guaranteed Delivery
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relates to Rights with respect to which exercise of the Basic Subscription
Privilege will be made through DTC and such Notice of Guaranteed Delivery
also relates to the exercise of the Oversubscription Privilege, a DTC
Participant Oversubscription Exercise Form must also be received by the
Subscription Agent in respect of such exercise of the Oversubscription
Privilege on or prior to the Expiration Date; and
(iii) the properly completed Subscription Certificate[s]
evidencing the Rights being exercised, with any required signatures
guaranteed, are received by the Subscription Agent, or such Rights are
transferred into the DTC account of the Subscription Agent, within five
AMEX trading days following the date of the Notice of Guaranteed Delivery
relating thereto. The Notice of Guaranteed Delivery may be delivered to
the Subscription Agent in the same manner as Subscription Certificates at
the addresses set forth above, or may be transmitted to the Subscription
Agent by telegram or facsimile transmission (telecopy no. 718-234-5001).
(c) The Rights shall expire at 5:00 p.m., Eastern time, on the
Expiration Date.
(d) The "Subscription Price" shall be $_____ per share of Common Stock
subscribed for pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege payable (in United States dollars) (i) by check or
bank draft drawn upon a U.S. bank or postal, telegraphic or express money order
payable to the Subscription Agent, or (ii) by wire transfer of funds to the
account maintained by the Subscription Agent for such purpose at Chemical Bank,
55 Water Street, New York, New York 10041, Account No. 323-294723; ABA
No._______________. The Subscription Price shall be deemed to have been
received by the Subscription Agent only upon (i) clearance of any uncertified
check, (ii) receipt by the Subscription Agent of any certified check or bank
draft drawn upon a U.S. bank or of any postal, telegraphic or express money
order or (iii) receipt of good funds in the Subscription Agent's account
designated above, in payment of the Subscription Price.
(e) If an exercising Rights holder has not indicated the number of
Rights being exercised, or if the Subscription Price payment forwarded by such
holder to the Subscription Agent is not sufficient to purchase the number of
shares subscribed for, the Rights holder will be deemed to have exercised the
Basic Subscription Privilege with respect to the maximum number of whole Rights
which may be exercised for the Subscription Price delivered to the Subscription
Agent and, to the extent that the Subscription Price payment delivered by such
holder exceeds the Subscription Price multiplied by the number of Rights
exercised (such excess being the "Subscription Excess"), the holder will be
deemed to have exercised its Oversubscription Privilege to purchase, to the
extent available, a number of whole Underlying Shares equal to the quotient
obtained by dividing the Subscription Excess by the Subscription Price.
(f) Funds received by the Subscription Agent in payment of the
Subscription Price for Underlying Shares subscribed for pursuant to the
Oversubscription Privilege shall be held in a segregated, interest-bearing
account pending allocation pursuant to Section 3(a)(ii) hereof and eventual
distribution pursuant to Section 8(a) hereof. The Company shall have sole
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discretion in determining how the funds in such account shall be invested, and
all interest and gains earned on such funds shall be paid to the Company. If a
Rights holder exercising the Oversubscription Privilege is allocated less than
all of the shares of Common Stock which such holder subscribed for pursuant to
the Oversubscription Privilege, the Subscription Agent, as soon as practicable
after the Expiration Date, shall mail to such Rights holder the Subscription
Price paid by such holder in respect of the number of shares that were
subscribed for but not ultimately issued, without interest or deduction.
(g) In case the holder of any Subscription Certificate shall exercise
less than all the Rights evidenced thereby, a new Subscription Certificate
evidencing the number of rights remaining unexercised shall be issued by the
Subscription Agent to the registered holder of such subscription Certificate or
to his duly authorized assigns, subject to the provisions of Section 9 hereof,
to the extent the Subscription Agent is able to reissue a Subscription
Certificate prior to the Expiration Date.
(h) The Subscription Agent is authorized to accept only Subscription
Certificates (other than Subscription Certificates delivered in accordance with
the procedure for guaranteed delivery set forth in Section 7(b)), or transfers
of Rights to its account at DTC, received prior to 5:00 p.m., Eastern time, on
the Expiration Date.
(i) Once a holder of Rights has exercised a Right, such exercise may
not be revoked.
(j) Notwithstanding anything to the contrary contained herein, the
Company has agreed to allow the Standby Underwriters (as defined below) to
exercise any Rights held by them on the business day following the Expiration
Date.
SECTION 8. Payment for Common Stock; Delivery of Stock Certificates.
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(a) The closing of the sale of the Common Stock upon exercise of the
Rights (the "Closing") will take place at 10:00 a.m., Eastern time, on the sixth
business day following the Expiration Date, or (if less than 1,000,000 shares of
Common Stock are properly subscribed for pursuant to the Rights Offering) at
such other date and time as the closing of the sale of Common Stock to the
underwriters for whom Lehman Brothers Inc. and NatWest Securities Limited
(collectively, the "Representatives") are acting as representatives (the
"Standby Underwriters") shall occur pursuant to Section 3 of the Standby
Underwriting Agreement (the "Underwriting Agreement") between the Company and
the Representatives (such date and time being referred to herein as the "Closing
Date"). At the Closing, the Subscription Agent shall pay, by wire transfer,
certified or bank check or other method acceptable to the Company, the amount of
all funds received by the Subscription Agent in payment of the Subscription
Price for Underlying Shares subscribed for pursuant to the Basic Subscription
Privilege and the Oversubscription Privilege. Notwithstanding the foregoing,
the Closing shall not occur if less than an aggregate of 1,000,000 shares of
Common Stock are sold through the exercise of Rights or to the Standby
Underwriters. If the Company notifies the Subscription Agent that the Closing
will not occur due to the failure of the condition described in the preceding
sentence, the
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Subscription Agent, as soon as practicable after receipt of such notice, shall
mail to each Rights holder the Subscription Price paid by such holder in respect
of the number of shares that were subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege, without interest or
deduction.
The Company shall deliver, or arrange to have delivered, at the Closing the
number of shares of Common Stock as are properly subscribed for pursuant to the
Rights Offering and as soon as practicable after the Closing, the Subscription
Agent shall deliver to each exercising Rights holder certificate(s) representing
the shares of Common Stock purchased pursuant to the Basic Subscription
Privilege and the Oversubscription Privilege.
(b) In the event that the Standby Underwriters shall become obligated
to purchase any of the Underlying Shares not subscribed for pursuant to the
Basic Subscription Privilege and the Oversubscription Privilege, the Company
will give the Subscription Agent not less than two business days' notice in
writing as to the number of shares of Common Stock which are to be issued, and
as to the date fixed for the delivery thereof to the Standby Underwriters,
together with a list of the names and denominations in which certificates for
such shares are to be issued. The Subscription Agent will be prepared to
deliver the certificates representing the shares of Common Stock to be so
purchased at the offices of the Representatives on the date specified in such
notice and will make such certificates available at the offices of the
Representatives for inspection, checking and packaging not later than 1:00 p.m.
on the business day prior to the date specified in such notice for such
delivery.
SECTION 9. Fractional Rights and Shares.
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(a) The Company shall not issue fractions of Rights nor shall the
Subscription Agent distribute Subscription Certificates which evidence
fractional Rights. The number of Rights issued to each holder will be rounded
up to the nearest whole number.
(b) The Company shall not issue fractional shares of Common Stock to
exercising Rights holders upon exercise and acceptance of Rights. The number of
shares of Common Stock that each Rights holder shall be entitled to purchase
pursuant to the Oversubscription Privilege shall be rounded down to the nearest
whole share.
SECTION 10. Transfer of Rights.
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(a) Any holder may transfer (a) all of the Rights evidenced by a
Subscription Certificate by properly endorsing the Subscription Certificate for
transfer in accordance with the instructions accompanying the Subscription
Certificate or (b) some of the Rights evidenced by a Subscription Certificate
(but not fractional Rights) by delivering to the Subscription Agent such
Subscription Certificate properly endorsed for transfer, with instructions to
register the Rights to be transferred in the name of the transferee (and to
issue a new Subscription Certificate to the transferee evidencing such
transferred Rights). In such event, the Subscription Agent shall issue a new
Subscription Certificate (together with a copy of the Prospectus) evidencing the
balance of the Rights to the holder or, if so instructed, to an additional
transferee. However,
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notwithstanding the foregoing, the Subscription Agent will reissue Subscription
Certificates for the transferred Rights to the transferee, and will reissue
Subscription Certificates for the balance, if any, to the holder of Rights, only
to the extent it is able to do so before the Expiration Date. For purposes of
this Agreement the term "properly endorsed for transfer" shall mean that each
and every signature of a registered holder or holders or assigns shall be made
or guaranteed by an Eligible Institution.
(b) Any holder may place an order with the Subscription Agent to sell
all or some of the Rights evidenced by a Subscription Certificate by delivering
to the Subscription Agent such Subscription Certificate properly executed for
sale by the Subscription Agent. In the event that such holder places an order
with the Subscription Agent to sell some of the Rights evidenced by the
Subscription Certificate, such holder shall instruct the Subscription Agent as
to the action to be taken with respect to the Rights that are not to be sold,
and the Subscription Agent shall take such action. Promptly following such sale
and receipt of the proceeds therefrom, the Subscription Agent shall send the
holder a check for the net proceeds from the sale of any such Rights. If the
proceeds from the sale of Rights are to be paid or delivered to anyone other
than the registered holder of the Rights, signatures on the Subscription
Certificate must be guaranteed by an Eligible Guarantor. If the Rights can be
sold, sales of such Rights will be deemed to have been effected at the weighted
average price received by the Subscription Agent on the day such Rights are
sold, less applicable brokerage commissions, taxes and other direct expenses of
sale, provided that the Company shall pay the fees of the Subscription Agent in
respect of such sales. Orders to sell Rights must be received by the
Subscription Agent at or prior to 11:00 a.m., Eastern time, on [the date that is
4 AMEX trading days prior to the Expiration Date]. The Subscription Agent's
obligation to execute orders is subject to its ability to find buyers at a price
that will result in net proceeds to the holder.
(c) International Holder Subscription Forms may not be used to sell,
transfer or subdivide Rights except to instruct the Subscription Agent to sell
Rights. If the Subscription Agent has not received instructions from
international holders or holders with APO or FPO addresses at or prior to 11:00
a.m. Eastern Time, on [the date that is 4 AMEX trading days prior to the
Expiration Date], it will sell the Rights held by such holders, if feasible, and
remit the net proceeds to such holders. The Subscription Agent's obligation to
sell Rights is subject to its ability to find buyers at a price that will result
in net proceeds to the holder.
SECTION 11. Foreign and Certain Other Stockholders. The Subscription
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Agent shall not mail Subscription Certificates to holders of Common Stock whose
addresses are outside the U.S. [and Canada] or who have an APO or FPO address.
The Subscription Agent shall hold such Subscription Certificates for the account
of such holders and upon notice from such holders shall exercise the Rights on
their behalf. To so exercise such Rights, such stockholders must notify the
Subscription Agent not later than 11:00 a.m., Eastern time, on [the date that is
4 AMEX trading days prior to the Expiration Date]. If no instructions have been
received at or prior to 11:00 a.m., Eastern time, on [the date that is 4 AMEX
trading days prior to the Expiration Date], the Subscription Agent shall sell
such Rights, if feasible, and shall remit the net proceeds, if any, to such
stockholders. If the Rights can be sold, sales of such Rights will be deemed to
have been effected at the weighted average price received by the Subscription
Agent on the day such Rights
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are sold, less any applicable brokerage commissions, taxes and other expenses,
provided that the Company shall pay the fees of the Subscription Agent in
respect of such sales. International holders who exercise less than all of their
rights will not receive a Subscription Certificate evidencing their remaining
rights.
SECTION 12. Reports. The Subscription Agent shall notify both the Company
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and its designated representatives by telephone as requested during the period
commencing with the mailing of Subscription Certificates and ending on the
Expiration Date (and in the case of guaranteed deliveries pursuant to Section
7(b), the period ending five AMEX trading days after the Expiration Date), which
notice shall thereafter be confirmed in writing, of (i) the number of Rights
exercised on the day of such request, (ii) the number of Underlying Shares
subscribed for pursuant to the Basic Subscription Privilege and the number of
such Rights for which payment has been received, (iii) the number of Underlying
Shares subscribed for pursuant to the Oversubscription Privilege and the number
of such Rights for which payment has been received, (iv) the number of Rights
subject to guaranteed delivery pursuant to Section 7(b) on such day, (v) the
number of Rights for which defective exercises have been received on such day
and (vi) cumulative totals derived from the information set forth in clauses (i)
through (v) above. At or before 5:00 p.m., Eastern time, on the first AMEX
trading day following the Expiration Date, the Subscription Agent shall certify
in writing to the Company the cumulative totals through the Expiration Date
derived from the information set forth in clauses (i) through (v) above. The
Subscription Agent shall also maintain and update a listing of holders who have
fully or partially exercised their Rights, holders who have transferred their
Rights and their transferees and holders who have not exercised their Rights.
The Subscription Agent shall provide the Company or its designated
representatives with the information compiled pursuant to this Section 12 as any
of them shall request.
SECTION 13. Future Instructions and Interpretation.
--------------------------------------
(a) All questions as to the timeliness, validity, form and eligibility
of any exercise of Rights will be determined by the Company, whose
determinations shall be final and binding. The Company in its sole discretion
may waive any defect or irregularity, permit a defect or irregularity to be
corrected within such time as it may determine or reject the purported exercise
of any Right. Subscriptions will not be deemed to have been received or
accepted until all irregularities have been waived or cured within such time as
the Company determines in its sole discretion. Neither the Company nor the
Subscription Agent shall be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Certificates or
incur any liability for failure to give such notification.
(b) The Subscription Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from an
authorized officer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
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SECTION 14. Payment of Taxes. The Company covenants and agrees that it
----------------
will pay when due and payable all documentary, stamp and other taxes, if any,
which may be payable in respect of the issuance or delivery of any Subscription
Certificate or of the Underlying Shares; provided, however, that the Company
shall not be liable for any tax liability arising out of any transaction which
results in, or is deemed to be, an exchange of Rights or shares or a
constructive dividend with respect to the Rights or shares and provided further
that the Company shall not be required to pay any tax or other governmental
charge which may be payable in respect of any transfer involved in the transfer
or delivery of any Subscription Certificate or the issuance or delivery of
certificates for shares of Common Stock in a name other than that of the
registered holder of such Subscription Certificate evidencing the Rights
exercised or transferred, and the Subscription Agent shall not register any such
transfer or issue any such certificate until such tax or governmental charge, if
required, shall have been paid.
SECTION 15. Cancellation and Destruction of Subscription Certificates.
---------------------------------------------------------
All Subscription Certificates surrendered for the purpose of exercise, exchange,
substitution or transfer shall be canceled by the Subscription Agent, and no
Subscription Certificates shall be issued in lieu thereof except as expressly
permitted by provisions of this Agreement. The Company shall deliver to the
Subscription Agent for cancellation and retirement, and the Subscription Agent
shall so cancel and return, any other Subscription Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Subscription Agent shall deliver all canceled Subscription Certificates to the
Company, or shall, at the written request of the Company, destroy such canceled
Subscription Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 16. Right of Action. All rights of action in respect of this
---------------
Agreement are vested in the Company and the respective registered holders of the
Subscription Certificates; and any registered holder of any Subscription
Certificate, without the consent of the Subscription Agent or of the holder of
any other Subscription Certificate, may, on his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Subscription Certificate in the manner
provided in such Subscription Certificate and in this Agreement.
SECTION 17. Concerning the Subscription Agent.
---------------------------------
(a) The Company agrees to pay to the Subscription Agent
compensation in the amount of $______________ for all services rendered by it
hereunder and, from time to time, on demand of the Subscription Agent, its
reasonable out-of-pocket expenses and disbursements for mailing, postage and
delivery. The Company also agrees to indemnify the Subscription Agent for, and
to hold it harmless against, any loss, liability, or expense incurred without
negligence or bad faith on the part of the Subscription Agent for anything done
or omitted by the Subscription Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises, provided that the Subscription
Agent shall have provided the Company with notice of any such claim promptly
after such claim became known to the Subscription Agent, and provided further
that the
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Company shall have the right to assume the defense of any such claim upon
receipt of written notice thereof from the Subscription Agent. If the Company
assumes the defense of any such claim, the Subscription Agent shall be entitled
to participate in (but not control) the defense of any such claim at its own
expense. The Company shall not indemnify the Subscription Agent with respect to
any claim or action settled without its consent, which consent shall not be
unreasonably withheld.
(b) The Subscription Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Subscription Certificate, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged by the proper person or persons.
SECTION 18. Merger or Consolidation of Subscription Agent. Any
---------------------------------------------
corporation into which the Subscription Agent or any successor Subscription
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Subscription Agent or
any successor Subscription Agent shall be a party, or any corporation succeeding
to the corporate trust business of the Subscription Agent or any successor
Subscription Agent, shall be the successor to the Subscription Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 19. Duties of Subscription Agent. The Subscription Agent
----------------------------
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Subscription Certificates by their acceptance thereof shall be bound:
(a) The Subscription Agent may consult with legal counsel (who may
be, but is not required to be, legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and protection to the
Subscription Agent as to any actions taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Subscription Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or a Vice President (including any Senior or Executive Vice President) and by
the Treasurer or any Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company and delivered to the Subscription Agent; and such
certificate shall be full authorization to the Subscription Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
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(c) The Subscription Agent shall be liable hereunder only for its
own negligence or willful misconduct.
(d) The Subscription Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Subscription Certificates or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(e) The Subscription Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Subscription Agent) or in respect
of the validity or execution of any Subscription Certificate; nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Subscription Certificate; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Subscription Certificate or as to whether any shares of
Common Stock will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Subscription Agent for the carrying out or performing by the
Subscription Agent of the provisions of this Agreement.
(g) Nothing herein shall preclude the Subscription Agent from
acting in any other capacity for the Company.
SECTION 20. Notices to the Company, Holders and Subscription Agent. All
------------------------------------------------------
notices and other communications provided for or permitted hereunder shall be
made by hand delivery, prepaid first-class mail, or telecopier:
(a) if to the Company, to:
Thermedics Detection Inc.
c/o Thermo Electron Corporation
81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
Attn: Seth H. Hoogasian, Esq.
Telecopier: 617-622-1283
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(b) if to the Subscription Agent, to:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Telecopier: 718-234-5001
Attn: Herb Lemmer, Esq.
Paula Magno
(c) if to a registered holder, at the address shown on the
registry books of the Company.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; two business days after
being deposited in the mail, postage prepaid, if mailed as aforesaid; when
answered back if telexed; and when receipt is acknowledged, if telecopied.
SECTION 21. Supplements and Amendments. The Company and the Subscription
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Subscription Certificates in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Subscription Agent may deem necessary or desirable and which
shall not materially adversely affect the interests of the holders of the
Subscription Certificates.
SECTION 22. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Subscription Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 23. Termination. This Agreement shall terminate at 5:00 p.m.,
-----------
Eastern time, on the thirtieth day following the Expiration Date. Upon
termination of this Agreement, and provided that all shares of Common Stock for
Rights accepted for execution prior to such termination are issued and delivered
by the Company, the Company shall be discharged from all obligations under this
Agreement except for its obligations to the Subscription Agent under Sections 14
and 17 hereof and except with respect to the obligation of the Company to
provide instruction and direction to the Subscription Agent as may be provided
in this Agreement.
SECTION 24. Governing Law. This Agreement and each Subscription
-------------
Certificate shall be deemed to be a contract made under the laws of the
Commonwealth of Massachusetts and for all purposes shall be construed in
accordance with the internal laws of said State.
SECTION 25. Benefits of This Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any person or corporation other than the Company, the
Subscription Agent and the holders of the Subscription Certificates any legal or
equitable right, remedy or claim
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under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Subscription Agent and the holders of the
Subscription Certificates.
SECTION 26. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
SECTION 27. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the undersigned have caused this Subscription Agency
Agreement to be executed by their duly authorized representative as of the date
first above written.
THERMEDICS DETECTION INC.
By:
---------------------------
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:
---------------------------
Name:
Title: