EXHIBIT 1
Draft 2/5/96
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Thermedics Detection Inc.
Common Stock
($.10 par value)
STANDBY UNDERWRITING AGREEMENT
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____________, 1997
Xxxxxx Brothers Inc.
NatWest Securities Limited
As Representatives of the several Underwriters
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Thermedics Detection Inc., a Massachusetts corporation (the
"Company"), proposes to offer approximately 1,900,000 shares of Common Stock,
par value $.10 per share (the "Common Stock"), of the Company, initially for
subscription upon the exercise of rights (the "Rights") evidenced by
transferable subscription certificates (the "Subscription Certificates") issued
by the Company to holders of Common Stock of the Company of record at the close
of business on ____________, 1997. The Rights will expire at 5:00 P.M., Eastern
time, on ____________, 1997, unless extended by the Company with the consent of
the Representatives (as defined below) (such date and time, the "Expiration
Date"). Thermedics Inc., a Massachusetts corporation ("Thermedics"), owns
10,000,000 shares of Common Stock. Thermedics will not exercise the Rights
received by it from the Company, but will distribute such rights to the holders
of its Common Stock, $.05 par value per share (the "Thermedics Common Stock"),
of record at the close of business on ____________, 1997. The Company proposes
to sell to the underwriters named in Schedule I hereto (the "Underwriters"), for
whom you (the "Representatives") are acting as representatives, a number of
shares of Common Stock equal to: (i) 1,000,000 shares of Common Stock less (ii)
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the number of shares of Common Stock which, as of the Expiration Date, have been
properly subscribed for by the exercise of Rights (such number of shares of
Common Stock, the "Standby Securities"). The Company also proposes to grant to
the Underwriters (i) an option to purchase up to 150,000 additional shares of
Common Stock (the "Standby Option Securities" in connection with the Rights
Offering (as hereinafter defined) and (ii) an option to purchase 45,000 shares
of Common Stock (the "Firm Option Securities") in
connection with the purchase by the Underwriters of the Firm Shares (as
hereinafter defined). The Firm Option Securities together with the Standby
Option Securities are referred to herein as the "Option Securities." The Company
also proposes to issue and sell to the Underwriters an additional 300,000 shares
(the "Firm Shares") of Common Stock on a firm commitment basis. The Standby
Securities together with the Option Securities and the Firm Shares are referred
to herein together as the "Securities." The issuance of the Rights, the offering
of the Common Stock to be issued by the Company upon exercise of the Rights and
the subscription and purchase of Common Stock upon the terms described in the
Prospectus (as hereinafter defined), including the purchase and distribution of
the Standby Securities and the Standby Option Securities pursuant to this
Agreement, are herein collectively referred to as the "Rights Offering". The
Rights Offering, together with the offering and sale of the Firm Shares and the
Firm Option Securities are referred to herein together as the "Offering."
Thermo Electron Corporation, a Delaware corporation ("Thermo
Electron"), is the corporate parent of Thermedics. To the extent provided
herein and for good and valuable consideration, each of Thermedics and Thermo
Electron has become a party to this Agreement.
1. Representations and Warranties. (a) The Company, Thermedics and
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Thermo Electron, jointly and severally, represent and warrant to, and agree
with, each Underwriter as set forth below in this Section 1(a). Certain terms
used in Section 1 are defined in paragraphs (i) and (xxii) of this Section 1(a).
The following representations, warranties and agreements shall be deemed to
apply to each Subsidiary (as defined in Section 15) of the Company, unless the
context does not permit:
(i) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (file number 333-19119),
including the related preliminary prospectus, for the registration under the
Securities Act of 1933, as amended, and the rules thereunder (the "Act") of the
Rights and Common Stock to be issued in the Rights Offering. The Company may
have filed one or more amendments thereto, including the related preliminary
prospectus, each of which has previously been furnished to you. Copies of such
registration statement as amended to date have been delivered by the Company to
the Representatives and, to the extent applicable, were identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
the Commission's Electronic Data Gathering, Analysis and Retrieval System
("XXXXX"), except to the extent permitted by Regulation S-T. The Company will
next file with the Commission either (A) prior to effectiveness of such
registration statement, a further amendment to such registration statement
(including the form of final prospectus) or (B) after effectiveness of such
registration statement, a final prospectus in accordance with Rules 430A and
424(b)(1) or (4). If the Company uses the provisions of Rule 430A, such
registration statement, as amended at the Effective Date, shall include all
material information (other than Rule 430A Information) required by the Act to
be included in the Prospectus with respect to the Securities and the offering
thereof. As filed, such amendment and form of final prospectus (in the case of
clause (A)), or such final prospectus (in the case of clause (B)), shall contain
all Rule 430A Information, and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent not
completed at the
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Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be included or
made therein.
"Prospectus" means (a) the form of prospectus relating to the
Securities, as first filed pursuant to paragraph (1) or (4) of Rule 424(b), or
if no filing pursuant to Rule 424(b) is required, the form of prospectus
included in the registration statement at the Effective Date, (b) the term sheet
or abbreviated term sheet described in Rule 434(b), as first filed pursuant to
paragraph (7) of Rule 424(b) together with the last preliminary prospectus
included in the registration statement filed prior to the Effective Date or
filed pursuant to Rule 424(a) that is delivered by the Company to the
Underwriters for delivery to purchasers of the Securities. The Prospectus and
any related letters from the Company, Thermedics or Thermo Electron to record or
beneficial owners of Common Stock, Thermedics Common Stock or Rights, related
letters from the Company, Thermedics, or Thermo Electron to securities dealers,
commercial banks, trust companies and other nominees and other offering
materials, in each case disseminated by the Company, Thermedics or Thermo
Electron by any of their agents, and any other information that the Company,
Thermedics or Thermo Electron may use, prepare, approve or authorize for use in
connection with the Rights Offering, are collectively referred to hereinafter as
the "Offering Materials". Notwithstanding the foregoing, any offering material
or other information that is distributed by the Underwriters in connection with
the Rights Offering shall not be deemed to be "Offering Materials" hereunder
unless the distribution thereof is approved by the Company, Thermedics or Thermo
Electron. For purposes of this Agreement, all references to the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include the respective
copies thereof filed with the Commission pursuant to XXXXX. Capitalized terms
used herein without definition have the meanings assigned to them in the
Prospectus.
(ii) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on each Closing Date (as hereinafter defined), the Prospectus (and
any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and, to the extent applicable, the
Securities Exchange Act of 1934, as amended, and the rules thereunder (the
"Exchange Act"); on the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the Effective Date, the Prospectus, if
not required to be filed pursuant to Rule 424(b), and the Offering Materials did
not or will not, and on the date of the filing pursuant to Rule 424(b) and on
each Closing Date, the Prospectus (together with any supplement thereto) and the
Offering Materials will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company, Thermedics and Thermo Electron make no
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representations or warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Prospectus (or
any
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supplement thereto). There is no contract or document required to be described
in the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as required.
(iii) The accounting firm(s) that have reported upon the audited
financial statements and schedules included in the Registration Statement and
Prospectus are independent public accountants as required by the Act.
(iv) The consolidated financial statements and the related notes of
the Company included in the Registration Statement and the Prospectus present
fairly, in all material respects, in accordance with generally accepted
accounting principles, the consolidated financial position of the entities
purported to be shown thereon, as of the dates indicated and the consolidated
results of operations and cash flows of the entities purported to be shown
thereon, for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved, except as otherwise noted
therein and subject, in the case of interim statements, to normal year-end audit
adjustments and footnote disclosures (which comply with the Act and the Exchange
Act). The financial statement schedules included in the Registration Statement
present fairly, in all material respects, in accordance with generally accepted
accounting principles the information required to be stated therein. The pro
forma financial statements and other pro forma financial information included in
the Registration Statement and the Prospectus, if any, present fairly, in all
material respects, the information shown therein, have been prepared, in all
material respects, in accordance with applicable rules and guidelines of the
Commission, if any, with respect thereto, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company and Thermo
Electron, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(v) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own or lease its
properties and conduct its business as described in the Prospectus, and is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the business conducted by it or the location of the properties
owned or leased by it makes such qualification necessary except where the
failure to so qualify or be in good standing would not have a material adverse
effect on the Company and its Subsidiaries taken as a whole; and, except as
described in the Prospectus, the Company holds all material licenses,
certificates and permits from governmental authorities necessary for the conduct
of its business as described in the Prospectus.
(vi) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued, fully paid and nonassessable. Other
than as described in the Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the Company's corporate
charter, by-laws or other governing documents or any agreement or other
instrument to which the Company is a party or by which it may be bound. The
capitalization of
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the Company as of ____________ __, 199_ is as set forth in the Prospectus and
the Common Stock, the Rights, the Subscription Certificates and the Securities
conform to the description thereof contained in the Prospectus. All of the
outstanding shares of capital stock of each Subsidiary (as defined in Section
15) of the Company have been duly authorized and validly issued, are fully paid
and nonassessable and are owned directly or indirectly by the Company, free and
clear of any claim, lien, encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third party.
(vii) Prior to or at the Effective Date, the Company and the
Subscription Agent will have entered into a subscription agency agreement (the
"Subscription Agency Agreement"). When executed by the Company, the
Subscription Agency Agreement will have been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and delivery
by the Subscription Agent, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
(A) as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law) (collectively, "applicable bankruptcy laws"), and (B) as rights to
indemnity and contribution thereunder may be limited by Federal or state
securities laws and/or public policy.
(viii) The Rights, when issued and delivered in accordance with the
terms of the Rights Offering, will be validly issued, and no holder thereof is
or will be subject to personal liability by reason of being such a holder (other
than with respect to potential tax liability as described in the Prospectus);
the shares of Common Stock issuable upon the exercise of the Rights, when issued
or delivered and paid for in accordance with the terms of the Rights Offering,
and any Securities issued pursuant to the terms of this Agreement, will be
validly issued, fully paid and nonassessable, and the issuance of the shares of
Common Stock issuable upon the exercise of the Rights and the Securities will
not be subject to the preemptive rights of any stockholder of the Company.
(ix) The Company has taken all valid corporate action to duly
reserve such number of its authorized and unissued shares of Common Stock as are
deliverable upon consummation of purchases pursuant to the Rights Offering.
(x) Except as described in or contemplated by the Registration
Statement and the Prospectus, there has not been (i) any material adverse change
in, or any adverse development which materially affects, the condition
(financial or other), results of operations, business or prospects of the
Company and its Subsidiaries on a consolidated basis from the date as of which
information is given in the Prospectus, (ii) any dividend or distribution of any
kind declared, paid or made by the Company on its capital stock other than the
Rights or (iii) any material change in the capitalization of the Company.
(xi) The Company is not, and would not be with the giving of notice
or lapse of time or both, in violation of or in default under, nor will the
execution or delivery hereof, the issuance and delivery of the Rights and the
Securities, the consummation of the Rights Offering or the
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consummation of the transactions contemplated hereby result in a violation of,
or constitute a default under, the corporate charter, by-laws or other governing
documents of the Company, or any agreement, indenture or other instrument to
which the Company is a party or by which it is bound, or to which any of its
properties is subject, nor will the performance by the Company of its
obligations hereunder violate any existing law, rule, administrative regulation
or decree of any court or any governmental agency or body having jurisdiction
over the Company or any of its properties, or result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or asset
of the Company, which would be material to the Company and its Subsidiaries
taken as a whole. Except for permits and similar authorizations required under
the Securities Act and the securities or "Blue Sky" laws of certain
jurisdictions and for such permits and authorizations as have been obtained, no
consent, approval, authorization or order of any court, governmental agency or
body or any financial institution is required for the offer and sale by the
Company of the Securities or the consummation of the Rights Offering as set
forth in the Registration Statement and the Prospectus or the consummation by
the Company, Thermedics or Thermo Electron of the transactions contemplated in
this Agreement and in the Registration Statement and the Prospectus (it being
understood that the Company, Thermedics and Thermo Electron make no
representation as to the distribution of the Securities by the Underwriters
outside of the United States or as to the distribution of the Rights by the
Company or Thermedics outside of the United States (except in the United
Kingdom)). Neither the filing of the Registration Statement nor the offering or
sale of its shares of Common Stock pursuant to the Rights Offering gives rise to
any rights, other than those that have been duly waived or satisfied and other
than the Company's obligations with respect to the "Resale Registration
Statement" (as defined in the Prospectus), for or relating to the registration
of any shares of Common Stock or other securities of the Company.
(xii) This Agreement has been duly authorized, executed and delivered by
the Company.
(xiii) The Company owns, or has valid rights to use, all items of real and
personal property which are material to the business of the Company and its
Subsidiaries taken as a whole, free and clear of all liens, encumbrances and
claims which may materially interfere with the business, properties, financial
condition or results of operations of the Company on a consolidated basis.
(xiv) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or Thermedics or Thermo Electron is
a party or to which any property of the Company is subject or which is pending
or, to the knowledge of the Company, Thermedics or Thermo Electron, contemplated
against the Company or Thermedics that is required to be disclosed in the
Prospectus and that is not so disclosed.
(xv) The Company is not in violation of any law, ordinance, governmental
rule or regulation or court decree to which it is subject, which violation could
have a material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries on a
consolidated basis.
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(xvi) The Company is not an "investment company" or a company "controlled
by an investment company" within the meaning of such terms under the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder, and
will not become such after giving effect to the transactions contemplated in
this Agreement and in the Registration Statement and the Prospectus.
(xvii) The Company owns or possesses adequate licenses or other rights to
use all intellectual property rights, including patents and trademarks,
necessary to conduct its business as described or referred to in the Prospectus,
except where such failure, singularly or in the aggregate would not have a
material adverse effect on the Company and its Subsidiaries on a consolidated
basis, and, except as disclosed in the Prospectus, neither Thermo Electron,
Thermedics nor the Company has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with) rights or
claims of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how, that if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse effect upon the Company
and its Subsidiaries on a consolidated basis, and, except as disclosed in the
Prospectus, all products or processes referred to in the Prospectus and relating
to the business of the Company now conducted by it do not infringe upon or
conflict with any right or patent, or with any discovery, invention, product or
process which is the subject of any patent application known to the Company or
Thermo Electron, in a manner which would materially and adversely affect the
Company and its Subsidiaries on a consolidated basis.
(xviii) Each of the Corporate Services Agreement between the Company and
Thermo Electron (the "Services Agreement"), and the other agreements between the
Company and Thermedics or Thermo Electron pursuant to which the Company was
initially organized and capitalized (collectively, the "Organization
Agreements"), and the Tax Allocation Agreement between Thermo Electron and the
Company (all of the foregoing agreements being referred to herein as the "Inter-
corporate Agreements") has been duly and validly authorized, executed and
delivered by the Company and is the valid and binding agreement of the Company
enforceable in accordance with its terms, except as provided by applicable
bankruptcy laws. The execution, delivery and performance of the Inter-corporate
Agreements by the Company, the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result in
a violation of, or constitute a default under, the corporate charter, by-laws or
other governing documents of the Company, or any agreement, indenture or other
instrument to which the Company is a party or by which it is bound, or to which
any of its properties is subject, and do not and will not violate any existing
law, rule, administrative regulation or decree of any court or any governmental
agency or body having jurisdiction over the Company or any of its properties, or
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company, which would be material to the
Company and its Subsidiaries taken as a whole. No consent, approval,
authorization or order of any court, governmental agency or body or financial
institution is required in connection with the consummation of the transactions
contemplated by such Inter-corporate Agreements.
(xix) Thermo Electron and Thermedics will take all such action as may be
necessary or expedient to ensure that (A) the representations and warranties of
the Company contained in this
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Agreement are true and correct and (B) the Company complies with the terms of
this Agreement and meets all of its obligations hereunder.
(xx) Neither the Company, Thermedics nor Thermo Electron or any other
Subsidiary of Thermo Electron has taken and none of such companies will take,
directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, stabilization
or manipulation of the price of the Rights or the Common Stock.
(xxi) The Common Stock and the Rights have been approved for listing,
subject only to official notice of issuance, on the American Stock Exchange.
(xxii) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus with respect to the Rights
Offering referred to in paragraph (i) above and any preliminary prospectus with
respect to the Rights Offering included in the Registration Statement at the
Effective Date that omits Rule 430A Information. "Registration Statement" shall
mean the registration statement referred to in paragraph (i) above, including
exhibits and financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto becomes effective prior
to a Closing Date, shall also mean such registration statement as so amended.
Such term shall include any Rule 430A Information deemed to be included therein
at the Effective Date as provided by Rule 430A together with any registration
statement filed by the Company pursuant to Rule 462(b). "Representatives" shall
mean the Underwriters to the extent that no more than two parties are listed on
Schedule I hereto as Underwriters. "Rule 424", "Rule 430A", "Rule 434" and
"Rule 462" refer to such rules under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering thereof permitted to
be omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A.
(b) Each of Thermedics and Thermo Electron represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1(b).
(i) Each of Thermedics and Thermo Electron has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate and
other) to own or lease its properties and conduct its business, and is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the business conducted by it or the location of the properties
owned or leased by it makes such qualification necessary, except where the
failure to so qualify or be in good standing would not have a material adverse
effect on Thermedics and its Subsidiaries taken as a whole or on Thermo Electron
and its Subsidiaries taken as a whole, as the case may be.
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(ii) There has not been any material adverse change in, or any adverse
development which materially affects, the condition (financial or other),
results of operations, business or prospects of Thermo Electron and its
Subsidiaries taken as a whole, or Thermedics and its Subsidiaries taken as a
whole, from the date as of which information is given in the most recent
quarterly or annual report filed by Thermo Electron or Thermedics, as the case
may be, pursuant to the Exchange Act, except any as may have been disclosed to
the public.
(iii) Except as described in their filings with the Commission under the
Exchange Act, neither Thermedics nor Thermo Electron is, nor with the giving of
notice or lapse of time or both would be, in violation of or in default under,
nor will the execution or delivery hereof or consummation of the transactions
contemplated hereby result in a violation of, or constitute a default under, the
corporate charter, by-laws or other governing documents of Thermedics or Thermo
Electron, or any material agreement, indenture or other instrument to which
Thermedics or Thermo Electron is a party or by which any of them is bound, or to
which any of their properties is subject, nor will the performance by Thermedics
or Thermo Electron of its obligations hereunder violate any existing law, rule,
administrative regulation or decree of any court or any governmental agency or
body having jurisdiction over Thermedics or Thermo Electron or any of their
respective properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of Thermedics or Thermo
Electron, which would be material to Thermedics and its Subsidiaries taken as a
whole or to Thermo Electron and its Subsidiaries taken as a whole, as the case
may be.
(iv) This Agreement has been duly authorized, executed and delivered by
Thermedics and Thermo Electron.
(v) Thermedics owns, and will own as of each Closing Date (as defined
below), of record and beneficially, the number of shares of Common Stock of the
Company set forth in the Prospectus, free and clear of any liens, encumbrances,
claims or restrictions, except that certain of such shares are reserved for
issuance pursuant to stock option and other benefit plans under which options to
purchase Common Stock of the Company owned by Thermedics are granted to certain
employees, directors or consultants of Thermo Electron and its Subsidiaries.
(vi) The most recent Annual Report on Form 10-K of Thermedics and of
Thermo Electron and any subsequent reports filed pursuant to the Exchange Act
complied as of the date thereof in all material respects with the Exchange Act
and the rules and regulations thereunder.
(vii) The transfer by Thermedics to the Company of certain stock and/or
assets, as described in the Prospectus and in the Organization Agreements, has
been completed by all required corporate and other action. Each of the Inter-
corporate Agreements to which Thermedics is a party has been duly and validly
authorized, executed and delivered by Thermedics and is the valid and binding
agreement of Thermedics enforceable in accordance with its terms, except as
provided by applicable bankruptcy laws. The execution, delivery and performance
of each of the Inter-corporate Agreements to which Thermedics is a party by
Thermedics, the consummation of the transactions therein contemplated and
compliance with the terms thereof do not and will not result in a violation of,
or constitute a default under, the
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corporate charter, by-laws or other governing documents of Thermedics, or any
agreement, indenture or other instrument to which Thermedics is a party or by
which it is bound, or to which any of its properties is subject, and do not and
will not violate any existing law, rule, administrative regulation or decree of
any court or any governmental agency or body having jurisdiction over Thermedics
or any of its properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of Thermedics, which
would be material to Thermedics. No consent, approval, authorization or order of
any court, governmental agency or body or financial institution is required in
connection with the consummation by Thermedics of the transactions contemplated
by the Inter-corporate Agreements to which Thermedics is a party, except such as
have been obtained.
(viii) The Services Agreement has been duly and validly authorized,
executed and delivered by Thermo Electron and is the valid and binding agreement
of Thermo Electron, enforceable in accordance with its terms.
(ix) The distribution to its stockholders of the Rights to be received
by Thermedics from the Company, as described in the Prospectus, has been duly
authorized by Thermedics and all necessary corporate action has been taken by
Thermedics with respect thereto.
(x) Except for permits and similar authorizations required under the
Securities Act and the securities or "Blue Sky" laws of certain jurisdictions
and for such permits and authorizations as have been obtained, no consent,
approval, authorization or order of any court, governmental agency or body or
financial institution is required for the distribution by Thermedics to its
stockholders of the Rights to be received by it from the Company or the
consummation by Thermedics and Thermo Electron of the transactions contemplated
in this Agreement and in the Registration Statement and the Prospectus.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company at a purchase price per share equal to
$______, the percentage set forth opposite such Underwriter's name in Schedule I
hereto of the Standby Securities, if any, such percentages to be adjusted as
necessary by the Representatives so that no Underwriter shall be obligated to
purchase Standby Securities other than in 100-share quantities. Subject to the
terms and conditions and in reliance upon the representations and warranties
herein set forth, the Company agrees to issue and sell to the Underwriters the
Firm Shares, and each of the Underwriters agrees, severally and not jointly, to
purchase at a price of $____ per Firm Share, the number of Firm Shares set forth
opposite such Underwriters' name in Schedule I hereto. The Underwriters agree
to offer the Firm Shares to the public as set forth in the Prospectus. The
number of Standby Securities shall be reduced by such number of shares reserved
for late subscriptions as may be agreed upon between the Company and the
Representatives. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company grants (i) an
option to the several Underwriters to purchase, severally and not jointly, up to
150,000 shares in the aggregate of the Standby Option Securities from the
Company at $_____ per share and (ii) an option to the several Underwriters to
purchase severally and not jointly, up to 45,000 shares in the aggregate of
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the Firm Option Securities from the Company at a price of $____ per share. Said
option may be exercised only to cover over-allotments in the sale of the
Securities and Common Stock purchased by or for the accounts of the Underwriters
upon exercise of Rights. Said option may be exercised in whole or in part at any
time on or before the thirtieth day after the Expiration Date upon written or
telegraphic notice by you to the Company, setting forth the aggregate number of
shares of the Option Securities as to which the several Underwriters are
exercising the option and the time and date for the purchase and sale thereof.
Such time and date (which may not be earlier than two or later than three
business days after the date of such notice, and which may be the same as but
may not be earlier than the First Closing Date defined in Section 3), or such
other time and date as may be agreed upon in writing by the Company and you, are
herein called the "Option Securities Closing Date". Delivery of certificates for
the shares of Option Securities, and payment therefor, shall be made as provided
in Section 3 hereof on the Option Securities Closing Date, which may be
postponed as provided in Section 9 hereof. The number of shares of the Option
Securities to be purchased by each Underwriter on the Option Securities Closing
Date shall be the same percentage of the total number of shares of the Option
Securities to be purchased by the several Underwriters on the Option Securities
Closing date as such Underwriter is committed to purchase of the Standby
Securities, as adjusted by you in such manner so that no Underwriter shall be
obligated to purchase Option Securities other than in 100-share quantities. The
Representatives also agree to provide to the Company, Thermedics and Thermo
Electron such assistance as they may reasonably request in connection with the
Rights Offering.
As compensation to the Underwriters for their commitments in connection
with the Rights Offering, the Company agrees to pay, on the First Closing Date
to you, as Representatives for the accounts of the several Underwriters as they
may agree, a fee in the amount of $230,000 (the "Standby Fee"). The Company
also agrees to pay, on the First Closing Date to you, as Representatives for the
accounts of the several Underwriters as they may agree, a management fee in the
amount of $506,000 (the "Management Fee"). In addition, in respect of the
Underwriters' commission for the purchase and resale of the Common Stock, the
Company agrees to pay to you, as Representatives for the accounts of the several
Underwriters as they may agree, on the First Closing Date, and on the Option
Securities Closing Date (to the extent not previously paid), an amount equal to
five percent (5.0%) of the aggregate Subscription Price (the "Take-Up Fee") in
respect of (i) all Standby Securities and Standby Option Securities, if any,
purchased by the several Underwriters, and (ii) all Common Stock acquired by the
Representatives for the accounts of the several Underwriters through the
exercise of Rights. Notwithstanding the foregoing, the Company shall not be
obligated to pay to the Representatives or the Underwriters, at any time, fees
in respect of the Rights Offering which exceed in the aggregate 6% of the
Subscription Price (as defined in the Prospectus) for each share of Common Stock
purchased pursuant to the exercise of Rights (by the Underwriters or otherwise)
or pursuant to the terms hereof (other than the Firm Shares or the Firm Option
Securities) plus an amount equal to the aggregate purchase price of Rights
purchased by the Underwriters, up to $100,000.
The Company and Thermo Electron acknowledge that the several Underwriters
may offer to the public Common Stock acquired by the Representatives for their
respective accounts
-11-
through the purchase and exercise of Rights or pursuant to their commitments
hereunder to purchase the Securities, if any, at such price or prices which, and
at such time or times when, the Representatives in their discretion may
determine in accordance with applicable laws, rules and regulations of the
Commission, whether or not prior to the Expiration Date, and whether or not for
long or short account. Any profits or losses realized upon such sales shall be
for the accounts of the several Underwriters.
3. Delivery and Payment. Delivery of and payment for the Standby
--------------------
Securities shall be made at 10:00 A.M., Eastern time, on __________ __, 1997,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Standby Securities and the Firm Shares being herein
called the "First Closing Date"). To the extent that the options referred to in
Section 2 are exercised, delivery of and payment for the Option Securities shall
be made on the Option Securities Closing Date. The First Closing Date and the
Option Securities Closing Date are herein called, individually, a "Closing Date"
and, together, the "Closing Dates". Delivery of the Securities purchased from
the Company shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of such Securities
being sold by the Company to or upon the order of the Company, by certified or
official bank check payable in New York Clearing House funds. Delivery of such
Securities shall be made at such location as the Representatives shall
reasonably designate at least one full business day in advance of the applicable
Closing Date and payment for such Securities shall be made at the office of
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(or at such other place as mutually may be agreed upon). Certificates for such
Securities shall be registered in such names in such denominations as you may
request not less than one full business day in advance of the applicable Closing
Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 P.M. on the business day prior to the applicable Closing Date.
4. Offering by Underwriters. NatWest Securities Limited represents
------------------------
and agrees that (i) it has not offered or sold and will not offer or sell any
Securities to persons in the United Kingdom prior to admission of the Securities
to listing in accordance with Part IV of the Financial Services Xxx 0000 (the
"Act") except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purpose of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995 or the
Act, (ii) it has complied and will comply with all applicable provisions of the
Act with respect to anything done by it in relation to the Securities in, from
or otherwise involving the United Kingdom and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom any document received
by it in connection with the issue of the Securities, other than any document
which consists of or any part of listing particulars, supplementary listing
particulars or any other document required or permitted to be published by
listing rules under Part IV of the Act, to a person who is of a kind described
in Article 11(3) of
-12-
the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom the document may otherwise lawfully be issued or
passed on.
5. Agreements. The Company, Thermedics and Thermo Electron, jointly
----------
and severally, agree with each Underwriter that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof,
including any post-effective amendment, to become effective as soon as
practicable. Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or supplement
to the Prospectus without your prior consent, which consent shall not be
unreasonably withheld or delayed. The Company shall prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which, in your opinion, may be
necessary or advisable in connection with the distribution of the Securities.
Subject to the foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the Prospectus,
properly completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of such
timely filing. The Company and, in the case of clause (G), Thermo Electron,
will promptly advise the Representatives (A) when the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, shall have
become effective, (B) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule 424(b), (C)
when, prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective, (D) of any
request by the Commission for any amendment of the Registration Statement or
supplement to the Prospectus or for any additional information, (E) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose, (F) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose
and (G) if any of the representations and warranties contained in Section 1
hereof becomes inaccurate in any material respect subsequent to the date hereof.
The Company will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company shall comply
with all requirements imposed upon it by the Act, so far as is necessary to
permit the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof and by the Prospectus. If, at any time when a
prospectus relating to the Securities is required to be delivered under the Act,
any event occurs as a result of which the Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the rules thereunder (including to comply with Item 512(c) of Regulation S-K
under the Act), the Company
-13-
promptly will prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earning
statement or statements of the Company and its subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or a dealer may be required by the Act, as many
copies of each Preliminary Prospectus and Prospectus and any supplement thereto
as the Representatives may reasonably request. To the extent applicable, the
copies of the Registration Statement, any Preliminary Prospectus or Prospectus
(in each case, as amended or supplemented) furnished to the Representative and
counsel to the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T. The Company will pay all expenses incident to the
Rights Offering and the performance of its obligations under this Agreement.
(e) The Company will arrange for the qualification of the Securities
for distribution, offering and sale under the laws of such jurisdictions as the
Representatives may designate, and will maintain such qualifications in effect
so long as required for the distribution of the Securities, except that in no
event shall the Company be obligated in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of process.
(f) The Company and Thermedics will commence mailing the
Subscription Certificates to record holders of the Common Stock and the
Thermedics Common Stock not later than two business days following the Record
Date, which shall be not later than ________ __, 1997 and shall complete such
mailing expeditiously, and will offer the Common Stock for subscription in
accordance with the terms and under the conditions set forth in the Prospectus.
The Expiration Date shall be not later than 5:00 P.M., Eastern time, on
_________ __, 1997, (unless extended by the Company with the consent of the
Representatives). The Company will advise you daily during the period when the
Rights are exercisable of the number of shares of Common Stock subscribed for,
and prior to 12:00 Noon, Eastern time, on the business day following the
Expiration Date, will advise you of the number of shares of Common Stock
subscribed for and of the number of Securities. Without your prior written
consent, the Company will not change any of the terms or conditions of the
Rights or the offering of Common Stock pursuant thereto as described in the
Registration Statement except that the Company may waive irregularities in the
exercise of Rights or waive conditions relating to the method (but not the
timing, except with your prior written consent) of the exercise of Rights. The
Company will not fix any date prior to any Closing Date as a record date for the
determination of the holders of Common Stock entitled to receive any dividend
other than the Rights.
-14-
(g) Each of the Company, Thermedics and Thermo Electron shall not,
during the 180-day period following the date of this Agreement, except pursuant
to this Agreement or the Rights Offering (including sales of Rights by Thermo
Electron) or with your prior written consent, directly or indirectly, offer for
sale, sell or otherwise dispose of any shares of Common Stock (except for the
issuance of shares of Common Stock pursuant to existing stock option, purchase
and compensation plans, the sales of shares of Common Stock by the Company to
Thermedics or the issuance of shares of Common Stock as consideration for the
acquisition of one or more businesses provided that such Common Stock may not be
resold prior to the expiration of the 180-day period following the date of this
Agreement), or sell or grant options, rights or warrants with respect to any
shares of Common Stock (other than the grant of options pursuant to existing
stock option, purchase and compensation plans). The Company, Thermedics and
Thermo Electron will not permit any employee stock option, director stock option
or other stock option to purchase Common Stock of the Company granted by it to
be exercised, and the Common Stock issued upon exercise of the stock option to
be sold, prior to the expiration of the 180-day period following the date of
this Agreement, without your prior written consent. The Company will not file
the Resale Registration Statement (as defined in the Prospectus) with the
Commission until the last date it is permitted to do so under the terms of the
applicable stock purchase agreements.
(h) The Company shall at all times reserve and keep available for
issue upon the exercise of the Rights such number of authorized but unissued
shares of Common Stock deliverable upon the exercise of the Rights as will be
sufficient to permit the exercise in full of all Rights issued.
(i) The Company shall take such steps as shall be necessary to
ensure that neither the Company nor any Subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
(j) Whether or not this Agreement is terminated or the sale of the
Securities to the Underwriters is consummated, the Company shall pay or cause to
be paid, in addition to the expenses referred to in Section 7, (A) all expenses
(including stock transfer taxes) incurred in connection with the delivery to the
several Underwriters of the Securities, (B) all fees and expenses (including,
without limitation, fees and expenses of the Company's accountants and counsel)
in connection with the preparation, printing, filing, delivery and shipping of
the Registration Statement (including the financial statements therein and all
amendments and exhibits thereto), each Preliminary Prospectus, the Prospectus
and any amendments or supplements of the foregoing, the preparation, printing,
delivery and shipping of all documents relating to the Rights Offering and the
printing, delivery and shipping of this Agreement and other underwriting
documents, including, but not limited to, any Underwriters' Questionnaires,
Underwriters' Powers of Attorney, Blue Sky Memoranda, Agreements Among
Underwriters and Selected Dealer Agreements, (C) all filing fees incurred in
connection with qualification of the Securities under state securities laws as
provided in Section 5(e) hereof, (D) the filing fee of the National Association
of Securities Dealers, Inc., (E) any applicable listing or other fees, (F) the
cost of printing certificates representing the Securities, (G) the cost and
charges of any transfer
-15-
agent or registrar, and (H) all other costs and expenses incident to the
performance of its obligations hereunder for which provision is not otherwise
made in this Section.
(k) The Company shall on or prior to each Closing Date use its best
efforts to cause the Securities to be purchased on such date by the Underwriters
to be approved for listing on the American Stock Exchange, subject only to
official notice of issuance, and shall take such action as shall be necessary to
comply with the rules and regulations of the American Stock Exchange with
respect to such Securities.
(l) During a period of five years from the Effective Date, the
Company shall furnish to the Representatives copies of all reports or other
communications furnished to shareholders and copies of any reports or financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed. To the
extent applicable, such reports or documents shall be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
6. Conditions to the Obligations of the Underwriters. The obligations of
-------------------------------------------------
the several Underwriters to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company,
Thermedics and Thermo Electron contained herein as of the Execution Time and the
applicable Closing Date, to the accuracy of the statements of the Company,
Thermedics and Thermo Electron made in any certificates pursuant to the
provisions hereof, to the performance by the Company, Thermedics and Thermo
Electron of their obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later time,
the Registration Statement will become effective not later than 12:00 Noon,
Eastern time, on ______ __, 1997; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) No Underwriter shall have been advised by the Company,
Thermedics or Thermo Electron or shall have discovered and disclosed to the
Company that the Registration Statement, or the Prospectus or any amendment or
supplement thereto, contains an untrue statement of fact which in your
reasonable opinion, or in the reasonable opinion of counsel for the
Underwriters, is material, or omits to state a fact which, in your reasonable
opinion, or in the reasonable opinion of counsel to the Underwriters, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) At the Execution Time and at the applicable Closing Date, the
Company and Thermo Electron shall have furnished to you the opinions (addressed
to the Underwriters) of Xxxx X. Xxxxxxxxx, Esq., General Counsel to the Company,
Thermedics and Thermo Electron,
-16-
dated respectively as of the Execution Time and the applicable Closing Date, in
the form previously provided to you.
(d) At the Execution Time and at the applicable Closing Date, the
Representatives shall have received from Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP,
counsel to the Underwriters, such opinion or opinions, dated as of the Execution
Time and the applicable Closing Date, with respect to the issuance and sale of
the Securities, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) At the applicable Closing Date, the Company shall have furnished
to the Representatives certificates of the Company, dated as of the applicable
Closing Date and signed by the President or a Vice President and by the
Treasurer or Secretary of the Company given in their capacities as such, to the
effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct at and as of the applicable Closing Date, with
the same effect as if made on the applicable Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the applicable Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to their knowledge, threatened;
(iii) all filings required by Rule 424 and Rule 430A have been made;
(iv) the signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments or supplements
thereto and such documents contain all statements and information required to be
included therein, and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and
(v) since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amendment or supplement to
the Registration Statement or the Prospectus which has not been so set forth.
(f) At the applicable Closing Date, each of Thermedics and Thermo
Electron shall have furnished to the Representatives certificates of Thermedics
and Thermo Electron, dated respectively as of the applicable Closing Date and
signed by the President or a Vice President and the Treasurer or Secretary
thereof given in their capacities as such, to the effect that:
(i) the representations and warranties of Thermedics or ThermoTrex
(as applicable) in this Agreement are true and correct at and as of the
applicable Closing Date
-17-
with the same effect as if made on the applicable Closing Date, and each of
Thermo Electron or Thermedics (as applicable) has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the applicable Closing Date;
(ii) the signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, and such documents contain all statements and information required
to be included therein and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(iii) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not been
so set forth.
(g) At the Execution Time and at the applicable Closing Date, each
accounting firm whose report appears in the Prospectus shall have furnished to
the Representatives letters, dated respectively as of the Execution Time and the
applicable Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the Act and the applicable published rules and regulations thereunder
and stating, as of the date of such letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date of each such letter), the conclusions and
findings of each such firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and with respect to each letter delivered on a Closing Date
confirming the conclusions and findings set forth in such prior letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
neither the Company nor any of the Subsidiaries of the Company shall have
sustained loss by fire, flood, accident or other calamity, or shall have become
a party to or the subject of any litigation, which is material to the Company
and its Subsidiaries taken as a whole, nor shall there have been a material
adverse change in the general affairs, operations, business, prospects, key
personnel, capitalization, financial condition or net worth of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, which loss, litigation or change, in your judgment, shall render it
inadvisable to proceed with the payment for and delivery of the Securities.
(i) Prior to the applicable Closing Date, the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
-18-
(j) The Securities to be purchased on such Closing Date by the
Underwriters shall be approved for listing on the American Stock Exchange,
subject only to official notice of issuance.
(k) At the Execution Time, the Company shall have furnished or
caused to be furnished to the Representatives such lock-up agreements as are
requested by the Representatives.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the applicable Closing Date by the Representatives. Any such
cancellation shall be without liability of the Underwriters to the Company,
Thermedics or Thermo Electron. Notice of such cancellation shall be given to
the Company in writing or by telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. The Company will reimburse
---------------------------------------
the Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP ) that
shall have been incurred by them in connection with the proposed purchase of the
Securities, whether or not a Closing shall have taken place.
8. Indemnification and Contribution.
--------------------------------
(a) The Company, Thermedics and Thermo Electron, jointly and severally,
shall indemnify and hold harmless each Underwriter against any loss, claim,
damage or liability (or any action in respect thereof), joint or several, to
which such Underwriter may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement made by the Company, Thermedics or Thermo Electron in
Section 1(a) hereof or by Thermedics or Thermo Electron in Section 1(b) hereof,
or (ii) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement, any Preliminary Prospectus, or any
of the Offering Materials, the Prospectus, any of the Offering Material or any
amendment or supplement to any thereof, or (B) in any "Blue Sky" application or
other document executed by the Company specifically for that purpose or based
upon any written information furnished by the Company filed in any state or
other jurisdiction in order to qualify any or all of the Securities under the
securities laws thereof (any such application, document or information being
hereinafter called "Blue Sky Information"), or (iii) the omission or alleged
omission to state in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement to any thereof, or in any Blue Sky
Information a material fact required to be stated therein or necessary to make
the statements therein not misleading or (iv) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Securities or the offering contemplated hereby, and which
is included as
-19-
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (ii) or (iii) above (provided
that the Company, Thermedics and Thermo Electron shall not be liable under this
clause (iv) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, liability or action
resulted directly or indirectly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its gross negligence, willful
misconduct or breach of this Agreement or to have resulted from a violation of
Rule 10b-6, 10b-7 or 10b-8 under the Exchange Act or this Agreement (other than
actions performed at the request or with the consent of the Company)); and shall
reimburse each Underwriter promptly after receipt of invoices from such
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending against or appearing
as a third-party witness in connection with any such loss, claim, damage,
liability or action, notwithstanding the possibility that payments for such
expenses might later be held to be improper, in which case the person receiving
them shall promptly refund them; provided, however, that the Company, Thermedics
and Thermo Electron shall not be liable in any such case to the extent, but only
to the extent, that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company through you by or on behalf of any
Underwriter specifically for use in the preparation of the Registration
Statement, any Preliminary Prospectus, the Prospectus, any of the Offering
Material or any amendment or supplement to any thereof, or any Blue Sky
Information; and provided, further, that as to any Preliminary Prospectus this
indemnity agreement shall not inure to the benefit of any Underwriter on account
of any loss, claim, damage, liability or action arising from the sale of
Securities to any person by that Underwriter if that Underwriter failed to send
or give a copy of the Prospectus, as the same may be amended or supplemented, to
that person within the time required by the Act, and the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company with
Section 5(d)
(b) Each Underwriter severally, but not jointly, shall indemnify and
hold harmless the Company, Thermedics and Thermo Electron against any loss,
claim, damage or liability (or action in respect thereof) to which the Company,
Thermedics or Thermo Electron may become subject, under the Act or otherwise,
insofar as such loss, claim, damage or liability (or action in respect thereof)
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in the Registration Statement, any
Preliminary Prospectus, the Prospectus, any of the Offering Material or any
amendment or supplement to any thereof, or (B) in any Blue Sky Information, (ii)
the omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus, any of the Offering Material or any
amendment or supplement to any thereof, or in any Blue Sky Information a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) actions or omissions of such Underwriter in
connection with the services performed by it with respect to the Rights Offering
that are found in a final judgment by a court of competent jurisdiction to have
resulted from the bad faith or gross negligence of such Underwriter or related
party or to constitute a violation of Rule 10b-6, 10b-7 or 10b-8 under the
Exchange Act or this Agreement (other than actions performed at the request or
with the consent of the Company); and
-20-
shall reimburse any legal or other expenses reasonably incurred by the Company,
Thermedics or Thermo Electron promptly after receipt of invoices from the
Company, Thermedics or Thermo Electron in connection with investigating or
defending against any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case the Company, Thermedics and Thermo Electron
shall promptly refund them; provided, however, that such indemnification
referred to in clauses (i) and (ii) above shall be available in each such case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company through you by
or on behalf of such Underwriter specifically for use in the preparation
thereof. The Company, Thermedics and Thermo Electron acknowledge that the
statements set forth in the last paragraph of the cover page and under the
heading "Underwriting" in any Preliminary Prospectus and Prospectus constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or Prospectus, and you,
as the Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been prejudiced in any material respect by such failure or from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it or they wish, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under such subsection for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation, except that the
Representatives shall have the right to employ counsel to represent you and
those other Underwriters who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Underwriters against
the Company, Thermedics or Thermo Electron under such subsection if, in your
reasonable judgment, it is advisable for you and those Underwriters to be
represented by separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the indemnifying party or parties; provided,
however, in no event, shall the indemnifying party or parties be responsible for
the expenses of more than one separate counsel for all such indemnified parties.
(d) If the indemnification provided for in this Section 8 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company,
Thermedics
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and Thermo Electron on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, Thermedics and Thermo Electron on the
one hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The benefits received by the
Company, Thermedics and Thermo Electron shall be deemed to be the total net
proceeds from the Rights Offering (before deducting expenses) and benefits
received by the Underwriters shall be deemed to be equal to the total
compensation paid to the Underwriters hereunder. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by one of the parties and such
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, Thermedics,
Thermo Electron and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (d), subject
to the proviso in the last sentence of subsection (c). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the compensation paid hereunder to such
Underwriter in respect of the securities purchased by such Underwriter
hereunder. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint. Each
party entitled to contribution agrees that upon the service of a summons or
other initial legal process upon it in any action instituted against it in
respect of which contribution may be sought, it shall promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in subsection (c) hereof).
(f) The obligations of the Company, Thermedics and Thermo Electron under
this Section 8 shall be in addition to any liability which the Company,
Thermedics and Thermo Electron may otherwise have, and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act or the Exchange Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability that the
respective Underwriters may otherwise have, and shall extend, upon the same
terms and conditions, to each director of the Company (including any person who,
with his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to Thermedics and
- 22 -
Thermo Electron, and each other person, if any, who controls the Company within
the meaning of the Act or the Exchange Act.
9. Default by an Underwriter. If anyone or more Underwriters shall fail
-------------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder, the non-defaulting Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the commitment percentage of each remaining Underwriter set forth opposite its
name in Schedule I hereto bears to the aggregate of the commitment percentages
of all the non-defaulting Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; except that the non-
defaulting Underwriters shall not be obligated to purchase any of the Securities
if the total number of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase exceed 9.09% of the total number of
Securities, and any non-defaulting Underwriters shall not be obligated to
purchase more than 110% of the percentage of the Securities set forth opposite
its name in Schedule I hereto. If the foregoing maximums are exceeded, the non-
defaulting Underwriters, and any other underwriters satisfactory to you that so
agree, shall have the right, but shall not be obligated, to purchase (in such
proportions as may be agreed upon among them) all of the Securities. If the non-
defaulting Underwriters or the other underwriters satisfactory to you do not
elect to purchase the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase, the Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company,
Thermedics or Thermo Electron.
10. Termination. Until the Closing Date, this Agreement may be terminated
-----------
by you by giving notice as hereinafter provided to the Company, if (i) the
Company, Thermedics or Thermo Electron shall have failed, refused or been
unable, at or prior to the Closing Date, to perform any agreement on its part to
be performed hereunder, (ii) any other condition of the obligations of the
Underwriters hereunder is not fulfilled, (iii) trading in the Thermedics
Detection Common Stock shall have been suspended by the American Stock Exchange
or trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or the International Stock Exchange of the United
Kingdom or the over-the-counter market shall have been suspended, limited or
minimum prices shall have been established on any of such exchanges or such
market by the Commission or by such exchange or other regulatory body or
governmental authority having jurisdiction, (iv) a banking moratorium shall have
been declared by Federal, New York, United Kingdom or Massachusetts authorities,
(v) the United States or the United Kingdom is or becomes engaged in hostilities
which result in the declaration of a national emergency or war, or (vi) there
shall have been such a material adverse change in general economic, political or
financial conditions, or the effect of international conditions on the financial
markets in the United States or the United Kingdom shall be such, as to, in the
judgment of a majority in interest of the several Underwriters, make it
inadvisable or impracticable to proceed with the delivery of the Securities.
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company, of Thermedics, of Thermo Electron and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any
- 23 -
Underwriter, the Company, Thermedics or Thermo Electron or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of the second
paragraph of Section 2 and Sections 7 and 8 hereof shall survive the termination
or cancellation of this Agreement; except that if this Agreement is terminated
as a result of the occurrence of the events described in Section 10 hereof or as
a result of a default of one or more Underwriters as set forth in Section 9
hereof, the Company shall not be liable to the Underwriters for the Management
Fee and Standby Fee specified in Section 2 hereof or expenses as provided in
Section 7 hereof.
12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telecopied to them c/x Xxxxxx Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department; or, if sent
to the Company, Thermedics or Thermo Electron, will be mailed, delivered or
telecopied to it at 00 Xxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxx, XX 00000-0000.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (a) the representations, warranties, indemnities and
agreements of the Company, Thermedics and Thermo Electron contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of the Act or the
Exchange Act and (b) the indemnity agreement of the Underwriters contained in
Section 8 hereof shall be deemed to be for the benefit of directors of the
Company, officers of the Company who signed the Registration Statement, and any
person controlling the Company, including Thermedics and Thermo Electron.
Nothing in this Agreement shall be construed to give any person, other than the
persons referred to in this paragraph, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
14. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York, without giving effect to the
choice of law or conflict of law principles thereof.
15. Definition of Business Day, Subsidiary and Significant Subsidiary.
-----------------------------------------------------------------
For purposes of this Agreement, (a) "business day" means any day on which the
American Stock Exchange is open for trading, (b) "Subsidiary" has the meaning
set forth in Rule 405 of the Rules and Regulations and (c) "Significant
Subsidiary" has the meaning set forth in Item 1-02(v) of the Regulation S-X of
the Rules and Regulations.
16. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
- 24 -
17. Agreement Supersedes. This Agreement shall supersede all provisions
--------------------
of any other agreements, whether written or oral, of any of the parties to this
Agreement that relate to the transactions contemplated by this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 25 -
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicates hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, Thermedics, Thermo Electron and you.
Very truly yours,
THERMEDICS DETECTION INC.
By:
-----------------------
Name:
Title:
THERMEDICS INC.
By:
-----------------------
Name:
Title:
THERMO ELECTRON CORPORATION
By:
-----------------------
Name:
Title:
Confirmed and accepted as of the date first above written.
XXXXXX BROTHERS INC.
NATWEST SECURITIES LIMITED
as Representatives of the
several Underwriters named
in Schedule I hereto
By: XXXXXX BROTHERS INC.
By:
----------------------
Authorized Signatory
- 26 -
Schedule I
----------
Underwriter Percentage of Securities to be Purchased
----------- ----------------------------------------
Xxxxxx Brothers Inc.
NatWest Securities Limited
Total............. 100%
- 27 -
