-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DG3ZkArwBvOCm4CEcjIONDeBuBAIAK0ucjR5eHSpv5KDXTKvT47+eVKX01DdF5uu 8gqpOZ7p+D7SKUU4KgCYiQ== 0000950135-97-000788.txt : 19970222 0000950135-97-000788.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950135-97-000788 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19970220 SROS: AMEX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMOLASE CORP CENTRAL INDEX KEY: 0000901416 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 061360302 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-19633 FILM NUMBER: 97539601 BUSINESS ADDRESS: STREET 1: 10455 PACIFIC CENTER COURT CITY: SAN DIEGO STATE: CA ZIP: 92121-4339 BUSINESS PHONE: 6176221000 MAIL ADDRESS: STREET 1: 10455 PACIFIC CENTER COURT CITY: SAN DIEGO STATE: CA ZIP: 92121-4339 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO ELECTRON CORP CENTRAL INDEX KEY: 0000097745 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 042209186 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-19633-01 FILM NUMBER: 97539602 BUSINESS ADDRESS: STREET 1: 81 WYMAN ST STREET 2: P O BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02254 BUSINESS PHONE: 6176221000 S-4/A 1 THERMOLASE AMENDMENT NO.1 TO FORM S-4 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 20, 1997 FORM S-4 REGISTRATION NO. 333-19633 FORM S-4 REGISTRATION NO. 333-19633-01 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AS TO THE UNITS: AS TO THE GUARANTEES: AMENDMENT NO. 1 AMENDMENT NO. 1 TO TO FORM S-4 FORM S-4 REGISTRATION STATEMENT REGISTRATION STATEMENT UNDER UNDER THE SECURITIES ACT OF 1933 THE SECURITIES ACT OF 1933 ------------------------ ------------------------ THERMOLASE CORPORATION THERMO ELECTRON CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CHARTER) DELAWARE DELAWARE (STATE OR OTHER JURISDICTION OF INCORPORATION OR (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) ORGANIZATION) ------------------------ ------------------------ 7299 3829 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) NUMBER) 06-1360302 04-2209186 (I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.) 10455 PACIFIC CENTER COURT 81 WYMAN STREET SAN DIEGO, CALIFORNIA 92121-4339 P.O. BOX 9046 (619) 578-5885 WALTHAM, MASSACHUSETTS 02254-9046 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (617) 622-1000 INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------ SANDRA L. LAMBERT, SECRETARY THERMOLASE CORPORATION AND THERMO ELECTRON CORPORATION 81 WYMAN STREET P.O. BOX 9046 WALTHAM, MASSACHUSETTS 02254-9046 (617) 622-1000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE FOR BOTH REGISTRANTS) ------------------------ COPIES TO: SETH H. HOOGASIAN, ESQUIRE DAVID E. REDLICK, ESQUIRE VICE PRESIDENT AND GENERAL COUNSEL HALE AND DORR LLP THERMOLASE CORPORATION 60 STATE STREET AND THERMO ELECTRON CORPORATION BOSTON, MASSACHUSETTS 02109 81 WYMAN STREET (617) 526-6000 WALTHAM, MASSACHUSETTS 02254-9046 (617) 622-1000 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: Upon consummation of the Offer described herein. If the securities being registered on the Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] ------------------------ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ 2 THERMOLASE CORPORATION OFFER TO EXCHANGE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT FOR EACH ONE OUTSTANDING SHARE OF COMMON STOCK PLUS $3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK) NO MORE THAN 2,000,000 UNITS WILL BE ISSUED ------------------------ REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS BY THERMO ELECTRON CORPORATION ------------------------ THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED. ------------------------ ThermoLase Corporation, a Delaware corporation ("ThermoLase", or the "Company"), hereby offers, upon the terms and subject to the conditions set forth in this Offer to Exchange and the accompanying letter of transmittal (the "Letter of Transmittal", and together with this Offer to Exchange, the "Offer"), to exchange one unit (a "Unit") consisting of one share of common stock, $.01 par value per share, of the Company (the "Common Stock") and one redemption right (each, a "Redemption Right"), for each share of Common Stock (each, a "Share") plus an additional payment of $3.00 (the "Additional Payment"), validly tendered and accepted for exchange in the Offer. The Additional Payment may be made either (i) in cash (such cash payment being hereinafter referred to as the "Additional Cash Payment", and an exchange in which an Additional Cash Payment is made being hereinafter referred to as a "Share and Cash Exchange"), or (ii) by delivery to the Company of additional Shares having a value equal to the aggregate required Additional Payment (the Shares being tendered in satisfaction of the Additional Payment being hereinafter referred to as the "Additional Share Payment", and an exchange in which an Additional Share Payment is made being hereinafter referred to as a "Share Only Exchange"). Shares tendered in satisfaction of the Additional Share Payment will be valued at $20.25; accordingly, for each Share tendered for exchange in a Share Only Exchange, the tendering shareholder will receive .871 Units. No fractional Units will be issued, and the number of Units issued will be rounded down to the nearest whole number. (Cover continued on next page) ------------------------ SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY SHAREHOLDERS OF THERMOLASE IN EVALUATING THE OFFER. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ IMPORTANT Any shareholder desiring to tender all or any portion of such shareholder's Shares should either (1) complete and sign the enclosed Letter of Transmittal in accordance with the instructions in the Letter of Transmittal, have such shareholder's signature thereon guaranteed if required by Instruction 1 of the Letter of Transmittal, mail or deliver the Letter of Transmittal (or a facsimile thereof), any Additional Cash Payment (in the manner set forth herein) and any other required documents to the Exchange Agent (as defined herein), and either deliver the certificates representing the tendered Shares or tender such Shares pursuant to the procedure for book-entry transfer set forth in this Offer to Exchange, or (2) request such shareholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such shareholder. Shareholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender such Shares. If a shareholder desires to tender Shares and any required Additional Cash Payment pursuant to the Offer but time will not permit the required deliveries to be made to the Exchange Agent prior to the Expiration Date, or the procedure for a book-entry transfer cannot be completed on a timely basis, a tender may be effected in accordance with the guaranteed delivery procedures set forth herein. Questions and requests for assistance or for additional copies of this Offer to Exchange, the Letter of Transmittal and all other exchange offer materials may be directed to National Westminster Bank Plc -- New York Branch (the "Information Agent") at its address and telephone number set forth on the back cover of this Offer to Exchange. Additional copies of this Offer to Exchange, the Letter of Transmittal and all other tender offer materials may also be obtained from brokers, dealers, commercial banks or trust companies. ------------------------ The Information Agent for the Offer is: NATIONAL WESTMINSTER BANK PLC -- NEW YORK BRANCH The date of this Offer to Exchange is , 1997. 3 (continued from previous page) Shareholders may make either a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof. No more than 2,000,000 Units will be issued. Shares not accepted for exchange, because of prorations or otherwise, will be returned. The Offer is subject to certain conditions, including there being validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares and related Additional Cash Payments, if applicable, as would result in the issuance of at least 500,000 Units (the "Minimum Condition"), and the listing of the Units on the American Stock Exchange ("AMEX"), subject to official notice of issuance. If all tendering shareholders make a Share Only Exchange, a maximum of 2,296,212 Shares will be tendered. The Offer will expire at 12:00 midnight, New York City time, on , 1997, unless extended (as so extended, the "Expiration Date"). The Expiration Date will not be extended beyond , 1997. The Board of Directors is not making any recommendations to its shareholders as to whether they should exchange or refrain from exchanging any or all of their shares of Common Stock. Each shareholder must make his or her own decision as to whether to exchange any shares of Common Stock owned. HOLDERS OF COMMON STOCK ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISORS IN MAKING A DECISION ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. Each Redemption Right will entitle the holder thereof to sell the related share of Common Stock to the Company for $20.25 during the first 20 business days after the fourth anniversary of the Expiration Date (as defined herein). The Redemption Right will not detach or trade separately from the related share of Common Stock (but instead will trade together with the related share of Common Stock as a Unit) and will expire and become worthless if the closing price of the Company's Common Stock is at least $26.00 for 20 of any 30 consecutive trading days after the Expiration Date. In the event of the expiration of the Redemption Right, each Unit will automatically become, and will trade as, one share of Common Stock. The Company's obligations under the Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron Corporation, the Company's ultimate parent corporation ("Thermo Electron"). For a description of the other terms of the Offer, see "The Offer to Exchange." Prior to this Offer, there has been no public market for the Units. The Company has applied for the listing of the Units on AMEX under the symbol "TLZ U." 4 AVAILABLE INFORMATION ThermoLase and Thermo Electron are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith file reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). The reports, proxy statements and other information filed by ThermoLase and Thermo Electron with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at 7 World Trade Center, 13th floor, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also can be obtained at prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street, Washington, D.C. 20549. In addition, ThermoLase and Thermo Electron are each required to file electronic versions of such material with the Commission through the Commission's Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. The Commission maintains a World Wide Web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. ThermoLase's Common Stock is listed on AMEX. Reports, proxy statements and other information concerning ThermoLase can also be inspected at the offices of AMEX, 86 Trinity Place, New York, New York 10006. Thermo Electron's Common Stock is listed on the New York Stock Exchange. Reports, proxy statements and other information concerning Thermo Electron can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. ADDITIONAL INFORMATION ThermoLase and Thermo Electron have each filed with the Commission a Registration Statement on Form S-4 (the "Registration Statements") under the Securities Act of 1933, as amended (the "Securities Act") with respect to the Units to be issued by ThermoLase pursuant to the Offer and the guarantees (the "Guarantees") by Thermo Electron of ThermoLase's obligations under the Redemption Rights. In addition, ThermoLase has filed an Issuer Tender Offer Statement on Schedule 13E-4 with respect to the Offer (the "Schedule 13E-4"). This Offer to Exchange does not contain all the information set forth in the Registration Statements or the Schedule 13E-4. For further information with respect to ThermoLase, Thermo Electron, the Units, the Guarantees and the Offer, reference is hereby made to the Registration Statements and the Schedule 13E-4 (including the exhibits and schedules thereto). Statements contained in this Offer to Exchange or in any document incorporated by reference in this Offer to Exchange as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document (if any) filed as an exhibit to the applicable Registration Statement or the Schedule 13E-4 or such other document, each such statement being qualified in all respects by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents of ThermoLase filed with the Commission are incorporated by reference in this Offer to Exchange: 1. Annual Report on Form 10-K for the fiscal year ended September 28, 1996 (as amended on Forms 10-K/A); 2. Quarterly Report on Form 10-Q for the quarter ended December 28, 1996; and 3. The description of ThermoLase's capital stock contained in ThermoLase's Registration Statements on Form 8-A. The following documents of Thermo Electron filed with the Commission are incorporated by reference in this Offer to Exchange: 1. Annual Report on Form 10-K, as amended on Form 10-K/A for the fiscal year ended December 30, 1995; i 5 2. Quarterly Reports on Form 10-Q for the quarters ended March 30, 1996, June 29, 1996 (as amended on Form 10-Q/A) and September 28, 1996; 3. Current Reports on Form 8-K dated January 3, 1996, January 19, 1996, April 16, 1996, October 24, 1996 and January 21, 1997; and 4. The description of Thermo Electron's capital stock contained in Thermo Electron's Registration Statements on Form 8-A. All documents and reports subsequently filed by ThermoLase or Thermo Electron pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Offer to Exchange and prior to the Expiration Date (as defined herein) shall be deemed to be incorporated by reference in this Offer to Exchange and to be part hereof from the date of filing of such documents or reports. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Offer to Exchange to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offer to Exchange. This Offer to Exchange incorporates documents by reference which are not presented herein or delivered herewith. Such documents (other than exhibits to such documents unless such exhibits are specifically incorporated by reference) are available to any person, including any beneficial owner, to whom this Offer to Exchange is delivered, on written or oral request, without charge, directed to Thermo Electron Corporation, 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02254-9046 (telephone number (617) 622-1000), Attention: Investor Relations. In order to ensure timely delivery of any of such documents, any request should be made not later than five business days prior to the Expiration Date. NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS OFFER TO EXCHANGE IN CONNECTION WITH THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THERMOLASE, THERMO ELECTRON OR ANY OTHER PERSON. THIS OFFER TO EXCHANGE DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS OFFER TO EXCHANGE NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THERMOLASE OR THERMO ELECTRON SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. "SoftLight" and "Spa Thira" are trademarks or service marks of ThermoLase. SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION Certain statements in this Offer to Exchange and in the documents incorporated herein constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. For this purpose, any statements contained herein or incorporated herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects" and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company and Thermo Electron to differ materially from those indicated by such forward-looking statements, including among others, the following: uncertainties in market demand and acceptance and intellectual property rights, changes in and compliance with government regulation; the impact of competitive products and pricing; risks associated with management of growth; the Company's limited operating history; and technology and product development, as well as commercialization; the failure of an active trading market to develop for the Units; and the volatility generally in the stock and other financial markets. In addition, these factors include those set forth in "Risk Factors" herein and the discussion of the important risk factors and other uncertainties identified under the caption "Forward looking Statements" incorporated by reference into the Company's Annual Report on Form 10-K, as amended, for the fiscal year ended September 28, 1996 and the important factors identified under the caption "Other Information" in Thermo Electron's Quarterly Report on Form 10-Q for the quarter ended September 28, 1996, which are incorporated by reference herein. ii 6 TABLE OF CONTENTS AVAILABLE INFORMATION................................................................... (i) ADDITIONAL INFORMATION.................................................................. (i) INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................................... (i) SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION...................................... (ii) SUMMARY................................................................................. 1 SELECTED FINANCIAL INFORMATION -- THERMOLASE CORPORATION................................ 6 SELECTED FINANCIAL INFORMATION -- THERMO ELECTRON CORPORATION........................... 8 RISK FACTORS............................................................................ 10 THE OFFER TO EXCHANGE................................................................... 11 MARKET PRICE INFORMATION................................................................ 24 DESCRIPTION OF SECURITIES............................................................... 28 TRANSACTIONS IN SECURITIES.............................................................. 31 LEGAL MATTERS........................................................................... 31 EXPERTS................................................................................. 31
iii 7 SUMMARY The following is a summary of certain information contained elsewhere in this Offer to Exchange. Reference is made to, and this summary is qualified in its entirety by, the more detailed information contained, or incorporated by reference, in this Offer to Exchange. Unless otherwise defined herein, capitalized terms used in this summary have the respective meanings ascribed to them elsewhere in this Offer to Exchange. Shareholders are urged to read this Offer to Exchange hereto in its entirety. THERMOLASE CORPORATION..... ThermoLase has developed a proprietary system for the removal of unwanted hair (the "SoftLight system"). In April 1995, the Company received clearance from the U.S. Food and Drug Administration to commercially market services using this system. The Company is marketing the SoftLight system in the United States through its "Spa Thira" salons and through licensing agreements with doctors and others. The Company is marketing the SoftLight system in foreign countries by engaging in joint ventures and other licensing arrangements with companies or individuals that are experienced in those locations. ThermoLase also manufactures and markets skin-care and body products through its CBI Laboratories, Inc. subsidiary, which also manufactures the lotion used in the SoftLight system. As of December 28, 1996, an aggregate of 40,583,874 shares of the Company's Common Stock were outstanding, of which, 25,960,996 shares (approximately 64% of the outstanding shares) were beneficially owned by ThermoTrex Corporation ("ThermoTrex"). ThermoTrex is a publicly traded, majority-owned subsidiary of Thermo Electron. ThermoLase's principal executive offices are located at 10455 Pacific Center Court, San Diego, California 92121-4339. Its telephone number is (619) 646-5700. THERMO ELECTRON CORPORATION................ Thermo Electron develops, manufactures and markets environmental monitoring and analysis instruments, biomedical products including heart-assist systems, mammography systems and respiratory care products, paper-recycling and papermaking equipment, alternative-energy systems, industrial process equipment, and other specialized products. Thermo Electron also provides environmental and metallurgical services and conducts advanced technology research and development. Thermo Electron performs its business through its divisions and wholly-owned subsidiaries, as well as majority-owned subsidiaries that are partially owned by the public or by private investors. Thermo Electron's principal executive offices are located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts. Its telephone number is (617) 622-1000. RISK FACTORS............... Shareholders should consider certain risk factors in evaluating whether to exchange their Shares and Additional Payments for Units. See "Risk Factors." THE OFFER TO EXCHANGE SECURITIES OFFERED......... Units consisting of one share of Common Stock and one Redemption Right. The Redemption Right entitles the holder thereof to sell the related share of Common Stock to the Company for $20.25 during the first 20 business days after the fourth anniversary of the Expiration Date. The Redemption Right will not detach or trade separately from the 8 related share of Common Stock (but instead will trade together with the related share of Common Stock as a Unit) and will expire and become worthless if the closing price of the Common Stock is at least $26.00 for 20 of any 30 consecutive trading days following the Expiration Date. In the event of the expiration of the Redemption Right, each Unit will automatically become, and will trade as, one share of Common Stock. The Company's obligations under the Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron. See "The Offer to Exchange -- Terms of the Offer to Exchange" and "Description of Securities." THE OFFER.................. One Unit is being offered in exchange for each Share, plus the Additional Payment of $3.00, validly tendered and accepted for exchange. The Additional Payment may be made either (i) in the form of an Additional Cash Payment; or (ii) by delivery of an Additional Share Payment, in either case equal in aggregate value to $3.00 times the number of Shares tendered for exchange. Shares tendered in satisfaction of the Additional Share Payment will be valued at $20.25 per share; accordingly, for each Share tendered for exchange in a Share Only Exchange, the tendering shareholder will receive .871 Units. No fractional Units will be issued, and the number of Units issued will be rounded down to the nearest whole number. Shareholders may make either a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof. No more than 2,000,000 Units will be issued. If the number of Shares and, if applicable, Additional Cash Payments validly tendered pursuant to the Offer and not withdrawn prior to the Expiration Date would result in the issuance of more than 2,000,000 Units, acceptances will be cut back pro rata (with adjustments to avoid issuance of fractional Units), based on the total number of Units that would have been issued to such tendering shareholders had no such cutback been made. ThermoTrex, the Company's principal shareholder, has notified the Company that it does not intend to tender any of its Shares pursuant to the Offer. See "The Offer to Exchange -- Terms of the Offer to Exchange." PURPOSE OF THE OFFER....... The Company does not believe that the market price of the Common Stock accurately reflects its intrinsic value. The purpose of the Offer is to give to shareholders who are considering selling their Shares the opportunity to reduce the risk associated with the continued ownership of the Common Stock. EXPIRATION DATE; EXTENSION; TERMINATION.............. The Offer will expire at 12:00 midnight, New York City time, on , 1997, unless extended (as so extended, the "Expiration Date"). The Expiration Date will not be extended beyond , 1997. The Company expressly reserves the right (i) to extend, amend or modify the terms of the Offer in any manner; and (ii) if certain conditions are not satisfied, to withdraw or terminate the Offer, and not accept for exchange any Shares. See "The Offer to Exchange -- Expiration Date; Extension; Termination," and "The Offer to Exchange -- Conditions to the Consummation of the Offer." WITHDRAWAL RIGHTS.......... Tenders of Shares and Additional Cash Payments, if applicable, pursuant to the Offer may be withdrawn at any time prior to the Expiration 2 9 Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after , 1997, unless theretofore accepted for exchange. See "The Offer to Exchange -- Withdrawal Rights." PROCEDURES FOR TENDERING... To be tendered properly, (i) certificates representing the tendered Shares, (ii) a certified or official bank check made payable to American Stock Transfer & Trust Company, the Company's exchange agent for the Offer (the "Exchange Agent") or wire transfer in the amount of the Additional Cash Payment, if applicable, and (iii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by the Letter of Transmittal, must be received by the Exchange Agent at the address set forth on the back cover page of this Offer to Exchange prior to 12:00 midnight, New York City time, on the Expiration Date. Special arrangements are provided for book-entry transfers of Shares. See "The Offer to Exchange -- Procedure for Tendering Shares." Shareholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender such Shares. If a holder desires to accept the Offer and time will not permit the required deliveries to be made to the Exchange Agent prior to the Expiration Date, or the procedure for a book- entry transfer cannot be completed on a timely basis, a tender may be effected in accordance with guaranteed delivery procedures. See "The Offer to Exchange -- Guaranteed Delivery Procedure." ACCEPTANCE OF TENDERED SHARES AND ADDITIONAL CASH PAYMENTS; PRORATION...... Upon the terms and subject to the conditions of the Offer (including satisfaction of the Minimum Condition), the Company will accept for exchange up to the number of Shares and related Additional Cash Payments validly tendered and not withdrawn prior to the Expiration Date that would result in the issuance of not more than 2,000,000 Units. Upon the terms and subject to the conditions of the Offer, if the number of Shares and, if applicable, Additional Cash Payments, validly tendered and not withdrawn prior to the Expiration Date would result in the issuance of more than 2,000,000 Units, acceptances will be cut back pro rata (with adjustments to avoid the issuance of fractional Units), based on the total number of Units that would have been issued to such tendering shareholders had no such cutback been made. DELIVERY OF UNITS.......... Subject to the terms and conditions of the Offer, the delivery of the Units to be issued pursuant to the Offer will occur as promptly as practicable following the Expiration Date. See "The Offer to Exchange -- Acceptance of Tendered Shares and Additional Cash Payments; Proration; Delivery of Units." If proration of Shares and Additional Cash Payments, if applicable, is required, the Company does not expect to be able to announce the final proration factor or to commence the exchange for any Shares pursuant to the Offer until approximately five business days after the Expiration Date, due to the difficulty in determining the number of Shares validly tendered (including shares tendered pursuant to the guaranteed delivery 3 10 procedure described in "The Offer to Exchange -- Guaranteed Delivery Procedure"). Preliminary results of the proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Common Stock may obtain such preliminary information from the Information Agent and may also be able to obtain such information from their brokers. CERTAIN FEDERAL INCOME TAX CONSEQUENCES............. Because of the unique features of the Offer and the Units, the tax treatment of the exchange is unclear. See "The Offer to Exchange -- Certain Federal Income Tax Consequences." Assuming that the Redemption Rights are treated as integral parts of the Units, both the Share and Cash Exchange and the Share Only Exchange should be treated as reorganizations under Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended (the "Code") and, therefore, (i) should not result in the recognition of income by shareholders making a Share and Cash Exchange, and (ii) should result in the recognition of income by shareholders who make a Share Only Exchange up to the fair market value of the Guarantee (estimated by the Company to be $1.00 per Unit). However, if the Internal Revenue Service were to successfully challenge the treatment of the exchange as a reorganization under the Code, shareholders who make a Share Only Exchange could be required to recognize income up to the fair market value of the Redemption Right (including the Guarantee). In general, shareholders who make a Share and Cash Exchange should not be required to recognize gain even if the Internal Revenue Service were to successfully challenge the Company's treatment of the exchange. However, if the Internal Revenue Service were to treat a Unit as debt, rather than equity, the exchange would be taxable, whether a shareholder made a Share and Cash Exchange or a Share Only Exchange. See "The Offer to Exchange -- Certain Federal Income Tax Consequences" and "Risk Factors -- Risk of Uncertain Tax Treatment." CONDITIONS TO THE OFFER.... The Offer is subject to certain conditions, including there being validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares and Additional Cash Payments, if applicable, as would result in the issuance of at least 500,000 Units and the listing of the Units on AMEX. There can be no assurance that such conditions will be met. See "The Offer to Exchange -- Conditions to the Consummation of the Offer." UNTENDERED SHARES.......... Holders of Shares who do not tender their Shares in the Offer or whose Shares are not accepted for exchange will continue to hold such Shares, which are listed on AMEX, and will be entitled to all the rights, and will be subject to all of the limitations, applicable thereto. See "The Offer to Exchange -- Effect on Non-Tendering Shareholders." LISTING OF THE UNIT........ The Company has applied for the listing of the Units on the American Stock Exchange. In order to be listed, the Company must meet certain minimum listing requirements (the "AMEX Listing Requirements"). Even if the Units are initially listed, there can be no assurance that the Units will meet the requirements for continued listing on AMEX. See "Risk Factors -- No Assurance as to Liquidity or Trading Market," and "The Offer to Exchange -- Listing of the Units." 4 11 PAYMENT OF FEES AND EXPENSES; TRANSFER TAXES... Tendering shareholders will not be required to pay brokerage fees or, except as otherwise provided in the Instructions of the Letter of Transmittal, transfer taxes with respect to the exchange of Shares and the Additional Cash Payment, if applicable, pursuant to the Offer. The Company will pay all transfer taxes, other than certain applicable taxes or as set forth in the Letter of Transmittal, in connection with the Offer. See "The Offer to Exchange -- Payment of Fees and Expenses; Transfer Taxes." 5 12 SELECTED FINANCIAL INFORMATION -- THERMOLASE CORPORATION The selected financial information presented below as of and for the fiscal year ended December 31, 1994, the nine months ended September 30, 1995 and the fiscal year ended September 28, 1996 has been derived from ThermoLase's Consolidated Financial Statements, which have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report incorporated by reference into this Registration Statement. The selected financial information as of and for the fiscal years ended January 2, 1993 and January 1, 1994 has been derived from ThermoLase's Consolidated Financial Statements, which have been audited by Arthur Andersen LLP, but have not been incorporated by reference into this Registration Statement. This information should be read in conjunction with the Consolidated Financial Statements and related notes incorporated by reference into this Registration Statement. The selected financial information for the fiscal year ended September 30, 1995 and the three-month periods ended December 30, 1995 and December 28, 1996 has not been audited but, in the opinion of ThermoLase, includes all adjustments (consisting only of normal, recurring adjustments) necessary to present fairly such information in accordance with generally accepted accounting principles applied on a consistent basis. The results of operations for the three-month period ended December 28, 1996 are not necessarily indicative of results for the entire year.
NINE MONTHS THREE MONTHS FISCAL YEAR ENDED ENDED FISCAL YEAR ENDED ENDED ------------------------------ ----------- ---------------------- -------------------- JAN. 2, JAN. 1, DEC. 31, SEPT. 30, SEPT. 30, SEPT. 28, DEC. 30, DEC. 28, 1993 1994(1) 1994(2) 1995(3)(4) 1995 1996 1995 1996 ------- ------- -------- ----------- --------- --------- -------- -------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) STATEMENT OF OPERATIONS DATA: Revenues..................... $ -- $ 625 $18,682 $17,544 $23,348 $27,812 $ 7,400 $ 8,610 ------- ------- ------- ------- ------- ------- ------- ------- Costs and Operating Expenses: Cost of revenues........... -- 438 10,785 11,424 14,714 20,027 5,160 6,827 Selling, general and administrative expenses................. 25 208 5,744 6,158 8,128 9,761 2,599 4,214 Research and development expenses................. 315 536 2,324 3,151 3,774 3,470 525 909 ------- ------- ------- ------- ------- ------- ------- ------- 340 1,182 18,853 20,733 26,616 33,258 8,284 11,950 ------- ------- ------- ------- ------- ------- ------- ------- Operating Loss............... (340) (557) (171) (3,189) (3,268) (5,446) (884) (3,340) Interest and Other Income.... -- 542 437 789 930 3,597 938 616 ------- ------- ------- ------- ------- ------- ------- ------- Income (Loss) Before Income Taxes and Cumulative Effect of Change in Accounting Principle.................. (340) (15) 266 (2,400) (2,338) (1,849) 54 (2,724) Income Tax (Provision) Benefit.................... 125 (1) (260) 721 663 463 (136) 1,335 ------- ------- ------- ------- ------- ------- ------- ------- Income (Loss) Before Cumulative Effect of Change in Accounting Principle.... (215) (16) 6 (1,679) (1,675) (1,386) (82) (1,389) Cumulative Effect of Change in Accounting Principle, Net of Tax................. -- -- 9 -- -- -- -- -- ------- ------- ------- ------- ------- ------- ------- ------- Net Income (Loss)............ $ (215) $ (16) $ 15 $(1,679) $(1,675) $(1,386) $ (82) $(1,389) ======= ======= ======= ======= ======= ======= ======= ======= Earnings (Loss) per Share Before Cumulative Effect of Change in Accounting Principle.................. $ (.01) $ -- $ -- $ (.04) $ (.04) $ (.03) $ -- $ (.03) ======= ======= ======= ======= ======= ======= ======= ======= Earnings (Loss) per Share.... $ (.01) $ -- $ -- $ (.04) $ (.04) $ (.03) $ -- $ (.03) ======= ======= ======= ======= ======= ======= ======= ======= Weighted Average Shares...... 26,168 31,141 35,767 38,005 37,880 40,353 40,091 40,685 ======= ======= ======= ======= ======= ======= ======= =======
6 13
NINE MONTHS THREE MONTHS FISCAL YEAR ENDED ENDED FISCAL YEAR ENDED ENDED ----------------------------- ------------ --------------------- --------------------- JAN. 2, JAN. 1, DEC. 31, SEPT. 30, SEPT. 30, SEPT. 28, DEC. 30, DEC. 28, 1993 1994(1) 1994(2) 1995(3)(4) 1995 1996 1995 1996 ------- ------- ------- ------- ------- ------- ------- ------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) BALANCE SHEET DATA (AT END OF PERIOD): Working Capital.............. $-- $ 3,610 $16,325 $68,691 $47,197 $68,019 $35,485 Total Assets................. 71 23,551 33,570 89,463 95,520 89,554 92,948 Long-term Obligations........ -- -- -- -- -- -- -- Common Stock Subject to Redemption................. -- 14,511 -- -- -- -- 2,613 Shareholders' Investment..... 71 (189) 28,997 82,218 79,037 82,246 72,985
- --------------- (1) Reflects the net proceeds of ThermoLase's March 1993 private placement and the December 1993 acquisition of CBI Laboratories. (2) Reflects the net proceeds of ThermoLase's July 1994 initial public offering and the adoption of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." (3) In September 1995, ThermoLase changed its fiscal year end from the Saturday nearest December 31 to the Saturday nearest September 30. Accordingly, ThermoLase's 39-week transition period ended September 30, 1995 is presented. (4) Reflects the net proceeds of ThermoLase's June 1995 private placements and August 1995 public offering of Common Stock. 7 14 SELECTED FINANCIAL INFORMATION -- THERMO ELECTRON CORPORATION The selected financial information presented below as of and for the fiscal years ended January 1, 1994, December 31, 1994 and December 30, 1995 has been derived from Thermo Electron's Consolidated Financial Statements, which have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report incorporated by reference into this Registration Statement. The selected financial information as of and for the fiscal years ended December 28, 1991 and January 2, 1993 has been derived from Thermo Electron's Consolidated Financial Statements, which have been audited by Arthur Andersen LLP, but have not been incorporated by reference into this Registration Statement. This information should be read in conjunction with Thermo Electron's Consolidated Financial Statements and related notes incorporated by reference into this Registration Statement. The selected financial information for the nine-month periods ended September 30, 1995 and September 28, 1996 has not been audited but, in the opinion of Thermo Electron, includes all adjustments (consisting only of normal, recurring adjustments) necessary to present fairly such information in accordance with generally accepted accounting principles applied on a consistent basis. The results of operations for the nine-month period ended September 28, 1996 are not necessarily indicative of results for the entire year.
FISCAL YEAR ENDED NINE MONTHS ENDED -------------------------------------------------------------- ----------------------- DEC. 28, JAN. 2, JAN. 1, DEC. 31, DEC. 30, SEPT. 30, SEPT. 28, 1991(1) 1993(2) 1994(3) 1994(4) 1995 1995 1996(5) ---------- ---------- ---------- ---------- ---------- ---------- ---------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) STATEMENT OF INCOME DATA: Revenues............................. $842,538 $999,228 $1,354,508 $1,729,191 $2,270,291 $1,623,333 $2,138,125 Costs and Expenses: Cost of product and service revenues......................... 532,904 608,975 755,493 928,645 1,239,762 881,247 1,209,280 Expenses for research and development and new lines of business......................... 84,595 106,466 183,965 233,099 272,809 201,855 221,675 Selling, general and administrative expenses......................... 177,694 213,266 289,282 384,715 510,564 365,162 510,238 Restructuring and other nonrecurring costs............... 3,709 -- 6,616 650 21,938 21,938 32,264 -------- -------- ---------- ---------- ---------- ---------- ---------- 798,902 928,707 1,235,356 1,547,109 2,045,073 1,470,202 1,973,457 -------- -------- ---------- ---------- ---------- ---------- ---------- Operating Income..................... 43,636 70,521 119,152 182,082 225,218 153,131 164,668 Gain on Issuance of Stock by Subsidiaries....................... 27,367 30,212 39,863 25,283 80,815 65,632 110,857 Other Income (Expense), Net.......... 10,557 1,842 (27,548) (989) (7,225) (7,772) (6,339) -------- -------- ---------- ---------- ---------- ---------- ---------- Income Before Income Taxes, Minority Interest and Change in Accounting Principle.......................... 81,560 102,575 131,467 206,376 298,808 210,991 269,186 Provision for Income Taxes........... 25,765 27,750 33,513 70,703 98,711 66,155 74,589 Minority Interest Expense............ 7,269 13,902 21,086 30,962 60,515 43,558 57,413 -------- -------- ---------- ---------- ---------- ---------- ---------- Income Before Change in Accounting Principle.......................... 48,526 60,923 76,868 104,711 139,582 101,278 137,184 Change in Accounting Principle, Net of Tax(6).......................... -- 1,438 -- -- -- -- -- -------- -------- ---------- ---------- ---------- ---------- ---------- Net Income........................... $ 48,526 $ 59,485 $ 76,868 $ 104,711 $ 139,582 $ 101,278 $ 137,184 ======== ======== ========== ========== ========== ========== ========== Earnings per Share Before Change in Accounting Principle: Primary............................ $ .56 $ .64 $ .74 $ .90 $ 1.10 $ .81 $ .99 ======== ======== ========== ========== ========== ========== ========== Fully diluted...................... $ .53 $ .60 $ .67 $ .80 $ .97 $ .71 $ .89 ======== ======== ========== ========== ========== ========== ========== Earnings per Share: Primary............................ $ .56 $ .62 $ .74 $ .90 $ 1.10 $ .81 $ .99 ======== ======== ========== ========== ========== ========== ========== Fully diluted...................... $ .53 $ .59 $ .67 $ .80 $ .97 $ .71 $ .89 ======== ======== ========== ========== ========== ========== ========== Weighted Average Shares: Primary............................ 86,333 95,811 104,203 116,500 126,626 125,058 138,853 ======== ======== ========== ========== ========== ========== ========== Fully diluted...................... 99,551 111,818 130,618 151,229 159,246 159,057 175,660 ======== ======== ========== ========== ========== ========== ==========
8 15
FISCAL YEAR ENDED NINE MONTHS ENDED -------------------------------------------------------------- ----------------------- DEC. 28, JAN. 2, JAN. 1, DEC. 31, DEC. 30, SEPT. 30, SEPT. 28, 1991(1) 1993(2) 1994(3) 1994(4) 1995 1995 1996(5) ---------- ---------- ---------- ---------- ---------- ---------- ---------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) BALANCE SHEET DATA (AT END OF PERIOD): Working Capital...................... $ 468,399 $ 508,685 $ 833,839 $1,150,732 $1,317,146 $1,279,435 $2,012,247 Total Assets......................... 1,212,519 1,837,983 2,507,597 3,061,935 3,786,339 3,546,130 4,949,500 Long-term Obligations................ 255,093 494,152 647,592 1,049,850 1,118,077 1,080,152 1,408,386 Common Stock of Subsidiaries Subject to Redemption......................... 5,486 5,468 14,511 -- 17,513 17,435 73,533 Shareholders' Investment............. 489,538 563,826 873,720 1,007,486 1,309,729 1,226,934 1,697,480 - --------------- (1) Reflects the issuance of $164.0 million principal amount of convertible debentures. (2) Reflects the August 1992 acquisition of Nicolet Instrument Corporation and the issuance of $260.0 million principal amount of convertible debentures. (3) Reflects the 1993 public offering of common stock for net proceeds of $246.0 million. (4) Reflects the issuance of $345.0 million principal amount of convertible debentures. (5) Reflects the issuance of $585.0 million principal amount of convertible debentures. (6) Reflects the adoption in fiscal 1992 of Statement of Financial Accounting Standards No. 106, "Accounting for Post-retirement Benefits Other Than Pensions."
9 16 RISK FACTORS The following risk factors, in addition to the other information contained or incorporated by reference in this Offer to Exchange, including the important risk factors identified under the caption "Forward looking Statements" incorporated by reference into the Company's Annual Report on Form 10-K, as amended, for the fiscal year ended September 28, 1996 and the important factors identified under the caption "Other Information" in Thermo Electron's Quarterly Report on Form 10-Q for the quarter ended September 28, 1996, should be considered by holders of Common Stock in evaluating the Offer. RISK OF UNCERTAIN TAX TREATMENT. Due to the unique characteristics of the Offer and the Units, the tax treatment of the exchange and the ownership and disposition of the Units is uncertain. The Internal Revenue Service might challenge all or part of the Company's treatment of the exchange as a reorganization under Section 368(a)(1)(E) of the Code. If the Internal Revenue Service were to successfully challenge the Company's treatment of the exchange, shareholders who make a Share Only Exchange could be required to recognize income up to the fair market value of the Redemption Right (including the Guarantee). Shareholders who make a Share and Cash Exchange could be treated as having exchanged a portion of their Common Stock surrendered in the exchange for a proportionate part of the Guarantee in a taxable transaction. In addition, the Internal Revenue Service might conclude that a Unit is indebtedness, rather than equity, for federal income tax purposes, in which case (i) the exchange would be a taxable exchange of the holder's Common Stock surrendered, which could result in the recognition of gain to a shareholder (whether the shareholder made a Share Only Exchange or a Share and Cash Exchange), and (ii) distributions of property by the Company with respect to a Unit would be treated as interest, and not dividends. Shareholders are urged to consult their own tax advisors with regard to the tax consequences of the exchange and the ownership or disposition of the Units. See "The Offer to Exchange -- Certain Federal Income Tax Consequences." NO ASSURANCE AS TO LIQUIDITY OR TRADING MARKET. The Units are a new issue of securities with no established trading market. Although the Company has applied for the listing of the Units on AMEX, and it is a condition to the Offer that the Units be approved for listing on AMEX, subject to official notice of issuance, there can be no assurance that an active trading market for the Units will develop or be sustained in the future. Even if the Units are initially listed, there can be no assurance that the Units will meet the requirements for continued listing on AMEX. Thus, no assurance can be given as to the liquidity of, or trading market, if any, for the Units. POTENTIAL TERMINATION OF REDEMPTION RIGHTS. The Redemption Rights will expire and become worthless if, following the Expiration Date, the closing price of the Common Stock is at least $26.00 for 20 of any 30 consecutive trading days. In the event of the expiration of the Redemption Rights, each Unit will automatically become, and trade as, one share of Common Stock. Accordingly, shareholders receiving Units in the exchange will need to monitor the price of the Common Stock (which may be different than the price of the Units) to be aware of the status of the Redemption Rights and the value of the Units. ABILITY OF SIGNIFICANT SHAREHOLDER TO CONTROL CORPORATE ACTIONS. The Company's shareholders do not have the right to cumulate votes for the election of directors. ThermoTrex, which at December 28, 1996, beneficially owned 64% of the voting stock of the Company and which may own a greater percentage upon the closing of the exchange (if Shares are tendered in satisfaction of the Additional Payment), has the power to elect the entire Board of Directors of the Company and to approve or disapprove any corporate actions submitted to a vote of the Company's shareholders. 10 17 THE OFFER TO EXCHANGE TERMS OF THE OFFER TO EXCHANGE ThermoLase hereby offers, upon the terms of and subject to the conditions set forth in this Offer to Exchange and in the accompanying Letter of Transmittal, to exchange one unit (each, a "Unit") consisting of one share of common stock, $.01 par value per share, of the Company (the "Common Stock"), plus one redemption right (each, a "Redemption Right") for each share of Common Stock (each, a "Share") plus an additional payment of $3.00 (the "Additional Payment"), validly tendered and accepted for exchange in the Offer. The Additional Payment may be made either (i) in the form of cash (such cash payment being hereinafter referred to as the "Additional Cash Payment," and an exchange in which an Additional Cash Payment is made being hereinafter referred to as a "Share and Cash Exchange"), or (ii) by delivery to the Company of additional Shares having a value equal to the aggregate required Additional Payment (the Shares being tendered in satisfaction of the Additional Payment being hereinafter referred to as the "Additional Share Payment", and an exchange in which an Additional Share Payment is made being hereinafter referred to as a "Share Only Exchange"). Shares tendered in satisfaction of the Additional Share Payment will be valued at $20.25 per share; accordingly, for each Share tendered in a Share Only Exchange, the tendering shareholder will receive .871 Units. No fractional Units will be issued, and the number of Units will be rounded down to the nearest whole number. Shareholders may make either a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof. No more than 2,000,000 Units will be issued. If the number of Shares and, if applicable, Additional Cash Payments validly tendered pursuant to the Offer and not withdrawn prior to the Expiration Date would result in the issuance of more than 2,000,000 Units, acceptances will be cut back pro rata (with adjustments to avoid issuance of fractional Units) based on the total number of Units that would have been issued to such tendering shareholders if no such cutback had been made. See "-- Acceptance of Tendered Shares and Additional Cash Payments; Proration; Delivery of Units." Each Redemption Right will entitle the holder thereof to sell the related share of Common Stock to the Company for $20.25 during the first 20 business days after the fourth anniversary of the Expiration Date. The Redemption Right will not detach or trade separately from the related share of Common Stock (but instead will trade together with the related share of Common Stock as a Unit) and will expire and become worthless if, following the Expiration Date, the closing price of the Common Stock is at least $26.00 for 20 of any 30 consecutive trading days. In the event of the expiration of the Redemption Right, each Unit will automatically become, and will trade as, one share of Common Stock. The Company's obligations under the Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron, the Company's ultimate parent corporation. The Offer commences on the date hereof and expires at 12:00 midnight, New York City time, on , 1997, unless extended, upon the terms and subject to the conditions set forth herein (as so extended, the "Expiration Date"). See "-- Expiration Date; Extensions; Termination." The Company's obligation to consummate the Offer is subject to certain conditions, including there being validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares and, if applicable, the Additional Cash Payments, as would result in the issuance of at least 500,000 Units (the "Minimum Condition"), and the listing of the Units on AMEX, subject to official notice of issuance. See "-- Conditions to the Consummation of the Offer." Shares tendered pursuant to the Offer which are accepted for exchange will be reclassified as treasury stock. AN EXCHANGING SHAREHOLDER WHO MAKES A SHARE AND CASH EXCHANGE WILL, IF SUCH TENDER IS ACCEPTED, RECEIVE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT FOR EVERY SHARE AND ADDITIONAL CASH PAYMENT TENDERED. AN EXCHANGING SHAREHOLDER WHO MAKES A SHARE ONLY EXCHANGE WILL, IF SUCH TENDER IS ACCEPTED, RECEIVE .871 UNITS FOR EVERY SHARE TENDERED (ROUNDED DOWN TO THE NEAREST WHOLE NUMBER 11 18 OF UNITS). THE REDEMPTION RIGHT WILL NOT DETACH OR TRADE SEPARATELY FROM THE COMMON STOCK RECEIVED IN THE EXCHANGE, BUT INSTEAD WILL TRADE TOGETHER WITH THE RELATED SHARE OF COMMON STOCK AS A UNIT. PURPOSE OF THE OFFER The Company does not believe that the market price of the Common Stock accurately reflects its intrinsic value. The purpose of the Offer is to give shareholders who are considering selling their shares the opportunity to reduce the risk associated with the continued ownership of the Common Stock. EXPIRATION DATE; EXTENSION; TERMINATION The Offer will expire at 12:00 midnight, New York City time, on the Expiration Date. Any extension of the Offer will be followed as soon as practicable by public announcement thereof, but in no event later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date, and any amendment of the Offer will be followed as soon as practicable by public announcement thereof. Without limiting the manner by which the Company may choose to make such public announcement, the Company shall not, unless otherwise required by law, have any obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. Subject to the applicable rules and regulations of the Commission, the Company reserves the right, in its sole discretion, to waive, modify or amend the Offer at any time and from time to time. If the Company decides to waive, modify or amend a material provision of the Offer, it may do so at any time, provided that it gives notice thereof in the manner specified in the preceding paragraph and extends the Offer to the extent required by the Exchange Act. With respect to an increase or decrease in the percentage of the class of securities being solicited for exchange or a change in the consideration offered, Rule 13e-4(f)(1) under the Exchange Act generally requires that a tender offer remain open for at least ten business days from the date the notice of such change is first published, sent or given to securityholders. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a Federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The minimum period during which the Offer must remain open following other material changes in the terms of the Offer will depend on the facts and circumstances, including the relative materiality of the change in the terms of information concerning the Offer. Any amendment to the Offer will apply to all Shares and Additional Cash Payments tendered pursuant thereto, regardless of when or in what order such Shares and Additional Cash Payments are tendered. PROCEDURE FOR TENDERING SHARES To be tendered properly, (i) certificates representing the tendered Shares; (ii) a certified or official bank check made payable to the Exchange Agent or wire transfer in the amount of the Additional Cash Payment, if applicable; and (iii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by the Letter of Transmittal, must be received by the Exchange Agent at the address set forth on the back cover page of this Offer to Exchange prior to 12:00 midnight, New York City time, on the Expiration Date. In lieu of the delivery of certificates for Shares, a holder may tender Shares pursuant to the procedure for book-entry tender set forth below (and a confirmation of such book-entry tender must be received by the Exchange Agent on or before the Expiration Date). The beneficial holders of Shares that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian are urged to contact such entity promptly if they wish to accept the Offer. LETTERS OF TRANSMITTAL, TENDERED SHARES AND ADDITIONAL CASH PAYMENTS, IF APPLICABLE, MUST BE DELIVERED AS DESCRIBED ABOVE AND SHOULD NOT BE SENT TO THE COMPANY. If a holder desires to accept the Offer and time will not permit the required deliveries to be made to the Exchange Agent prior to the Expiration Date, or the procedure for a book-entry transfer cannot be completed on a timely basis, a tender may be effected in accordance with the guaranteed delivery procedures, See "-- Guaranteed Delivery Procedure." 12 19 THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL, CERTIFICATES REPRESENTING TENDERED SHARES, ADDITIONAL CASH PAYMENTS, IF APPLICABLE, AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF EACH TENDERING SHAREHOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT SHAREHOLDERS USE PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE. Within two business days after the date hereof, the Exchange Agent will establish accounts with respect to the Common Stock at each of The Depository Trust Company and the Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer Facilities") for purposes of the Offer. Any financial institution that is a participant in a Book-Entry Transfer Facility's system may make book-entry delivery of Shares tendered pursuant to the terms of the Offer by causing such Book-Entry Transfer Facility to transfer the same into the Exchange Agent's account at such Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedure for such transfer and to confirm such transfer to the Exchange Agent in writing. Although delivery of Shares may be effected though book-entry transfer, either (i) a properly completed Letter of Transmittal (or facsimile thereof) executed by the holder of record, together with the proper signature guarantees, and a certified or official bank check made payable to the Exchange Agent or wire transfer in the amount of the Additional Cash Payment, if applicable, together with all other documents required, or (ii) a Notice of Guaranteed Delivery, must be transmitted to and received by the Exchange Agent at its address set forth on the back cover page of this Offer to Exchange on or before the Expiration Date. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURE DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. Except as otherwise provided below, each signature on the Letter of Transmittal, certificates representing Shares or instruments of transfer must be guaranteed by a firm or other entity that is an "Eligible Institution." An Eligible Institution means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act, including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings institution that is a participant in a Securities Transfer Association recognized program. A verification by a notary public alone is not acceptable. Signatures on a Letter of Transmittal need not be guaranteed (i) if the Letter of Transmittal is signed by the registered holder of the Shares being tendered and the holder has not completed the box titled "Special Exchange Instructions" or "Special Delivery Instructions" on the Letter of Transmittal; or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If any of the certificates for Shares being tendered are registered in the name of a person other than the signer of the Letter of Transmittal, or if Units are to be issued to a person other than the registered owner of the Shares being tendered, or if the Letter of Transmittal specifies that Shares that are not accepted for exchange pursuant to the Offer are to be returned to a person other than the registered owner, then the certificates for such Shares must be endorsed or accompanied by an appropriate instrument of transfer, signed exactly as the name(s) of the registered owner(s) appears on the certificate(s), with the signature(s) on the certificate(s) or instrument(s) of transfer guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If less than the full number of Shares evidenced by a submitted certificate are to be tendered, the tendering shareholder should indicate on the Letter of Transmittal the number of Shares being tendered. If no indication is given, all Shares represented by such certificate will be deemed to have been tendered. In the event that a shareholder desires to make a Share and Cash Exchange but such shareholder's Additional Cash Payment, as designated in the Letter of Transmittal, is insufficient with respect to the number of Shares 13 20 designated in the Letter of Transmittal or would result in the tendering of a fractional share, the number of Shares deemed tendered shall be the maximum number which may be tendered based on the Additional Cash Payment actually received. Any Shares tendered in a Share and Cash Exchange for which no Additional Cash Payment is made will be returned to such tendering shareholder. All questions as to the validity, form, eligibility (including the time of receipt) and acceptance of tendered Shares and Additional Cash Payments, if applicable, pursuant to any of the foregoing procedures will be determined by the Company, in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any or all tenders of any particular Shares and Additional Cash Payments determined by it not to be in appropriate form or the acceptance of or exchange for which may, in the opinion of the Company, be unlawful. The Company also reserves the absolute right to waive any irregularities or defects in the tender as to any particular Shares or Additional Cash Payments, whether or not similar irregularities or defects are waived in the case of any other Shares or Additional Cash Payments. The Company's interpretation of the terms and conditions of this Offer (including the Letter of Transmittal and Instructions thereto) shall be final and binding. Any irregularities or defects in connection with any tender, unless waived, must be cured within such time as the Company shall determine, which time may be extended beyond the Expiration Date. Neither the Company, the Exchange Agent, the Information Agent nor any of their respective affiliates shall be under any duty to give notification of any irregularities or defects in such tenders or incur any liability for failure to give such notification. Tendered Shares and Additional Cash Payments received by the Exchange Agent that are not properly tendered and as to which the irregularities or defects have not been cured or waived will be returned (without interest thereon or deduction therefrom) by the Exchange Agent to the tendering shareholder as soon as practicable following the Expiration Date, unless otherwise provided in the Letter of Transmittal. GUARANTEED DELIVERY PROCEDURE If a shareholder desires to tender his Shares and Additional Cash Payments, if applicable, pursuant to the Offer but is unable to deliver (i) all necessary stock certificates, or to comply with the procedures for book-entry tender of such Shares, (ii) the Additional Cash Payment, if applicable, and (iii) the Letter of Transmittal and all other required documents, to the Exchange Agent on or before the Expiration Date, such tender may nevertheless be effected, provided that all of the following conditions are satisfied: (i) such tender is made by or through a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or by or through a commercial bank or trust company having an office or correspondent in the United States. (ii) prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery, including a guarantee by a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company having an office or correspondent in the United States (by telegram, telex, facsimile transmission, mail or hand delivery) setting forth the name and address of the shareholder and the number of Shares and Additional Cash Payment, if applicable, being tendered, stating that the tender is being made thereby and guaranteeing that within three trading days after the date of the Notice of Guaranteed Delivery, the Shares, the Additional Cash Payment, if applicable, and the Letter of Transmittal (or facsimile thereof), together with all other required documents, will be deposited by the Eligible Institution with the Exchange Agent; and (iii) the certificates for all Shares being tendered in proper form for transfer (or a written confirmation of book-entry transfer into the Exchange Agent's account at a Book-Entry Transfer Facility as described above), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and a certified or official bank check made payable to the Exchange Agent or wire transfer in the amount of the Additional Cash Payment, if applicable, together with all other required documents, are received by the Exchange Agent within three American Stock Exchange trading days after the date of the Notice of Guaranteed Delivery. 14 21 WITHDRAWAL RIGHTS Any Shares and, if applicable, Additional Cash Payments tendered pursuant to the Offer may be withdrawn by the tendering shareholder subject to the procedures described below, at any time prior to the Expiration Date. Thereafter, any such tenders are irrevocable, except that they may be withdrawn after , 1997, unless theretofore accepted for exchange as provided in this Offer to Exchange. If the Company extends the period of time during which the Offer is open, is delayed in its acceptance of the Shares and, if applicable, Additional Cash Payments or is unable to accept the Shares and, if applicable, Additional Cash Payments for any reason, then, without prejudice to the Company's rights under the Offer, the Exchange Agent may, on behalf of the Company, retain all Shares and Additional Cash Payments and such Shares and Additional Cash Payments may not be withdrawn, except to the extent tendering shareholders are entitled to and duly exercise withdrawal rights as provided herein. Any such delay will be accompanied by an extension of the Offer to the extent required by law. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must (i) be timely received by the Exchange Agent at its address on the back cover of this Offer to Exchange before the Exchange Agent receives notice of acceptance for exchange by the Company of the Shares and, if applicable, the Additional Cash Payments, (ii) set forth the name of the tendering shareholder, (iii) if the certificates for the Shares have been deposited with or otherwise identified to the Exchange Agent, contain the description of the Shares to be withdrawn and indicate the certificate numbers shown on the certificates evidencing such Shares (except in the case of book-entry transfers), (iv) identify the aggregate amount of any Additional Cash Payment deposited with the Exchange Agent and identify the check or wire transfer number thereof, and (v) be executed by the shareholder in the same manner as the original Common Stock certificate(s) for tendered shares or be accompanied by evidence satisfactory to the Company that the person withdrawing the tender has succeeded to the beneficial ownership of such tendered Shares. In the case of Shares tendered by book-entry transfer, a notice of withdrawal must specify, in lieu of certificate numbers, the name and number of the account at one of the Book-Entry Transfer Facilities to be credited with the withdrawn Shares. The notice of withdrawal must be guaranteed by an Eligible Institution, unless the Shares subject to the withdrawal have been tendered (i) by a registered holder who has not completed the box entitled "Special Exchange Instructions" or "Special Delivery Instructions" on the Letter of Transmittal; or (ii) for the account of an Eligible Institution. All questions as to the form and validity (including the time of receipt) of notices of withdrawal will be determined by the Company, in its sole discretion, whose determination shall be final and binding. Neither the Company, the Exchange Agent, the Information Agent nor any of their respective affiliates shall be under any duty to give any notification of any irregularities or defects in any notice of withdrawal or incur any liability for failure to give any such notification. Shares and, if applicable, Additional Cash Payments withdrawn in the manner specified above will not be considered to have been duly tendered, and any such Shares and Additional Cash Payments will be returned by the Exchange Agent as soon as practicable after such withdrawal. However, withdrawn Shares and Additional Cash Payments may be re-tendered at any time prior to the Expiration Date, upon the terms and subject to the conditions of the Offer. No interest shall be paid on any amount returned to a shareholder whether on account of the extension or termination of the Offer, the withdrawal of Shares and Additional Cash Payments by the tendering shareholder, or otherwise. ACCEPTANCE OF SHARES AND ADDITIONAL CASH PAYMENTS; PRORATION; DELIVERY OF UNITS Upon the terms and subject to the conditions of this Offer, no more than 2,000,000 Units will be issued. For purposes of this Offer, the Company will be deemed to have accepted for exchange properly tendered Shares and the related Additional Cash Payments, if applicable, when, as and if the Company has given oral or written notice thereof to the Exchange Agent. If the number of Shares, and, if applicable, Additional Cash Payments validly tendered and not withdrawn prior to the Expiration Date would result in the issuance of more than 2,000,000 Units, acceptances will be cut back pro rata (with adjustments to avoid issuance of fractional Units) based on the total number of Units that would have been issued to such tendering 15 22 shareholders had no such cutback been made. All tendering shareholders will be deemed to have waived any right to receive notice of the acceptance of their Shares and, if applicable, the related Additional Cash Payments. The Exchange Agent will act as agent for the tendering shareholders for the purposes of receiving from the Company the Units and transmitting the Units to tendering shareholders. Tendered Shares not accepted for exchange by the Company, if any, together with any Additional Cash Payments related thereto, will be returned to the tendering shareholders (or, in the case of Shares tendered by a Book-Entry Transfer Facility, will be credited to an account maintained with such Book-Entry Transfer Facility) without expense as promptly as practicable following the Expiration Date. Delivery of the Units in exchange for Shares and Additional Cash Payments, if applicable, that have been properly tendered and not withdrawn on or prior to the Expiration Date and that have been accepted for exchange by the Company will be made as promptly as practicable after the Expiration Date. All deliveries will be made through the Exchange Agent. Upon the deposit of the Units by the Company with the Exchange Agent for the purpose of making the exchange to validly tendering shareholders, the Company's obligation to make such exchange shall be satisfied, and such tendering shareholders must thereafter look solely to the Exchange Agent for delivery of the Units. If proration of tendered Shares is required, the Company does not expect to be able to announce the final proration factor or to commence the exchange for any Shares and Additional Cash Payments, if applicable, pursuant to the Offer until approximately five business days after the Expiration Date, due to the difficulty in determining the number of Shares validly tendered (including shares tendered by the guaranteed delivery procedures described above). Preliminary results of the proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Common Stock may obtain such preliminary information from the Information Agent and may also be able to obtain such information from their brokers. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following addresses the material federal income tax consequences of the Exchange (as defined below) and the ownership and disposition of Units. The discussion reflects the opinion of Hale and Dorr LLP counsel to the Company, attached as Exhibit 8.1 to the Registration Statement of which this Offer to Exchange is a part. Because of the unique features of the Offer to Exchange and the Units, it is not possible to provide a definitive discussion of the federal income tax consequences of a Share and Cash Exchange or a Share Only Exchange (each sometimes referred to as the "Exchange"), or of the ownership and disposition of Units. The following discussion is based upon the interpretation by Hale and Dorr LLP, the Company's counsel, of the Code, applicable Treasury Regulations, judicial authority and administrative rulings and practice, all as of the date hereof. The Internal Revenue Service (the "IRS") is not bound by such discussion and is not precluded from adopting a contrary position. In addition, there can be no assurance that future legislative, judicial or administrative changes or interpretations will not adversely affect the accuracy of the statements and conclusions set forth herein. Any such changes or interpretations could be applied retroactively and could affect the tax consequences of the Exchange or of the ownership or disposition of Units. In addition, the Company has not sought a ruling from the IRS with respect to these matters. Shareholders should be aware that this section does not deal with all federal income tax considerations that may be relevant to a particular shareholder in light of their particular circumstances, such as shareholders who are dealers in securities, who are foreign persons or who acquired their Shares through stock option or stock purchase programs or in other compensatory transactions. Moreover, no foreign, state or local tax consequences are addressed herein. ACCORDINGLY, SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXCHANGE, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM. 16 23 The discussion below assumes that the Units will be treated as equity rather than as debt for federal income tax purposes. See "Treatment of Units as Equity," below. Treatment of The Exchange The federal tax treatment of the Exchange will depend in significant part upon whether a Redemption Right is treated as one of the attributes of a Unit (and thus as an integral part of a Unit) or whether it will be treated as a separate property right. Although there is a limited amount of analogous legal authority, there is no authority addressing the issue on facts substantially similar to those presented by the Units. Accordingly, Hale and Dorr LLP is unable to render an opinion as to the more likely treatment of the Exchange for federal income tax purposes. Nevertheless, based on the analogous authority, Hale and Dorr LLP believes that a shareholder who reports the tax consequences of the Exchange on the assumption that the Redemption Right is an integral part of a Unit would have a realistic possibility of having such position upheld if challenged by the IRS. If the Redemption Right is treated as an integral part of the Unit, the Exchange would be treated as a reorganization under Section 368(a)(1)(E) of the Code (a "Reorganization") and: (a) No gain or loss should be recognized by holders of Common Stock upon the receipt of a Unit in exchange for a Share and the Additional Payment in the Exchange, except that a holder will recognize income to the extent of the excess, if any, of the fair market value of the Guarantee over any portion of any Additional Cash Payment. The IRS, however, could assert that a shareholder who made an Additional Cash Payment should not be allowed to treat the Guarantee as having been purchased entirely with the Additional Cash Payment but should be treated as having exchanged a portion of the Common Stock surrendered in the Exchange for a proportionate part of the Guarantee in a taxable transaction. Because of the lack of authority addressing this issue, Hale and Dorr LLP is unable to render an opinion as to the more likely outcome if raised by the IRS. Nevertheless, Hale and Dorr LLP believes that a shareholder who takes the position that the Guarantee was purchased entirely with the Additional Cash Payment would have a realistic possibility of having such position upheld if challenged by the IRS. (b) The tax basis of the Unit received by a shareholder in the Exchange will be the same as the tax basis of the Common Stock surrendered in exchange for the Unit, plus any Additional Cash Payment and the amount of gain recognized, if any, by such shareholder, less the fair market value of the Guarantee. (c) The holding period of the Unit received by each shareholder in the Exchange will include the period for which the Common Stock surrendered in the Exchange was considered to be held, provided that the Common Stock so surrendered was held as a capital asset at the time of the Exchange. The Company estimates that the Guarantee has a fair market value of $1.00 per Unit; however, the Company's estimate is not binding on the IRS. If the IRS were to successfully challenge the above-described treatment of the Exchange on the grounds that a Redemption Right should be treated as a property right that is separate from a Unit, shareholders who participate in the Exchange and make the Additional Payment with Shares may be required to recognize income up to the fair market value of the Redemption Rights (including the related Guarantee) received by that shareholder. Such income would be a capital gain if the provisions of Section 302 of the Code applied to the exchange by such shareholder of Common Stock, and otherwise it will be treated as a distribution of property to which Section 301 of the Code applies. See "Consequences of the Redemption of a Unit" below. Except as noted in paragraph (a) above, shareholders who make an Additional Cash Payment should not recognize income, even if the IRS were to successfully challenge the Company's treatment of the Exchange as a Reorganization. Treatment of Units as Equity Hale and Dorr LLP believes that it is more likely than not that the Units will be treated as equity for federal income tax purposes, and the Company will so treat the Units. The determination of whether the Units will be treated as equity for federal income tax purposes is a question of fact, and no one factor is conclusive. Although no definitive set of relevant factors exists, 17 24 Section 385 of the Code lists five factors that "may" be taken into account in regulations, yet to be issued, that are to set forth the rules for determining whether an interest in a corporation is to be treated as equity or debt for federal income tax purposes. These factors are (1) whether there is a written unconditional promise to pay on demand or on a specified date a sum certain in money in return for an adequate consideration in money or money's worth, and to pay a fixed rate of interest, (2) whether there is a subordination to or preference over any indebtedness of the corporation, (3) the ratio of debt to equity of the corporation, (4) whether there is convertibility into the stock of the corporation, and (5) the relationship between holdings of stock in the corporation and the holdings of the interest in question. The IRS has indicated that the intent of the parties in creating the instrument is a factor that may be taken into account as well. Hale and Dorr LLP believes that an analysis of the foregoing factors indicates that it is likely, although not certain, that a Unit will be treated as equity for federal income tax purposes. The Company is obliged to redeem a Unit for a fixed amount of money upon exercise of the Redemption Right at essentially a predetermined date, raising the possibility that a Unit could be treated as convertible debt. However, no provisions for interest payments or guaranteed dividends of any sort are made. In addition, the Redemption Right will expire if the closing price of the Common Stock is at least $26.00 for 20 of any 30 consecutive trading days. The Company is also prohibited from redeeming a Unit to the extent that such redemption is made at a time when the Company's capital is impaired or when such redemption would cause any impairment of the Company's capital or if such redemption is otherwise prohibited by law. Furthermore, a Unit will be subordinated to all indebtedness of the Company; the stock portion of the Unit is voting stock; there are no "conversion" rights other than a possible "deemed" conversion at the time of expiration of the Redemption Right; and, finally, the parties intend to create an equity interest notwithstanding the contrary treatment for financial accounting purposes. Section 385 of the Code provides that the issuer's characterization of an interest in a corporation as debt or equity will be binding on the issuer and all holders, but will not be binding on the IRS. Accordingly, because the Company intends to treat the Units as equity for federal income tax purposes, holders will not be able to treat the Units as debt for such purposes. If the Units were to be treated as debt by the IRS or a court, the federal income tax consequences would include: (i) the Exchange would be a taxable exchange of the holder's Common Stock surrendered, which could result in the recognition of gain to a shareholder and (ii) distributions of property by the Company with respect to a Unit would be treated as interest, and not dividends, and so would not be eligible for the dividends received deduction. Similarly, redemptions by the Company of the Common Stock would not be subject to the rules of Section 302 of the Code, as discussed below, but would instead be treated as payments of principal and interest. Sale of Units In general, gain or loss will be recognized upon a sale of a Unit or, in the event of the expiration of the Redemption Right, upon the sale of the remaining share of Common Stock. The amount of such gain or loss will be the difference between the amount received in exchange for the Unit or share of Common Stock and the holder's adjusted basis in the Unit or share of Common Stock. The holder's tax basis in a share of Common Stock after the associated Redemption Right has lapsed should equal the basis of the holder's Unit immediately before the lapse of the Redemption Right, assuming, as described above under "Treatment of the Exchange," that the Redemption Right is treated as an integral part of the Unit. Any gain or loss recognized upon the sale or exchange of a Unit or share of Common Stock will generally be treated as capital gain or loss if the Unit or Common Stock sold was held as a capital asset. Such gain or loss will be long term capital gain or loss if the Unit or Common Stock was held for more than one year, and will be short term capital gain or loss if it has been held for one year or less. To the extent applicable, the straddle rules, summarized below, will likely suspend the running of the holder's holding period for this purpose until the expiration of the Redemption Right. 18 25 Short Sale and Straddle Rules Under certain circumstances the holding period of a share of Common Stock may be suspended. It is possible that the Redemption Right will be characterized for federal income tax purposes as an option to sell Common Stock. In that case, it is possible that the short sale rules of Section 1233 of the Code would apply, resulting in, among other possible results, suspension of the holding period of a number of other shares of Common Stock equal to the number subject to the Redemption Right until the expiration of the Redemption Right. However, Section 1233(c) of the Code and Treas. Reg. sec. 1.1233-1(c)(3) provide that, if the Common Stock is identified by appropriate entries in the holder's records within fifteen days after the date of its acquisition as subject to such option, the rules of Section 1233(b), including the holding period suspension rules, will not apply. If the Redemption Right is properly characterized as an option and a holder identifies that the Common Stock is subject to the Redemption Right in its records within 15 days of the Unit's acquisition, Section 1233(c) of the Code should apply. It is likely that the Unit will be considered to be a tax straddle subject to the rules of Section 1092 of the Code. The tax straddle rules apply only if both (a) the Common Stock is considered to be actively traded and (b) the Redemption Right is considered to be either (i) an "option" with respect to the Common Stock or substantially identical stock or securities or (ii) a position with respect to substantially similar or related property (other than stock). Assuming that a Unit is considered to be a tax straddle, Temporary Treasury Regulations provide that the holding period of a share of Common Stock that is part of that straddle generally will not begin earlier than the expiration of the Redemption Right with respect to that share, unless the holder has held the Common Stock exchanged for such Unit for more than one year prior to the acquisition of the Unit. In addition, under Section 263(g) of the Code, interest and carrying charges relating to a tax straddle are not deductible and must be capitalized and added to basis. Consequences of the Redemption of a Unit The amount of cash received by a holder of a Unit upon the redemption of the Unit by the Company upon exercise of the Redemption Right will be treated either (i) as a distribution by the Company in exchange for the Unit, in which case the holder will recognize gain or loss measured by the difference between the amount realized and the holder's tax basis for the Unit surrendered or (ii) as a distribution of property to which Section 301 of the Code applies (that is, as a dividend, to the extent of the Company's earnings and profits; see "Dividends; Dividends Received Deduction," below). For this purpose, the determination of whether the distribution will be treated as an exchange for stock or as a Code Section 301 distribution will be made in accordance with the provisions of Section 302 of the Code, as explained below. Under Section 302 of the Code, a holder will not be treated as having received a Code Section 301 distribution upon the redemption of a Unit upon exercise of the Redemption Right if (1) the redemption results in the complete termination of the holder's interest in the Company, (2) the holder's percentage ownership of the outstanding Common Stock of the Company (and voting stock if any voting stock other than Common Stock is outstanding) immediately after such redemption is less than 80% of such holder's percentage ownership of the total of such outstanding stock immediately before the redemption or (3) the distribution from the Company upon such redemption is not "essentially equivalent to a dividend" based on the individual holder's particular facts and circumstances. For purposes of making these determinations, the holder's percentage ownership will in general be calculated by taking into account all shares owned by him, including those deemed to be owned by him pursuant to Section 318 of the Code. Section 318 of the Code provides that in applying the above rules, a holder is considered to own shares directly or indirectly owned by certain members of his family or certain related entities and to own shares with respect to which he holds options. For a redemption to qualify as "not essentially equivalent to a dividend," it must result in a "meaningful reduction" in the holder's percentage interest in the Company. The IRS has indicated in published rulings that any reduction in the percentage interest of a small shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a "meaningful reduction," absent special circumstances. In applying these rules, other transactions that are part of an overall plan may be taken into account to determine 19 26 the decrease, if any, of a shareholder's percentage interest. In view of the terms of the Units it is likely that the exercise of the Redemption Right by other holders of Units will have to be taken into account in determining whether a particular holder's percentage interest is reduced. In a case in which a holder would have an increase in his percentage interest after the exercise of the Redemption Right (for example, if such holder redeemed a lesser percentage of his shares as compared to other shareholders), the holder could avoid dividend treatment by selling Units rather than redeeming them; however, there can be no assurance that there will be an active market for the Units or that if such a market exists the proceeds received will not be substantially less than those that would be received by redemption. In the event that, upon the tender of a Unit pursuant to the Redemption Right, Thermo Electron is required to acquire the associated Common Stock pursuant to the terms of the Guarantee, it is probable that the holder will be deemed to have disposed of the Unit or Common Stock through a sale or exchange, the consequences of which are discussed in "Sale of Units" above, rather than as a redemption by the Company (absent circumstances in which the selling holder is deemed to be in control of the Company and Thermo Electron). If a redemption is not treated as a Code Section 301 distribution, any gain or loss recognized will be capital gain or loss if the redeemed Unit is held as a capital asset. Such gain or loss will be long term or short term depending on the holding period of such Common Stock. See "Sale of Units" above. Dividends; Dividends Received Deduction The Company has never paid any cash dividends on its Common Stock and anticipates that no dividends will be paid on its Common Stock or the Units in the foreseeable future. A distribution of property by the Company to its shareholders will be treated as a dividend only to the extent of its accumulated earnings and profits or its earnings and profits in the taxable year in which such distributions occur. Any distribution of property by the Company that is not a dividend would be treated first as a return of basis to the shareholder and then as gain from the sale or exchange of property. To the extent that the Company does have earnings and profits and does make dividend distributions with respect to Units or shares of Common Stock, corporate holders would generally be eligible for the dividends received deduction. This deduction generally equals 70% of the amount received as dividends, although corporations owning 20% or more of the stock of the Company are eligible for an 80% deduction. Corporate holders would be eligible for the dividends received deduction only if, among other things, the Units or shares of Common Stock are held for more than 45 days. Under Section 246(c) of the Code, the holding period of stock will be suspended for any periods for which the holder has, among other things, (i) an option to sell such stock or (ii) a diminished risk of loss by holding one or more other positions with respect to substantially similar or related property. It is likely that the Redemption Right would be considered an option or other position triggering the suspension of the holding period under Section 246(c) of the Code. For corporate holders of Units or Common Stock, Section 246A of the Code reduces the dividends received deduction in the case of "debt-financed portfolio stock." Debt-financed portfolio stock is defined as portfolio stock, such as the Units or Common Stock, acquired or carried by the corporate holder with indebtedness that is "directly attributable" to the investment in such stock. The reduction is generally a fraction, the numerator of which is the amount of the holder's indebtedness attributable to such stock and the denominator of which is the holder's adjusted tax basis in the stock. In addition, any dividends received by corporate holders would be subject to the provisions of Section 1059 of the Code relating to "extraordinary dividends" if the Units or Common Stock with respect to which the dividend is paid has not been held for more than two years and the amount of the dividend is considered extraordinary. For this purpose, the holding period of the stock will be considered suspended under rules similar to those applicable to the determination of the availability of the dividends received deduction. In general, a dividend paid with respect to common stock is treated as an extraordinary dividend if it equals or exceeds ten percent of the shareholder's adjusted basis in the stock. Dividends that have ex-dividend dates within 85 consecutive days are aggregated for this purpose. An aggregation period of one year applies if the aggregated dividends exceed 20 percent of the shareholder's basis. In addition, any redemption of stock of a 20 27 corporation that is not pro rata as to all shareholders and which is treated as a dividend distribution under Section 301 of the Code will be treated as an extraordinary dividend subject to Section 1059 of the Code, without regard to the period of time the shareholder has held the stock, except as provided in regulations yet to be proposed or promulgated. If a dividend is subject to the rules of Section 1059, the tax basis of the holder's Units or Common Stock (or remaining Units or Common Stock in the case of a redemption) will be reduced by the amount of the dividend received deduction (the "non-taxed portion" of the dividend). If the non-taxed portion exceeds the holder's tax basis in such Units or Common Stock, such excess will be treated as gain from the sale of Units or Common Stock upon disposition of such Units or Common Stock. UNTENDERED SHARES Holders of Shares who do not tender their Shares in the Offer or whose Shares are not accepted for exchange will continue to hold such Shares, which are listed on AMEX, and will be entitled to all the rights, and will be subject to all of the limitations, applicable thereto. CONDITIONS TO THE CONSUMMATION OF THE OFFER The obligation of the Company to consummate the Offer will be subject to the satisfaction or waiver, at or prior to the acceptance of the tendered Shares and, if applicable, the Additional Cash Payments for exchange, of the following conditions: (i) There being validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares and the related Additional Cash Payments, if applicable, as would result in the issuance of at least 500,000 Units; and (ii) the listing of the Units on the American Stock Exchange, subject to official notice of issuance. In addition, notwithstanding any other provision of the Offer, the Company reserves the right to withdraw, terminate or amend the Offer before the acceptance of the tendered Shares and Additional Cash Payments for exchange if: (i) any legal action or proceeding is instituted or threatened to be instituted in any court or by or before any governmental agency (A) directly or indirectly with respect to the Offer, (B) which, in the sole judgment of the Company may materially adversely affect the business, operations or financial condition of the Company; (ii) there shall have occurred any material adverse development in any existing legal action or proceeding involving the Company; (iii) there shall have occurred (A) any general suspension of trading in, or limitation on prices for, securities on the New York Stock Exchange or AMEX, (B) a declaration of a banking moratorium by United States authorities or any governmental agency in the United States, (C) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States, or (D) a material adverse change in general economic, political or financial conditions, if the effect thereof on the financial markets of the United States shall be such that in the sole judgment of the Company it shall be impracticable to consummate the Offer; (iv) there shall have occurred any change, or development involving a prospective change, in or affecting the business or financial affairs of the Company which, in the sole judgment of the Company, would materially impair the contemplated benefits of the Offer to the Company or its shareholders; (v) any statute, rule or regulation shall have been proposed or enacted, or any action shall have been taken by any governmental authority, which, in the sole judgment of the Company, would or might prohibit, restrict or delay consummation of the Offer as presently proposed or materially impair the contemplated benefits of the Offer to the Company or its shareholders; or (vi) there exists, in the sole judgment of the Company, any other actual or threatened legal impediment to the acquisition of the Shares and Additional Cash Payments or the issuance of the Units 21 28 as presently proposed. In any such event, the Company shall not be obligated to accept Shares and Additional Cash Payments tendered pursuant to the Offer. If the Offer should be withdrawn pursuant to the foregoing, the Shares and Additional Cash Payments previously tendered will be returned without expense to the tendering shareholders as promptly as practicable. The foregoing conditions are for the sole benefit of the Company and may be waived by the Company in whole or in part. LISTING OF THE UNITS The Company has applied for listing of the Units on AMEX. In order to be listed, the Company must meet the AMEX Listing Requirements. Even if the Units are initially listed, there can be no assurance that the Units will meet the requirements for continued listing on AMEX. Failure to continue to be listed may adversely affect the market value and liquidity of the Units. See "Risk Factors -- No Assurance as to Liquidity or Trading Market". POSITION OF THE BOARD OF DIRECTORS The Board of Directors is not making any recommendations to its shareholders as to whether they should exchange or refrain from exchanging any or all of their Shares. Each shareholder must make his or her own decision as to whether to exchange any Shares. PAYMENT OF FEES AND EXPENSES; TRANSFER TAXES The Company will pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Offer to Exchange and related documents to the beneficial owners of the Common Stock, and in handling or forwarding tenders for their customers. However, the Company will not make any other payments to brokers, dealers or others soliciting tenders of Common Stock and Additional Cash Payments. The Company will pay all legal, accounting, printing, listing, filing and other similar fees and expenses in connection with the Offer. The Company will pay all transfer taxes, if any, applicable to the transfer and sale of Shares to it pursuant to the Offer. If, however, Units are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Shares tendered, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer and sale of Shares to the Company pursuant to the Offer, the amount of any such transfer tax (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES Any shareholder whose Common Stock certificates have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at its address set forth on the back cover page of this Offer to Exchange for further information. EXCHANGE AGENT; INFORMATION AGENT American Stock Transfer & Trust Company has been appointed as Exchange Agent for the Offer. American Stock Transfer & Trust Company is also the transfer agent for the Common Stock and the Units. National Westminster Bank Plc -- New York Branch has been appointed as Information Agent for the Offer. The Company will pay all fees and expenses of the Exchange Agent and the Information Agent incurred in connection with the Offer. 22 29 ACCOUNTING TREATMENT No gain or loss for accounting purposes will be recognized by the Company upon the consummation of the Offer. The Units will be treated for accounting purposes as Common Stock subject to redemption until the expiration of the Redemption Rights. INTERESTS OF CERTAIN PERSONS IN OFFER The Offer is open to the officers, directors and affiliates of the Company. As of December 28, 1996, the Company's officers and directors beneficially owned 2,795,315 shares of Common Stock, which represented approximately 6.9% of the outstanding shares. In addition, as of December 28, 1996, ThermoTrex beneficially owned 25,960,996 shares of Common Stock, which represented approximately 64% of the outstanding shares. ThermoTrex has advised the Company that it does not intend to tender any shares of Common Stock for exchange pursuant to the Offer. The Company has been advised that none of its officers or directors intend to tender shares of Common Stock for exchange pursuant to the Offer. 23 30 MARKET PRICE INFORMATION ThermoLase's Common Stock is listed on AMEX under the symbol "TLZ." Thermo Electron's Common Stock is listed on the New York Stock Exchange under the symbol "TMO." The table below sets forth, for the fiscal quarters indicated, the reported high and low sale prices of ThermoLase's Common Stock and Thermo Electron's Common Stock on AMEX and the New York Stock Exchange, respectively. The Thermo Electron Common Stock price information is presented for ThermoLase's fiscal period (fiscal year ending on the Saturday nearest September 30) rather than for Thermo Electron's fiscal period (fiscal year ending on the Saturday nearest December 31).(1)
THERMO THERMOLASE ELECTRON COMMON COMMON STOCK(2) STOCK(3) ------------ ------------ HIGH LOW HIGH LOW ---- --- ---- --- FISCAL 1995 - ------------ Quarter ended December 31, 1994................................ 5 3 9/16 215/18 18 1/9 Quarter ended April 1, 1995.................................... 615/16 3 5/8 225/6 19 1/2 Quarter ended July 1, 1995..................................... 223/8 5 15/16 271/3 21 7/9 Quarter ended September 30, 1995............................... 251/2 19 1/2 311/12 26 2/5 FISCAL 1996 - ------------ Quarter ended December 30, 1995................................ 275/8 17 1/4 342/3 28 1/4 Quarter ended March 30, 1996................................... 31 20 7/8 421/12 30 5/12 Quarter ended June 29, 1996.................................... 361/2 24 1/4 443/8 38 5/6 Quarter ended September 28, 1996............................... 303/4 19 7/8 417/8 31 3/4 FISCAL 1997 - ------------ Quarter ended December 28, 1996................................ 247/8 15 1/8 381/4 29 3/4 Quarter ending March 29, 1997 (through February 14, 1997)...... 175/8 12 3/8 411/4 33 3/8
- --------------- (1) In September 1995, the Company changed its fiscal year end from the Saturday nearest December 31 to the Saturday nearest September 30. All periods referenced in the above table assume that such new fiscal year end had been in effect for all periods presented. (2) Prices of the ThermoLase Common Stock have been restated to reflect a two-for-one stock split, effected in the form of a 100% stock dividend, which was distributed in June 1995. (3) Prices of the Thermo Electron Common Stock have been restated to reflect a three-for-two stock split, effected in the form of a 50% stock dividend, which was distributed in June 1996. On February 14, 1997, the most recent practicable date prior to the date of this Offer to Exchange, the last reported sale price of ThermoLase's Common Stock on AMEX was $13.75 per share and the last reported sale price of Thermo Electron's Common Stock on the New York Stock Exchange was $38.00 per share. 24 31 THERMOLASE CORPORATION PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED) The Company has offered to exchange one Unit, consisting of one share of Common Stock and one Redemption Right, for one Share plus an Additional Payment of $3.00. Tendering shareholders may elect to make a Share Only Exchange or a Share and Cash Exchange. Tendering shareholders selecting a Share Only Exchange will receive .871 Units for each Share tendered. Tendering shareholders selecting a Share and Cash Exchange will receive one Unit for each Share and $3.00 cash payment tendered. Each Redemption Right will entitle its holder to sell the related share of Common Stock to the Company for $20.25 during the first 20 business days after the fourth anniversary of the Expiration Date. No more than 2,000,000 Units will be issued. Pro forma information is not presented for Thermo Electron because this transaction is not material to Thermo Electron's financial position or results of operations. Pro forma balance sheets for the Company follow that assume: a) a Share Only Exchange; and b) a Share and Cash Exchange. Pro forma statement of operations information is not presented as a result of the immaterial effect the proposed transaction will have on the Company's results of operation. 25 32 THERMOLASE CORPORATION PRO FORMA CONDENSED BALANCE SHEET -- SHARE ONLY EXCHANGE DECEMBER 28, 1996 (UNAUDITED) The following unaudited pro forma condensed balance sheet sets forth the financial position of the Company as of December 28, 1996, to reflect the receipt by the Company of 2,296,212 Shares in a Share Only Exchange, resulting in the issuance of 2,000,000 Units, each consisting of one share of Common Stock and one Redemption Right (such Shares reflecting the ratio of .871 Units exchanged for every Share tendered). The exchange results in the reclassification of $40,500,000 from "Common stock" and "Capital in excess of par value" to "Common stock subject to redemption," based on the issuance of 2,000,000 Redemption Rights, each carrying a maximum liability to the Company of $20.25 per share. A Share Only Exchange also results in the reclassification of $4,073,000 from "Capital in excess of par value" to "Treasury Stock," based on the satisfaction of the $3.00 per share Additional Payment with 296,212 Shares each recorded at fair value on the date of the exchange, assumed for purposes of this calculation to be $13 3/4, the closing price of the Company's Common Stock on February 14, 1997.
HISTORICAL ADJUSTMENTS PRO FORMA ---------- ----------- --------- (IN THOUSANDS, EXCEPT SHARE AMOUNTS) ASSETS Current Assets: Cash and available-for-sale investments.................. $39,403 $ -- $39,403 Accounts receivable, net................................. 4,305 -- 4,305 Inventories.............................................. 4,486 -- 4,486 Other current assets..................................... 3,850 -- 3,850 ------- -------- ------- 52,044 -- 52,044 ------- -------- ------- Property and Equipment, at Cost, Net....................... 27,906 -- 27,906 ------- -------- ------- Other Assets............................................... 4,725 -- 4,725 ------- -------- ------- Cost in Excess of Net Assets of Acquired Company........... 8,273 -- 8,273 ------- -------- ------- $92,948 $ -- $92,948 ======= ======== ======= LIABILITIES AND SHAREHOLDERS' INVESTMENT CURRENT LIABILITIES: Accounts payable......................................... $ 3,201 $ -- $ 3,201 Accrued expenses......................................... 4,762 -- 4,762 Deferred revenue......................................... 1,776 -- 1,776 Due to parent company and affiliated companies........... 6,847 -- 6,847 ------- -------- ------- 16,586 -- 16,586 ------- -------- ------- Deferred Lease Liability................................... 764 -- 764 ------- -------- ------- Common Stock Subject to Redemption......................... 2,613 40,500 43,113 ------- -------- ------- Shareholders' Investment: Common stock, 40,807,932 shares issued, 38,807,932 shares, pro forma..................................... 408 (20) 388 Capital in excess of par value........................... 82,240 (36,407) 45,833 Accumulated deficit...................................... (4,905) -- (4,905) Treasury stock at cost, 224,058 shares, 520,270 shares, pro forma............................................. (4,736) (4,073) 8,809) Net unrealized loss on available-for-sale investments.... (22) -- (22) ------- -------- ------- 72,985 (40,500) 32,485 ------- -------- ------- $92,948 $ -- $92,948 ======= ======== ======= Book Value per Share....................................... $ 1.80 $ (.99) $ .81 ======= ======== =======
26 33 THERMOLASE CORPORATION PRO FORMA CONDENSED BALANCE SHEET -- SHARE AND CASH EXCHANGE DECEMBER 28, 1996 (UNAUDITED) The following unaudited pro forma condensed balance sheet sets forth the financial position of the Company as of December 28, 1996, to reflect the receipt by the Company of 2,000,000 Shares and $6,000,000 in cash in a Share and Cash Exchange, resulting in the issuance of 2,000,000 Units, each consisting of one share of Common Stock and one Redemption Right. The exchange results in the reclassification of $40,500,000 from "Common stock" and "Capital in excess of par value" to "Common stock subject to redemption," based on the issuance of 2,000,000 Redemption Rights, each carrying a maximum liability to the Company of $20.25 per share. Cash received in a Share and Cash Exchange is recorded as an increase to "Capital in excess of par value."
HISTORICAL ADJUSTMENTS PRO FORMA ---------- ----------- --------- (IN THOUSANDS, EXCEPT SHARE AMOUNTS) ASSETS Current Assets: Cash and available-for-sale investments.................. $39,403 $ 6,000 $45,403 Accounts receivable, net................................. 4,305 -- 4,305 Inventories.............................................. 4,486 -- 4,486 Other current assets..................................... 3,850 -- 3,850 ------- -------- ------- 52,044 6,000 58,044 ------- -------- ------- Property and Equipment, at Cost, Net....................... 27,906 -- 27,906 ------- -------- ------- Other Assets............................................... 4,725 -- 4,725 ------- -------- ------- Cost in Excess of Net Assets of Acquired Company........... 8,273 -- 8,273 ------- -------- ------- $92,948 $ 6,000 $98,948 ======= ======== ======= LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Accounts payable......................................... $ 3,201 $ -- $ 3,201 Accrued expenses......................................... 4,762 -- 4,762 Deferred revenue......................................... 1,776 -- 1,776 Due to parent company and affiliated companies........... 6,847 -- 6,847 ------- -------- ------- 16,586 -- 16,586 ------- -------- ------- Deferred Lease Liability................................... 764 -- 764 ------- -------- ------- Common Stock Subject to Redemption......................... 2,613 40,500 43,113 ------- -------- ------- Shareholders' Investment: Common stock, 40,807,932 shares issued, 38,807,932 shares, pro forma............................................. 408 (20) 388 Capital in excess of par value........................... 82,240 (34,480) 47,760 Accumulated deficit...................................... (4,905) -- (4,905) Treasury stock at cost, 224,058 shares................... (4,736) -- (4,736) Net unrealized loss on available-for-sale investments.... (22) -- (22) ------- -------- ------- 72,985 (34,500) 38,485 ------- -------- ------- $92,948 $ 6,000 $98,948 ======= ======== ======= Book Value per Share....................................... $ 1.80 $ (.85) $ .95 ======= ======== =======
27 34 DESCRIPTION OF SECURITIES The following is a summary description of the principal terms applicable to the Units, including the Redemption Rights and the Guarantees. UNITS Each Unit being offered by the Company consists of one share of Common Stock and one Redemption Right. The Redemption Rights will not detach or trade separately from the related shares of Common Stock (but instead will trade together with the related share of Common Stock as a Unit). The Company has applied for the listing of the Units on AMEX under the symbol "TLZ U." The holder of a Unit may require the Company to redeem the related share of Common Stock for $20.25 (the "Redemption Price") during the first 20 days after the fourth anniversary of the Expiration Date (the "Redemption Period"). Notice of commencement of the Redemption Period will be published in The Wall Street Journal and will be mailed to holders of record of the Units, not less than 30 nor more than 45 days prior to the commencement of the Redemption Period. To be redeemed, certificates for Units must be received at the office of the Company duly executed indicating the number of shares being tendered for redemption during the Redemption Period. After the end of the Redemption Period, the Company will mail to each shareholder a check in consideration for the shares that were redeemed. Shareholders who elect to redeem their shares will be entitled to revoke their election by delivering a written notice of such revocation to the Company prior to the end of the Redemption Period. The Company's obligation to make such redemptions would be deferred to the extent that such redemptions are made at a time when the Company's capital is impaired or when such redemptions would cause any impairment of the Company's capital or if such redemptions are otherwise prohibited by law. These provisions do not affect the guarantee by Thermo Electron of the Company's redemption obligations. Both the consideration payable by the Company upon redemption of the shares of Common Stock and the number of shares of Common Stock which are subject to redemption are subject to adjustment upon the occurrence of certain events, including (i) the issuance of Common Stock as a dividend or the distribution of a security or right convertible into or exchangeable for shares of Common Stock to all of the holders of Common Stock, (ii) a subdivision or combination of the Company's outstanding Common Stock and (iii) the issuance by reclassification or reorganization of the outstanding shares of Common Stock. The Redemption Rights will expire and become worthless in the event that the closing price of the Common Stock as reported on the principal trading market for the Common Stock is at least $26.00, as adjusted as provided above, for 20 of any 30 consecutive trading days after the Expiration Date. In the event of the expiration of the Redemption Rights, each Unit will automatically become, and will trade as, one share of Common Stock. In the event of the occurrence prior to the expiration of the Redemption Rights of a merger or consolidation of the Company with or into another entity (other than a merger in which the Company is the surviving entity) or the sale of all or substantially all of the assets of the Company, the holders of Units shall have the right either (i) to receive the consideration per share as is payable in such transaction to the holders of Common Stock on account of their ownership thereof; or (ii) to elect to receive the Redemption Price in cash at the end of the Redemption Period. Any shareholder electing the provisions of clause (ii) shall, from and after the date of the transaction to which such election relates, have the status of a creditor of the Company and all of such shareholder's rights shall cease with respect to the Units. If, through or as a result of any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, (i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Company, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, an appropriate and proportionate adjustment may be made in the Redemption 28 35 Rights to preserve as nearly as possible, as determined by the Company, the economic benefits of the Redemption Rights for the holders of Units. The Company reserves the right to amend the terms of the Redemption Rights. However, the Redemption Rights may not be amended in a way that will dilute or impair the Redemption Rights without the consent of the holders of a majority of the then outstanding Units other than Thermo Electron and its subsidiaries. THE GUARANTEES The Company and Thermo Electron have entered into a Guarantee Agreement, pursuant to which Thermo Electron has agreed to guarantee, on a subordinated basis, the due and punctual performance by the Company of its redemption obligations described above. Thermo Electron will be obligated to honor the Guarantees upon the failure of the Company to perform its redemption obligations, including any failure due to the impairment or potential impairment of the Company's capital. The Company and Thermo Electron reserve the right to amend the terms of the Guarantee Agreement. However, the Guarantee Agreement may not be amended in a way that will dilute or impair the Redemption Rights described above without the consent of the holders of majority of the then outstanding Units other than Thermo Electron and its subsidiaries. Subordination of Guarantees The obligations represented by the Guarantees will be subordinated in right of payment to the prior payment in full of all Senior Indebtedness of Thermo Electron, whether outstanding at the date of execution of the Guarantee Agreement or thereafter incurred or created. There are no limitations, in the Guarantee Agreement or otherwise, on Thermo Electron's ability to incur or create additional Senior Indebtedness in the future. Senior Indebtedness of Thermo Electron is defined for this purpose as the principal of, premium, if any, and interest and other amounts due on or with respect to the following, whether outstanding at the date of execution of the Guarantee Agreement or thereafter incurred or created: (a) indebtedness of Thermo Electron for money borrowed by Thermo Electron (including, without limitation, purchase money obligations), whether or not evidenced by debentures, bonds, notes or other corporate debt securities or similar instruments issued by Thermo Electron (including the principal of, premium, if any, and interest on Thermo Electron's 5% Senior Convertible Debentures due 2001); (b) obligations to reimburse any bank or other person in respect of amounts paid under letters of credit; (c) leases of real property, equipment or other assets, which leases are capitalized in Thermo Electron's financial statements in accordance with generally accepted accounting principles; (d) commitment, standby and other fees due and payable to financial institutions with respect to credit facilities available to Thermo Electron; (e) obligations of Thermo Electron under interest rate or currency swaps, floors, caps or other similar arrangements intended to hedge interest rates or currency exposure; (f) indebtedness secured by any mortgage, pledge, lien or other encumbrance on property which is owned or held by Thermo Electron subject to such mortgage, pledge, lien or encumbrance, whether or not the indebtedness secured thereby shall have been assumed by Thermo Electron; (g) obligations of Thermo Electron constituting guarantees of indebtedness of or joint obligations with another or others which would be included in the preceding clauses (a), (b), (c), (d), (e) or (f) (including Thermo Electron's guarantee of the principal of, premium, if any, and interest on the 3 3/4% Senior Convertible Debentures due 2000 of Thermo Instrument Systems Inc. and the 4 1/2% Senior Convertible Debentures due 2003 of Thermo Instrument Systems Inc.); and (h) modifications, renewals, extensions or refundings of any of the indebtedness, leases, fees or obligations referred to in the preceding clauses (a), (b), (c), (d), (e), (f) or (g) or debentures, notes or other evidences of indebtedness issued in exchange therefor, provided that Senior Indebtedness shall not include any particular indebtedness, lease, fee or obligation, modification, renewal, extension or refunding or exchanged securities if, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, such indebtedness, lease, fee or obligation or such modification, renewal, extension or refunding thereof or exchanged securities are stated to be not superior in right of payment to the Guarantees. Most of Thermo Electron's assets are owned by its subsidiaries. Thermo Electron's rights as a shareholder and the rights of its creditors, including holders of the Units, to participate in 29 36 the assets of any subsidiary upon the latter's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors. At September 28, 1996, the aggregate amount of Senior Indebtedness and indebtedness of subsidiaries not constituting Senior Indebtedness (but to which the Guarantees are effectively subordinated) was approximately $503,076,000. The obligations represented by the Guarantees will rank pari passu with Thermo Electron's obligations with respect to its outstanding 4 1/4% Convertible Subordinated Debentures due 2003. In addition, the obligations represented by the Guarantees will rank pari passu with Thermo Electron's subordinated guarantees of the principal, premium, if any, and interest on the Non-Interest Bearing Convertible Subordinated Debentures due 2003 issued by Thermedics Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 2001 issued by Thermo Ecotek Corporation, the 6 1/2% Convertible Subordinated Debentures due 1997 and the 4 5/8% Convertible Subordinated Debentures due 2003 issued by Thermo Terra Tech Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 1997 issued by Thermo Cardiosystems Inc., the 3 3/4% Convertible Subordinated Debentures due 2000 issued by Thermo Voltek Corp., the 4 7/8% Convertible Subordinated Debentures due 2000 issued by Thermo Remediation Inc., the 5% Convertible Subordinated Debentures due 2000 issued by ThermoQuest Corporation and the 5% Convertible Subordinated Debentures due 2000 issued by Thermo Optek Corporation. In addition, the obligations represented by the Guarantees will rank pari passu with Thermo Electron's subordinated guarantees of the obligations to redeem the common stock of ThermoLyte Corporation and Thermo Fibergen Inc. The obligation of ThermoLyte Corporation to redeem its common stock requires ThermoLyte Corporation at the option of the holders to redeem up to an aggregate of approximately 1,845,000 shares of its common stock for $10.00 per share at the end of 1998 and 1999. The obligation of Thermo Fibergen Inc. to redeem its common stock requires Thermo Fibergen at the option of the holders to redeem up to an aggregate of approximately 4,715,000 shares of its common stock for $12.75 per share during the months of September 2000 and September 2001. As of September 28, 1996, the aggregate outstanding principal amount of the above obligations was approximately $1,102,439,000. In the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings in connection herewith, relative to Thermo Electron or to its creditors as such, or to its property, or in the event of any proceedings for voluntary liquidation, dissolution or other winding up, of Thermo Electron, or in the event of any assignment for the benefit of creditors of Thermo Electron or any marshaling of assets of Thermo Electron, the holders of all Senior Indebtedness of Thermo Electron will be entitled to receive payment in full of the principal of and premium, if any, and interest, including interest accruing after the commencement of any such proceeding, on all Senior Indebtedness of Thermo Electron, before holders of the Units offered hereby will be entitled to receive any payment in respect of the Guarantees. Upon the maturity of any Senior Indebtedness of Thermo Electron by lapse of time, acceleration or otherwise, such Senior Indebtedness of Thermo Electron shall first be paid in full (to the same extent as provided in the preceding sentence) or provided for before any payment is made by Thermo Electron, directly or indirectly, with respect to the Redemption Rights. Upon the occurrence of any event of default with respect to any Senior Indebtedness of Thermo Electron, as defined therein or in the instrument under which it is outstanding, permitting the holders to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, no payment shall be made by Thermo Electron, directly or indirectly, with respect to the Redemption Rights. By reason of such subordination, in the event of insolvency, creditors of Thermo Electron that are not holders of Senior Indebtedness of Thermo Electron may recover less, ratably, than holders of Senior Indebtedness of Thermo Electron and may recover more, ratably, than the holders of the Guarantees. TRANSFER AGENT The transfer agent for the Common Stock and the Units is American Stock Transfer & Trust Company. 30 37 TRANSACTIONS IN SECURITIES During the 40 business days immediately preceding the date of this Offer to Exchange, no transactions in the Company's Common Stock were known by the Company to have been effected by any of the Company, any executive officer and director of the Company, Thermo Electron, ThermoTrex, any executive officer and director of Thermo Electron or ThermoTrex, or any associate or subsidiary of any such person, including any executive officer or director of any such subsidiary. LEGAL MATTERS The validity of the Units and the Guarantees to be issued in connection with the Offer will be passed upon for ThermoLase and Thermo Electron, respectively, by Seth H. Hoogasian, Esq., General Counsel of the Company, ThermoTrex and Thermo Electron. Mr. Hoogasian is a full time employee of Thermo Electron and owns or has the right to acquire 12,800 shares of Common Stock, 7,800 shares of common stock of ThermoTrex and 115,927 shares of common stock of Thermo Electron. EXPERTS The financial statements of the Company and Thermo Electron included or incorporated by reference in this Offer to Exchange have been audited by Arthur Andersen LLP, independent public accountants, to the extent and for the periods as indicated in their reports with respect thereto, and are included or incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. Reference is made to said report with respect to Thermo Electron's financial statements which includes an explanatory fourth paragraph with respect to the change in method of accounting for investments in debt and marketable equity securities in 1994 as discussed in Note 2 to the financial statements. Facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal, certificates for Shares, certified or official bank checks for Additional Cash Payments, if applicable, and any other required documents should be sent to the Exchange Agent as set forth below. Wire transfers constituting Additional Cash Payments should be sent pursuant to the instructions in the Letter of Transmittal. 31 38 The Exchange Agent: AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail: By Facsimile: By Hand: - ------------------------------ ------------------------------ ------------------------------ American Stock Transfer & (718) 234-5001 American Stock Transfer & Trust Company Trust Company 40 Wall Street Telephone (confirmation 40 Wall Street New York, New York 10005 only): New York, New York 10005 (212) 936-5100
If you have any additional questions, or need additional copies of this Offer to Exchange, the Letter of Transmittal or any other Offer materials, please contact the Information Agent at its telephone number and address listed below. The Information Agent: NATIONAL WESTMINSTER BANK PLC -- NEW YORK BRANCH 175 Water Street 20th Floor New York, New York 10038 (212) 602-5609 Attn: Austin Chen 32 39 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Delaware General Corporation Law and the Registrants' Certificates of Incorporation and By-Laws limit the monetary liability of directors to the Company, Thermo Electron and their respective shareholders and provide for indemnification of their respective officers and directors for liabilities and expenses that they may incur in such capacities. In general, officers and directors are indemnified with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the Company or Thermo Electron, as the case may be, and with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to believe were unlawful. The Registrants also have indemnification agreements with their respective directors and officers that provide for the maximum indemnification allowed by law. Thermo Electron has an insurance policy which insures the directors and officers of Thermo Electron and its subsidiaries, including the Company, against certain liabilities which might be incurred in connection with the performance of their duties. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (A) EXHIBITS See the Exhibit Indexes included immediately preceding the exhibits to this Registration Statement. (B) FINANCIAL STATEMENT SCHEDULES All schedules required under Regulation S-X are hereby incorporated by reference. ITEM 22. UNDERTAKINGS Each of the undersigned Registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (b) Each of the undersigned Registrants hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended), that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Each of the undersigned Registrants hereby undertakes that, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions contained in the Certificate of Incorporation and By-Laws of the Registrant and the laws of the State of Delaware, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-1 40 Each of the undersigned Registrants hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-2 41 SIGNATURES Pursuant to the requirements of the Securities Act, the undersigned registrant has duly caused this Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on this 20th day of February, 1997. THERMOLASE CORPORATION By: /s/ JOHN C. HANSEN ------------------------------------ John C. Hansen President and Chief Executive Officer 42 SIGNATURES Pursuant to the requirements of the Securities Act, the undersigned registrant has duly caused this Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Waltham, Commonwealth of Massachusetts, on this 20th day of February, 1997. THERMO ELECTRON CORPORATION By: /s/ GEORGE N. HATSOPOULOS ------------------------------------ George N. Hatsopoulos Chairman and Chief Executive Officer 43 SIGNATURES AS TO THE COMPANY: Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------------------------------------------- ------------------------- ------------------- /s/ JOHN C. HANSEN President, Chief February 20th, 1997 - --------------------------------------------- Executive Officer and John C. Hansen Director (Principal Executive Officer) * Vice President and Chief February 20th, 1997 - --------------------------------------------- Financial Officer John N. Hatsopoulos (Principal Financial Officer) * Chief Accounting Officer February 20th, 1997 - --------------------------------------------- and Director (Principal Paul F. Kelleher Accounting Officer) * Chairman of the Board and February 20th, 1997 - --------------------------------------------- Director Gary S. Weinstein * Director February 20th, 1997 - --------------------------------------------- Carliss Y. Baldwin * Director - --------------------------------------------- Elias P. Gyftopoulos * Director February 20th, 1997 - --------------------------------------------- Robert C. Howard * Director February 20th, 1997 - --------------------------------------------- Anthony J. Pellegrino * Director February 20th, 1997 - --------------------------------------------- Firooz Rufeh * Director February 20th, 1997 - --------------------------------------------- Kenneth Y. Tang * Director February 20th, 1997 - --------------------------------------------- Nicholas T. Zervas * /s/ JONATHAN W. PAINTER - --------------------------------------------- Jonathan W. Painter Attorney-in-Fact
44 SIGNATURES AS TO THERMO ELECTRON: Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - ------------------------------------------ ------------------------------- ------------------ /s/ GEORGE N. HATSOPOULOS Chief Executive Officer, February 20, 1997 - ------------------------------------------ Chairman of the Board and George N. Hatsopoulos Director (Principal Executive Officer) * President and Chief Financial February 20, 1997 - ------------------------------------------ Officer (Principal Financial John N. Hatsopoulos Officer) * Vice President, Finance February 20, 1997 - ------------------------------------------ (Principal Accounting Officer) Paul F. Kelleher * Director February 20, 1997 - ------------------------------------------ John M. Albertine * Director February 20, 1997 - ------------------------------------------ Peter O. Crisp Director - ------------------------------------------ Elias P. Gyftopoulos Director - ------------------------------------------ Frank Jungers * Director February 20, 1997 - ------------------------------------------ Robert A. McCabe * Director February 20, 1997 - ------------------------------------------ Frank E. Morris * Director February 20, 1997 - ------------------------------------------ Donald E. Noble * Director February 20, 1997 - ------------------------------------------ Hutham S. Olayan * Director February 20, 1997 - ------------------------------------------ Roger D. Wellington */s/ JONATHAN W. PAINTER - ------------------------------------------ Jonathan W. Painter Attorney-in-Fact
45 THERMOLASE CORPORATION EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ---------------------------------------------------------------------------- 4.1 Form of Unit Certificate. 4.2 Form of Guarantee Agreement between Thermo Electron and ThermoLase 5.1 Opinion of Seth H. Hoogasian, Esq. 8.1 Opinion of Hale and Dorr LLP as to certain federal income tax matters 23.1 Consent of Seth H. Hoogasian, Esq. (included in Exhibit 5.1). 23.2 Consent of Arthur Andersen LLP 23.3 Consent of Hale and Dorr LLP (included in Exhibit 8.1) +24 Power of Attorney 99.1 Form of Letter of Transmittal 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees 99.4 Form of Letter to Clients - --------------- + Previously filed
46 THERMO ELECTRON CORPORATION EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ---------------------------------------------------------------------------- 4 Form of Guarantee Agreement between Thermo Electron and ThermoLase 5 Opinion of Seth H. Hoogasian, Esq. 23.1A Consent of Seth H. Hoogasian, Esq. (included in Exhibit 5). 23.2A Consent of Arthur Andersen LLP +24 Power of Attorney
- --------------- + Previously filed EX-4 2 FORM OF GUARANTY AGREEMENT 1 Exhibit 4.1 ----------- GUARANTEE AGREEMENT This Guarantee Agreement, dated _________________, 1997 (the "Agreement"), is entered into by and between ThermoLase Corporation, a Delaware corporation (the "Corporation" or "ThermoLase"), and Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Offer to Exchange of the Corporation dated ______, 1997 (the "Offer to Exchange"). WHEREAS, pursuant to the Offer to Exchange, the Corporation has offered to exchange one unit (each, a "Unit"), consisting of one share of Common Stock, par value $0.01 per share, of the Corporation (the "Common Stock") and one redemption right (a "Redemption Right") for each share of Common Stock (each, an "Exchange Share"), plus an additional payment of $3.00, payable either in cash or in additional shares of Common Stock. No more than 2,000,000 Exchange Shares will be accepted for exchange. Each Redemption Right will entitle the holder thereof to sell the related share of Common Stock to the Company for $20.25 during the first 20 business days after the fourth anniversary of the Expiration Date (as defined in the Offer to Exchange). WHEREAS, the issuance and sale of the Units will be materially enhanced by the existence of a subordinated guarantee by Thermo Electron of the Corporation's obligations under the Redemption Rights; NOW, THEREFORE, FOR VALUE RECEIVED, the parties hereby agree as follows: 1. Thermo Electron hereby agrees to guarantee, as provided in the Guarantee dated the date hereof and attached hereto as EXHIBIT A, on a subordinated basis, the due and punctual payment of any amounts due from the Corporation to holders of Units pursuant to the Corporation's obligation to redeem shares of its outstanding Common Stock during the Redemption Period, in case of the failure of the Corporation to make any such payment punctually when and as the same shall become due and payable. For purposes of this Agreement, the guarantee of the Redemption Rights referred to in the preceding sentence shall be referred to as the "Guarantee." 2 2. The text of the Guarantee shall be endorsed on the back of each Unit Certificate and shall be executed and attested by duly authorized officers of Thermo Electron under its corporate seal. Such signatures may be manual or facsimile. 3. Upon the failure or prospective failure of the Corporation to meet its redemption obligations during the Redemption Period, the Corporation shall deliver to Thermo Electron, at the earliest practicable time, a statement of the failure or the prospective failure of the Corporation to meet its obligations and the correct amount to be paid in respect of such redemption. Failure of the Corporation to deliver such statement shall not relieve Thermo Electron of its obligations under this Agreement or the Guarantee. 4. The Corporation hereby covenants to cause notice of the commencement of the Redemption Period to be published in the Wall Street Journal, and to be mailed to the holders of record of the Redemption Rights, not less than 30 nor more than 45 days prior to the commencement of the Redemption Period. The Corporation hereby further covenants that in the event of the occurrence prior to the expiration of the Redemption Rights of a merger or consolidation of the Corporation with or into another entity (other than a merger in which the Corporation is the surviving entity) or the sale of all or substantially all of the assets of the Corporation, or in the event of the reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the holders of Units shall have the rights set forth in the Offer to Exchange under the heading "Description of Securities - -- The Units." 5. This Agreement may be amended only by written amendment signed by the parties, and no such amendment that dilutes or impairs the rights of the holders of the Units shall be effective against such holders without the consent of the holders of a majority of the then outstanding Units other than Thermo Electron and its subsidiaries. 6. This Agreement is effective as of the date hereof and shall terminate on the date that the redemption obligations of the Corporation have been satisfied in full. -2- 3 7. This Agreement has been entered into for the benefit of the holders of the Units from time to time and such holders are third party beneficiaries hereof. Executed as a sealed instrument. THERMOLASE CORPORATION THERMO ELECTRON CORPORATION By: _______________________________ By: _________________________________ Title: _____________________________ Title: ______________________________ -3- 4 EXHIBIT A 1. FOR VALUE RECEIVED, Thermo Electron Corporation, a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Guarantor"), hereby unconditionally guarantees to the holder of the Rights represented by the Certificate upon which this Guarantee is endorsed (the "Holder") the due and punctual payment of any amounts due from ThermoLase Corporation ("ThermoLase") to the Holder pursuant to ThermoLase's obligation to redeem shares of its outstanding Common Stock during the Redemption Period, as that term is defined on the face of this Certificate, in case of the failure of ThermoLase to make any such payment punctually when and as the same shall become due and payable. 2. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of ThermoLase's redemption obligations and shall be applicable without regard to the provisions of Section 160 of the Delaware General Corporation Law (with respect to the impairment of the capital of ThermoLase) or other legal prohibition or impediment and irrespective of the absence of any action to enforce the same, any waiver or consent by the Holder, the recovery of any judgment against ThermoLase or any action to enforce the same or any other circumstances that might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of ThermoLase, any right to require a proceeding first against ThermoLase, protest or notice with respect to redemption of ThermoLase's Common Stock as provided in this Certificate relating to redemption of ThermoLase's Common Stock and of this Guarantee. 3. (a) Prior to satisfaction in full of the aforesaid redemption obligations and this Guarantee, the Guarantor will not merge or consolidate with, or sell or convey all or substantially all of its assets to, any other corporation or entity, unless (i) either (A) the Guarantor shall be the surviving corporation in the case of a merger or (B) the surviving, resulting or transferee corporation or entity shall expressly assume the due and punctual performance of all of the covenants and obligations of the Guarantor under this Guarantee and (ii) the Guarantor or such successor corporation, as the case may be, shall not, immediately after such merger, consolidation, sale or conveyance, be in default in the performance of any covenants or obligations of the Guarantor under this Guarantee. (b) Upon any merger, consolidation, sale, conveyance or assumption as provided in Section 3(a), the successor or assuming corporation shall succeed to and be substituted for, and may exercise every right and power of and be subject to A-1 5 all the obligations of, the Guarantor under this Guarantee with the same effect as if such successor or assuming corporation had been named as the guarantor therein and herein and the Guarantor shall be released from its liability as obligor under this Guarantee. 4. (a) The Guarantor, for itself, its successors and assigns, covenants and agrees, and each Holder by his acceptance of the Units likewise covenants and agrees, that all obligations of the Guarantor relating to payment of any amounts due for the redemption of ThermoLase's Common Stock pursuant to the terms set forth in this Certificate are hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor. "Senior Indebtedness" shall mean the principal of, premium, if any, and interest and other amounts due on or with respect to the following, whether outstanding at the date hereof or thereafter incurred or created: (i) indebtedness of the Guarantor for money borrowed by the Guarantor (including, without limitation, purchase money obligations), whether or not evidenced by debentures, bonds, notes or other corporate debt securities or similar instruments issued by the Guarantor (including the principal of, premium, if any, and interest on the Guarantor's 5% Senior Convertible Debentures due 2001); provided, however, that Senior Indebtedness shall not include (i) the Guarantor's obligations with respect to its outstanding 4 1/4% Convertible Subordinated Debentures due 2003, which rank pari passu with the obligations represented by this Guarantee in right of payment, (ii) the Guarantor's subordinated guarantees of the principal, premium, if any, and interest on the Non-Interest Bearing Convertible Subordinated Debentures due 2003 issued by Thermedics Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 2001 issued by Thermo Ecotek Corporation, the 6 1/2% Convertible Subordinated Debentures due 1997 and the 4 5/8% Convertible Subordinated Debentures due 2003 issued by Thermo TerraTech Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 1997 issued by Thermo Cardiosystems Inc., the 3 3/4% Convertible Subordinated Debentures due 2000 issued by Thermo Voltek Corp., the 4 7/8% Convertible Subordinated Debentures due 2000 issued by Thermo Remediation Inc., the 5% Convertible Subordinated Debentures due 2000 issued by ThermoQuest Corporation or the 5% Convertible Subordinated Debentures due 2000 issued by Thermo Optek Corporation, which rank pari passu with the obligations represented by this Guarantee in right of payment, or (iii) the Guarantor's subordinated guarantees of the obligations to redeem the common stock of ThermoLyte Corporation and Thermo Fibergen, Inc., which rank pari passu with the obligations represented by this Guarantee in right of payment; (ii) obligations to reimburse any bank or other person in respect of amounts paid under letters of credit; A-2 6 (iii) leases of real property, equipment or other assets, which leases are capitalized in the Guarantor's financial statements in accordance with generally accepted accounting principles; (iv) commitment, standby and other fees due and payable to financial institutions with respect to credit facilities available to the Guarantor; (v) obligations of the Guarantor under interest rate or currency swaps, floors, caps or other similar arrangements intended to hedge interest rates or currency exposure; (vi) indebtedness secured by any mortgage, pledge, lien or other encumbrance on property which is owned or held by the Guarantor subject to such mortgage, pledge, lien or encumbrance, whether or not the indebtedness secured thereby shall have been assumed by the Guarantor; (vii) obligations of the Guarantor constituting guarantees of indebtedness of or joint obligations with another or others which would be included in the preceding clauses (i), (ii), (iii), (iv), (v) or (vi) (including the Guarantor's guarantee of the principal of, premium, if any, and interest on the 3 3/4% Senior Convertible Debentures due 2000 of Thermo Instrument Systems Inc. and the 4 1/2% Senior Convertible Debentures due 2003 of Thermo Instrument Systems Inc.); and (viii) modifications, renewals, extensions or refundings of any of the indebtedness, leases, fees or obligations referred to in the preceding clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) or debentures, notes or other evidences of indebtedness issued in exchange therefor; provided, however, that Senior Indebtedness shall not include any particular indebtedness, lease, fee or obligation, modification, renewal, extension or refunding or exchanged securities if, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, such indebtedness, lease, fee or obligation or such modification, renewal, extension or refunding thereof or exchanged securities are stated to be not superior in right of payment to the Guarantees. (b) (i) In the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to the Guarantor or to its creditors as such, or to its property, or in the event of any proceedings for voluntary liquidation, dissolution or other winding up of the Guarantor, or in the event of any assignment for the benefit of creditors of the Guarantor or any marshaling of assets of the Guarantor, then the holders of all Senior Indebtedness of the Guarantor shall first be entitled to receive payment in full of the principal of and premium, if any and interest, including interest thereon accruing after the commencement of any such proceeding, on all Senior Indebtedness of the Guarantor before the holders of any of the Units, shall be entitled A-3 7 to receive any payment on account of the obligations of the Guarantor pursuant to Section 1, and to that end the holders of Senior Indebtedness of the Guarantor shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash, property or securities, which may be payable or deliverable in any such proceedings in respect to obligations of the Guarantor relating to the Redemption Rights other than securities of the Guarantor as reorganized or readjusted or securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Section 4 with respect to the obligations of the Guarantor relating to the Redemption Rights, to the payment of all Senior Indebtedness of the Guarantor, provided that the rights of the holders of Senior Indebtedness of the Guarantor are not altered by such reorganization or readjustment. For the purposes of this Section, no consolidation, merger, conveyance or transfer made pursuant to the provisions of Section 3 shall be deemed to be a liquidation, reorganization, dissolution or other winding up of the Guarantor. (ii) If under the circumstances set forth in paragraph (b)(i) of this Section, and notwithstanding the provisions thereof, any payment or distribution of assets of the Guarantor of any kind, whether in cash, property, or securities (other than securities of the Guarantor as reorganized or readjusted or securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinated, at least to the extent provided in this Section with respect to the obligations of the Guarantor relating to the Redemption Rights, to the payment of all Senior Indebtedness of the Guarantor provided that the rights of the holders of Senior Indebtedness of the Guarantor are not altered by such reorganization or readjustment) shall be received by the holders of the Units in respect of the obligations of the Guarantor before the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor is paid in full, such payment or distribution shall be paid over to the holders of Senior Indebtedness of the Guarantor, ratably, for application to the payment of the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor remaining unpaid until all the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness of the Guarantor. (iii) Upon any distribution of assets of the Guarantor referred to in this Section, the holders of the Units shall be entitled to rely upon any final order or decree of a court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, and the holders of the Units shall be entitled to rely upon a certificate of the liquidating trustee or agent or other person making any distribution to the holders of the Units for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of Senior Indebtedness of the Guarantor and other indebtedness of the Guarantor, the A-4 8 amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section. (c) (i) Upon the maturity of any Senior Indebtedness of the Guarantor by lapse of time, acceleration or otherwise, all principal thereof (and premium, if any) and interest due thereon, including interest thereon accruing after the commencement of any proceeding of the type referred to in paragraph (i) of Section (b) above, shall first be paid in full, or such payment duly provided for in cash, before any payment, directly or indirectly, is made on account of the obligations of the Guarantor relating to the Redemption Rights. (ii) Upon the happening of an event of default with respect to any Senior Indebtedness of the Guarantor, as defined therein or in the instrument under which it is outstanding, permitting the holders to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, no payment shall be made by the Guarantor, directly or indirectly, on account of the obligations of the Guarantor relating to the Redemption Rights. (d) In case cash, securities or other property otherwise payable or deliverable to the holders of the Units on account of the Guarantee shall have been applied, pursuant to Section (b) or (c), to the payment of Senior Indebtedness of the Guarantor, then, upon the payment in full of the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor, the holders of the Units shall be subrogated to any rights of any holders of Senior Indebtedness of the Guarantor, to receive any further payments or distributions applicable to Senior Indebtedness of the Guarantor until the obligation of the Guarantor in respect of this Guarantee shall have been discharged in full, and such payments or distributions received by the holders of the Units by reason of such subrogation, of cash, securities or other property that otherwise would be paid or distributed to the holders of Senior Indebtedness of the Guarantor, shall, as between the Guarantor and its creditors other than the holders of Senior Indebtedness of the Guarantor, on the one hand, and the holders of the Units on account of this Guarantee, on the other hand, be deemed to be a payment by the Guarantor on account of Senior Indebtedness of the Guarantor and not on account of the Redemption Rights. (e) No present or future holder of any Senior Indebtedness of the Guarantor shall be prejudiced in any way in the right to enforce the subordination of this Guarantee by any act or failure to act on the part of the Guarantor. The provisions of this Section 4 are solely for the purpose of defining the relative rights of the holders of Senior Indebtedness of the Guarantor, on the one hand, and the holders of the Units on account of this Guarantee, on the other hand, against the Guarantor and its assets, and nothing contained in this Section 4 shall impair, as between the Guarantor and the holder of any Units, the obligation of the Guarantor, which is A-5 9 unconditional and absolute, to perform in accordance with the terms of this Guarantee or prevent the holder of any Units, upon default hereunder or under the terms of the Units, from exercising all rights, powers and remedies otherwise provided herein or therein or by applicable law, all subject to the rights of the holders of Senior Indebtedness of the Guarantor under this Section 4 to receive cash, property or securities otherwise payable or deliverable to the holders of the Units on account of this Guarantee. (f) Nothing contained in this Section 4 shall prevent at any time, except under the conditions described in Section 4(b) and (c) hereof or during the pendency of any dissolution, winding up, liquidation or reorganization proceedings therein referred to, the Guarantor from performing its obligations under this Guarantee. 5. The Guarantor shall be subrogated to all rights of the holders of the Units against ThermoLase in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee to the end that the Guarantor shall be entitled to receive the shares of ThermoLase Common Stock as to which it makes payments in respect of ThermoLase's redemption obligations hereunder. 6. This Guarantee shall be governed by and construed in accordance with the laws of Commonwealth of Massachusetts. 7. The Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Guarantee and to constitute the same a valid obligation of the Guarantor have been done and performed and have happened in due compliance with all applicable laws. 8. By his acceptance hereof, each Holder acknowledges and agrees that this Guarantee supersedes any and all prior guarantees by Guarantor to such Holder with respect to any redemption obligations of ThermoLase as to its Common Stock. A-6 10 9. The Holder shall at all times be a beneficiary under, and shall be entitled to enforce, that certain Guarantee Agreement dated as of ___________, 1997 by and between the Guarantor and ThermoLase. A copy of such Guarantee Agreement will be provided to the Holder, without charge, upon written request to the Guarantor. WITNESS the facsimile seal of the Guarantor and the facsimile signatures of its duly authorized officers. Dated: ________________, 1997 _______________________ __________________________ Secretary [Seal] President and Chief Executive Officer A-7 EX-4.1 3 FORM OF UNIT CERTIFICATE 1 Exhibit 4.1 ----------- [Front of Unit Certificate] Unit No. U Number of Units: --------------- CUSIP 883624207 THERMOLASE CORPORATION Incorporated under the Laws of the State of Delaware Units, each consisting of one share of Common Stock, $.01 per value per share, and one Redemption Right This certifies that__________is the owner of that number of Units of ThermoLase Corporation as described above, each Unit consisting of one share of Common Stock, $.01 par value per share, and one Redemption Right, transferable only on the books of the Corporation by the holder hereof (the "Holder") in person or by attorney upon surrender of this Certificate properly endorsed. The Holder has the right, during the period commencing on ____________, 2001 and ending at 5:00 p.m., New York City time, on __________, 2001 (the "Redemption Period"), to require ThermoLase Corporation (the "Corporation") to redeem any or all of the shares (the "Shares") of the common stock, $0.01 par value per share (the "Common Stock"), of the Corporation evidenced by this Certificate, as is equal to the number of Units set forth in the box in the upper right-hand corner of this Certificate, in accordance with the terms set forth in this Certificate. Each right represented by this Certificate to require the redemption of one such Share is sometimes hereinafter referred to as a "Right" and the aggregate of such rights represented by this Certificate to require the redemption of one such Share is sometimes hereinafter referred to as the "Rights." The aggregate of all rights substantially identical to these Rights that are outstanding from time to time, including these Rights, are sometimes hereinafter referred to as the "Redemption Rights." A. Exercise. During the Redemption Period, the Holder may exercise all or any portion of his right to require the Corporation to redeem the Shares as provided herein. Notwithstanding anything to the contrary, (1) any such redemption and the procedures relating to the redemption and offer of redemption set forth herein (the "Redemption") shall be conducted in compliance with all applicable laws, including all federal securities laws, and (2) the obligation of the Corporation to 2 redeem shares is contingent upon compliance with Delaware General Corporation Law Section 160 and if at any time the Corporation's capital is impaired or the Redemption of the Shares would cause any impairment of the Corporation's capital, or if the Corporation is otherwise prohibited by law from redeeming the Shares, the Redemption will occur to the extent permissible and, to the extent permitted, as soon as possible after such legal prohibition or impediment is no longer applicable. B. Consideration to be Received. Upon the valid exercise of these Rights, in whole or in part, the Holder shall be entitled to receive from the Corporation, upon surrender to the Corporation of this Certificate as provided below $20.25 per Share redeemed, adjusted as provided herein (the "Redemption Price"). C. Notice to Shareholders. The Corporation shall cause to be published in the Wall Street Journal, and shall mail to the registered holders of the Units (the "Holders") at their registered addresses, not less than 30 nor more than 45 days prior to the commencement of the Redemption Period, a notice (the "Notice"). Such Notice shall state the number of Redemption Rights outstanding that are eligible for exercise on the date of such Notice, the address of the Corporation or its agent at which Holders may surrender their Shares for Redemption and any other procedures determined by the Board of Directors for exercise of the Redemption Rights in accordance with the terms of this Certificate and the other certificates for Redemption Rights. D. Exercise of Redemption Rights. (1) The Holder may exercise his rights to have the Corporation redeem Shares upon surrender to the Corporation or its agent (as specified in the Notice) during the Redemption Period at the Corporation's office or the office of its agent (at the address specified in the Notice) of this Certificate with the form on the reverse hereof indicating the number of Shares being tendered for Redemption completed and duly signed and duly endorsed in blank. The Holder of this Certificate may require the Corporation to redeem up to the number of Shares equal to the number of Units set forth above. The Holder will be entitled to revoke an election to redeem so long as written notice of revocation is received by the Corporation or its agent, as specified in the Notice, before expiration of the Redemption Period. The Corporation or its agent will hold this Certificate in trust for the Holder until payment shall have been made in accordance with Section E hereof. (2) In the event that the Holder exercises fewer Redemption Rights than are represented by this Certificate, each of the Units as to which the Redemption Rights are not so exercised shall become, and shall trade as, one share of Common Stock of the Corporation, and the Corporation or the transfer agent for the Corporation's Common Stock shall issue a new certificate or certificates of Common Stock for the balance of the number of Units not redeemed by the Corporation. -2- 3 E. Manner of Payment. The Corporation shall within five business days after the end of the Redemption Period pay, or cause payment to be made, in the form of a check mailed to the redeeming Holder, for the Shares that have been redeemed. F. Adjustment of Amounts. In the event of the occurrence prior to the expiration of the Redemption Rights of a merger or consolidation of the Corporation with or into another entity (other than a merger in which the Corporation is the surviving entity) or the sale of all or substantially all of the assets of the Corporation, the Holder shall have the right either (i) to receive the consideration per share as is payable in such transaction to the holders of Common Stock on account of their ownership thereof; or (ii) to elect to receive the Redemption Price in cash at the end of the Redemption Period. Upon electing the provisions of clause (ii), the Holder shall, from and after the date of the transaction to which such election relates, have the status of a creditor of the Corporation and all of the Holder's rights shall cease with respect to the Units. If, through or as a result of any merger, consolidation, sale of all or substantially all of the assets of the Corporation, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, (i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Corporation, or (ii) additional shares or new or different shares or other securities of the Corporation or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, an appropriate and proportionate adjustment may be made in the Redemption Rights to preserve as nearly as possible, as determined by the Corporation the economic benefits of the Redemption Rights for the Holders. G. Expiration of Redemption Rights. The Redemption Rights will expire and become worthless if, after the date hereof, the closing price of the Common Stock is at least $26.00 for 20 of any 30 consecutive trading days. In the event of the expiration of the Redemption Rights, each Unit will automatically become, and will trade as, one share of Common Stock. H. Interest. In the event that the Redemption is deferred as provided in Section A hereof, the Redemption Price will continue to compound annually at an annual rate equal to the Base Rate of Bank Boston and the amounts payable to the Holder will be calculated on the basis of such adjusted Redemption Price. I. Definition. As used herein, the term "business day" shall mean any day on which the American Stock Exchange is open for trading. J. Amendments. The Redemption Rights and this Unit Certificate may not be amended in any manner that dilutes or impairs the rights of the Holders without the consent of the holders of a majority of the then outstanding Units (which need not include the Holder) other than Thermo Electron Corporation and its subsidiaries; -3- 4 provided, however, that no other amendment, including any amendment in accordance with Section F above, shall require any such consent. K. Exchange of Certificates. This Certificate may be exchanged at the office of the Corporation upon its surrender, duly endorsed either separately or in combination with one or more other Certificates for one or more new Certificates evidencing the same aggregate number of Units evidenced by the Certificate or Certificates exchanged. L. Other Provisions. The Holder hereof may be treated by the Corporation and all other persons dealing with this Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the Rights represented hereby or to the transfer on the books of the Corporation any notice to the contrary notwithstanding, and until such transfer on such books, the Corporation may treat the Holder hereof as the owner for all purposes. By accepting this Certificate the Holder hereby consents to its terms. WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. Dated: ____________ /s/ Sandra L. Lambert /s/ John C. Hansen - --------------------- ------------------ Secretary [Seal] President and Chief Executive Officer Countersigned and Registered: AMERICAN STOCK TRANSFER & TRUST COMPANY (NEW YORK, NY) By: __________________________________________ Transfer Agent Authorized Signature and Registrar -4- 5 [Back of Unit Certificate] GUARANTEE OF THERMO ELECTRON CORPORATION 1. FOR VALUE RECEIVED, Thermo Electron Corporation, a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Guarantor"), hereby unconditionally guarantees to the holder of the Rights represented by the Certificate upon which this Guarantee is endorsed (the "Holder") the due and punctual payment of any amounts due from ThermoLase Corporation ("ThermoLase") to the Holder pursuant to ThermoLase's obligation to redeem shares of its outstanding Common Stock during the Redemption Period, as that term is defined on the face of this Certificate, in case of the failure of ThermoLase to make any such payment punctually when and as the same shall become due and payable. 2. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of ThermoLase's redemption obligations and shall be applicable without regard to the provisions of Section 160 of the Delaware General Corporation Law (with respect to the impairment of the capital of ThermoLase) or other legal prohibition or impediment and irrespective of the absence of any action to enforce the same, any waiver or consent by the Holder, the recovery of any judgment against ThermoLase or any action to enforce the same or any other circumstances that might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of ThermoLase, any right to require a proceeding first against ThermoLase, protest or notice with respect to redemption of ThermoLase's Common Stock as provided in this Certificate relating to redemption of ThermoLase's Common Stock and of this Guarantee. 3. (a) Prior to satisfaction in full of the aforesaid redemption obligations and this Guarantee, the Guarantor will not merge or consolidate with, or sell or convey all or substantially all of its assets to, any other corporation or entity, unless (i) either (A) the Guarantor shall be the surviving corporation in the case of a merger or (B) the surviving, resulting or transferee corporation or entity shall expressly assume the due and punctual performance of all of the covenants and obligations of the Guarantor under this Guarantee and (ii) the Guarantor or such successor corporation, as the case may be, shall not, immediately after such merger, consolidation, sale or conveyance, be in default in the performance of any covenants or obligations of the Guarantor under this Guarantee. (b) Upon any merger, consolidation, sale, conveyance or assumption as provided in Section 3(a), the successor or assuming corporation shall succeed to and be substituted for, and may exercise every right and power of and be subject to -5- 6 all the obligations of, the Guarantor under this Guarantee with the same effect as if such successor or assuming corporation had been named as the guarantor therein and herein and the Guarantor shall be released from its liability as obligor under this Guarantee. 4. (a) The Guarantor, for itself, its successors and assigns, covenants and agrees, and each Holder by his acceptance of the Units likewise covenants and agrees, that all obligations of the Guarantor relating to payment of any amounts due for the redemption of ThermoLase's Common Stock pursuant to the terms set forth in this Certificate are hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor. "Senior Indebtedness" shall mean the principal of, premium, if any, and interest and other amounts due on or with respect to the following, whether outstanding at the date hereof or thereafter incurred or created: (i) indebtedness of the Guarantor for money borrowed by the Guarantor (including, without limitation, purchase money obligations), whether or not evidenced by debentures, bonds, notes or other corporate debt securities or similar instruments issued by the Guarantor (including the principal of, premium, if any, and interest on the Guarantor's 5% Senior Convertible Debentures due 2001); provided, however, that Senior Indebtedness shall not include (A) the Guarantor's obligations with respect to its outstanding 4 1/4% Convertible Subordinated Debentures due 2003, which rank pari passu with the obligations represented by this Guarantee in right of payment, (B) the Guarantor's subordinated guarantees of the principal, premium, if any, and interest on the Non-Interest Bearing Convertible Subordinated Debentures due 2003 issued by Thermedics Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 2001 issued by Thermo Ecotek Corporation, the 6 1/2% Convertible Subordinated Debentures due 1997 and the 4 5/8% Convertible Subordinated Debentures due 2003 issued by Thermo TerraTech Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 1997 issued by Thermo Cardiosystems Inc., the 3 3/4% Convertible Subordinated Debentures due 2000 issued by Thermo Voltek Corp., the 4 7/8% Convertible Subordinated Debentures due 2000 issued by Thermo Remediation Inc., the 5% Convertible Subordinated Debentures due 2000 issued by ThermoQuest Corporation or the 5% Convertible Subordinated Debentures due 2000 issued by Thermo Optek Corporation, which rank pari passu with the obligations represented by this Guarantee in right of payment, or (C) the Guarantor's subordinated guarantees of the obligations to redeem the common stock of ThermoLyte Corporation and Thermo Fibergen Inc., which rank pari passu with the obligations represented by this Guarantee in right of payment; (ii) obligations to reimburse any bank or other person in respect of amounts paid under letters of credit; -6- 7 (iii) leases of real property, equipment or other assets, which leases are capitalized in the Guarantor's financial statements in accordance with generally accepted accounting principles; (iv) commitment, standby and other fees due and payable to financial institutions with respect to credit facilities available to the Guarantor; (v) obligations of the Guarantor under interest rate or currency swaps, floors, caps or other similar arrangements intended to hedge interest rates or currency exposure; (vi) indebtedness secured by any mortgage, pledge, lien or other encumbrance on property which is owned or held by the Guarantor subject to such mortgage, pledge, lien or encumbrance, whether or not the indebtedness secured thereby shall have been assumed by the Guarantor; (vii) obligations of the Guarantor constituting guarantees of indebtedness of or joint obligations with another or others which would be included in the preceding clauses (i), (ii), (iii), (iv), (v) or (vi) (including the Guarantor's guarantee of the principal of, premium, if any, and interest on the 3 3/4% Senior Convertible Debentures due 2000 of Thermo Instrument Systems Inc. and the 4 1/2% Senior Convertible Debentures due 2003 of Thermo Instrument Systems Inc.); and (viii) modifications, renewals, extensions or refundings of any of the indebtedness, leases, fees or obligations referred to in the preceding clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) or debentures, notes or other evidences of indebtedness issued in exchange therefor; provided, however, that Senior Indebtedness shall not include any particular indebtedness, lease, fee or obligation, modification, renewal, extension or refunding or exchanged securities if, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, such indebtedness, lease, fee or obligation or such modification, renewal, extension or refunding thereof or exchanged securities are stated to be not superior in right of payment to the Guarantees. (b) (i) In the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to the Guarantor or to its creditors as such, or to its property, or in the event of any proceedings for voluntary liquidation, dissolution or other winding up of the Guarantor, or in the event of any assignment for the benefit of creditors of the Guarantor or any marshaling of assets of the Guarantor, then the holders of all Senior Indebtedness of the Guarantor shall first be entitled to receive payment in full of the principal of and premium, if any and interest, including interest thereon accruing after the commencement of any such proceeding, on all Senior Indebtedness of the Guarantor before the holders of any of the Units, shall be -7- 8 entitled to receive any payment on account of the obligations of the Guarantor pursuant to Section 1, and to that end the holders of Senior Indebtedness of the Guarantor shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash, property or securities, which may be payable or deliverable in any such proceedings in respect to obligations of the Guarantor relating to the Redemption Rights other than securities of the Guarantor as reorganized or readjusted or securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Section 4 with respect to the obligations of the Guarantor relating to the Redemption Rights, to the payment of all Senior Indebtedness of the Guarantor, provided that the rights of the holders of Senior Indebtedness of the Guarantor are not altered by such reorganization or readjustment. For the purposes of this Section, no consolidation, merger, conveyance or transfer made pursuant to the provisions of Section 3 shall be deemed to be a liquidation, reorganization, dissolution or other winding up of the Guarantor. (ii) If under the circumstances set forth in paragraph (b)(i) of this Section, and notwithstanding the provisions thereof, any payment or distribution of assets of the Guarantor of any kind, whether in cash, property, or securities (other than securities of the Guarantor as reorganized or readjusted or securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinated, at least to the extent provided in this Section with respect to the obligations of the Guarantor relating to the Redemption Rights, to the payment of all Senior Indebtedness of the Guarantor provided that the rights of the holders of Senior Indebtedness of the Guarantor are not altered by such reorganization or readjustment) shall be received by the holders of the Units in respect of the obligations of the Guarantor before the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor is paid in full, such payment or distribution shall be paid over to the holders of Senior Indebtedness of the Guarantor, ratably, for application to the payment of the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor remaining unpaid until all the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness of the Guarantor. (iii) Upon any distribution of assets of the Guarantor referred to in this Section, the holders of the Units shall be entitled to rely upon any final order or decree of a court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, and the holders of the Units shall be entitled to rely upon a certificate of the liquidating trustee or agent or other person making any distribution to the holders of the Units for the purpose of ascertaining the persons entitled to participate in such distribution, the -8- 9 holders of Senior Indebtedness of the Guarantor and other indebtedness of the Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section. (c) (i) Upon the maturity of any Senior Indebtedness of the Guarantor by lapse of time, acceleration or otherwise, all principal thereof (and premium, if any) and interest due thereon, including interest thereon accruing after the commencement of any proceeding of the type referred to in paragraph (i) of Section (b) above, shall first be paid in full, or such payment duly provided for in cash, before any payment, directly or indirectly, is made on account of the obligations of the Guarantor relating to the Redemption Rights. (ii) Upon the happening of an event of default with respect to any Senior Indebtedness of the Guarantor, as defined therein or in the instrument under which it is outstanding, permitting the holders to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, no payment shall be made by the Guarantor, directly or indirectly, on account of the obligations of the Guarantor relating to the Redemption Rights. (d) In case cash, securities or other property otherwise payable or deliverable to the holders of the Units on account of the Guarantee shall have been applied, pursuant to Section (b) or (c), to the payment of Senior Indebtedness of the Guarantor, then, upon the payment in full of the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor, the holders of the Units shall be subrogated to any rights of any holders of Senior Indebtedness of the Guarantor, to receive any further payments or distributions applicable to Senior Indebtedness of the Guarantor until the obligation of the Guarantor in respect of this Guarantee shall have been discharged in full, and such payments or distributions received by the holders of the Units by reason of such subrogation, of cash, securities or other property that otherwise would be paid or distributed to the holders of Senior Indebtedness of the Guarantor, shall, as between the Guarantor and its creditors other than the holders of Senior Indebtedness of the Guarantor, on the one hand, and the holders of the Units on account of this Guarantee, on the other hand, be deemed to be a payment by the Guarantor on account of Senior Indebtedness of the Guarantor and not on account of the Redemption Rights. (e) No present or future holder of any Senior Indebtedness of the Guarantor shall be prejudiced in any way in the right to enforce the subordination of this Guarantee by any act or failure to act on the part of the Guarantor. The provisions of this Section 4 are solely for the purpose of defining the relative rights of the holders of Senior Indebtedness of the Guarantor, on the one hand, and the holders of the Units on account of this Guarantee, on the other hand, against the Guarantor and its assets, and nothing contained in this Section 4 shall impair, as -9- 10 between the Guarantor and the holder of any Units, the obligation of the Guarantor, which is unconditional and absolute, to perform in accordance with the terms of this Guarantee or prevent the holder of any Units, upon default hereunder or under the terms of the Units, from exercising all rights, powers and remedies otherwise provided herein or therein or by applicable law, all subject to the rights of the holders of Senior Indebtedness of the Guarantor under this Section 4 to receive cash, property or securities otherwise payable or deliverable to the holders of the Units on account of this Guarantee. (f) Nothing contained in this Section 4 shall prevent at any time, except under the conditions described in Section 4(b) and (c) hereof or during the pendency of any dissolution, winding up, liquidation or reorganization proceedings therein referred to, the Guarantor from performing its obligations under this Guarantee. 5. The Guarantor shall be subrogated to all rights of the holders of the Units against ThermoLase in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee to the end that the Guarantor shall be entitled to receive the shares of ThermoLase Common Stock as to which it makes payments in respect of ThermoLase's redemption obligations hereunder. 6. This Guarantee shall be governed by and construed in accordance with the laws of Commonwealth of Massachusetts. 7. The Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Guarantee and to constitute the same a valid obligation of the Guarantor have been done and performed and have happened in due compliance with all applicable laws. 8. By his acceptance hereof, each Holder acknowledges and agrees that this Guarantee supersedes any and all prior guarantees by Guarantor to such Holder with respect to any redemption obligations of ThermoLase as to its Common Stock. 9. The Holder shall at all times be a beneficiary under, and shall be entitled to enforce, that certain Guarantee Agreement dated as of ___________, 1997 by and between the Guarantor and ThermoLase. A copy of such Guarantee Agreement will be provided to the Holder, without charge, upon written request to the Guarantor. -10- 11 WITNESS the facsimile seal of the Guarantor and the facsimile signatures of its duly authorized officers. Dated: ________________, 1997 /s/ Sandra L. Lambert /s/ George N. Hatsopoulos - --------------------- ------------------------- Secretary [Seal] Chairman and Chief Executive Officer -11- 12 EXERCISE FORM The undersigned hereby irrevocably exercises _________ of the Redemption Rights represented by this Certificate and hereby surrenders to the Corporation an equal number of Shares represented by this Certificate, and requests that the consideration to be received by the undersigned upon such exercise be issued in the name of: ________________________________________________________________________________ (Please Print Name, Address and Taxpayer Identification No.) If the number of Units represented by this Certificate is greater than the number of Redemption Rights exercised, the undersigned requests that a new stock certificate for the balance of the Shares of Common Stock remaining be registered in the name of the undersigned Holder as indicated below and delivered to the address stated below. Date: _________________, ____. Name of Holder: ________________________________________________________________ (Please Print) Address: _______________________________________________________________________ _______________________________________________________________________ Signature: _____________________________________________________________________ Taxpayer Identification No.: ___________________________________________________ NOTE: The above signature must correspond with the name as written upon the face of this Certificate in every particular, without alteration or enlargement or any change whatever. -12- 13 ASSIGNMENT (TO BE SIGNED BY THE REGISTERED HOLDER ONLY UPON ASSIGNMENT OF UNITS) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: ________________________________________________________________________________ ________________________________________________________________________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________________________________________________________ (Name and Address of Assignee Must be Printed or Typewritten) ____________________________________________________________ Units, represented by this Certificate, and hereby irrevocably constitutes and appoints __________________________ attorney to transfer said Units on the books of the Corporation, with full power of substitution in the premises. Date: ___________, _____ ____________________________________ Signature of Registered Holder The above signature must correspond with the name as written upon the face of this Certificate in every particular, without alteration or enlargement or any change whatever. -13- EX-4.2 4 FORM OF GUARANTEE AGREEMENT 1 Exhibit 4.2 ----------- GUARANTEE AGREEMENT This Guarantee Agreement, dated _________________, 1997 (the "Agreement"), is entered into by and between ThermoLase Corporation, a Delaware corporation (the "Corporation" or "ThermoLase"), and Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Offer to Exchange of the Corporation dated , 1997 (the "Offer to Exchange"). WHEREAS, pursuant to the Offer to Exchange, the Corporation has offered to exchange one unit (each, a "Unit"), consisting of one share of Common Stock, par value $0.01 per share, of the Corporation (the "Common Stock") and one redemption right (a "Redemption Right") for each share of Common Stock (each, an "Exchange Share"), plus an additional payment of $3.00, payable either in cash or in additional shares of Common Stock. No more than 2,000,000 Exchange Shares will be accepted for exchange. Each Redemption Right will entitle the holder thereof to sell the related share of Common Stock to the Company for $20.25 during the first 20 business days after the fourth anniversary of the Expiration Date (as defined in the Offer to Exchange). WHEREAS, the issuance and sale of the Units will be materially enhanced by the existence of a subordinated guarantee by Thermo Electron of the Corporation's obligations under the Redemption Rights; NOW, THEREFORE, FOR VALUE RECEIVED, the parties hereby agree as follows: 1. Thermo Electron hereby agrees to guarantee, as provided in the Guarantee dated the date hereof and attached hereto as EXHIBIT A, on a subordinated basis, the due and punctual payment of any amounts due from the Corporation to holders of Units pursuant to the Corporation's obligation to redeem shares of its outstanding Common Stock during the Redemption Period, in case of the failure of the Corporation to make any such payment punctually when and as the same shall become due and payable. For purposes of this Agreement, the guarantee of the Redemption Rights referred to in the preceding sentence shall be referred to as the "Guarantee." 2 2. The text of the Guarantee shall be endorsed on the back of each Unit Certificate and shall be executed and attested by duly authorized officers of Thermo Electron under its corporate seal. Such signatures may be manual or facsimile. 3. Upon the failure or prospective failure of the Corporation to meet its redemption obligations during the Redemption Period, the Corporation shall deliver to Thermo Electron, at the earliest practicable time, a statement of the failure or the prospective failure of the Corporation to meet its obligations and the correct amount to be paid in respect of such redemption. Failure of the Corporation to deliver such statement shall not relieve Thermo Electron of its obligations under this Agreement or the Guarantee. 4. The Corporation hereby covenants to cause notice of the commencement of the Redemption Period to be published in the Wall Street Journal, and to be mailed to the holders of record of the Redemption Rights, not less than 30 nor more than 45 days prior to the commencement of the Redemption Period. The Corporation hereby further covenants that in the event of the occurrence prior to the expiration of the Redemption Rights of a merger or consolidation of the Corporation with or into another entity (other than a merger in which the Corporation is the surviving entity) or the sale of all or substantially all of the assets of the Corporation, or in the event of the reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the holders of Units shall have the rights set forth in the Offer to Exchange under the heading "Description of Securities - -- The Units." 5. This Agreement may be amended only by written amendment signed by the parties, and no such amendment that dilutes or impairs the rights of the holders of the Units shall be effective against such holders without the consent of the holders of a majority of the then outstanding Units other than Thermo Electron and its subsidiaries. 6. This Agreement is effective as of the date hereof and shall terminate on the date that the redemption obligations of the Corporation have been satisfied in full. -2- 3 7. This Agreement has been entered into for the benefit of the holders of the Units from time to time and such holders are third party beneficiaries hereof. Executed as a sealed instrument. THERMOLASE CORPORATION THERMO ELECTRON CORPORATION By: _______________________________ By: _________________________________ Title: _____________________________ Title: ______________________________ -3- 4 EXHIBIT A 1. FOR VALUE RECEIVED, Thermo Electron Corporation, a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Guarantor"), hereby unconditionally guarantees to the holder of the Rights represented by the Certificate upon which this Guarantee is endorsed (the "Holder") the due and punctual payment of any amounts due from ThermoLase Corporation ("ThermoLase") to the Holder pursuant to ThermoLase's obligation to redeem shares of its outstanding Common Stock during the Redemption Period, as that term is defined on the face of this Certificate, in case of the failure of ThermoLase to make any such payment punctually when and as the same shall become due and payable. 2. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of ThermoLase's redemption obligations and shall be applicable without regard to the provisions of Section 160 of the Delaware General Corporation Law (with respect to the impairment of the capital of ThermoLase) or other legal prohibition or impediment and irrespective of the absence of any action to enforce the same, any waiver or consent by the Holder, the recovery of any judgment against ThermoLase or any action to enforce the same or any other circumstances that might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of ThermoLase, any right to require a proceeding first against ThermoLase, protest or notice with respect to redemption of ThermoLase's Common Stock as provided in this Certificate relating to redemption of ThermoLase's Common Stock and of this Guarantee. 3. (a) Prior to satisfaction in full of the aforesaid redemption obligations and this Guarantee, the Guarantor will not merge or consolidate with, or sell or convey all or substantially all of its assets to, any other corporation or entity, unless (i) either (A) the Guarantor shall be the surviving corporation in the case of a merger or (B) the surviving, resulting or transferee corporation or entity shall expressly assume the due and punctual performance of all of the covenants and obligations of the Guarantor under this Guarantee and (ii) the Guarantor or such successor corporation, as the case may be, shall not, immediately after such merger, consolidation, sale or conveyance, be in default in the performance of any covenants or obligations of the Guarantor under this Guarantee. (b) Upon any merger, consolidation, sale, conveyance or assumption as provided in Section 3(a), the successor or assuming corporation shall succeed to and be substituted for, and may exercise every right and power of and be subject to A-1 5 all the obligations of, the Guarantor under this Guarantee with the same effect as if such successor or assuming corporation had been named as the guarantor therein and herein and the Guarantor shall be released from its liability as obligor under this Guarantee. 4. (a) The Guarantor, for itself, its successors and assigns, covenants and agrees, and each Holder by his acceptance of the Units likewise covenants and agrees, that all obligations of the Guarantor relating to payment of any amounts due for the redemption of ThermoLase's Common Stock pursuant to the terms set forth in this Certificate are hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor. "Senior Indebtedness" shall mean the principal of, premium, if any, and interest and other amounts due on or with respect to the following, whether outstanding at the date hereof or thereafter incurred or created: (i) indebtedness of the Guarantor for money borrowed by the Guarantor (including, without limitation, purchase money obligations), whether or not evidenced by debentures, bonds, notes or other corporate debt securities or similar instruments issued by the Guarantor (including the principal of, premium, if any, and interest on the Guarantor's 5% Senior Convertible Debentures due 2001); provided, however, that Senior Indebtedness shall not include (i) the Guarantor's obligations with respect to its outstanding 4 1/4% Convertible Subordinated Debentures due 2003, which rank pari passu with the obligations represented by this Guarantee in right of payment, (ii) the Guarantor's subordinated guarantees of the principal, premium, if any, and interest on the Non-Interest Bearing Convertible Subordinated Debentures due 2003 issued by Thermedics Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 2001 issued by Thermo Ecotek Corporation, the 6 1/2% Convertible Subordinated Debentures due 1997 and the 4 5/8% Convertible Subordinated Debentures due 2003 issued by Thermo TerraTech Inc., the Non-Interest Bearing Convertible Subordinated Debentures due 1997 issued by Thermo Cardiosystems Inc., the 3 3/4% Convertible Subordinated Debentures due 2000 issued by Thermo Voltek Corp., the 4 7/8% Convertible Subordinated Debentures due 2000 issued by Thermo Remediation Inc., the 5% Convertible Subordinated Debentures due 2000 issued by ThermoQuest Corporation or the 5% Convertible Subordinated Debentures due 2000 issued by Thermo Optek Corporation, which rank pari passu with the obligations represented by this Guarantee in right of payment, or (iii) the Guarantor's subordinated guarantees of the obligations to redeem the common stock of ThermoLyte Corporation and Thermo Fibergen, Inc., which rank pari passu with the obligations represented by this Guarantee in right of payment; (ii) obligations to reimburse any bank or other person in respect of amounts paid under letters of credit; A-2 6 (iii) leases of real property, equipment or other assets, which leases are capitalized in the Guarantor's financial statements in accordance with generally accepted accounting principles; (iv) commitment, standby and other fees due and payable to financial institutions with respect to credit facilities available to the Guarantor; (v) obligations of the Guarantor under interest rate or currency swaps, floors, caps or other similar arrangements intended to hedge interest rates or currency exposure; (vi) indebtedness secured by any mortgage, pledge, lien or other encumbrance on property which is owned or held by the Guarantor subject to such mortgage, pledge, lien or encumbrance, whether or not the indebtedness secured thereby shall have been assumed by the Guarantor; (vii) obligations of the Guarantor constituting guarantees of indebtedness of or joint obligations with another or others which would be included in the preceding clauses (i), (ii), (iii), (iv), (v) or (vi) (including the Guarantor's guarantee of the principal of, premium, if any, and interest on the 3 3/4% Senior Convertible Debentures due 2000 of Thermo Instrument Systems Inc. and the 4 1/2% Senior Convertible Debentures due 2003 of Thermo Instrument Systems Inc.); and (viii) modifications, renewals, extensions or refundings of any of the indebtedness, leases, fees or obligations referred to in the preceding clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) or debentures, notes or other evidences of indebtedness issued in exchange therefor; provided, however, that Senior Indebtedness shall not include any particular indebtedness, lease, fee or obligation, modification, renewal, extension or refunding or exchanged securities if, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, such indebtedness, lease, fee or obligation or such modification, renewal, extension or refunding thereof or exchanged securities are stated to be not superior in right of payment to the Guarantees. (b) (i) In the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to the Guarantor or to its creditors as such, or to its property, or in the event of any proceedings for voluntary liquidation, dissolution or other winding up of the Guarantor, or in the event of any assignment for the benefit of creditors of the Guarantor or any marshaling of assets of the Guarantor, then the holders of all Senior Indebtedness of the Guarantor shall first be entitled to receive payment in full of the principal of and premium, if any and interest, including interest thereon accruing after the commencement of any such proceeding, on all Senior Indebtedness of the Guarantor before the holders of any of the Units, shall be entitled A-3 7 to receive any payment on account of the obligations of the Guarantor pursuant to Section 1, and to that end the holders of Senior Indebtedness of the Guarantor shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash, property or securities, which may be payable or deliverable in any such proceedings in respect to obligations of the Guarantor relating to the Redemption Rights other than securities of the Guarantor as reorganized or readjusted or securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Section 4 with respect to the obligations of the Guarantor relating to the Redemption Rights, to the payment of all Senior Indebtedness of the Guarantor, provided that the rights of the holders of Senior Indebtedness of the Guarantor are not altered by such reorganization or readjustment. For the purposes of this Section, no consolidation, merger, conveyance or transfer made pursuant to the provisions of Section 3 shall be deemed to be a liquidation, reorganization, dissolution or other winding up of the Guarantor. (ii) If under the circumstances set forth in paragraph (b)(i) of this Section, and notwithstanding the provisions thereof, any payment or distribution of assets of the Guarantor of any kind, whether in cash, property, or securities (other than securities of the Guarantor as reorganized or readjusted or securities of the Guarantor or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinated, at least to the extent provided in this Section with respect to the obligations of the Guarantor relating to the Redemption Rights, to the payment of all Senior Indebtedness of the Guarantor provided that the rights of the holders of Senior Indebtedness of the Guarantor are not altered by such reorganization or readjustment) shall be received by the holders of the Units in respect of the obligations of the Guarantor before the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor is paid in full, such payment or distribution shall be paid over to the holders of Senior Indebtedness of the Guarantor, ratably, for application to the payment of the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor remaining unpaid until all the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness of the Guarantor. (iii) Upon any distribution of assets of the Guarantor referred to in this Section, the holders of the Units shall be entitled to rely upon any final order or decree of a court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, and the holders of the Units shall be entitled to rely upon a certificate of the liquidating trustee or agent or other person making any distribution to the holders of the Units for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of Senior Indebtedness of the Guarantor and other indebtedness of the Guarantor, the A-4 8 amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section. (c) (i) Upon the maturity of any Senior Indebtedness of the Guarantor by lapse of time, acceleration or otherwise, all principal thereof (and premium, if any) and interest due thereon, including interest thereon accruing after the commencement of any proceeding of the type referred to in paragraph (i) of Section (b) above, shall first be paid in full, or such payment duly provided for in cash, before any payment, directly or indirectly, is made on account of the obligations of the Guarantor relating to the Redemption Rights. (ii) Upon the happening of an event of default with respect to any Senior Indebtedness of the Guarantor, as defined therein or in the instrument under which it is outstanding, permitting the holders to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, no payment shall be made by the Guarantor, directly or indirectly, on account of the obligations of the Guarantor relating to the Redemption Rights. (d) In case cash, securities or other property otherwise payable or deliverable to the holders of the Units on account of the Guarantee shall have been applied, pursuant to Section (b) or (c), to the payment of Senior Indebtedness of the Guarantor, then, upon the payment in full of the principal of (and premium, if any) and interest on all Senior Indebtedness of the Guarantor, the holders of the Units shall be subrogated to any rights of any holders of Senior Indebtedness of the Guarantor, to receive any further payments or distributions applicable to Senior Indebtedness of the Guarantor until the obligation of the Guarantor in respect of this Guarantee shall have been discharged in full, and such payments or distributions received by the holders of the Units by reason of such subrogation, of cash, securities or other property that otherwise would be paid or distributed to the holders of Senior Indebtedness of the Guarantor, shall, as between the Guarantor and its creditors other than the holders of Senior Indebtedness of the Guarantor, on the one hand, and the holders of the Units on account of this Guarantee, on the other hand, be deemed to be a payment by the Guarantor on account of Senior Indebtedness of the Guarantor and not on account of the Redemption Rights. (e) No present or future holder of any Senior Indebtedness of the Guarantor shall be prejudiced in any way in the right to enforce the subordination of this Guarantee by any act or failure to act on the part of the Guarantor. The provisions of this Section 4 are solely for the purpose of defining the relative rights of the holders of Senior Indebtedness of the Guarantor, on the one hand, and the holders of the Units on account of this Guarantee, on the other hand, against the Guarantor and its assets, and nothing contained in this Section 4 shall impair, as between the Guarantor and the holder of any Units, the obligation of the Guarantor, which is A-5 9 unconditional and absolute, to perform in accordance with the terms of this Guarantee or prevent the holder of any Units, upon default hereunder or under the terms of the Units, from exercising all rights, powers and remedies otherwise provided herein or therein or by applicable law, all subject to the rights of the holders of Senior Indebtedness of the Guarantor under this Section 4 to receive cash, property or securities otherwise payable or deliverable to the holders of the Units on account of this Guarantee. (f) Nothing contained in this Section 4 shall prevent at any time, except under the conditions described in Section 4(b) and (c) hereof or during the pendency of any dissolution, winding up, liquidation or reorganization proceedings therein referred to, the Guarantor from performing its obligations under this Guarantee. 5. The Guarantor shall be subrogated to all rights of the holders of the Units against ThermoLase in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee to the end that the Guarantor shall be entitled to receive the shares of ThermoLase Common Stock as to which it makes payments in respect of ThermoLase's redemption obligations hereunder. 6. This Guarantee shall be governed by and construed in accordance with the laws of Commonwealth of Massachusetts. 7. The Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Guarantee and to constitute the same a valid obligation of the Guarantor have been done and performed and have happened in due compliance with all applicable laws. 8. By his acceptance hereof, each Holder acknowledges and agrees that this Guarantee supersedes any and all prior guarantees by Guarantor to such Holder with respect to any redemption obligations of ThermoLase as to its Common Stock. A-6 10 9. The Holder shall at all times be a beneficiary under, and shall be entitled to enforce, that certain Guarantee Agreement dated as of ___________, 1997 by and between the Guarantor and ThermoLase. A copy of such Guarantee Agreement will be provided to the Holder, without charge, upon written request to the Guarantor. WITNESS the facsimile seal of the Guarantor and the facsimile signatures of its duly authorized officers. Dated: ________________, 1997 _______________________ _________________________ Secretary [Seal] President and Chief Executive Officer A-7 EX-5 5 OPINION OF SETH HOOGASIAN, ESQ. 1 Exhibit 5.1 ----------- THERMO ELECTRON CORPORATION 81 Wyman Street Waltham, MA 02254-9046 February 14, 1997 ThermoLase Corporation 10455 Pacific Center Court San Diego, CA 92121-4339 Thermo Electron Corporation 81 Wyman Street Waltham, MA 02254-9046 Re: Combined Registration Statement on Forms S-4 Relating to 2,000,000 Units of ThermoLase Corporation and Guarantees by Thermo Electron Corporation ----------------------------------------------------- Ladies and Gentlemen: I am Vice President and General Counsel to Thermo Electron Corporation, a Delaware corporation (the "Guarantor"), and am General Counsel to its subsidiary, ThermoLase Corporation, a Delaware corporation (the "Company"). I have acted as counsel in connection with the filing of a combined registration statement (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), (i) on Form S-4, with respect to 2,000,000 units (the "Units"), each of which consists of one share of the Company's common stock, $.01 par value per share (the "Common Stock"), and the right to sell one share of Common Stock to the Company during a certain period in the future (the "Redemption Rights'); and (ii) on Form S-4, with respect to the Guarantor's guarantees of the Company's obligations under the Redemption Rights (the "Guarantees"). The Units and the Guarantees, together with any Units and Guarantees registered under a registration statement related to the offering contemplated by the Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act (a "462(b) Registration Statement"), are collectively referred to herein as the "Securities." I or a member of my legal staff have reviewed the corporate proceedings taken by the Company and/or by the Guarantor with respect to the authorization of the issuance of the Securities. I or a member of my legal staff have also examined and relied upon originals or copies, certified or otherwise authenticated to my satisfaction, of all corporate records, documents, agreements or other instruments of the Company and/or of the Guarantor and have made all investigations of law and have discussed 2 with representatives of the Company and of the Guarantor all questions of fact that I have deemed necessary or appropriate. Based upon and subject to the foregoing, I am of the opinion that: 1. The Company and the Guarantor are each corporations duly organized, validly existing and in corporate good standing under the laws of the State of Delaware. 2. The issuance and sale of the Securities registered pursuant to the Registration Statement have been duly authorized by the Company or by the Guarantor, as the case may be, and the issuance and sale of the Securities registered pursuant to a 462(b) Registration Statement will have been duly authorized by the Company or by the Guarantor, as the case may be, prior to their issuance and sale. 3. The Units, when issued and sold in accordance with the provisions of the Offer to Exchange contained in the Registration Statement will be validly issued, fully paid and non-assessable under the General Corporation Law of the State of Delaware. 4. The Guarantees have been duly authorized on behalf of the Guarantor and, when issued and countersigned by the Guarantor or on its behalf by its transfer agent and registrar, will constitute valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with their terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the rights and remedies of creditors and (ii) general principles of equity regardless of whether such enforcement is considered in a proceeding in equity or at law. I hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement or any 462(b) Registration Statement. Very truly yours, /s/ Seth H. Hoogasian --------------------- Seth H. Hoogasian Vice President and General Counsel EX-5.1 6 OPINION OF SETH HOOGASIAN, ESQ. 1 Exhibit 5.1 ----------- THERMO ELECTRON CORPORATION 81 Wyman Street Waltham, MA 02254-9046 February 14, 1997 ThermoLase Corporation 10455 Pacific Center Court San Diego, CA 92121-4339 Thermo Electron Corporation 81 Wyman Street Waltham, MA 02254-9046 Re: Combined Registration Statement on Forms S-4 Relating to 2,000,000 Units of ThermoLase Corporation and Guarantees by Thermo Electron Corporation ------------------------------------------------------ Ladies and Gentlemen: I am Vice President and General Counsel to Thermo Electron Corporation, a Delaware corporation (the "Guarantor"), and am General Counsel to its subsidiary, ThermoLase Corporation, a Delaware corporation (the "Company"). I have acted as counsel in connection with the filing of a combined registration statement (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), (i) on Form S-4, with respect to 2,000,000 units (the "Units"), each of which consists of one share of the Company's common stock, $.01 par value per share (the "Common Stock"), and the right to sell one share of Common Stock to the Company during a certain period in the future (the "Redemption Rights'); and (ii) on Form S-4, with respect to the Guarantor's guarantees of the Company's obligations under the Redemption Rights (the "Guarantees"). The Units and the Guarantees, together with any Units and Guarantees registered under a registration statement related to the offering contemplated by the Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act (a "462(b) Registration Statement"), are collectively referred to herein as the "Securities." I or a member of my legal staff have reviewed the corporate proceedings taken by the Company and/or by the Guarantor with respect to the authorization of the issuance of the Securities. I or a member of my legal staff have also examined and relied upon originals or copies, certified or otherwise authenticated to my satisfaction, of all corporate records, documents, agreements or other instruments of the Company and/or of the Guarantor and have made all investigations of law and have discussed 2 with representatives of the Company and of the Guarantor all questions of fact that I have deemed necessary or appropriate. Based upon and subject to the foregoing, I am of the opinion that: 1. The Company and the Guarantor are each corporations duly organized, validly existing and in corporate good standing under the laws of the State of Delaware. 2. The issuance and sale of the Securities registered pursuant to the Registration Statement have been duly authorized by the Company or by the Guarantor, as the case may be, and the issuance and sale of the Securities registered pursuant to a 462(b) Registration Statement will have been duly authorized by the Company or by the Guarantor, as the case may be, prior to their issuance and sale. 3. The Units, when issued and sold in accordance with the provisions of the Offer to Exchange contained in the Registration Statement will be validly issued, fully paid and non-assessable under the General Corporation Law of the State of Delaware. 4. The Guarantees have been duly authorized on behalf of the Guarantor and, when issued and countersigned by the Guarantor or on its behalf by its transfer agent and registrar, will constitute valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with their terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the rights and remedies of creditors and (ii) general principles of equity regardless of whether such enforcement is considered in a proceeding in equity or at law. I hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement or any 462(b) Registration Statement. Very truly yours, /s/ Seth H. Hoogasian --------------------- Seth H. Hoogasian Vice President and General Counsel EX-8.1 7 OPINION OF HALE AND DORR LLP RE: TAX MATTERS 1 Exhibit 8.1 ----------- HALE AND DORR LLP COUNSELLORS AT LAW 60 STATE STREET, BOSTON, MASSACHUSETTS 02109 617-526-6000 * FAX 617-526-5000 February 20, 1997 ThermoLase Corporation 81 Wyman Street Waltham, Massachusetts 02254-9046 Re: Offer to Exchange ----------------- Ladies and Gentlemen: We have acted as counsel to ThermoLase Corporation ("ThermoLase") in connection with the Registration Statement on Form S-4 (the "Registration Statement") relating to its offer to exchange one Unit consisting of one share of Common Stock and one Redemption Right for one outstanding share of Common Stock plus an Additional Payment. Unless otherwise indicated, capitalized terms used herein shall have the meaning ascribed to them in the offer to exchange included in the Registration Statement (the "Offer to Exchange"). We hereby confirm that assuming that the Exchange is consummated as described in the Offer to Exchange, the discussion under the caption "CERTAIN FEDERAL TAX CONSEQUENCES" in the Offer to Exchange expresses our opinion regarding the material Federal income tax consequences to the ThermoLase shareholders attributable to the exchange of Common Stock and Additional Payments for Units in the Exchange, and the ownership and disposition of Units acquired in the Exchange. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption "CERTAIN FEDERAL TAX CONSEQUENCES" in the Offer to Exchange. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended. Very truly yours, /s/ Hale and Dorr LLP --------------------- Hale and Dorr LLP WASHINGTON, DC BOSTON, MA LONDON, UK* - -------------------------------------------------------------------------------- HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS *BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM) EX-23.2 8 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To ThermoLase Corporation: As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated November 1, 1996, included in ThermoLase Corporation's Annual Report on Form 10-K, as amended on Form 10-K/A, for the year ended September 28, 1996 and to all references to our firm included in this registration statement. /s/ Arthur Andersen LLP - ----------------------- ARTHUR ANDERSEN LLP Boston, Massachusetts February 19, 1997 EX-23.2(A) 9 CONSENT OF ARTHUR ANDERSEN 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To Thermo Electron Corporation: As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated February 15, 1996 (except with respect to the matters discussed in Note 16 as to which the date is June 28, 1996) included in Thermo Electron Corporation's Annual Report on Form 10-K, as amended on Form 10-K/A, for the year ended December 30, 1995 and to all references to our firm included in this registration statement. /s/ Arthur Andersen LLP - ----------------------- ARTHUR ANDERSEN LLP Boston, Massachusetts February 19, 1997 EX-99.1 10 FORM OF LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 LETTER OF TRANSMITTAL THERMOLASE CORPORATION OFFER TO EXCHANGE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT FOR EACH ONE OUTSTANDING SHARE OF COMMON STOCK PLUS $3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK) NO MORE THAN 2,000,000 UNITS WILL BE ISSUED ------------------ REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS BY THERMO ELECTRON CORPORATION ------------------ THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED. The Exchange Agent for the Offer is: AMERICAN STOCK TRANSFER & TRUST COMPANY By Hand or Overnight By Mail: By Facsimile Transmission: Courier: American Stock Transfer & (718) 234-5001 American Stock Transfer & Trust Company Trust Company 40 Wall Street Telephone (confirmation only) 40 Wall Street New York, NY 10005 (212) 936-5100 New York, NY 10005
DELIVERY OF THIS LETTER OF TRANSMITTAL OR THE OTHER REQUIRED MATERIALS TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. 2 This Letter of Transmittal is to be completed by holders of shares of Common Stock, $.01 par value per share (the "Common Stock"), of ThermoLase Corporation, a Delaware corporation (the "Company"), desiring to tender their shares of Common Stock (each, a "Share") pursuant to the Offer to Exchange dated , 1997 (the "Offer to Exchange"). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Offer to Exchange. After this Letter of Transmittal has been completed and signed (and the stockholder's signature hereon is guaranteed if required by Instruction 1, this Letter of Transmittal (or a facsimile thereof), the Additional Cash Payment, if applicable, and any other required documents, should be mailed or delivered to the Exchange Agent, along with the certificates for the tendered Shares ("Share Certificates"). If any Shares are to be tendered pursuant to the procedure for book-entry transfer described in the Offer to Exchange, then delivery of such Shares should be made into the account of American Stock Transfer & Trust Company, as Exchange Agent (the "Exchange Agent"), at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities"). Shareholders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Shareholders." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. Pursuant to the Offer to Exchange, tendering shareholders must deliver an additional payment of $3.00 (the "Additional Payment") for each Share tendered for exchange. Shareholders may make the Additional Payment by delivery of (i) cash via a certified or official bank check made payable to the Exchange Agent or via wire transfer to the Exchange Agent (such cash payment being hereinafter referred to as the "Additional Cash Payment," and an exchange in which an Additional Cash Payment is made being hereinafter referred to as a "Share and Cash Exchange"), or (ii) additional Shares having a value equal to the aggregate required Additional Payment (the Shares being tendered in satisfaction of the Additional Payment being hereinafter referred to as the "Additional Share Payment," and an exchange in which an Additional Share Payment is made being hereinafter referred to as a "Share Only Exchange"). Shares tendered in satisfaction of the Additional Share Payment will be valued at $20.25 per share; accordingly, for each Share tendered for exchange in a Share Only Exchange, the tendering shareholder will receive .871 Units. No fractional Units will be issued, and the number of Units issued will be rounded down to the nearest whole number. SHAREHOLDERS MAY EITHER MAKE A SHARE AND CASH EXCHANGE OR A SHARE ONLY EXCHANGE, BUT NOT A COMBINATION THEREOF. Shareholders whose (i) Share Certificates, (ii) Additional Cash Payments, if applicable, and (iii) Letter of Transmittal and all other required documents are not immediately available or cannot be delivered to the Exchange Agent prior to the Expiration Date (including, with respect to the Shares, pursuant to the procedures for delivery by book-entry transfer) may tender their Shares, Additional Cash Payments, if applicable, Letter of Transmittal and other required documents according to the guaranteed delivery procedures set forth in the Offer to Exchange. See Instruction 2. 2 3 - ------------------------------------------------------------------------------- I. DESCRIPTION OF SHARES AND ADDITIONAL PAYMENTS TENDERED - -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------ NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL SHARES CERTIFICATE(S) AND SHARE(S) TENDERED IN EXACTLY AS NAME(S) APPEAR(S) (ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY). ON SHARE CERTIFICATE(S)) SEE INSTRUCTION 3. - ------------------------------------------------------------------------------------------------------------------------------ (A) (B) (C) (D) (E) TOTAL NUMBER OF SHARES REPRESENTED BY SHARE CERTIFICATE(S) OR AMOUNT OF SHARE DELIVERED BY NUMBER OF ADDITIONAL CASH CERTIFICATE BOOK-ENTRY SHARES PAYMENT NUMBER OF UNITS NUMBER(S)* TRANSFER TENDERED+ TENDERED++ REQUESTED+++ ---------------------------------------------------------------------------------- $ ---------------------------------------------------------------------------------- $ ---------------------------------------------------------------------------------- $ ---------------------------------------------------------------------------------- $ ---------------------------------------------------------------------------------- Total $ ------------------------------------------------------------------------------------------------------------------------------ * Need not be completed by Book-Entry Shareholders. + If less than the full number of Shares evidenced by a submitted certificate are to be tendered, the tendering shareholder should indicate the number of Shares being tendered. If no indication is given, all Shares represented by such certificate will be deemed to have been tendered. ++ Additional Cash Payment to be made only in a Share and Cash Exchange. In the event that a shareholder desires to make a Share and Cash Exchange but such stockholder's Additional Cash Payment is insufficient with respect to the number of Shares designated or would result in the tendering of a fractional share, the number of Shares deemed tendered shall be the maximum number which may be tendered based on the Additional Cash Payment actually received. In the event that no Additional Cash Payment is designated in column (D), the tendering shareholder will be deemed to have made a Share Only Exchange. +++ Equals one Unit for every Share plus $3.00 cash tendered in a Share and Cash Exchange or .871 Units for every Share tendered in a Share Only Exchange, rounded down to the nearest whole number of Units. The actual issuance of Units is subject to the terms and conditions set forth in the Offer to Exchange. Shareholders may either make a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof.
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- II. ADDITIONAL CASH PAYMENT - -------------------------------------------------------------------------------- Additional Cash Payment Tendered: (TOTAL OF AMOUNT SET FORTH IN COLUMN (D) IN TABLE I) $ ----------- Payment made via (check appropriate box): [ ] Certified or official bank check made payable to the Exchange Agent (check must be enclosed); or [ ] Wire transfer to the Exchange Agent pursuant to the following wire instructions: Chase Manhattan Bank 55 Water Street New York, NY 10041 Account No.: 323212069 ABA No.: 021000021 For the benefit of ThermoLase Corporation - -------------------------------------------------------------------------------- 3 4 [ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution: --------------------------------------------- Check box of applicable Book-Entry Transfer Facility: [ ] The Depository Trust Company [ ] Philadelphia Depository Trust Company Account Number: Transaction Code Number: -------------- --------------- [ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY): Name(s) of Registered Holder(s): ------------------------------------------- Window Ticket Number (if any): --------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------ Name of Institution that Guaranteed Delivery: ------------------------------ If delivered by Book-Entry Transfer, check box of applicable Book-Entry Transfer Facility: [ ] The Depository Trust Company [ ] Philadelphia Depository Trust Company Account Number: Transaction Code Number: -------------- --------------- NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. 4 5 LADIES AND GENTLEMEN: The undersigned hereby tenders to ThermoLase Corporation, a Delaware corporation (the "Company"), the above-described Shares and, if applicable, Additional Cash Payments pursuant to and on the terms and conditions set forth in the Company's Offer to Exchange dated , 1997 and in this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the "Offer"), receipt of each of which is hereby acknowledged. Subject to, and effective upon, acceptance for exchange of the Shares and, if applicable, Additional Cash Payments tendered herewith in accordance with the terms and subject to the conditions of the Offer, including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to all of the Shares and Additional Cash Payments that are being tendered hereby and irrevocably appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and, if applicable, Additional Cash Payments with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver Share Certificates for such Shares, or transfer ownership of such Shares on the account books maintained by a Book-Entry Transfer Facility, together in either case with appropriate evidences of transfer and authenticity, to, or upon the order of, the Company, upon receipt by the Exchange Agent, as the undersigned's agent, of the Units to be exchanged for such Shares and, if applicable, Additional Cash Payments; (b) present such Shares for transfer on the books of the Company and (c) deliver the Additional Cash Payment, if applicable, to the Company, all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the Shares and, if applicable, the Additional Cash Payment tendered hereby and (b) when such Shares and Additional Cash Payment are accepted for exchange by the Company, the Company will acquire good, marketable and unencumbered title to such Shares and Additional Cash Payment, free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim. The undersigned, upon request, shall execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares and, if applicable, Additional Cash Payment tendered hereby. No authority herein conferred or agreed to be conferred shall be affected by, and all authority herein conferred or agreed to be conferred shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise provided in the Offer to Exchange, tenders of Shares and, if applicable, Additional Cash Payments made pursuant to the Offer are irrevocable. Shares and Additional Cash Payments tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Company pursuant to the Offer, may also be withdrawn at any time after , 1997. The undersigned understands that tenders of Shares and, if applicable, Additional Cash Payments pursuant to any of the procedures described in the Offer to Exchange and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. The Company's acceptance of such Shares and, if applicable, Additional Cash Payments for exchange will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions set forth in the Offer. The undersigned understands that, under certain circumstances set forth in the Offer to Exchange, the Company may terminate or amend the Offer and may not be required to accept for exchange any of the tendered Shares or Additional Cash Payments. 5 6 Unless otherwise indicated herein under "Special Exchange Instructions," the undersigned hereby instructs the Exchange Agent to issue the Units in exchange for all tendered Shares and, if applicable, Additional Cash Payments accepted for exchange and issue or return any Share Certificate(s) for Shares not tendered and any Shares and, if applicable, Additional Cash Payments not exchanged in the name(s) of the registered holder(s) appearing under "Description of Shares and Additional Payments Tendered." In addition, unless otherwise indicated herein under "Special Delivery Instructions," the undersigned hereby instructs the Exchange Agent to mail the Units issued in exchange for all tendered Shares and, if applicable, Additional Cash Payments accepted for exchange and return any Share Certificate(s) for Shares not tendered and any Shares and, if applicable, Additional Cash Payments not exchanged (and accompanying other documents, as appropriate) to the address of the registered holder(s) appearing under "Description of Shares and Additional Payments Tendered." In the event that both the "Special Delivery Instructions" and the "Special Exchange Instructions" boxes are completed, the undersigned hereby instructs the Exchange Agent to issue the Units issued in exchange for all tendered Shares and, if applicable, Additional Cash Payments accepted for exchange and return any Share Certificate(s) for Shares not tendered and any Shares and, if applicable, Additional Cash Payments not exchanged in the name(s) of, and deliver such Units and return such Share Certificate(s) and any Additional Cash Payment to, the person(s) so indicated, as applicable. Unless otherwise indicated herein under "Special Exchange Instructions," the undersigned hereby instructs the Exchange Agent to credit any Shares tendered herewith by book-entry transfer that are not exchanged by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that the Company has no obligation pursuant to the "Special Exchange Instructions" to transfer any Shares or Additional Cash Payments from the name(s) of the registered holder(s) thereof if the Company does not accept for exchange any of the tendered Shares and, if applicable, Additional Cash Payments tendered hereby. 6 7 - ------------------------------------------------------------------------------- SPECIAL EXCHANGE INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6, AND 7) To be completed ONLY if Share Certificate(s) evidencing Shares not tendered or Shares not exchanged or the Units to be issued in exchange for tendered Shares and, if applicable, Additional Cash Payments accepted for exchange are to be issued in the name of someone other than the registered holder(s) shown above or if Shares tendered by book-entry transfer which are not exchanged are to be returned by credit to any account maintained at a Book-Entry Transfer Facility other than the account indicated above. Issue: [ ] Certificates for Shares not tendered for exchange or Shares not exchanged to: [ ] Units to: Name: ----------------------------------------------------------------------- (PLEASE PRINT) Address: -------------------------------------------------------------------- ---------------------------------------------------------------------------- (INCLUDE ZIP CODE) ---------------------------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) Credit Shares tendered by book-entry transfer that are not exchanged to (Check one): Name of Tendering Institution: [ ] DTC [ ] PDTC (check one) Account No.: --------------------------------------------- Transaction Code No.: ---------------------------------------------------- - ------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificate(s) evidencing Shares not tendered or Shares not exchanged or the Unites to be issued in exchange for tendered Shares and, if applicable, Additional Cash Payments accepted for exchange are to be sent to someone other than the registered holder(s) shown above or to the registered holder(s) shown above at an address other than that shown above. Mail: [ ] Certificates for Shares not tendered for exchange or Shares not exchanged to: [ ] Units to: Name: ----------------------------------------------------------------------- (PLEASE PRINT) Address: -------------------------------------------------------------------- -------------------------------------------------------------------------- (INCLUDE ZIP CODE) - ------------------------------------------------------------------------------- 7 8 - ------------------------------------------------------------------------------- IMPORTANT SIGN HERE X ------------------------------------------------------------------------------ X ------------------------------------------------------------------------------ SIGNATURE(S) OF HOLDER(S) Dated: , 1997 --------------------------- (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) Name(s): ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title): --------------------------------------------------------- Address: ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: ------------------------------------------------ Tax Identification or Social Security No.: ------------------------------------- GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: ---------------------------------------------------------- Name: -------------------------------------------------------------------------- (PLEASE PRINT) Title: ------------------------------------------------------------------------- Name of Firm: ------------------------------------------------------------------ (PLEASE PRINT) Address: ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: ( ) ------------------------------------- Dated: ------------------------ , 1997 - ------------------------------------------------------------------------------- 8 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Share(s) tendered herewith, unless such holder(s) has (have) completed either the box entitled "Special Exchange Instructions" or the box entitled "Special Delivery Instructions," or (b) if such Share(s) is (are) tendered for the account of a firm which is identified in Rule 17Ad-15 under the Exchange Act including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) savings institution that is a participant in a Securities Transfer Association recognized program (each of the foregoing being referred to as an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal, Certificates and Additional Cash Payments. This Letter of Transmittal is to be completed by holders of shares of Common Stock of the Company desiring to tender their Shares pursuant to the Offer to Exchange regardless of whether (i) Share Certificates are to be forwarded herewith or (ii) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in the Offer to Exchange. In order for Shares and, if applicable, Additional Cash Payments to be validly tendered pursuant to the Offer, (i) this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, together with any required signature guarantees, Share Certificates evidencing all tendered Shares, the Additional Cash Payment, if applicable, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth on the front cover hereof prior to the Expiration Date (provided that in lieu of delivery of such Share Certificates, the Shares may be tendered by book-entry transfer, provided that a timely confirmation of such book-entry transfer (a "Book-Entry Confirmation") is received by the Exchange Agent at such address prior to the Expiration Date) or (ii) the guaranteed delivery procedures described in the following paragraph must be complied with. Shareholders whose Share Certificates (or book-entry transfer), Additional Cash Payments, if applicable, and all other required documents are not immediately available or who cannot deliver their Share Certificates, Additional Cash Payments, if applicable, Letter of Transmittal and all other required documents to the Exchange Agent prior to the Expiration Date may tender their Shares, Additional Cash Payments, if applicable, Letter of Transmittal and all other required documents by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in the Offer to Exchange. Pursuant to such procedure: (i) such tender must be made by or through a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or by or through a commercial bank or trust company having an office or correspondent in the United States; (ii) a properly completed and duly executed Notice of Guaranteed Delivery must be received by the Exchange Agent prior to the Expiration Date; and (iii) the Share Certificates (or a book-entry confirmation) evidencing all tendered Shares in proper form for transfer, and if applicable, the Additional Cash Payment, in each case together with this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three American Stock Exchange trading days after the date of the Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES, ADDITIONAL CASH PAYMENTS, IF APPLICABLE, AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY OF SHARES THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. 9 10 No alternative, conditional or contingent tenders will be accepted. All tendering shareholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their tendered Shares and, if applicable, Additional Cash Payments for exchange. 3. Inadequate Space. If the space provided herein is inadequate, information should be listed on a separate signed schedule attached hereto and referenced in the box entitled "Description of Shares and Additional Payments Tendered." 4. Partial Tenders. (Not Applicable to Book-Entry Shareholders.) If fewer than all the Shares evidenced by any Share Certificate submitted to the Exchange Agent herewith are to be tendered, fill in the number of Shares which are to be tendered in the boxes entitled "Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing the Shares that were evidenced by the Share Certificate(s) delivered to the Exchange Agent herewith, but which were not tendered hereby, will be sent to the registered holder(s) shown above, unless otherwise provided in the box entitled "Special Delivery Instructions," as soon as practicable after the expiration or termination of the Offer. All Shares represented by Share Certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. In the event that a shareholder desires to make a Share and Cash Exchange but such shareholder's Additional Cash Payment is insufficient with respect to the number of Shares designated or would result in the tendering of a fractional share, the number of Shares deemed tendered shall be the maximum number which may be tendered based on the Additional Cash Payment actually received. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of such person's authority so to act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless the issuance of Units in exchange therefor is to be made to, or certificates evidencing Shares not tendered or Share Certificates evidencing Shares not exchanged are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered must be endorsed or accompanied by appropriate stock powers signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Share Certificate(s) listed and tendered hereby, the Share Certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on such Share Certificate(s). Signature(s) on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. 6. Transfer Taxes. Except as set forth in this Instruction 6, the Company will pay or cause to be paid any transfer taxes with respect to the transfer and sale of Shares to it pursuant to the Offer. If, however, Units in exchange for Shares and, if applicable, Additional Cash Payments accepted for exchange are to be issued to, or if Share Certificate(s) evidencing Shares not tendered or Shares not exchanged are to be issued in the name of, any person other than the registered holder(s), or if tendered Share Certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, then the amount of any transfer taxes (whether imposed on the registered holder(s) or such person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or an exemption therefrom, is submitted. EXCEPT AS SET FORTH IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) TENDERED HEREBY. 10 11 7. Special Exchange and Delivery Instructions. If Units issued in exchange for tendered Shares and, if applicable, Additional Cash Payments accepted for exchange are to be issued in the name of, or Share Certificate(s) evidencing Shares not tendered or Shares not exchanged are to be issued or returned to, a person other than the registered holder or if Units or such Share Certificate(s) are to be returned to a person other than the signer of this Letter of Transmittal or to an address of the signer other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed. Book-Entry Shareholders may request that Shares not accepted for exchange be credited to such account maintained at a Book-Entry Transfer Facility as such Book-Entry Stockholder may designate in the box entitled "Special Exchange Instructions." If no such instructions are given, such Shares will be returned by crediting the account at the Book-Entry Transfer Facility designated above. 8. Questions and Requests for Assistance or Additional Copies. Questions and requests for assistance, as well as requests for additional copies of the Offer to Exchange, this Letter of Transmittal and all other exchange offer materials, may be directed to the Information Agent for the Offer at its address and telephone number set forth below. Additional copies of the Offer to Exchange, this Letter of Transmittal and all other exchange offer materials may also be obtained from brokers, dealers, banks or trust companies at the Company's expense. The Information Agent: National Westminster Bank Plc -- New York Branch 175 Water Street, 20th Floor New York, New York 10038 (212) 602-5609 Attention: Austin Chen (Call Collect) 9. Lost, Destroyed or Stolen Certificates. If any Share Certificate has been lost, destroyed or stolen, the shareholder should promptly notify the Exchange Agent. The shareholder will then be instructed as to the steps that must be taken in order to replace such Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Share Certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, ANY RELATED ADDITIONAL CASH PAYMENT, IF APPLICABLE, AND ALL OTHER REQUIRED DOCUMENTS, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. 11 EX-99.2 11 FORM OF NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES AND, IF APPLICABLE, ADDITIONAL CASH PAYMENTS OF THERMOLASE CORPORATION As set forth in the Offer to Exchange of ThermoLase Corporation, a Delaware corporation (the "Company"), described below, this Notice of Guaranteed Delivery or one substantially in the form hereof must be used to tender Shares and, if applicable, Additional Cash Payments, pursuant to the Offer (as defined below) if a shareholder is unable to deliver (i) all necessary stock certificates evidencing all Shares in proper form for transfer (or to comply with the procedure for book-entry transfer of such Shares), (ii) the Additional Cash Payment, if applicable, and (iii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees and all other required documents to the Exchange Agent prior to the Expiration Date. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Company's Offer to Exchange dated , 1997 (the "Offer to Exchange"). This instrument may be delivered by hand or transmitted by facsimile transmission, overnight courier or mail to the Exchange Agent. The Exchange Agent for the Offer is: AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand or Overnight Courier: American Stock Transfer (718) 234-5001 American Stock Transfer & Trust Company & Trust Company 40 Wall Street 40 Wall Street New York, NY 10005 Telephone (confirmation only): New York, NY 10005 (212) 936-5100
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of Transmittal. 2 LADIES AND GENTLEMEN: The undersigned hereby tenders to ThermoLase Corporation, a Delaware corporation (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Exchange dated , 1997 (the "Offer to Exchange") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares and the amount of the Additional Cash Payment, if applicable, indicated below pursuant to the guaranteed delivery procedures set forth in the Offer to Exchange. Signature(s): - --------------------------------------------- Name(s) of Record Holders: - ---------------------------- ============================================================ Please Type or Print Address: - -------------------------------------------------- - ------------------------------------------------------------ Zip Code Area Code and Tel. No. (s): - -------------------------------------------------- I. Number of Shares to be tendered: -------------------------------------------------------------------------- II. Amount of cash to be Tendered in satisfaction of the Additional Cash Payment*: ----------------------------------------------------------------------- III. Number of Units requested**: -------------------------------------------------------------------------- Dated: ---------------------------------- ,1997 * Additional Cash Payment to be made only in a Share and Cash Exchange. In the event that a shareholder desires to make a Share and Cash Exchange but such shareholder's Additional Cash Payment is insufficient with respect to the number of Shares designated or would result in the tendering of a fractional share, the number of Shares deemed tendered shall be the maximum number which may be tendered based on the Additional Cash Payment actually received. In the event that no Additional Cash Payment is designated, a Share Only Exchange will be deemed to be made. ** Equals one Unit for every Share plus $3.00 cash tendered in a Share and Cash Exchange and .871 Units for every Share tendered in a Share Only Exchange, rounded down to the nearest whole number of Units. The actual issuance of Units is subject to the terms and conditions set forth in the Offer to Exchange. Shareholders may either make a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof. GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEES) The undersigned, a firm which is a member firm of a registered national securities exchange, or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States, hereby guarantees to deliver to the Exchange Agent (i) all necessary stock certificates evidencing all Shares in proper form for transfer (or to confirm the book-entry transfer of such Shares into the Exchange Agent's account at The Depository Trust Company or the Philadelphia Depository Trust Company), (ii) the Additional Cash Payment, if applicable, and (iii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees and all other required documents, all within three American Stock Exchange trading days after the date hereof. ---------------------------------------------------------- ---------------------------------------------------------- Name of Firm Authorized Signature ---------------------------------------------------------- ---------------------------------------------------------- Address Name ---------------------------------------------------------- ---------------------------------------------------------- Zip Code Title Dated: ----------------------------------------, 1997 ---------------------------------------------------------- Area Code and Telephone No.
NOTE: DO NOT SEND CERTIFICATES OR CASH PAYMENTS WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES AND CASH PAYMENTS SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 2 EX-99.3 12 FORM OF LETTER TO BROKERS 1 EXHIBIT 99.3 NATIONAL WESTMINSTER BANK PLC -- NEW YORK BRANCH 175 WATER STREET, 20TH FLOOR NEW YORK, NEW YORK 10038 THERMOLASE CORPORATION OFFER TO EXCHANGE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT FOR EACH ONE OUTSTANDING SHARE OF COMMON STOCK PLUS $3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK) NO MORE THAN 2,000,000 UNITS WILL BE ISSUED ------------------ REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS BY THERMO ELECTRON CORPORATION ------------------ - ------------------------------------------------------------------------------- THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED. - ------------------------------------------------------------------------------- , 1997 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by ThermoLase Corporation, a Delaware corporation (the "Company"), to act as Information Agent in connection with the Company's offer to exchange one unit (a "Unit") consisting of one share of Common Stock, $0.01 par value per share, of the Company (the "Common Stock") and one redemption right (each, a "Redemption Right") for each outstanding share of Common Stock (each, a "Share"), plus an additional payment of $3.00 (the "Additional Payment"), validly tendered and accepted for exchange upon the terms and subject to the conditions set forth in the Offer to Exchange dated , 1997 (the "Offer to Exchange") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") enclosed herewith. The Additional Payment may be made either (i) in cash (such cash payment being hereinafter referred to as the "Additional Cash Payment," and an exchange in which an Additional Cash Payment is made being referred to herein as a "Share and Cash Exchange") or (ii) by delivery to the Company of additional Shares having a value equal to the aggregate required Additional Payment (the Shares being tendered in satisfaction of the Additional Payment being hereinafter referred to as the "Additional Share Payment," and an exchange in which an Additional Share Payment is made being hereinafter referred to as "Share Only Exchange"). Shares tendered in satisfaction of the Additional Share Payment will be valued at $20.25 per share; accordingly, for each Share tendered for exchange in a Share Only Exchange, the tendering shareholder will receive .871 Units. No fractional Units will be issued, and the number of Units issued will be rounded down to the nearest whole number. Shareholders may either make a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof. No more than 2,000,000 Units will be issued. If the number of Shares and, if applicable, Additional Cash Payments validly tendered pursuant to the Offer and not withdrawn prior to the Expiration Date would result in the issuance of more than 2,000,000 Units, acceptances will be cut back pro rata (with adjustments to avoid issuance of fractional Units) based 2 on the total number of Units that would have been issued to such tendering shareholders if no such cutback had been made. Each Redemption Right will entitle the holder thereof to sell the related share of Common Stock to the Company for $20.25 per share during the first 20 business days after the fourth anniversary of the Expiration Date (as defined in the Offer to Exchange). The Redemption Right will not detach or trade separately from the related share of Common Stock (but instead will trade together with the related share of Common Stock as a Unit) and will expire and become worthless if the closing price of the Company's Common Stock is at least $26.00 for 20 of any 30 consecutive trading days after the Expiration Date. In the event of the expiration of the Redemption Right, each Unit will automatically become, and will trade as, one share of Common Stock. The Company's obligations under the Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron Corporation, the Company's ultimate parent corporation. THE OFFER IS SUBJECT TO CERTAIN CONDITIONS, INCLUDING THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF SHARES AND, IF APPLICABLE, RELATED ADDITIONAL CASH PAYMENTS AS WOULD RESULT IN THE ISSUANCE OF AT LEAST 500,000 UNITS, AND THE LISTING OF THE UNITS ON THE AMERICAN STOCK EXCHANGE, SUBJECT TO OFFICIAL NOTICE OF ISSUANCE. Enclosed for your information and for forwarding to your clients for whose accounts you hold shares of Common Stock registered in your name or in the name of your nominees are copies of the following documents: 1. The Offer to Exchange dated , 1997. 2. The [green] Letter of Transmittal to tender Shares and, if applicable, Additional Cash Payments (for your use and for the information of your clients). 3. The [yellow] Notice of Guaranteed Delivery for tendering Shares and, if applicable, Additional Cash Payments (to be used to accept the Offer if (i) all necessary stock certificates evidencing Shares (collectively, "Share Certificates") (or written confirmation of the book-entry transfer of such Shares), (ii) a certified or official bank check made payable to American Stock Transfer & Trust Company (the "Exchange Agent") or a wire transfer in the amount of the Additional Cash Payment, if applicable, and (iii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) and all other required documents cannot be delivered to the Exchange Agent prior to the Expiration Date. 4. A [gray] printed form of letter which may be sent to your clients for whose accounts you hold shares of Common Stock registered in your name or in the name of your nominees, with space provided for obtaining such clients' instructions with regard to the Offer. 5. A return envelope addressed to the Exchange Agent. YOUR PROMPT ACTION IS REQUESTED. BECAUSE THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED, YOU SHOULD CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. In all cases, delivery of Units in exchange for Shares and, if applicable, Additional Cash Payments tendered and accepted for exchange pursuant to the Offer will be made only after timely receipt by the Exchange Agent of (i) certificates representing tendered Shares or timely confirmation of a book-entry transfer of such Shares into the Exchange Agent's account at one of the Book-Entry Transfer Facilities (as defined in the Offer to Exchange) pursuant to the procedures set forth in the Offer to Exchange, (ii) a certified or official bank check made payable to the Exchange Agent or wire transfer in the amount of the Additional Cash Payment, if applicable, and (iii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) and any other documents required by the Letter of Transmittal. If a shareholder desires to tender Shares and, if applicable, the Additional Cash Payment pursuant to the Offer and such shareholder cannot deliver his Share Certificates (or confirmation of a book-entry transfer thereof), Additional Cash Payment, if applicable, Letter of Transmittal and all other required documents to reach the Exchange Agent prior to the 2 3 Expiration Date, such Shares, Additional Cash Payment, Letter of Transmittal and other required documents may nevertheless be tendered by following the guaranteed delivery procedures specified in the Offer to Exchange. No fees or commissions will be paid to brokers, dealers or any other persons for soliciting tenders of Shares and, if applicable, Additional Cash Payments pursuant to the Offer. The Company will, however, upon request, reimburse you for reasonable out-of-pocket expenses incurred by you in forwarding any of the enclosed materials to your clients. The Company will pay or cause to be paid all transfer taxes, if any, applicable to the transfer and sale of Shares to it pursuant to the Offer, except as otherwise provided in the Letter of Transmittal. Questions and requests for assistance or for additional copies of the enclosed materials may be directed to the Information Agent or the Exchange Agent, at their respective addresses and telephone numbers set forth on the back cover of the Offer to Exchange. Very truly yours, National Westminster Bank Plc -- New York Branch NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THERMO ELECTRON, THE INFORMATION AGENT, THE EXCHANGE AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.4 13 FORM OF LETTER TO CLIENTS 1 EXHIBIT 99.4 THERMOLASE CORPORATION OFFER TO EXCHANGE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT FOR EACH ONE OUTSTANDING SHARE OF COMMON STOCK PLUS $3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK) NO MORE THAN 2,000,000 UNITS WILL BE ISSUED ------------------ REDEMPTION PAYMENTS GUARANTEED ON A SUBORDINATED BASIS BY THERMO ELECTRON CORPORATION ------------------ - -------------------------------------------------------------------------------- THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration is an Offer to Exchange dated , 1997 (the "Offer to Exchange") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") relating to an offer by ThermoLase Corporation, a Delaware corporation (the "Company"), to exchange one unit (a "Unit") consisting of one share of Common Stock, $0.01 par value per share, of the Company (the "Common Stock") and one redemption right (each, a "Redemption Right") for each outstanding share of Common Stock (each, a "Share"), plus an additional payment of $3.00 (the "Additional Payment"), validly tendered and accepted for exchange in the Offer. The Additional Payment may be made either (i) in cash (such cash payment being hereinafter referred to as the "Additional Cash Payment," and an exchange in which an Additional Cash Payment is made being hereinafter referred to as a "Share and Cash Exchange"), or (ii) by delivery to the Company of additional Shares having a value equal to the aggregate required Additional Payment (the Shares being tendered in satisfaction of the Additional Payment being hereinafter referred to as the "Additional Share Payment," and an exchange in which an Additional Share Payment is made being hereinafter referred to as a "Share Only Exchange"). Shares tendered in satisfaction of the Additional Share Payment will be valued at $20.25 per share; accordingly, for each Share tendered for exchange in a Share Only Exchange, the tendering shareholder will receive .871 Units. No fractional Units will be issued, and the number of Units issued will be rounded down to the nearest whole number. Shareholders may either make a Share and Cash Exchange or a Share Only Exchange, but not a combination thereof. No more than 2,000,000 Units will be issued. If the number of Shares and, if applicable, Additional Cash Payments validly tendered pursuant to the Offer and not withdrawn prior to the Expiration Date would result in the issuance of more than 2,000,000 Units, acceptances will be cut back pro rata (with adjustments to avoid issuance of fractional Units) based on the total number of Units that would have been issued to such tendering shareholders if no such cutback had been made. Each Redemption Right will entitle the holder thereof to sell the related share of Common Stock to the Company for $20.25 per share during the first 20 business days after the fourth anniversary of the Expiration Date. The Redemption Right will not detach or trade separately from the related share of Common Stock (but instead will trade together with the related share of Common Stock as a Unit) and will expire and become worthless if the closing price of the Company's Common Stock is at least $26.00 for 20 of any 30 consecutive trading days after the Expiration Date (as defined in the Offer to Exchange). In the event of the expiration of the Redemption Right, each Unit will automatically become, and 2 will trade as, one share of Common Stock. The Company's obligations under the Redemption Rights will be guaranteed on a subordinated basis by Thermo Electron Corporation, the Company's ultimate parent corporation. We are the holder of record of shares of Common Stock held by us for your account. A TENDER OF SUCH SHARES OF COMMON STOCK CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES OF COMMON STOCK HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all of the shares of Common Stock held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer. Your attention is directed to the following: 1. The Offer is to exchange one Unit, consisting of one share of Common Stock and one Redemption Right, for each one outstanding share of Common Stock plus an additional payment of $3.00, payable either in cash or in additional shares of Common Stock, but not a combination thereof. 2. The Offer, withdrawal rights and proration period will expire at 12:00 midnight, New York City time, on , 1997, unless the Offer is extended. 3. No more than 2,000,000 Units will be issued. 4. The Offer is subject to certain conditions, including there being validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares and, if applicable, related Additional Cash Payments as would result in the issuance of at least 500,000 Units, and the listing of the Units on the American Stock Exchange, subject to official notice of issuance. 5. Tendering shareholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the exchange of Shares and, if applicable, Additional Cash Payments pursuant to the Offer. 6. In all cases, delivery of Units in exchange for Shares and, if applicable, Additional Cash Payments tendered and accepted for exchange pursuant to the Offer will be made only after timely receipt by American Stock Transfer & Trust Company (the "Exchange Agent") of (i) certificates representing tendered Shares, or timely confirmation of a book-entry transfer of such Shares into the Exchange Agent's account at one of the Book Entry Transfer Facilities (as defined in the Offer to Exchange) pursuant to the procedures set forth in the Offer to Exchange, (ii) a certified or official bank check made payable to the Exchange Agent or wire transfer in the amount of the Additional Cash Payment, if applicable, and (iii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), and any other documents required by the Letter of Transmittal. The Offer is being made solely by the Offer to Exchange and the related Letter of Transmittal and is being made to all holders of shares of Common Stock. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of shares of Common Stock in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. If you wish to have us tender any or all of the shares of Common Stock held by us for your account, please instruct us by completing, executing and returning to us the instruction form contained in this letter. If you authorize a tender of your shares of Common Stock, all such shares of Common Stock will be tendered unless otherwise specified in such instruction form. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. 2 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO EXCHANGE ONE UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE REDEMPTION RIGHT FOR EACH ONE OUTSTANDING SHARE OF COMMON STOCK PLUS $3.00 (PAYABLE IN CASH OR SHARES OF COMMON STOCK) OF THERMOLASE CORPORATION The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Exchange dated , 1997 (the "Offer to Exchange") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") pursuant to an offer by ThermoLase Corporation, a Delaware corporation, to exchange one unit (a "Unit") consisting of one share of Common Stock, $0.01 par value per share, of the Company (the "Common Stock") and one redemption right (each, a "Redemption Right") for each outstanding share of Common Stock (each, a "Share"), plus an additional payment of $3.00 (the "Additional Payment"), payable either (i) in cash (such payment being hereinafter referred to as the "Additional Cash Payment," and an exchange in which an Additional Cash Payment is made being hereinafter referred to as a "Share and Cash Exchange") or (ii) in additional shares of Common Stock (the Shares tendered in satisfaction of the Additional Payment being hereinafter referred to as the "Additional Share Payment," and an exchange in which an Additional Share Payment is made being hereinafter referred to as a "Share Only Exchange") validly tendered and accepted for exchange in the Offer. Shares tendered in satisfaction of the Additional Share Payment are valued at $20.25 per share. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to such terms in the Offer to Exchange. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. - -------------------------------------------------------------------------------- I. Number of Shares to be Tendered*: ------------------------------------ II. Amount of cash enclosed herewith in satisfaction of the Additional Cash Payment**: ------------------------------------------------------ Payment made via (check appropriate box): [ ] Certified or official bank check made payable to the Exchange Agent and enclosed herewith. [ ] Wire transfer pursuant to the instructions contained in the Letter of Transmittal. III. Number of Units requested***: ---------------------------------------- Dated: , 1997 --------- - -------------------------------------------------------------------------------- * Unless otherwise indicated, it will be assumed that all of the shares of Common Stock held by us for your account are to be tendered. ** Additional Cash Payment to be made only in a Share and Cash Exchange. In the event that you desire to make a Share and Cash Exchange but your Additional Cash Payment is insufficient with respect to the number of Shares designated or would result in the tendering of a fractional share, the number of Shares deemed tendered shall be the maximum number which may be tendered based on the Additional Cash Payment actually received. In the event that no Additional Cash Payment is designated, you will be deemed to have made a Share Only Exchange. *** Equals one Unit for every Share plus $3.00 cash tendered in a Share and Cash Exchange and .871 Units for every Share tendered in a Share Only Exchange, rounded down to the nearest whole number of Units. The actual issuance of Units is subject to the terms and conditions set forth in the Offer to Exchange. SHAREHOLDERS MAY EITHER MAKE A SHARE AND CASH EXCHANGE OR A SHARE ONLY EXCHANGE, BUT NOT A COMBINATION THEREOF. 4 - -------------------------------------------------------------------------------- SIGN HERE Signature(s): ------------------------------------------------------------- Please type or print name(s): --------------------------------------------- Address: ------------------------------------------------------------------ Area Code and Telephone Number: ------------------------------------------- Tax Identification or Social Security Number: ----------------------------- - -------------------------------------------------------------------------------- 2 -----END PRIVACY-ENHANCED MESSAGE-----