Exhibit 4.2
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GUARANTEE AGREEMENT
This Guarantee Agreement, dated March 5, 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 March 6, 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. 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
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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.
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: Xxxx Xxxxxx By: Xxxx Xxxxxxxxxxx
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Title: President Title: President
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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 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.
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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;
(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;
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(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 entitledto
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
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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, theamount 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
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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 isunconditional 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
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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
March 5, 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: March 5, 1997
______________________ ______________________
Secretary [Seal] President
