EXHIBIT 10.6
MASTER GUARANTEE REIMBURSEMENT AGREEMENT
This AGREEMENT is entered into as of the 20th day of March, 1996 by and
among Thermedics Inc. (the "Parent") and those of its subsidiaries that join in
this Agreement by executing the signature page hereto (the "Majority Owned
Subsidiaries").
WITNESSETH:
WHEREAS, the majority owned subsidiaries wish to enter into in the
future various financial transactions, such as convertible or nonconvertible
debt, bank loans, and equity offerings, and other contractual arrangements with
third parties (the "Underlying Obligations");
WHEREAS, the Majority Owned Subsidiaries acknowledge that they may be
unable to enter into many kinds of Underlying Obligations without a guarantee
of their performance thereunder from the Parent (a "Parent Guarantee");
WHEREAS, certain Majority Owned Subsidiaries ("Second Tier Majority
Owned Subsidiaries ") may themselves be majority owned subsidiaries of other
Majority Owned Subsidiaries ("First Tier Majority Owned Subsidiaries");
WHEREAS, for various reasons, Parent Guarantees of a Second Tier
Majority Owned Subsidiary's Underlying Obligations may be demanded and given
without the respective First Tier Majority Owned Subsidiary also issuing a
guarantee of such Underlying Obligation; and
WHEREAS, the Parent is willing to consider continuing to issue Parent
Guarantees, on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each party hereto, the parties agree as follows:
1. If, after the date hereof, the Parent provides a Parent
Guarantee of an Underlying Obligation, and the beneficiary(ies) of the Parent
Guarantee enforce the Parent Guarantee, or the Parent performs under the Parent
Guarantee for any other reason, then the Majority Owned Subsidiary that is
obligated under such Underlying Obligation shall indemnify and save harmless the
Parent from any liability, cost, expense or damage (including reasonable
attorneys' fees) suffered by the Parent as a result of the Parent Guarantee. If
the Underlying Obligation is issued by a Second Tier Majority Owned Subsidiary,
and such Second Tier Majority Owned Subsidiary is unable to fully indemnify the
Parent (because of the poor financial condition of such Second Tier Majority
Owned Subsidiary, or for any other reason), then the First Tier Majority Owned
Subsidiary that owns the majority of the stock of such Second Tier Majority
Owned Subsidiary shall indemnify and save harmless the Parent from any remaining
liability, cost, expense or damage (including reasonable attorneys' fees)
suffered by the Parent as a result of the Parent Guarantee.
2. For purposes of this Agreement, the term "guarantee" shall
include not only a formal guarantee of an obligation, but also any other
arrangement where the Parent is liable for the obligations of a Majority Owned
Subsidiary. Such other arrangements include (a) representations, warranties
and/or covenants or other obligations joined in by the Parent, whether on a
joint or joint and several basis, for the benefit of the Majority Owned
Subsidiary and (b) responsibility of the Parent by operation of law for the acts
and omissions of the Majority Owned Subsidiary, including controlling person
liability under securities and other laws.
3. Promptly after the Parent receives notice that a beneficiary of
a Parent Guarantee is seeking to enforce such Parent Guarantee, the Parent shall
notify the Majority Owned Subsidiary(s) obligated under the relevant Underlying
Obligation. Such Majority Owned Subsidiary(s) shall have the right, at its own
expense, to contest the claim of such beneficiary. If a Majority Owned
Subsidiary is contesting the claim of such beneficiary, the Parent will not
perform under the relevant Parent Guarantee unless and until, in the Parent's
reasonable judgment, the Parent is obligated under the terms of such Parent
Guarantee to perform. Subject to the foregoing, any dispute between a Majority
Owned Subsidiary and a beneficiary of a Parent Guarantee shall not affect such
Majority Owned Subsidiary's obligation to promptly indemnify the Parent
hereunder.
4. All payments required to be made by a Majority Owned Subsidiary
shall be made within two days after receipt of notice from the Parent.
5. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts applicable to contracts made
and performed therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
THERMEDICS INC.
By: /s/ Xxxx X. Xxxx Xx.
Title: President
THERMEDICS DETECTION INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
Title: Treasurer
