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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 2, 2000
--------------------------
AAVID THERMAL TECHNOLOGIES, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-27308 02-0466826
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
One Eagle Square, Suite 509
Concord, New Hampshire 03301
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (603) 224-1117
---------------------------
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On February 2, 2000, Heat Merger Corp., a wholly-owned subsidiary of
Heat Holdings Corp., merged with Aavid Thermal Technologies, Inc. (the
"Company"), with the Company as the surviving corporation and a wholly-owned
subsidiary of Heat Holdings Corp. (the "Merger"). Heat Holdings Corp. and Heat
Merger Corp. were formed by Willis Stein & Partners II, L.P. and certain
co-investors to acquire the Company. In the merger, each outstanding share of
the Company's Common Stock was converted into the right to receive $25.50 in
cash without interest, and all outstanding options and warrants were canceled in
exchange for a cash payment equal to the difference, if any, between $25.50 and
the exercise price. The purchase price for the Company was funded through:
- equity contributions from Heat Holdings Corp. and its
affiliate, Heat Holdings II Corp., of $152.0 million;
- net proceeds (after original issue discount and underwriting
discounts and commissions, but before expenses) of $143.9 million from
the issuance of 150,000 Units (the "Units"), consisting of (i) an
aggregate of $150 million principal amount of the Company's 12.75%
Senior Subordinated Notes due 2007 (the "Notes"), which Notes are
guaranteed by the Company's domestic subsidiaries, and (ii) warrants to
purchase an aggregate of 60 shares of the Company's Class A Common
Stock and warrants to purchase an aggregate of 60 shares of the
Company's Class H Common Stock (the "Warrants");
- $54.7 million of borrowings under the Company's amended and
restated credit facility; and
- cash on hand.
In connection with the Merger, the Company consummated the sale of
the Units. The sale of the Units, consisting of the Notes and the Warrants,
was made through a Rule 144A offering to qualified institutional buyers. The
Indenture provides that upon a change in control of the Company, the Company
must offer to repurchase the Notes at 101% of the face value thereof,
together with accrued and unpaid interest. The Notes are subordinated in
right of payment to amounts outstanding under the Credit Facility (as defined
below) and certain other permitted indebtedness. Pursuant to a registration
rights agreement, the Company has agreed to file a registration statement to
exchange the Notes for substantially identical notes which have been
registered under the Securities Act of 1933. In addition, the Company has
agreed to register the shares of the Company's Class A Common Stock and Class
H Common Stock underlying the Warrants on a piggyback basis under certain
circumstances. The Units, Notes and Warrants have not been registered under
the Securities Act of 1933, as amended, and may not be offered and sold in
the United States absent registration under such Act or an applicable
exemption from registration.
In addition, in connection with the Merger the Company entered into an
amended and restated revolving credit and term loan facility with Canadian
Imperial Bank of Commerce, as Administrative Agent, and certain other lenders
(the "Credit Facility"). The Credit Facility, which
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replaced its existing $100 million revolving credit and term loan facility,
consists of a $53 million term loan facility (the "Term Facility") and a $22
million revolving credit facility, including a $2 million letter of credit
subfacility (the "Revolving Facility"). The Term Facility, all of which was
borrowed on February 2, 2000 to repay amounts outstanding under its existing
credit facility, matures on March 31, 2005, and will be amortized in 18
consecutive quarterly installments, commencing December 31, 2000, as follows:
five quarterly payments of $2 million each; four quarterly payments of $2.5
million each; four quarterly payments of $2.75 million each; two quarterly
payments of $3.2 million each; two quarterly payments of $3.9 million; and a
final payment of $7.8 million. The Revolving Facility matures on March 31, 2005.
The Credit Facility bears interest at a rate equal to, at the Company's option,
either (1) in the case of Eurodollar loans, the sum of (x) the interest rate in
the London interbank market for loans in an amount substantially equal to the
amount of borrowing and for the period of borrowing selected by the Company and
(y) a margin of between one and one-half percent and two and one-quarter percent
(depending on the Company's consolidated leverage ratio (as defined in the
credit agreement)) or (2) the sum of (A) the higher of (x) Canadian Imperial
Bank of Commerce's prime or base rate or (y) one-half percent plus the latest
overnight federal funds rate plus (y) a margin of between one quarter percent
and one percent (depending on the Company's consolidated leverage ratio). The
Credit Facility may be prepaid at any time in whole or in part without penalty,
and must be prepaid to the extent of certain equity or asset sales and excess
cash flow.
The Credit Facility and the indenture pursuant to which the Notes were
issued limit the Company's ability to incur debt, to sell or dispose of assets,
to create or incur liens, to make additional acquisitions, to pay dividends, to
purchase or redeem its stock and to merge or consolidate with any other person.
In addition, the Credit Facility requires that the Company meet certain
financial ratios, and provides the banks with the right to require the payment
of all amounts outstanding under the facility, and to terminate all commitments
thereunder, if there is a change in control of the Company. The Credit Facility
is guaranteed by Heat Holdings Corp., Heat Holdings II Corp. and all of the
Company's domestic subsidiaries and secured by the Company's assets (including
the assets and stock of its domestic subsidiaries and a portion of the stock of
its foreign subsidiaries), and a pledge of the Company's stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not Applicable
(B) PRO FORMA FINANCIAL INFORMATION.
Not Applicable
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(C) EXHIBITS.
2.1 Agreement of Plan and Merger, dated as of August 23,
1999, by and among Heat Holdings Corp., Heat Merger
Corp. and Aavid Thermal Technologies, Inc.
(incorporated herein by reference to Exhibit 2.2
to the Company's Current Report on Form 8-K dated
August 23, 1999).
4.1 Indenture, dated as of February 2, 2000, among Aavid
Thermal Technologies, Inc., the Guarantors signatory
thereto and Bankers Trust Company.
4.2 Warrant Agreement dated as of February 2, 2000 by and
between Aavid Thermal Technologies, Inc. and Bankers
Trust Company, as Warrant Agent.
10.1 Amended and Restated Credit Agreement, dated as of
February 2, 2000, among Aavid Thermal Technologies,
Inc., Heat Holdings Corp., Heat Holdings II Corp.,
the several lenders from time to time parties hereto,
CIBC World Markets Corp., as Lead Arranger and
Bookrunner, BankBoston, N.A., as Documentation Agent,
and Canadian Imperial Bank of Commerce, as Issuer and
Administrative Agent.
10.2 Registration Rights Agreement dated as of February
2, 2000 by and among Aavid Thermal Technologies,
Inc., the Guarantors named therein and CIBC World
Markets Corp. and FleetBoston Robertson Stephens
Inc., as Initial Purchasers.
10.3 Common Stock Registration Rights Agreement dated as
of February 2, 2000 among Aavid Thermal Technologies,
Inc., Heat Holdings Corp. and CIBC World Markets
Corp. and FleetBoston Robertson Stephens Inc., as
Initial Purchasers.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ John W. Mitchell
---------------------------
Name: John W. Mitchell
Title: General Counsel
Date: February 16, 2000
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Exhibit Index
2.1 Agreement of Plan and Merger, dated as of August 23,
1999, by and among Heat Holdings Corp., Heat Merger
Corp. and Aavid Thermal Technologies,
Inc.(incorporated herein by reference to Exhibit 2.2
to the Company's Current Report on Form 8-K dated
August 23, 1999).
4.1 Indenture, dated as of February 2, 2000, among Aavid
Thermal Technologies, Inc., the Guarantors signatory
thereto and Bankers Trust Company.
4.2 Warrant Agreement dated as of February 2, 2000 by and
between Aavid Thermal Technologies, Inc. and Bankers
Trust Company, as Warrant Agent.
10.1 Amended and Restated Credit Agreement, dated as of
February 2, 2000, among Aavid Thermal Technologies,
Inc., Heat Holdings Corp., Heat Holdings II Corp.,
the several lenders from time to time parties hereto,
CIBC World Markets Corp., as Lead Arranger and
Bookrunner, BankBoston, N.A., as Documentation Agent,
and Canadian Imperial Bank of Commerce, as Issuer and
Administrative Agent.
10.2 Registration Rights Agreement dated as of February 2,
2000 by and among Aavid Thermal Technologies, Inc.,
the Guarantors named therein and CIBC World Markets
Corp. and FleetBoston Robertson Stephens Inc., as
Initial Purchasers.
10.3 Common Stock Registration Rights Agreement dated as
of February 2, 2000 among Aavid Thermal Technologies,
Inc., Heat Holdings Corp. and CIBC World Markets
Corp. and FleetBoston Robertson Stephens Inc., as
Initial Purchasers.
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Exhibit 4.1
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AAVID THERMAL TECHNOLOGIES, INC.,
as Issuer,
The GUARANTORS named herein
---------------------------
and
Bankers Trust Company, as Trustee
INDENTURE
Dated as of February 2, 2000
% Senior Subordinated Notes due 2007, Series A
% Senior Subordinated Notes due 2007, Series B
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
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310(a)(1)....................................................................... 7.10
(a)(2)....................................................................... 7.10
(a)(3)....................................................................... N.A.
(a)(4)....................................................................... N.A
(b).......................................................................... 7.08; 7.10; 12.02
(b)(1)....................................................................... 7.10
(b)(9)....................................................................... 7.10
(c).......................................................................... N.A.
311(a).......................................................................... 7.11
(b).......................................................................... 7.11
(c).......................................................................... N.A.
312(a).......................................................................... 2.05
(b).......................................................................... 12.03
(c).......................................................................... 12.03
313(a).......................................................................... 7.06
(b)(1)....................................................................... 7.06
(b)(2)....................................................................... 7.06
(c).......................................................................... 7.06; 12.02
(d).......................................................................... 7.06
314(a).......................................................................... 4.02; 4.08; 12.02
(b).......................................................................... N.A.
(c)(1)....................................................................... 13.04; 12.05
(c)(2)....................................................................... 13.04; 12.05
(c)(3)....................................................................... N.A.
(d).......................................................................... N.A.
(e).......................................................................... 13.05
(f).......................................................................... N.A.
315(a).......................................................................... 7.01; 7.02
(b).......................................................................... 7.05; 12.02
(c).......................................................................... 7.01
(d).......................................................................... 6.05; 7.01; 7.02
(e).......................................................................... 6.11
316(a) (last sentence).......................................................... 2.09
(a)(1)(A).................................................................... 6.05
(a)(1)(B).................................................................... 6.04
(a)(2)....................................................................... 8.02
(b).......................................................................... 6.07
(c).......................................................................... 8.04
317(a)(1)....................................................................... 6.08
(a)(2)....................................................................... 6.09
(b).......................................................................... 2.04
318(a).......................................................................... 12.01
</TABLE>
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
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Section 1.01. Definitions...............................................................................1
Section 1.02. Other Definitions........................................................................26
Section 1.03. Incorporation by Reference of Trust Indenture Act........................................27
Section 1.04. Rules of Construction....................................................................27
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating..........................................................................28
Section 2.02. Execution and Authentication.............................................................28
Section 2.03. Registrar and Paying Agent...............................................................29
Section 2.04. Paying Agent To Hold Assets in Trust.....................................................30
Section 2.05. Noteholder Lists.........................................................................30
Section 2.06. Transfer and Exchange....................................................................30
Section 2.07. Replacement Notes........................................................................31
Section 2.08. Outstanding Notes........................................................................31
Section 2.09. Treasury Notes...........................................................................31
Section 2.10. Temporary Notes..........................................................................31
Section 2.11. Cancellation.............................................................................32
Section 2.12. Defaulted Interest.......................................................................32
Section 2.13. Deposit of Moneys........................................................................32
Section 2.14. CUSIP Number.............................................................................33
Section 2.15. Book-Entry Provisions for Global Notes...................................................33
Section 2.16. Registration of Transfers and Exchanges..................................................34
Section 2.17. Restrictive Legends......................................................................37
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.......................................................................39
Section 3.02. Selection of Notes To Be Redeemed........................................................39
Section 3.03. Notice of Redemption.....................................................................39
Section 3.04. Effect of Notice of Redemption...........................................................40
Section 3.05. Deposit of Redemption Price..............................................................40
Section 3.06. Notes Redeemed in Part...................................................................40
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ARTICLE 4
COVENANTS
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Section 4.01. Payment of Notes.........................................................................41
Section 4.02. Provision of Financial Statements and Other Information..................................41
Section 4.03. Waiver of Stay, Extension or Usury Laws..................................................41
Section 4.04. Compliance Certificate; Notice of Default; Tax Information...............................42
Section 4.05. Payment of Taxes and Other Claims........................................................42
Section 4.06. Corporate Existence......................................................................43
Section 4.07. Maintenance of Office or Agency..........................................................43
Section 4.08. Compliance with Laws.....................................................................43
Section 4.09. Maintenance of Properties and Insurance..................................................44
Section 4.10. Limitation on Additional Indebtedness....................................................44
Section 4.11. Limitation on Restricted Payments........................................................45
Section 4.12. Limitation on Other Senior Subordinated Indebtedness.....................................47
Section 4.13. Limitation on Certain Asset Sales........................................................47
Section 4.14. Limitation on Transactions with Affiliates...............................................50
Section 4.15. Limitations on Liens.....................................................................51
Section 4.16. Limitations on Investments...............................................................51
Section 4.17. Change of Control........................................................................52
Section 4.18. Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.........................................................................54
Section 4.19. Limitation on Conduct of Business........................................................55
Section 4.20. Limitation on Preferred Stock of Restricted Subsidiaries.................................55
Section 4.21. Limitation on Capital Stock of Restricted Subsidiaries...................................55
Section 4.22. Limitation on Sale and Lease-Back Transactions...........................................56
Section 4.23. Payments for Consent.....................................................................56
Section 4.24. Limitation on Creation of Subsidiaries...................................................56
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger and Sale of Assets...................................57
Section 5.02. Successor Person Substituted.............................................................59
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default........................................................................59
Section 6.02. Acceleration.............................................................................60
Section 6.03. Other Remedies...........................................................................61
Section 6.04. Waiver of Past Defaults and Events of Default............................................61
Section 6.05. Control by Majority......................................................................62
Section 6.06. Limitation on Suits......................................................................62
Section 6.07. Rights of Holders To Receive Payment.....................................................63
Section 6.08. Collection Suit by Trustee...............................................................63
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Section 6.09. Trustee May File Proofs of Claim.........................................................63
Section 6.10. Priorities...............................................................................63
Section 6.11. Undertaking for Costs....................................................................64
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee........................................................................64
Section 7.02. Rights of Trustee........................................................................65
Section 7.03. Individual Rights of Trustee.............................................................66
Section 7.04. Trustee's Disclaimer.....................................................................66
Section 7.05. Notice of Defaults.......................................................................66
Section 7.06. Reports by Trustee to Holders............................................................66
Section 7.07. Compensation and Indemnity...............................................................67
Section 7.08. Replacement of Trustee...................................................................67
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.................................68
Section 7.10. Eligibility; Disqualification............................................................68
Section 7.11. Preferential Collection of Claims Against Company........................................69
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders...............................................................69
Section 8.02. With Consent of Holders..................................................................69
Section 8.03. Compliance with TIA......................................................................71
Section 8.04. Revocation and Effect of Consents........................................................71
Section 8.05. Notation on or Exchange of Notes.........................................................71
Section 8.06. Trustee To Sign Amendments, etc..........................................................71
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Satisfaction and Discharge of Indenture..................................................72
Section 9.02. Legal Defeasance.........................................................................73
Section 9.03. Covenant Defeasance......................................................................73
Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance....................................74
Section 9.05. Application of Trust Money...............................................................75
Section 9.06. Repayment to the Company.................................................................76
Section 9.07. Reinstatement............................................................................76
ARTICLE 10
SUBORDINATION OF NOTES
Section 10.01. Notes Subordinate to Senior Indebtedness.................................................76
Section 10.02. Payment Over of Proceeds upon Dissolution, etc...........................................77
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Section 10.03. Suspension of Payment When Senior Indebtedness in Default................................78
Section 10.04. Trustee's Relation to Senior Indebtedness................................................79
Section 10.05. Subrogation..............................................................................79
Section 10.06. Provisions Solely To Define Relative Rights..............................................80
Section 10.07. Trustee To Effectuate Subordination......................................................80
Section 10.08. No Waiver of Subordination Provisions....................................................80
Section 10.09. Notice to Trustee........................................................................81
Section 10.10. Reliance on Judicial Order or Certificate of Liquidating Agent...........................81
Section 10.11. No Suspension of Remedies................................................................82
ARTICLE 11
GUARANTEE OF NOTES
Section 11.01. Guarantee................................................................................82
Section 11.02. Execution and Delivery of Guarantee......................................................83
Section 11.03. Limitation of Guarantee..................................................................83
Section 11.04. Additional Guarantors....................................................................84
Section 11.05. Release of Guarantor.....................................................................84
Section 11.06. Subordination of Subrogation and Other Rights; Subrogation...............................84
Section 11.07. Guarantee Obligations Subordinated to Guarantor Senior Indebtedness......................84
Section 11.08. Payment Over of Proceeds upon Dissolution, etc., of a Guarantor..........................85
Section 11.09. Suspension of Guarantee Obligations When Guarantor Senior Indebtedness in
Default..............................................................................86
Section 11.10. Trustee's Relation to Guarantor Senior Indebtedness......................................87
Section 11.11. Subrogation to Rights of Holders of Guarantor Senior Indebtedness........................88
Section 11.12. Guarantee Subordination Provisions Solely To Define Relative Rights......................88
Section 11.13. Trustee To Effectuate Subordination......................................................89
Section 11.14. Notice to Trustee........................................................................89
Section 11.15. Application of Certain Article 11 Provisions.............................................90
ARTICLE 12
MISCELLANEOUS
Section 12.01. TIA Controls.............................................................................90
Section 12.02. Notices..................................................................................90
Section 12.03. Communications by Holders with Other Holders.............................................92
Section 12.04. Certificate and Opinion as to Conditions Precedent.......................................92
Section 12.05. Statements Required in Certificate and Opinion...........................................92
Section 12.06. Rules by Trustee and Agents..............................................................92
Section 12.07. Business Days; Legal Holidays............................................................92
Section 12.08. Governing Law............................................................................93
Section 12.09. No Adverse Interpretation of Other Agreements............................................93
Section 12.10. No Recourse Against Others...............................................................93
Section 12.11. Successors...............................................................................93
Section 12.12. Multiple Counterparts....................................................................93
Section 12.13. Table of Contents, Headings, etc.........................................................93
Section 12.14. Separability.............................................................................93
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EXHIBITS
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Exhibit A. Form of Series A Note...................................................................A-1
Exhibit B. Form of Series B Note...................................................................B-1
Exhibit C. Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB
Accredited Investors....................................................................C-1
Exhibit D. Form of Transferee Letter of Representation.............................................D-1
Exhibit E. Form of Certificate To Be Delivered in Connection with Regulation S
Transfers...............................................................................E-1
Exhibit F. Form of Guarantee.......................................................................F-1
Exhibit G. Willis Stein Make Well Agreement........................................................G-1
</TABLE>
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INDENTURE, dated as of February 2, 2000, between AAVID THERMAL
TECHNOLOGIES, INC., a Delaware corporation (the "COMPANY"), each of the
GUARANTORS (as defined herein) and BANKERS TRUST COMPANY, a New York banking
corporation organized under the laws of the State of New York, as trustee (the
"TRUSTEE").
The Company has duly authorized the creation of an issue of 12
3/4% Senior Subordinated Notes due 2007, Series A (the "INITIAL NOTES"), and 12
3/4% Senior Subordinated Notes due 2007, Series B (the "EXCHANGE NOTES"), and,
to provide therefor, the Company and each Guarantor has duly authorized the
execution and delivery of this Indenture. All things necessary to make the
Notes, when duly issued and executed by the Company, and authenticated and
delivered hereunder, the valid obligations of the Company and to make this
Indenture a valid and binding agreement of the Company and the Guarantors, have
been done.
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person
(including an Unrestricted Subsidiary) existing at the time such Person becomes
a Restricted Subsidiary or is merged into or consolidated with any other Person
or that is assumed in connection with the acquisition of assets from such Person
and, in each case, not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
or such merger, consolidation or acquisition.
"ADJUSTED NET ASSETS" of any Person at any date shall mean the
lesser of the amount by which the fair value of the property of such Person
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities), but excluding liabilities under the Guarantee of such Person at
such date and the present fair salable value of the assets of such Person at
such date exceeds the amount that will be required to pay the probable liability
of such Person on its debts (after giving effect to all other fixed and
contingent liabilities and after giving effect to any collection from any
Subsidiary of such Person in respect of the obligations of such Person under the
Guarantee of such Person), excluding Indebtedness in respect of the Guarantee of
such Person, as they become absolute and matured.
"ADDITIONAL INTEREST" has the meaning provided to such term in
the Registration Rights Agreement.
"AFFILIATE" means, with respect to any specific Person, any
other Person that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by," and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED that, for purposes of Section
4.14, beneficial ownership of at least 10% of the voting securities of a Person,
either directly or indirectly, shall be deemed to be control.
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"AGENT" means any Registrar, Paying Agent, co-Registrar,
Authenticating Agent or agent for service of notices and demands.
"ASSET ACQUISITION" means
(1) an Investment by the Company or any Restricted Subsidiary
in any other Person pursuant to which such Person shall become a
Restricted Subsidiary or shall be merged with or into the Company
or any Restricted Subsidiary or
(2) the acquisition by the Company or any Restricted
Subsidiary of the assets of any Person (other than a Restricted
Subsidiary) which constitute all or substantially all of the
assets of such Person or comprise any division or line of
business of such Person or any other properties or assets of such
Person or any other properties or assets of such Person other
than in the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance,
conveyance, assignment, transfer, lease or other disposition (including any Sale
and Lease-Back Transaction), other than to the Company or any of its Restricted
Subsidiaries, in any single transaction or series of related transactions of
(1) any Capital Stock of or other equity interest in any
Restricted Subsidiary, or
(2) any other property or assets, other than in the ordinary
course of business, of the Company or of any Restricted
Subsidiary ;
PROVIDED that Asset Sales shall not include
(1) a transaction or series of related transactions for which
the Company or the Restricted Subsidiaries receive aggregate
consideration of less than $1 million,
(2) the sale, lease, conveyance, disposition or other transfer
of all or substantially all of the assets of the Company as
permitted under Section 5.01,
(3) any Permitted Investment and any Restricted Payment
permitted by Section 4.11;
(4) any disposition of obsolete or unnecessary equipment or
assets;
(5) the sale of up to 40% of the outstanding Capital Stock of
Thermalloy Malaysia Sdn Bhd in accordance with Malaysian law;
(6) the licensing of intellectual property in the ordinary
course of business;
(7) sales of Cash Equivalents; and
(8) the sale of 95% of the outstanding common membership
interests of Aavid Thermalloy LLC to Heat Holdings II Corp. or
the other restructuring transactions set forth on Schedule A-1
hereto.
"ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
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(1) cash received by the Company or any Restricted Subsidiary
from such Asset Sale (including cash received as consideration
for the assumption of liabilities incurred in connection with or
in anticipation of such Asset Sale), after
(a) provision for all income or other taxes measured by or
resulting from such Asset Sale,
(b) payment of all brokerage commissions and underwriting,
legal, accounting and other fees and expenses related to
such Asset Sale,
(c) provision for minority interest holders in any
Restricted Subsidiary as a result of such Asset Sale,
(d) repayment of Indebtedness that is secured by the
assets connection with such Asset Sale,
(e) deduction of appropriate amounts to be provided by the
Company or a Restricted Subsidiary as a reserve, in
accordance with GAAP, against any liabilities associated
with the assets sold or disposed of in such Asset Sale and
retained by the Company or a Restricted Subsidiary after
such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities and liabilities
related to environmental matters or against any
indemnification obligations associated with the assets sold
or disposed of in such Asset Sale and
(f) deduction of any consideration (that would otherwise
constitute Asset Sale Proceeds) that is held in escrow, or
otherwise reserved by the Company or a Restricted Subsidiary,
pending determination of whether a purchase price adjustment
will be made; PROVIDED, HOWEVER, that following such
determination and release of the amount in escrow to pay the
remaining consideration, such proceeds are applied in
accordance with Section 4.13; and
(2) promissory notes and other non-cash consideration received
by the Company or any Restricted Subsidiary from such Asset Sale
or other disposition upon the liquidation or conversion of such
notes or non-cash consideration into cash.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale and
Lease-Back Transaction means, as at the time of determination, the greater of
(1) the fair value of the property subject to such arrangement
and
(2) the present value of the total obligations (discounted at
the rate borne by the Notes, compounded semi-annually) of the
lessee for rental payments during the remaining term of the lease
included in such Sale and Lease-Back Transaction (including any
period for which such lease has been extended).
"AVAILABLE ASSET SALE PROCEEDS" means, with respect to any
Asset Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not
been applied in accordance with clauses (3)(a) or (3)(b) of the first paragraph
of Section 4.13, and that have not yet been the basis for an Excess Proceeds
Offer in accordance with clause (3)(c) of the first paragraph of Section 4.13.
<PAGE>
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"BOARD OF DIRECTORS" means, with respect to any Person, the
board of directors of such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means a copy of a resolution certified by
an Officer, the Secretary or an Assistant Secretary to have been duly adopted by
the Board of Directors of the Company and to be in full force and effect, and
delivered to the Trustee.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated and
whether or not voting) of corporate stock, partnership or limited liability
company interests or any other participation, right or other interest in the
nature of an equity interest in such Person including, without limitation,
Common Stock and Preferred Stock of such Person, or any option, warrant or other
security convertible into any of the foregoing.
"CAPITALIZED LEASE OBLIGATIONS" means with respect to any
Person, Indebtedness represented by obligations under a lease that is required
to be capitalized for financial reporting purposes in accordance with GAAP, and
the amount of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with GAAP.
"CASH EQUIVALENTS" means
(1) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or
issued by any agency or instrumentality thereof and backed by the
full faith and credit of the United States, in each case maturing
within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one
year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable
from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S");
(3) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having
a rating of at least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by
any bank organized under the laws of the United States of America
or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than
$250,000,000;
(5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause
(1) above entered into with any bank meeting the qualifications
specified in clause (4) above; and
(6) investments in money market funds that invest
substantially all their assets in securities of the types
described in clauses (1) through (5) above.
"CERTIFICATED NOTES" means one or more certificated Notes in
registered form.
<PAGE>
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A "CHANGE OF CONTROL" of the Company will be deemed to have
occurred at such time as
(1) any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "GROUP"), other than a
Permitted Holder, becomes the beneficial owner (as defined under
Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time) of 50% or more of the total
voting or economic power of the Company's Capital Stock;
(2) any Person or Group, other than a Permitted Holder,
becomes the beneficial owner (as defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act,
except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only
after the passage of time) of more than 33 1/3% of the total
voting power of the Company's Capital Stock, and the Permitted
Holders beneficially own, in the aggregate, a lesser percentage
of the total voting power of the Capital Stock of the Company
than such other Person or Group and do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of
the Company;
(3) there shall be consummated any consolidation or merger of
the Company in which the Company is not the continuing or
surviving Person or pursuant to which the Common Stock of the
Company would be converted into cash, securities or other
property, other than a merger or consolidation of the Company in
which the holders of the Capital Stock of the Company outstanding
immediately prior to the consolidation or merger hold, directly
or indirectly, at least a majority of the Capital Stock of the
surviving corporation immediately after such consolidation or
merger;
(4) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for
election by the shareholders of the Company has been approved by
the Permitted Holders or a majority of the directors then still
in office who either were directors at the beginning of such
period or whose election or recommendation for election was
previously so approved) cease to constitute a majority of the
Board of Directors of the Company; or
(5) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or
dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture).
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" of any Person means all Capital Stock of such
Person that is generally entitled to
(1) vote in the election of directors of such Person or
(2) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners,
managers or others that will control the management and policies
of such Person.
<PAGE>
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"COMPANY" means the party named as such in the first paragraph
of this Indenture until a successor replaces such party pursuant to Article 5 of
this Indenture and thereafter means the successor.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect
to any Person, the ratio of EBITDA of such Person during the four full fiscal
quarters (the "Four Quarter Period") ending on or prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of such
Person for the Four Quarter Period. In addition to and without limitation of the
foregoing, for purposes of this definition, "EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a PRO FORMA basis for the
period of such calculation to
(1) the incurrence or repayment of any Indebtedness of such
Person or any of the Restricted Subsidiaries or the issuance or
redemption or other repayment of Preferred Stock (and the
application of the proceeds thereof) giving rise to the need to
make such calculation and any incurrence or repayment of other
Indebtedness and, in the case of any Restricted Subsidiary, the
issuance or redemption or other repayment of Preferred Stock (and
the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of
business for working capital purposes pursuant to working capital
facilities, occurring during the Four Quarter Period or at any
time subsequent to the last day of the Four Quarter Period and on
or prior to the Transaction Date (except that, in determining the
Consolidated Fixed Charge Coverage Ratio as of any Transaction
Date, any Permitted Indebtedness that is incurred concurrently
with the Indebtedness giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio shall not be included
for purposes of such calculation on such date of issuance), as if
such incurrence or repayment or issuance or redemption or other
repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter
Period and
(2) any asset sales or other disposition or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of such Person
or one of the Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset
Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any EBITDA (PROVIDED
that such EBITDA shall be included only to the extent includable
pursuant to the definition of "Consolidated Net Income")
(including any PRO FORMA expense and cost reductions calculated
on a basis consistent with Regulation S-X of the Exchange Act)
attributable to the assets that are the subject of the Asset
Acquisition or asset sale or other disposition during the Four
Quarter Period) occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period
and on or prior to the Transaction Date, as if such asset sale or
other disposition or Asset Acquisition (including the incurrence,
assumption or liability for any such Acquired Indebtedness)
occurred on the first day of the Four Quarter Period.
In making any calculation of the Consolidated Fixed Charge Coverage Ratio for
any Four Quarter Period commencing prior to the Merger, the Merger and the
financing thereof shall be deemed to have taken place on the first day of such
Four Quarter Period.
If such Person or any of the Restricted Subsidiaries directly
or indirectly guarantees Indebtedness of a third Person, the second preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Restricted Subsidiary of such Person had directly incurred
or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio,"
<PAGE>
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(1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will
continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date;
(2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is
covered by one or more Interest Rate Agreements, shall be deemed
to accrue at the rate per annum resulting after giving effect to
the operation of such agreements; and
(3) interest accrued on outstanding Indebtedness incurred
under a revolving credit facility shall be computed based upon
the average daily balance of such Indebtedness during the Four
Quarter Period.
"CONSOLIDATED FIXED CHARGES" means, with respect to any
Person, for any period, the sum, without duplication, on a consolidated basis,
of
(1) Consolidated Interest Expense, plus
(2) the product of
(a) the amount of all dividend payments on any series
of Preferred Stock of such Person and the Restricted Subsidiaries
(other than dividends paid in Capital Stock (other than
Disqualified Capital Stock) and other than dividends to the
Company on Preferred Stock of the Restricted Subsidiaries) paid,
during such period and
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person,
expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any
Person, for any period, the aggregate amount of interest that, in conformity
with GAAP, would be set forth opposite the caption "interest expense" or any
like caption on an income statement for such Person and the Restricted
Subsidiaries on a consolidated basis (including, but not limited to,
(1) Redeemable Dividends paid on Preferred Stock of a
Restricted Subsidiary (other than such dividends paid to the
Company),
(2) imputed interest included in Capitalized Lease
Obligations,
(3) all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance
financing,
(4) the net costs associated with Interest Rate Agreements,
Currency Agreements and other hedging obligations,
(5) amortization of other financing fees and expenses,
(6) the interest portion of any deferred payment obligation,
<PAGE>
-8-
(7) amortization of discount (including without limitation all
original issue discount on the Notes) or premium, if any, and
(8) all other non-cash interest expense (other than interest
amortized to cost of sales))
plus, without duplication,
(1) all net capitalized interest for such period,
(2) all interest incurred or paid under any guarantee of
Indebtedness (including a guarantee of principal, interest or any
combination thereof) of any Person and
(3) the amount of all dividends or distributions paid on
Disqualified Capital Stock (other than dividends paid or payable
in shares of Capital Stock of the Company).
"CONSOLIDATED NET INCOME" means, with respect to any Person,
for any period, the aggregate of the Net Income of such Person and the
Restricted Subsidiaries thereof for such period, on a consolidated basis,
determined in accordance with GAAP; PROVIDED, HOWEVER, that:
(1) the Net Income of (A) any Person (the "OTHER PERSON") in
which the referent Person or any of the Restricted Subsidiaries
has less than a 100% interest (which interest does not cause the
Net Income of such other Person to be consolidated into the Net
Income of the Person in question in accordance with GAAP) and (B)
any Unrestricted Subsidiary shall be included only to the extent
of the amount of dividends or distributions paid, and in the case
of (B) paid in cash, to the Person in question or a Restricted
Subsidiary;
(2) the Net Income of any Restricted Subsidiary of the Person
in question that is subject to any restriction or limitation on
the payment of dividends or the making of other distributions
shall be excluded to the extent of such restriction or
limitation;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(4) any net gain or net loss (in the case of any net loss only
to the extent that such determination of Consolidated Net Income
is being made in connection with the determination of amounts
available for Restricted Payments under clause (3) of the first
paragraph of Section 4.11) resulting from an Asset Sale by the
Person in question or any of the Restricted Subsidiaries other
than in the ordinary course of business shall be excluded;
(5) extraordinary gains and losses shall be excluded;
(6) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during
such period whether or not such operations were classified as
discontinued) shall be excluded;
(7) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent
Person's assets, any earnings of the successor corporation prior
to such consolidation, merger or transfer of assets shall be
excluded; and
<PAGE>
-9-
(8) any charge for minority interest attributable to Heat
Holdings II Corp.'s interest in Aavid Thermalloy, LLC shall be
excluded.
"CORPORATE TRUST OFFICE" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at Four Albany Street, New York, New York 10006, Attn: Corporate Trust and
Agency Group, Corporate Market Services.
"CUMULATIVE CONSOLIDATED NET INCOME" means, with respect to
any Person, as of any date of determination, Consolidated Net Income from
February 2, 2000 to the end of such Person's most recently ended full fiscal
quarter to such date, taken as a single accounting period.
"CURRENCY AGREEMENT" means, with respect to any Person, any
foreign currency exchange agreement, option or futures contract or other similar
agreement or arrangement designed to protect the party indicated therein against
fluctuations in foreign currency exchange rates.
"DEFAULT" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"DEPOSITORY" means, with respect to the Notes issued in the
form of one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which Person must be a clearing agency
registered under the Exchange Act.
"DESIGNATED SENIOR INDEBTEDNESS" as to the Company or any
Guarantor, as the case may be, means
(1) Indebtedness under the Senior Credit Facility and
(2) any other Indebtedness that at the time of determination
exceeds $20 million in aggregate principal amount (or accreted
value in the case of Indebtedness issued at a discount)
outstanding or available under a committed facility, which is
specifically designated in the instrument evidencing such Senior
Indebtedness as "Designated Senior Indebtedness" by such Person
and as to which the Trustee has been given written notice of such
designation.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock of a
Person or a Restricted Subsidiary thereof that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include any Preferred Stock of a Person or a Restricted
Subsidiary of such Person, with respect to either of which, under the terms of
such Preferred Stock, by agreement or otherwise, such Person or Restricted
Subsidiary is obligated to pay current dividends or distributions in cash during
the period prior to the maturity date of the Notes; PROVIDED, HOWEVER, that
Preferred Stock of a Person or any Restricted Subsidiary thereof that is issued
with the benefit of provisions requiring a change of control offer to be made
for such Preferred Stock in the event of a change of control of such Person or
Restricted Subsidiary, which provisions have substantially the same effect as
the provisions of this Indenture described under Section 4.17, shall not be
deemed to be Disqualified Capital Stock solely by virtue of such provisions and,
PROVIDED, FURTHER, that if such Capital Stock is issued pursuant to any plan for
the benefit of employees of the Company or its Subsidiaries or by
<PAGE>
-10-
any such plan to such employees, such Capital Stock shall not constitute
Disqualified Capital Stock solely because it may be required to be repurchased
by the Company in order to satisfy applicable statutory or regulatory
obligations.
"EBITDA" means, with respect to any Person and its Restricted
Subsidiaries, for any period, an amount equal to
(1) the sum of
(a) Consolidated Net Income for such period, plus
(b) the provision for taxes for such period based on
income or profits to the extent such income or profits were
included in computing Consolidated Net Income and any
provision for taxes utilized in computing net loss under
clause (a) hereof, plus
(c) Consolidated Interest Expense for such period, plus
(d) depreciation for such period on a consolidated
basis, plus
(e) amortization of intangibles for such period on a
consolidated basis, plus
(f) any other non-cash items reducing Consolidated Net
Income for such period, except for any non-cash items that
represent accruals of, or reserves for, cash disbursements
to be made in any future accounting period or amortization
of a prepaid cash expense that was paid in a prior period,
minus
(2) all non-cash items increasing Consolidated Net Income
(other than any non-cash items that were accrued in the ordinary
course of business) for such period, all for such Person and its
Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP;
PROVIDED, HOWEVER, that, for purposes of calculating EBITDA during any fiscal
quarter, cash income from a particular Investment (other than a Restricted
Subsidiary) of such Person shall be included only
(1) if cash income has been received by such Person with
respect to such Investment during each of the previous four
fiscal quarters or
(2) if the cash income derived from such Investment is
attributable to Cash Equivalents.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"EXCHANGE NOTES" has the meaning provided in the preamble to
this Indenture.
"FAIR MARKET VALUE" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair market value shall be determined by the Board of Directors of
the Company acting reasonably and in good faith and shall be evidenced by a
Board Resolution delivered to the Trustee.
<PAGE>
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"FOREIGN RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary of the Company that is not a domestic Restricted Subsidiary.
"GAAP" means generally accepted accounting principles
consistently applied as in effect in the United States from time to time.
"GUARANTEE" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"GUARANTEE" means the guarantee of the Obligations of the
Company with respect to the Notes by each Guarantor.
"GUARANTOR" means the issuer at any time of a Guarantee (so
long as such Guarantee remains outstanding), which shall consist of each of the
Company's domestic Restricted Subsidiaries (excluding domestic Subsidiaries of
Foreign Restricted Subsidiaries).
"GUARANTOR SENIOR INDEBTEDNESS" means, with respect to any
Guarantor, the principal of and premium, if any, and interest on, and any and
all other fees, expense reimbursement obligations and other amounts due pursuant
to the terms of all agreements, documents and instruments providing for,
creating, securing or evidencing or otherwise entered into in connection with:
(1) all Indebtedness of such Guarantor owed to lenders under
the Senior Credit Facility;
(2) all obligations of such Guarantor with respect to any
Interest Rate Agreements or Currency Agreements;
(3) all obligations of such Guarantor to reimburse any bank or
other Person in respect of amounts paid under letters of credit,
acceptances or other similar instruments;
(4) all other Indebtedness of such Guarantor that does not
provide that it is to rank equally with or subordinate to the
Guarantee of such Guarantor; and
(5) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the
Guarantor Senior Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing,
Guarantor Senior Indebtedness will not include, with respect to any Guarantor:
(1) Indebtedness of such Guarantor to any of its Subsidiaries,
or to any Affiliate of such Guarantor or any of such Affiliate's
Subsidiaries;
(2) Indebtedness represented by the Guarantees;
<PAGE>
-12-
(3) any Indebtedness which by the express terms of the
agreement or instrument creating, evidencing or governing the
same is junior or subordinate in right of payment to any item of
Guarantor Senior Indebtedness;
(4) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of
business;
(5) Indebtedness incurred in violation of this Indenture;
(6) Indebtedness represented by Disqualified Capital Stock;
and
(7) any Indebtedness to or guaranteed on behalf of any
shareholder, director, officer or employee of the Guarantor or
any Subsidiary of such Guarantor or any of its Subsidiaries.
"HOLDER" or "NOTEHOLDER" means a Person in whose name a Note
is registered on the Registrar's book.
"HOLDINGS" means Heat Holdings Corp., a Delaware corporation.
"HOLDINGS II" means Heat Holdings II Corp., a Delaware
corporation.
"INCUR" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "incurrence," "incurred," "incurable," and "incurring" shall
have meanings correlative to the foregoing); PROVIDED that a change in GAAP that
results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed an incurrence of such Indebtedness.
"INDEBTEDNESS" means (without duplication), with respect to
any Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding, without limitation, any balances that
constitute accounts payable or trade payables, and other accrued liabilities
arising in the ordinary course of business) if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, and shall also include, to the extent
not otherwise included,
(1) any Capitalized Lease Obligations of such Person;
(2) obligations secured by a Lien to which the property or
assets owned or held by such Person is subject (other than a
Permitted Lien not securing any liability that would itself
constitute Indebtedness), whether or not the obligation or
obligations secured thereby shall have been assumed; PROVIDED
that if such obligations have not been assumed by such Person,
the amount of such Indebtedness shall be the lesser of (A) the
fair market value of such assets at such date of determination
and (B) the amount of such obligations;
<PAGE>
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(3) guarantees of items of other Persons which would be
included within this definition for such other Persons (whether
or not such items would appear upon the balance sheet of the
guarantor);
(4) all obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit
transaction;
(5) Disqualified Capital Stock of such Person or any
Subsidiary thereof; and
(6) obligations of any such Person under any Currency
Agreement or any Interest Rate Agreement applicable to any of the
foregoing (if and to the extent such Currency Agreement or
Interest Rate Agreement obligations would appear as a liability
upon a balance sheet of such Person prepared in accordance with
GAAP).
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation; PROVIDED that:
(1) the amount outstanding at any time of any Indebtedness
issued with original issue discount is the principal amount of
such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as
determined in conformity with GAAP and
(2) Indebtedness shall not include any liability for federal,
state, local or other taxes.
Notwithstanding any other provision of the foregoing definition, any trade
payable arising from the purchase of goods or materials or for services obtained
in the ordinary course of business shall not be deemed to be "Indebtedness" of
the Company or any of the Restricted Subsidiaries for purposes of this
definition. Furthermore, guarantees of (or obligations with respect to letters
of credit supporting) Indebtedness otherwise included in the determination of
such amount shall not also be included.
"INDENTURE" means this Indenture as amended, restated or
supplemented from time to time.
"INDEPENDENT FINANCIAL ADVISOR" means an investment banking
firm of national reputation in the United States
(1) which does not, and whose directors, officers or
Affiliates do not, have a direct or indirect financial interest
in the Company and
(2) which, in the judgment of the Board of Directors of the
Company, is otherwise independent and qualified to perform the
task for which it is to be engaged.
"INITIAL NOTES" has the meaning provided in the preamble to
this Indenture.
"INITIAL PURCHASERS" refers to CIBC World Markets Corp. and
FleetBoston Robertson Stephens Inc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) promulgated under the Securities Act.
<PAGE>
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"INTEREST PAYMENT DATE" means the stated maturity of an
installment of interest on the Notes.
"INTEREST RATE AGREEMENT" means, with respect to any Person,
any interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement designed to protect the party
indicated therein against fluctuations in interest rates.
"INVESTMENTS" means, with respect of any Person, directly or
indirectly, any advance, account receivable (other than an account receivable
arising in the ordinary course of business of such Person), loan or capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others or otherwise), or any
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures, partnership or joint venture interests or other securities of, the
acquisition, by purchase or otherwise, of all or substantially all of the
business or assets or stock or other evidence of beneficial ownership of, any
Person or the making of any investment in any Person. Investments shall exclude
(1) extensions of trade credit on commercially reasonable
terms in accordance with normal trade practices of such Person,
(2) endorsements for collection or deposit in the ordinary
course of business by such Person of bank drafts and similar
negotiable instruments of such other Person received as payment
for ordinary course of business trade receivables and
(3) the repurchase of securities of any Person by such Person.
For the purposes of Section 4.11, the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of the Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of cash distributions which
constitute a return of capital in connection with such Investment; PROVIDED that
the aggregate of all such reductions shall not exceed the amount of such initial
Investment plus the cost of all additional Investments; PROVIDED, FURTHER that
no such payment of dividends or distributions or receipt of any such other
amounts shall reduce the amount of any Investment if such payment of
distributions or receipt of any such amounts would be included in Consolidated
Net Income.
If the Company or any Restricted Subsidiary sells or otherwise
disposes of any Common Stock of any direct or indirect Restricted Subsidiary
such that, after giving effect to any such sale or disposition, the Company no
longer owns, directly or indirectly, greater than 50% of the outstanding Common
Stock of such Restricted Subsidiary, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Common Stock of such Restricted Subsidiary not sold or disposed of.
"ISSUE DATE" means February 2, 2000.
"LIEN" means, with respect to any property or assets of any
Person, any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, security interest, lien, charge, easement, encumbrance,
preference, priority, or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such property or assets
(including without limitation, any Capitalized Lease Obligation, conditional
sales or other title retention agreement having substantially the same economic
effect as any of the foregoing).
"MAKE WELL AGREEMENT" means that certain agreement among
Holdings, the Company and the Trustee dated as of the Issue Date and attached
hereto as Exhibit G pursuant to which Holdings has committed to make additional
equity contributions to repay Indebtedness in an amount necessary (not to exceed
$25 million in
<PAGE>
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the aggregate) for the Company's Debt to EBITDA Ratio (as defined therein) on a
PRO FORMA basis after such debt reduction to be no more than 4.5 to 1.0 for the
twelve-month period ended December 31, 2000 and no more than 4.25 to 1.0 for the
twelve-month period ended December 31, 2001.
"MATURITY DATE" means February 1, 2007.
"MERGER" means the merger of Heat Merger Corp. with and into
the Company pursuant to the terms of the Agreement and Plan of Merger, dated as
of August 23, 1999.
"NET INCOME" means, with respect to any Person, for any
period, the net income (loss) of such Person determined in accordance with GAAP.
"NET PROCEEDS" means
(1) in the case of any sale of Capital Stock by or equity
contribution to any Person, the aggregate net proceeds received
by such Person, after payment of expenses, commissions and the
like incurred in connection therewith, whether such proceeds are
in cash or in property (valued at the fair market value thereof,
as determined in good faith by the Board of Directors of such
Person, at the time of receipt) and
(2) in the case of any exchange, exercise, conversion or
surrender of outstanding securities of any kind for or into
shares of Capital Stock of the Company which is not Disqualified
Capital Stock, the net book value of such outstanding securities
on the date of such exchange, exercise, conversion or surrender
(plus any additional amount required to be paid by the holder to
such Person upon such exchange, exercise, conversion or
surrender, less any and all payments made to the holders, E.G.,
on account of fractional shares and less all expenses incurred by
such Person in --- connection therewith).
"NON-PAYMENT EVENT OF DEFAULT" means any event (other than a
Payment Default) the occurrence of which entitles one or more Persons to
accelerate the maturity of any Designated Senior Indebtedness.
"NOTES" means the Initial Notes and the Exchange Notes treated
as a single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
"OBLIGATIONS" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating to,
any Indebtedness.
"OFFICER" means, with respect to any Person, the Chief
Executive Officer, the Chief Financial Officer, Chief Accounting Officer,
Treasurer, President or any Vice President of such Person.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by any two Officers.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who and which is reasonably acceptable to the Trustee complying with the
requirements of this Indenture.
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"PAYMENT DEFAULT" means any Default, whether or not any
requirement for the giving of notice, the lapse of time or both, or any other
condition to such Default becoming an Event of Default has occurred, in the
payment of principal of or premium, if any, or interest on or any other amount
payable in connection with Designated Senior Indebtedness.
"PERMITTED HOLDERS" means Willis Stein & Partners, investment
funds managed by Willis Stein & Partners, partners and limited partners of
Willis Stein & Partners and such investment funds, and any entity controlled by
any of the foregoing and/or by a trust for the benefit of any of the foregoing.
"PERMITTED INDEBTEDNESS" means:
(1) Indebtedness of the Company or any Restricted Subsidiary
arising under or in connection with the Senior Credit Facility in
an aggregate principal amount not to exceed $75 million
outstanding at any time, less any mandatory prepayment actually
made thereunder (to the extent, in the case of payments of
revolving credit borrowings, that the corresponding commitments
have been permanently reduced);
(2) Indebtedness under the Notes and the Guarantees;
(3) Indebtedness not covered by any other clause of this
definition which is outstanding on the Issue Date;
(4) Indebtedness of the Company to any Restricted Subsidiary
and Indebtedness of any Restricted Subsidiary to the Company or
another Restricted Subsidiary;
(5) Purchase Money Indebtedness and Capitalized Lease
Obligations incurred to acquire property in the ordinary course
of business, which Purchase Money Indebtedness and Capitalized
Lease Obligations do not in the aggregate exceed $5 million at
any one time outstanding;
(6) Interest Rate Agreements and Currency Agreements;
(7) Refinancing Indebtedness;
(8) Indebtedness incurred in respect of (A) surety, judgment,
appeal, performance and other similar bonds, instruments or
obligations provided in the ordinary course of business or (B)
letters of credit, bankers' acceptances or other similar
instruments or obligations issued in connection with liabilities
incurred in the ordinary course of business;
(9) Indebtedness consisting of guarantees made in the ordinary
course of business by the Company or any Restricted Subsidiary in
accordance with the terms of this Indenture of obligations of the
Company or any Restricted Subsidiary, which obligations are
otherwise permitted under this Indenture;
(10) Indebtedness of the Company or any Restricted Subsidiary
consisting of indemnities or obligations in respect of purchase
price adjustments in connection with the acquisition or
disposition of assets, including pursuant to the Company's
acquisition of Thermalloy and the Merger;
<PAGE>
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(11) Indebtedness incurred by Foreign Restricted Subsidiaries
in an amount not to exceed $20 million; PROVIDED, HOWEVER, that
the amount of any Indebtedness under this clause (11) shall
reduce the amount of Indebtedness permitted under clause (1)
above; and
(12) additional Indebtedness of the Company and the Restricted
Subsidiaries not to exceed $10 million in aggregate principal
amount at any one time outstanding.
For purposes of determining compliance with any
dollar-denominated restriction on the incurrence of Indebtedness denominated in
a foreign currency, the dollar equivalent principal amount of such Indebtedness
incurred pursuant thereto shall be calculated based on the relevant currency
exchange rate in effect on the date that such Indebtedness was incurred, in the
case of term debt, or first committed, in the case of revolving credit debt,
PROVIDED that (x) the dollar-equivalent principal amount of any such
Indebtedness outstanding on the Issue Date shall be calculated based on the
relevant currency exchange rate in effect on the Issue Date and (y) if such
Indebtedness is incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect of the date of such refinancing, such
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced. The principal amount of
any Refinancing Indebtedness, if incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such respective Indebtedness
in denominated that is in effect on the date of such refinancing.
Notwithstanding the foregoing, the dollar-equivalent principal amount of
Indebtedness incurred pursuant to the Senior Credit Facility shall be calculated
in accordance therewith.
"PERMITTED INVESTMENTS" means Investments made on or after the
Issue Date consisting of
(1) Investments by the Company, or by a Restricted Subsidiary,
in the Company or a Restricted Subsidiary;
(2) Investments by the Company, or by a Restricted Subsidiary,
in a Person, if as a result of such Investment (a) such Person
becomes a Restricted Subsidiary or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary;
(3) Investments in cash and Cash Equivalents;
(4) reasonable and customary loans made to employees in
connection with their relocation not to exceed $500,000 in the
aggregate at any one time outstanding;
(5) an Investment that is made by the Company or a Restricted
Subsidiary in the form of any Capital Stock, bonds, notes,
debentures, partnership or joint venture interests or other
securities that are issued by a third party to the Company or
such Restricted Subsidiary solely as partial consideration for
the consummation of an Asset Sale that is otherwise permitted
under Section 4.13;
(6) Interest Rate Agreements and Currency Agreements entered
into in the ordinary course of the Company's or the Restricted
Subsidiaries' business;
(7) additional Investments not to exceed $1 million at any one
time outstanding;
<PAGE>
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(8) Investments existing on the Issue Date;
(9) Investments in securities of trade creditors received
pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or
customers;
(10) guarantees by the Company or any Restricted Subsidiary of
Indebtedness otherwise permitted to be incurred by Restricted
Subsidiaries under this Indenture; and
(11) Investments for which the sole consideration provided is
Capital Stock (other than Disqualified Capital Stock).
"PERMITTED LIENS" means
(1) Liens on property or assets of, or any shares of Capital
Stock of or secured indebtedness of, any Person existing at the
time such Person becomes a Restricted Subsidiary or at the time
such Person is merged into the Company or any of its Restricted
Subsidiaries; PROVIDED that such Liens are not incurred in
connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary or merging into the Company or any of its
Restricted Subsidiaries;
(2) Liens on Property acquired by the Company or a Restricted
Subsidiary; PROVIDED, that such Liens are not incurred in
connection with, or in contemplation of, such acquisition of
Property;
(3) Liens securing Indebtedness under the Senior Credit
Facility, which Indebtedness is incurred in compliance with
Section 4.10;
(4) Liens securing Refinancing Indebtedness that is incurred
to Refinance any Indebtedness that has been secured by a Lien
permitted under this Indenture and that has been incurred in
accordance with the provisions of this Indenture; PROVIDED that
any such Lien (i) is not less favorable to the holders of the
Notes and is not more favorable to the lienholders with respect
to such Lien than the Lien in respect of Indebtedness being
Refinanced; and (ii) does not extend to or cover any Property,
Capital Stock or Indebtedness other than the Property, shares or
debt securing the Indebtedness so refunded, refinanced or
extended;
(5) Liens in favor of the Company or any of the Restricted
Subsidiaries;
(6) Liens securing industrial revenue bonds;
(7) Liens securing Purchase Money Indebtedness that is
otherwise permitted to be incurred under this Indenture; PROVIDED
that
(a) any such Lien is created solely for the purpose
of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including sales and excise
taxes, installation and delivery charges and other direct
costs of, and other direct expenses paid or charged in
connection with, such purchase or construction) of such
Property,
<PAGE>
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(b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such costs and
(c) such Lien does not extend to or cover any
Property other than such item of Property and any
improvements on such item;
(8) statutory liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business which do not
secure any Indebtedness and with respect to amounts not yet
delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made
therefor;
(9) Liens for taxes, assessments or governmental charges that
are being contested in good faith by appropriate proceedings;
(10) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of
the business of the Company or any of the Restricted
Subsidiaries;
(11) Liens securing Capitalized Lease Obligations permitted to
be incurred under this Indenture; PROVIDED that such Lien does
not extend to any property other than that subject to the
underlying lease;
(12) Liens existing on the Issue Date and Liens securing the
Notes;
(13) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance and other types of social security, including landlord
Liens on leased properties and any Lien securing letters of
credit issued in the ordinary course of business consistent with
past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeals
bonds, bids, leases, government contracts, performance bonds and
other similar obligations;
(14) attachment or judgment Liens not giving rise to an Event
of Default;
(15) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the account
of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods;
(16) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and
proceeds thereof;
(17) Liens in respect of obligations under Interest Rate
Agreements or Currency Agreements;
(18) Liens securing Indebtedness of Foreign Restricted
Subsidiaries incurred in reliance on clause (11) of the
definition of Permitted Indebtedness;
<PAGE>
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(19) Liens in favor of the Trustee pursuant to Section 7.07;
and
(20) any extensions, substitutions, replacements or renewals
of the foregoing.
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government (including any agency or
political subdivision thereof).
"PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"PROPERTY" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"PUBLIC EQUITY OFFERING" means a public offering by the
Company, Holdings or Holdings II of shares of its Common Stock (however
designated and whether voting or not-voting) and any and all rights, warrants or
options to acquire such Common Stock and, in the case of a public offering by
Holdings or Holdings II, the proceeds thereof are contributed to the Company.
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness incurred
in the ordinary course of business by a Person to finance the cost (including
the cost of construction) of an item of property, the principal amount of which
Indebtedness does not exceed the sum of
(1) 100% of such cost and
(2) reasonable fees and expenses of such Person incurred in
connection therewith.
"QUALIFIED INSTITUTIONAL BUYER" shall have the meaning
specified in Rule 144A promulgated under the Securities Act.
"RECORD DATE" for interest payable on any Interest Payment
Date (except a date for payment of default interest) means the January 15 and
July 15 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date.
"REDEEMABLE DIVIDEND" means, for any cash dividend or
distribution with regard to Preferred Stock, the quotient of the dividend or
distribution divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such Preferred Stock.
"REDEMPTION DATE" when used with respect to any Note to be
redeemed means the date fixed for such redemption pursuant to this Indenture.
"REDEMPTION PRICE" when used with respect to any Note to be
redeemed means the price fixed for such redemption pursuant to this Indenture.
<PAGE>
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"REFINANCING INDEBTEDNESS" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company outstanding on the Issue
Date or other Indebtedness permitted to be incurred by the Company or the
Restricted Subsidiaries pursuant to the terms of this Indenture (other than
pursuant to clauses 1, 5, 11 and 12 of the definition of Permitted
Indebtedness), but only to the extent that
(1) the Refinancing Indebtedness is subordinated to the Notes
to at least the same extent as the Indebtedness being refunded,
refinanced or extended, if at all;
(2) the Refinancing Indebtedness is scheduled to mature either
(a) no earlier than the Indebtedness being refunded,
refinanced or extended or
(b) after the maturity date of the Notes;
(3) the portion, if any, of the Refinancing Indebtedness that
is scheduled to mature on or prior to the maturity date of the
Notes has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater
than the Weighted Average Life to Maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the maturity date of the
Notes;
(4) such Refinancing Indebtedness is in an aggregate principal
amount that is equal to or less than the sum of
(a) the aggregate principal amount then outstanding
under the Indebtedness being refunded, refinanced or
extended,
(b) the amount of accrued and unpaid interest, if any,
and premiums owed, if any, not in excess of preexisting
prepayment provisions on such Indebtedness being refunded,
refinanced or extended, and
(c) the amount of customary fees, expenses and costs
related to the incurrence of such Refinancing Indebtedness;
and
(5) such Refinancing Indebtedness is incurred by the same
Person that initially incurred the Indebtedness being refunded,
refinanced or extended, except that the Company may incur
Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Restricted Subsidiary.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the Issue Date by and among the Company, the Guarantors
and the Initial Purchasers.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"RESPONSIBLE OFFICER" shall mean when used with respect to the
Trustee any officer within the Corporate Trust Office including any Principal,
Vice President, Managing Director, Assistant Vice President, Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
<PAGE>
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"RESTRICTED PAYMENT" means any of the following:
(1) the declaration or payment of any dividend or any other
distribution or payment on Capital Stock of the Company or any
Restricted Subsidiary or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock
of the Company or any Restricted Subsidiary (other than (a)
dividends or distributions payable solely in Capital Stock (other
than Disqualified Capital Stock) or in options, warrants or other
rights to purchase such Capital Stock (other than Disqualified
Capital Stock), and (b) in the case of Restricted Subsidiaries of
the Company, dividends or distributions payable to the Company or
to a Restricted Subsidiary);
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any
of the Restricted Subsidiaries (other than Capital Stock owned by
the Company or a Restricted Subsidiary, excluding Disqualified
Capital Stock) or any option, warrants or other rights to
purchase such Capital Stock;
(3) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or
retirement for value, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, of any Indebtedness
which is subordinated in right of payment to the Notes (other
than subordinated Indebtedness acquired in anticipation of
satisfying a scheduled sinking fund obligation, principal
installment or final maturity, in each case due within one year
of the date of acquisition);
(4) the making of any Investment or guarantee of any
Investment in any Person other than a Permitted Investment;
(5) any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary (valued at the fair market value of the
net assets of such Restricted Subsidiary on the date of such
designation); and
(6) forgiveness of any Indebtedness of an Affiliate of the
Company to the Company or a Restricted Subsidiary.
For purposes of determining the amount expended for Restricted Payments, cash
distributed or invested shall be valued at the face amount thereof and property
other than cash shall be valued at its fair market value.
"RESTRICTED SECURITY" has the meaning set forth in Rule
144(a)(3) promulgated under the Securities Act; PROVIDED that the Trustee shall
be entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.
"RESTRICTED SUBSIDIARY" means a Subsidiary of the Company
other than an Unrestricted Subsidiary and includes all of the Subsidiaries of
the Company existing as of the Issue Date.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with
any Person providing for the leasing by the Company or any Restricted Subsidiary
of any real or tangible personal property, which property has been or is to be
sold or transferred by the Company or such Restricted Subsidiary to such Person
in contemplation of such leasing.
<PAGE>
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"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"SENIOR CREDIT FACILITY" means the Amended and Restated Credit
Agreement dated as of the Issue Date, by and among the Company, the lenders
party thereto in their capacities as lenders thereunder and Canadian Imperial
Bank of Commerce, as agent, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowings thereunder (PROVIDED that such increase in borrowings is
permitted by Section 4.10) or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"SENIOR INDEBTEDNESS" means the principal of and premium, if
any, and interest on, and any and all other fees, expense reimbursement
obligations and other amounts due pursuant to the terms of all agreements,
documents and instruments providing for, creating, securing or evidencing or
otherwise entered into in connection with
(1) all Indebtedness of the Company owed to lenders under the
Senior Credit Facility;
(2) all obligations of the Company with respect to any
Interest Rate Agreement or Currency Agreement;
(3) all obligations of the Company to reimburse any bank or
other person in respect of amounts paid under letters of credit,
acceptances or other similar instruments;
(4) all other Indebtedness of the Company that does not
provide that it is to rank equally with or subordinate to the
Notes; and
(5) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the Senior
Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
will not include
(1) Indebtedness of the Company to any of its Subsidiaries, or
to any Affiliate of the Company or any of such Affiliate's
Subsidiaries;
(2) Indebtedness represented by the Notes and the Guarantees;
(3) any Indebtedness which by the express terms of the
agreement or instrument creating, evidencing or governing the
same is junior or subordinate in right of payment to any item of
Senior Indebtedness;
(4) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of
business;
(5) Indebtedness incurred in violation of this Indenture;
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(6) Indebtedness represented by Disqualified Capital Stock;
and
(7) any Indebtedness to or guaranteed on behalf of, any
shareholders, director, officer or employee of the Company or any
Subsidiary of the Company.
"SIGNIFICANT RESTRICTED SUBSIDIARY" means, with respect to any
Person, any Restricted Subsidiary of such Person that satisfies the criteria for
a "significant subsidiary" set forth in Rule 1.02 (w) of Regulation S-X under
the Securities Act, as such Rule is in effect on the Issue Date.
"SUBSIDIARY" of any specified Person means any corporation,
partnership, limited liability company, joint venture, association or other
business entity, whether now existing or hereafter organized or acquired,
(1) in the case of a corporation, of which more than 50% of
the total voting power of the Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the
election of directors, officers or trustees thereof is held by
such first-named Person or any of its Subsidiaries; or
(2) in the case of a partnership, limited liability company,
joint venture, association or other business entity, with respect
to which such first-named Person or any of its Subsidiaries has
the power to direct or cause the direction of the management and
policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the
first-named Person for financial statement purposes.
"THERMALLOY" means the Thermalloy division of Bowthorpe Plc.
"TREASURY RATE" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by, and published in, the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two business
days prior to the date fixed for redemption) most nearly equal to the period
from February 1, 2004 to such redemption; PROVIDED, however, that if the period
from February 1, 2004 to such redemption is not equal to the constant maturity
of a United States Treasury security for which a weekly a average yield is
given, the Treasury Rate shall be obtained by linear interpolation (calculated
to the nearest one-twelfth of a year) from the weekly average yield of United
States Treasury securities for which such yields are given, except that if the
period from February 1, 2004 to such redemption is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act
of 1939 (15 U.S. Code sections 77aaa-77bbbb) as in effect on the date of this
Indenture (except as provided in Section 8.03).
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"UNRESTRICTED SUBSIDIARY" means
(1) any Subsidiary of an Unrestricted Subsidiary and
(2) any Subsidiary of the Company which is classified after
the Issue Date as an Unrestricted Subsidiary by a Board
Resolution;
<PAGE>
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PROVIDED that a Subsidiary may be so classified as an Unrestricted Subsidiary
only if
(1) such classification is in compliance with Section 4.11,
(2) immediately after giving effect to such classification,
the Company could have incurred at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.10,
(3) no Default or Event of Default shall have occurred and be
continuing or result therefrom and
(4) neither the Company nor any Restricted Subsidiary shall at
any time
(a) provide a guarantee of, or similar credit support
to, any Indebtedness of such Subsidiary (including any
undertaking, agreement or instrument evidencing such
Indebtedness),
(b) be directly or indirectly liable for any
Indebtedness of such Subsidiary or
(c) be directly or indirectly liable for any other
Indebtedness that provides that the holder thereof may (upon
notice, lapse of time or both) declare a default thereon (or
cause the payment thereof to be accelerated or payable prior
to its final scheduled maturity) upon the occurrence of a
default with respect to any other Indebtedness that is
Indebtedness of such Subsidiary (including any corresponding
right to take enforcement action against such Subsidiary),
except in the case of clause (a) or (b) above to the extent
(a) that the Company or such Restricted Subsidiary
could otherwise provide such a guarantee or incur such
Indebtedness (other than as Permitted Indebtedness)
pursuant to Section 4.10 and
(b) the provision of such guarantee and the incurrence
of such Indebtedness otherwise would be permitted under
Section 4.11.
The Board of Directors of the Company may designate any
Unrestricted Subsidiary or any Person that is to become a Subsidiary as a
Restricted Subsidiary if immediately after giving effect to such action (and
treating any Indebtedness of such Unrestricted Subsidiary or Person as having
been incurred at the time of such action),
(1) the Company could have incurred at least $1.00 of
additional Indebtedness (other that Permitted Indebtedness)
pursuant to Section 4.10 and
(2) no Default or Event of Default shall have occurred and be
continuing or result therefrom.
The Trustee shall be given prompt written notice by the
Company of each Board Resolution adopted under this provision, together with a
copy of each such Board Resolution adopted.
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"U.S. GOVERNMENT OBLIGATIONS" means (a) securities that are
direct obligations of the United States of America for the payment of which its
full faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; PROVIDED that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(1) the then outstanding aggregate principal amount of such
Indebtedness into
(2) the sum of the total of the products obtained by
multiplying
(a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect
thereof and
(b) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the
making of such payment.
"WSP" means Willis Stein & Partners Management II, L.P.
Section 1.02. OTHER DEFINITIONS.
The definitions of the following terms may be found in the
sections indicated as follows:
<TABLE>
<CAPTION>
TERM DEFINED IN SECTION
<S> <C>
"AFFILIATE TRANSACTION"................................................. 4.14
"AGENT MEMBERS"......................................................... 2.15
"AUTHENTICATING AGENT".................................................. 2.02
"BANKRUPTCY LAW"........................................................ 6.01
"BANKRUPTCY PROCEEDING"................................................. 10.02
"BUSINESS DAY".......................................................... 12.07
"CHANGE OF CONTROL OFFER"............................................... 4.17
"CHANGE OF CONTROL PAYMENT DATE"........................................ 4.17
"CHANGE OF CONTROL PURCHASE PRICE"...................................... 4.17
"COVENANT DEFEASANCE"................................................... 9.03
"CUSTODIAN"............................................................. 6.01
"EVENT OF DEFAULT"...................................................... 6.01
"EXCESS PROCEEDS OFFER"................................................. 4.13
"EXCESS PROCEEDS PAYMENT DATE".......................................... 4.13
</TABLE>
<PAGE>
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<TABLE>
<S> <C>
"FOUR QUARTER PERIOD"................................................... 1.01
"GLOBAL NOTES".......................................................... 2.01
"GUARANTOR BANKRUPTCY PROCEEDING"....................................... 11.07
"GUARANTOR PAYMENT BLOCKAGE PERIOD"..................................... 11.09
"GUARANTOR REPRESENTATIVE".............................................. 11.09
"INITIAL BLOCKAGE PERIOD"............................................... 10.03
"INITIAL GUARANTOR BLOCKAGE PERIOD"..................................... 11.09
"LEGAL DEFEASANCE"...................................................... 9.02
"LEGAL HOLIDAY"......................................................... 12.07
"MOODY'S"............................................................... 1.01
"PAYING AGENT".......................................................... 2.03
"PAYMENT BLOCKAGE PERIOD"............................................... 10.03
"PRIVATE PLACEMENT LEGEND".............................................. 2.17
"REGISTRAR"............................................................. 2.03
"REGULATION S GLOBAL NOTE".............................................. 2.01
"REPRESENTATIVE"........................................................ 10.03
"RESALE RESTRICTION TERMINATION DATE"................................... 2.16
"RULE 144A GLOBAL NOTE"................................................. 2.01
"S&P"................................................................... 1.01
"TRANSACTION DATE"...................................................... 1.01
</TABLE>
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITYHOLDER" means a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee.
"OBLIGOR ON THE INDENTURE SECURITIES" means the Company, the
Guarantors or any other obligor on the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by Commission
rule have the meanings therein assigned to them.
Section 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether
defined expressly or by reference;
<PAGE>
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) words used herein implying any gender shall apply to every
gender.
ARTICLE 2
THE NOTES
Section 2.01. FORM AND DATING.
The Initial Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form of EXHIBIT A
hereto. The Exchange Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of EXHIBIT B hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or Depository rule or usage. The form of the Notes and any
notation, legend or endorsement on them shall be satisfactory to both the
Company and the Trustee. Each Note shall be dated the date of its issuance and
shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed
hereto as EXHIBITS A and B, shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
The Notes shall be issued initially in the form of two or more
permanent global Notes (the "GLOBAL NOTES"). Notes offered and sold (i) in
reliance on Rule 144A shall be issued initially in the form of one or more
permanent Global Notes in registered form, substantially in the form set forth
in EXHIBIT A (the " RULE 144A GLOBAL NOTE") and (ii) in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth
in Exhibit A (the "REGULATION S GLOBAL NOTE"), and in each case shall be
deposited with the Trustee, as custodian for the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of any Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Section 2.02. EXECUTION AND AUTHENTICATION.
The Notes shall be executed on behalf of the Company by two
Officers of the Company or an Officer and the Secretary or Assistant Secretary
of the Company. Such signature may be either manual or facsimile. The Company's
seal may be impressed, affixed, imprinted or reproduced on the Notes and may be
in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless.
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A Note shall not be valid until an authorized signatory of the
Trustee or Authenticating Agent manually signs the certificate of authentication
on the Note. Such signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee or an authentication agent (the "AUTHENTICATING
AGENT") shall authenticate (i) Initial Notes for original issue on the date of
this Indenture in the aggregate principal amount not to exceed $150,000,000 and
(ii) Exchange Notes from time to time for issue only in exchange for a like
principal amount of Initial Notes, in each case upon written orders of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Notes to be authenticated, the date on which the Notes are
to be authenticated and the aggregate principal amount of Notes outstanding on
the date of authentication, whether the Notes are to be Initial Notes or
Exchange Notes, and shall further specify the amount of such Notes to be issued
as the Global Note or Certificated Notes. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount, except as provided in
Section 2.07.
Notwithstanding the foregoing, all Notes issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Notes may vote or consent) as one class and no series of Notes will have
the right to vote or consent as a separate class on any matter.
The Trustee, at the expense of the Company, may appoint an
Authenticating Agent to authenticate Notes. Any such appointment shall be
evidenced by an instrument signed by a Responsible Officer, a copy of which
shall be furnished to the Company. An Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same right as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.
Section 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("REGISTRAR"), an
office or agency located in the Borough of Manhattan, City of New York, State of
New York where Notes may be presented for payment ("PAYING AGENT") and an office
or agency where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Registrar shall provide the
Company a current copy of such register from time to time upon request of the
Company. The Company may have one or more co-Registrars and one or more
additional Paying Agents. Neither the Company nor any Affiliate of the Company
may act as Paying Agent. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to any Noteholder.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, or agent for service of notices and
demands, or fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent and agent
for service of notices and demands in connection with the Notes.
<PAGE>
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Section 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of the Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of, premium, if any, or interest on Notes (whether such
assets have been distributed to it by the Company or any other obligor on the
Notes), and shall promptly notify the Trustee in writing of any Default in
making any such payment. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any Payment
Default, upon written request to a Paying Agent, require such Paying Agent to
forthwith distribute to the Trustee all assets so held in trust by such Paying
Agent together with a complete accounting of such sums. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
Section 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish or cause the Registrar to furnish to the Trustee on or before each and
in each year, and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Holders which list may be conclusively relied on by
the Trustee.
Section 2.06. TRANSFER AND EXCHANGE.
Subject to the provisions of Sections 2.15 and 2.16, when
Notes are presented to the Registrar or a co-Registrar with a written request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations of the same series,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its requirements for such transaction are met; PROVIDED,
HOWEVER, that the Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfer and exchanges, the Company shall execute and
the Trustee shall authenticate Notes at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge in connection therewith payable by
the transferor of such Notes (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Section
2.10, 3.06, 4.13, 4.17, 4.24 or 9.06, in which event the Company shall be
responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Note (i) during a period beginning
at the opening of business 15 days before the mailing of a notice of redemption
of Notes and ending at the close of business on the day of such mailing and (ii)
selected for redemption in whole or in part pursuant to Article 3, except the
unredeemed portion of any Note being redeemed in part.
Any Holder of a Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global Notes
may be effected only through a book entry system maintained by the Holder of
such Global Note (or its agent), and that ownership of a beneficial interest in
the Note shall be required to be reflected in a book entry.
<PAGE>
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Section 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the
Holder presents evidence to the satisfaction of the Company and the Trustee that
the Note has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Note. An indemnity bond may be
required by the Company or the Trustee that is sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. In every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
to the Trustee evidence to their satisfaction of the destruction, loss or the
theft of such Note and the ownership thereof. Each of the Company and the
Trustee may charge for its expenses (including without limitation attorneys'
fees and expenses) in replacing a Note. In the event any such mutilated, lost,
destroyed or wrongfully taken Note has become due and payable, the Company in
its discretion may pay such Note instead of issuing a new Note in replacement
thereof. The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to replacement
or payment of mutilated, lost, destroyed or wrongfully taken Notes.
Every replacement Note is an additional Obligation of the
Company.
Section 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding until
the Company and the Trustee receive proof satisfactory to each of them that the
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or the Maturity Date, the Paying Agent
holds U.S. legal tender sufficient to pay all of the principal and interest due
on the Notes payable on that date and is not prohibited from paying such money
to the Holders thereof pursuant to the terms of this Indenture, then on and
after that date such Notes cease to be outstanding and interest on them ceases
to accrue.
Section 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver, consent or notice,
Notes owned by the Company or any of its Affiliates shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which a Responsible Officer of the Trustee actually knows
are so owned shall be so considered. The Company shall notify the Trustee, in
writing, when it or any of its Affiliates repurchases or otherwise acquires
Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.
Section 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes.
Without
<PAGE>
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unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.02
definitive Notes in exchange for temporary Notes.
Section 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Company, dispose of and deliver evidence of such disposal of all Notes
surrendered for registration of transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Company may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation. If the Company
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.
Section 2.12. DEFAULTED INTEREST.
The Company shall pay interest on overdue principal (including
post-petition interest in a proceeding under Bankruptcy Law) at the rate of
interest then borne by the Notes. The Company shall, to the extent lawful, pay
interest on overdue installments of interest (without regard to any applicable
grace periods) at the rate of interest then borne by the Notes.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, as of a recent date selected by the Company, with a copy to the Trustee,
a notice that states the subsequent special record date, the payment date and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid
prior to the expiration of the 30-day period set forth in Section 6.01(b) shall
be paid to Holders as of the Record Date for the Interest Payment Date for which
interest has not been paid.
Section 2.13. DEPOSIT OF MONEYS.
Prior to 10:00 a.m., New York City time, on each Interest
Payment Date, Redemption Date, Change of Control Payment Date, Excess Proceeds
Payment Date and Maturity Date, the Company shall have deposited with the Paying
Agent in immediately available funds U.S. legal tender sufficient to make
payments, if any, due on such Interest Payment Date, Redemption Date, Change of
Control Payment Date, Excess Proceeds Payment Date or Maturity Date, as the case
may be, in a timely manner which permits the Trustee to remit payment to the
Holders on such Interest Payment Date, Redemption Date, Change of Control
Payment Date, Excess Proceeds Payment Date or Maturity Date, as the case may be.
The principal and interest on Global Notes shall be payable to the Depository or
its nominee, as the case may be, as the sole registered owner and the sole
holder of the Global Notes represented thereby. The principal and interest on
Notes in certificated form shall be payable at the office of the Paying Agent.
<PAGE>
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Section 2.14. CUSIP NUMBER.
The Company in issuing the Notes may use one or more "CUSIP"
numbers, and if so, the Trustee shall use such CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP numbers printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Company shall promptly notify the Trustee in writing of any change in
the CUSIP number.
Section 2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Global Notes initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Section 2.17.
Members of, or participants in, the Depository ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depository or under the Global Note, and the
Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of the Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder.
(b) Interests of beneficial owners in the Global Notes may be
transferred or exchanged for Certificated Notes in accordance with the rules and
procedures of the Depository and the provisions of Section 2.16. In addition,
Certificated Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Notes if (i) the Depository (x) notifies
the Company that it is unwilling or unable to continue as Depository for any
Global Note or (y) has ceased to be a clearing company registered under the
Exchange Act and, in each case, a successor depositary is not appointed by the
Company within 90 days of such notice, (ii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of Certificated
Notes, or (iii) a Default or an Event of Default has occurred and is continuing
and the Registrar has received a written request from the Depository to issue
Certificated Notes.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Note to beneficial owners
pursuant to paragraph (b), the Registrar shall (if one or more Certificated
Notes are to be issued) reflect on its books and records the date and a decrease
in the principal amount of the Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and the
Company shall execute, and the Trustee shall upon receipt of a written order
from the Company authenticate and make available for delivery, one or more
Certificated Notes of like tenor and amount.
(d) In connection with the transfer of Global Notes as an
entirety to beneficial owners pursuant to paragraph (b), the Global Notes shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall, upon receipt of an authentication order
from the Company in the form of an Officers' Certificate, authenticate and
deliver, to each beneficial owner identified by the Depository in writing in
exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Certificated Notes of authorized denominations.
<PAGE>
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(e) Any Certificated Note constituting a Restricted Security
delivered in exchange for an interest in a Global Note pursuant to paragraph
(b), (c) or (d) shall, except as otherwise provided by Section 2.16, bear the
Private Placement Legend (as defined).
(f) The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
Section 2.16. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF CERTIFICATED NOTES. When
Certificated Notes are presented to the Registrar or co-Registrar with a
request:
(i) to register the transfer of the Certificated Notes;
or
(ii) to exchange such Certificated Notes for an equal
principal amount of Certificated Notes of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; PROVIDED, HOWEVER, that the
Certificated Notes presented or surrendered for registration of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar
or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Certificated Notes the offer and
sale of which have not been registered under the Securities
Act and are presented for transfer or exchange prior to (x)
the date which is two years after the later of the date of
original issue and the last date on which the Company or any
Affiliate of the Company was the owner of such Note, or any
predecessor thereto and (y) such later date, if any, as may
be required by any subsequent change in applicable law (the
"RESALE RESTRICTION TERMINATION DATE"), such Certificated
Notes shall be accompanied, in the sole discretion of the
Company, by the following additional information and
documents, as applicable:
(A) if such Certificated Note is being
delivered to the Registrar or co-Registrar by a
Holder for registration in the name of such
Holder, without transfer, a certification to that
effect (substantially in the form of EXHIBIT C);
or
(B) if such Certificated Note is being
transferred to a Qualified Institutional Buyer in
accordance with Rule 144A, a certification to that
effect (substantially in the form of EXHIBIT C);
or
(C) if such Certificated Note is being
transferred in reliance on Regulation S, delivery
of a certification to that effect (substantially
in the form of EXHIBIT C) and a transferor
certificate for Regulation S transfers
(substantially in the form of EXHIBIT E); or
(D) if such Certificated Note is being
transferred to an Institutional Accredited
Investor, delivery of certification to that effect
(substantially in the form of EXHIBIT C),
certificates of the transferee (substantially in
the form of EXHIBIT D) and, at the option of the
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Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that
such transfer is in compliance with the Securities
Act; or
(E) if such Certificated Note is being
transferred in reliance on Rule 144 under the
Securities Act, delivery of a certification to
that effect (substantially in the form of EXHIBIT
C) and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company
to the effect that such transfer is in compliance
with the Securities Act; or
(F) if such Certificated Note is being
transferred in reliance on another exemption from
the registration requirements of the Securities
Act, a certification to that effect (substantially
in the form of EXHIBIT C) and, at the option of
the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that
such transfer is in compliance with the Securities
Act.
(b) RESTRICTIONS ON TRANSFER OF A CERTIFICATED NOTE FOR A
BENEFICIAL INTEREST IN A GLOBAL NOTE. A Certificated Note may not be exchanged
for a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) in the case of Certificated Notes, the offer and sale of
which have not been registered under the Securities Act and which are
presented for transfer prior to the Resale Restriction Termination
Date, certification (substantially in the form of EXHIBIT C), that such
Certificated Note is being transferred (I) to a Qualified Institutional
Buyer, (II) to an Institutional Accredited Investor (and, in the case
of this clause (II), the Company shall have received a transferee
letter of representation (substantially in the form of EXHIBIT D) and,
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transaction is in
compliance with the Securities Act) or (III) in an offshore transaction
in reliance on Regulation S (and, in the case of this clause III, the
Company shall have received a transferor certificate for Regulation S
transfers (substantially in the form of EXHIBIT E) and, at the option
of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transaction is in compliance with the
Securities Act); and
(B) written instructions from the Holder thereof directing the
Registrar or co-Registrar to make, or to direct the Depository to make,
an endorsement on the applicable Global Note to reflect an increase in
the aggregate amount of the Notes represented by the Global Note,
then the Registrar or co-Registrar shall cancel such Certificated Note and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Notes represented by the applicable Global
Note to be increased accordingly. If no Global Note representing Notes held by
Qualified Institutional Buyers or Persons acquiring Notes in offshore
transactions in reliance on Regulation S, as the case may be, is then
outstanding, the Company shall issue and the Trustee shall, upon receipt of an
authentication order in the form of an Officers' Certificate in accordance with
Section 2.02, authenticate such a Global Note in the appropriate principal
amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or co-Registrar of written instructions,
or such other instruction as is customary for the Depository, from the
Depository or its nominee, requesting the registration of transfer of an
interest in a U.S. Global Note or
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Regulation S Global Note, as the case may be, to another type of Global Note,
together with the applicable Global Notes (or, if the applicable type of Global
Note required to represent the interest as requested to be transferred is not
then outstanding, only the Global Note representing the interest being
transferred), the Registrar or co-Registrar shall cancel such Global Notes (or
Global Note) and the Company shall issue and the Trustee shall, upon receipt of
an authentication order in the form of an Officers' Certificate in accordance
with Section 2.02, authenticate new Global Notes of the types so cancelled (or
the type so cancelled and applicable type required to represent the interest as
requested to be transferred) reflecting the applicable increase and decrease of
the principal amount of Notes represented by such types of Global Notes, giving
effect to such transfer. If the applicable type of Global Note required to
represent the interest as requested to be transferred is not outstanding at the
time of such request, the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate a new Global Note of such type in principal amount equal to the
principal amount of the interest requested to be transferred.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
CERTIFICATED NOTE. (i) Any Person having a beneficial interest in a Global Note
may upon request exchange such beneficial interest for a Certificated Note. Upon
receipt by the Registrar or co-Registrar of written instructions, or such other
form of instructions as is customary for the Depository, from the Depository or
its nominee on behalf of any Person having a beneficial interest in a Global
Note and upon receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the Person designated by the
Depository as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Notes the offer and sale of which have not been registered under the
Securities Act and which Notes are presented for transfer or exchange prior to
the Resale Restriction Termination Date, the following additional information
and documents:
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification from such Person to that effect (substantially in the
form of EXHIBIT C); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule l44A, a
certification to that effect (substantially in the form of EXHIBIT C);
or
(C) if such beneficial interest is being transferred in
reliance on Regulation S, delivery of a certification to that effect
(substantially in the form of EXHIBIT C) and a transferor certificate
for Regulation S transfers (substantially in the form of EXHIBIT E); or
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of certification
(substantially in the form of EXHIBIT C), a certificate of the
transferee (in substantially the form of EXHIBIT D) and, at the option
of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the
Securities Act; or
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of EXHIBIT C);
or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in the
form of EXHIBIT C) and, at the option of the Company, an Opinion of
Counsel reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act,
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then the Registrar or co-Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the aggregate principal amount of the applicable Global Note to be
reduced and, following such reduction, the Company will execute and, upon
receipt of an authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and deliver to the
transferee a Certificated Note in the appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.16(d) shall be registered
in such names and in such authorized denominations as the Depository, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar or co-Registrar in writing. The Registrar or co-Registrar
shall deliver such Certificated Notes to the Persons in whose names such
Certificated Notes are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless, and the Trustee is hereby authorized
to deliver Notes without the Private Placement Legend if, (i) the Resale
Restriction Termination Date shall have occurred, (ii) there is delivered to the
Trustee an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act.
(g) GENERAL. By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Note only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among Agent Members or beneficial owners of interest in any Global Note)
other than to require delivery of such certificates and other documentation
or evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
Section 2.17. RESTRICTIVE LEGENDS.
Each Global Note and Certificated Note that constitutes a
Restricted Security shall bear the following legend (the "PRIVATE PLACEMENT
LEGEND") on the face thereof until February 2, 2002, unless otherwise agreed to
by the Company and the Holder thereof:
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE
ON WHICH THE COMPANY, OR ANY AFFILIATE OF THE COMPANY, WAS THE OWNER OF
THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE), RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF SUBPARAGRAPH 501(a)(1), (2), (3), or (7) UNDER THE
SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS NOTE), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (2) WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE, IF THE PROPOSED TRANSFER IS BEING MADE
PURSUANT TO CLAUSE (C) OR (E) ABOVE, PRIOR TO SUCH TRANSFER, THE HOLDER
WILL BE REQUIRED TO FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS
NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE
<PAGE>
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SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.16 OF THE INDENTURE.
ARTICLE 3
REDEMPTION
Section 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to paragraph 7
of the Notes, at least 60 days prior to the Redemption Date or during such other
period as the Trustee may agree to, the Company shall notify the Trustee in
writing of the Redemption Date, the principal amount of Notes to be redeemed and
the Redemption Price, and deliver to the Trustee an Officers' Certificate
stating that such redemption will comply with the conditions contained herein
and in the Notes, as appropriate.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
In the event that less than all of the Notes are to be
redeemed at any time, selection of the Notes to be redeemed shall be made by the
Trustee in compliance with the requirements of the principal securities
exchange, if any, on which such Notes are listed or, if such Notes are not then
listed on a national securities exchange, on a PRO RATA basis, by lot or by such
other method as the Trustee shall deem fair and appropriate; PROVIDED, HOWEVER,
that no Notes of a principal amount of $1,000 or less shall be redeemed in part;
PROVIDED, FURTHER, that if a partial redemption is made with the proceeds of any
Public Equity Offering, selection of the Notes or portions thereof for
redemption shall be made by the Trustee only on a PRO RATA basis or on as nearly
a PRO RATA basis as is practicable (subject to the procedures of the
Depository), unless such method is otherwise prohibited. The Trustee shall
promptly notify the Company of the Notes selected for redemption and, in the
case of any Notes selected for partial redemption, the principal amount thereof
to be redeemed.
Section 3.03. NOTICE OF REDEMPTION.
Notice of redemption shall be mailed by first class mail at
least 30 but not more than 60 calendar days before the Redemption Date to each
Holder of Notes to be redeemed at its registered address. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed.
The notice shall identify the Notes to be redeemed (including
the CUSIP number(s) thereof) and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(3) that, if any Note is being redeemed in part, the portion
of the principal amount (equal to $1,000 in principal amount or any
integral multiple thereof) of such Note to be redeemed and that, on and
after the Redemption Date, upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion thereof will
be issued;
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(4) the name, address and telephone number of the Paying
Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent at the address specified to collect the Redemption
Price plus accrued interest, if any;
(6) that, unless the Company defaults in its obligation to
deposit U.S. legal tender with the Paying Agent in accordance with
Section 3.05 hereof, interest on Notes called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right of
the Holders is to receive payment of the Redemption Price plus accrued
interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
(7) the subparagraph of the Notes pursuant to which the Notes
called for redemption are being redeemed; and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once the notice of redemption described in Section 3.03 is
mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price, including any premium, plus accrued interest
to the Redemption Date, if any. Upon surrender to the Paying Agent, such Notes
shall be paid at the Redemption Price, including any premium, plus accrued
interest to the Redemption Date, if any; PROVIDED that if the Redemption Date is
after a Record Date and on or prior to the Interest Payment Date, the accrued
interest shall be payable to the Holder of the redeemed Notes registered on the
relevant Record Date.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 a.m., New York City time, on each
Redemption Date, the Company shall have deposited with the Paying Agent in
immediately available funds U.S. legal tender sufficient to pay the Redemption
Price of and accrued interest on all Notes to be redeemed on that date. The
Paying Agent shall promptly return to the Company any U.S. legal tender so
deposited that is not required for that purpose upon the written request of the
Company.
On and after any Redemption Date, if U.S. legal tender
sufficient to pay the Redemption Price of and accrued interest on Notes called
for redemption shall have been made available in accordance with the preceding
paragraph, the Notes called for redemption will cease to accrue interest and the
only right of the Holders of such Notes will be to receive payment of the
Redemption Price of and, subject to the first proviso in Section 3.04, accrued
and unpaid interest on such Notes to the Redemption Date. If any Note called for
redemption shall not be so paid, interest will continue to accrue and be paid,
from the Redemption Date until such redemption payment is made, on the unpaid
principal of the Note and any interest not paid on such unpaid principal, in
each case, at the rate and in the manner provided for in Section 2.12.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for a Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
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ARTICLE 4
COVENANTS
Section 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of and interest (including
all Additional Interest, if any, as provided in the Registration Rights
Agreement) on the Notes on the dates and in the manner provided in the Notes and
this Indenture. An installment of principal or interest shall be considered paid
on the date it is due if the Trustee or Paying Agent holds, for the benefit of
the Holders, on that date U.S. legal tender designated for and sufficient to pay
such installment in full and is not prohibited from paying such money to the
Holders pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal and
interest on overdue interest, to the extent lawful as provided for in Section
2.12.
Section 4.02. PROVISION OF FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) Following consummation of the exchange offer
contemplated by the Registration Rights Agreement, the Company will file with
the Commission all information, documents and reports required to be filed with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act and will
provide the Trustee and the Holders with copies of all such information,
documents and reports (excluding reports filed in connection with events
reported solely pursuant to Item 5 thereof) within 15 days of filing thereof
with the Commission; PROVIDED that if the Company is not required to file such
information, documents or reports with the Commission, it will nonetheless
continue to furnish such information, documents and reports (excluding reports
filed in connection with events reported solely pursuant to Item 5 thereof)
required to be filed by a company subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act to the Trustee and the Holders within 15
days of the date on which filing with the Commission would have been otherwise
required and will file such information, documents and reports with the
Commission unless the Commission will not accept such a filing. The Company
shall also comply with the provisions of TIA ss. 314(a). Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
(b) The Company will, upon request, provide to any Holder or
any prospective transferee of any such Holder any information concerning the
Company (including financial statements) necessary in order to permit such
Holder to sell or transfer Notes in compliance with Rule 144 and Rule 144A under
the Securities Act.
Section 4.03. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead (as a defense or
otherwise) or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of,
premium, if any, and/or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent it may
lawfully do so) the Company hereby expressly waives all benefit or
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advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 4.04. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT; TAX INFORMATION.
(a) The Company will deliver to the Trustee, on or before 90
days after the end of the Company's fiscal year and on or before 45 days after
the end of each of the first, second and third fiscal quarters in each year an
Officers' Certificate (one of the signers of which shall be the principal
executive officer, principal financial officer or principal accounting officer
of the Company) stating that a review of the activities of the Company and its
Subsidiaries during such fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and, in the case
of Restricted Payments, listing all Restricted Payments for such year, and is
not in default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all or such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest, if any, on the Notes are prohibited or if such event has occurred,
a description of the event and what action the Company is taking or proposes to
take with respect thereto. The Officers' Certificate shall also notify the
Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) Forthwith upon any Officer becoming aware (i) of any
Default or Event of Default or (ii) that any Holder seeks to exercise any remedy
hereunder with respect to a claimed default under this Indenture, the Company
will, so long as any of the Notes are outstanding, within five Business Days of
its becoming aware of such occurrence, deliver to the Trustee at its address set
forth in Section 12.02 (by registered or certified mail or by telegram, telex or
facsimile transmission followed by hard copy by registered or certified mail) an
Officers' Certificate specifying such Default or Event of Default, notice or
other action, the status thereof and what action the Company is taking or
proposes to take.
(c) The annual financial statements delivered pursuant to
Section 4.02 shall be accompanied by a written report addressed to the Trustee
of the Company's independent accountants (who shall be a firm of established
national reputation) that in conducting their audit of such financial statements
nothing has come to their attention that would lead them to believe that a
Default or Event of Default has occurred under this Indenture insofar as they
relate to accounting matters or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(d) The Company shall calculate and deliver to the Trustee all
original issue discount information to be reported by the Trustee to Holders as
required by applicable law.
Section 4.05. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Subsidiaries or properties of it or any of its Subsidiaries and (ii) all
lawful claims for labor, materials and supplies that have become due and
<PAGE>
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payable and that, if unpaid, might by law become a Lien upon the property of it
or any of its Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted for which adequate reserves, to the extent required under
GAAP, have been taken.
Section 4.06. CORPORATE EXISTENCE.
Subject to Article 5, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or limited liability company
or other existence of each Subsidiary, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Subsidiary and the material rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries except where the failure to
preserve and keep in full force and effect any such rights, licenses and
franchise shall not have a material adverse effect on the financial condition,
business or results of operations or prospects of the Company and its
Subsidiaries taken as a whole; and PROVIDED that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
limited liability company, partnership or other existence of any of its
Subsidiaries, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders.
Section 4.07. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York where Notes may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee as set forth in Section 12.02.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company shall give prompt written notice to the Trustee of such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the Corporate Trust
Office of the Trustee set forth in Section 12.02 as such office of the Company.
Section 4.08. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not in the aggregate have a
material adverse effect on the financial condition, business or results of
operations or prospects of the Company and its Subsidiaries taken as a whole.
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Section 4.09. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall cause all material properties owned or
leased by it or any of its Subsidiaries used or useful to the conduct of the
Company's business or the business of any of its Subsidiaries to be maintained
and kept in normal condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in its judgment may be necessary, so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; PROVIDED, HOWEVER, that nothing in this Section 4.09 shall prevent the
Company or any of its Subsidiaries from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors of the
Company or of the Board of Directors of the Subsidiary of the Company concerned,
or of an Officer (or other agent employed by the Company or of any of its
Subsidiaries) of the Company or any of its Subsidiaries having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or any Subsidiary of the Company, and if such discontinuance or
disposal is not adverse in any material respect to the Holders.
(b) The Company shall maintain, and shall cause its respective
Subsidiaries to maintain, insurance with carriers believed by the Company to be
responsible against such risks and in such amounts, and with such deductibles,
retentions, self-insured amounts and co-insurance provisions, as are customarily
carried by similar businesses of similar size, including property and casualty
loss, workers' compensation and interruption of business insurance.
Section 4.10. LIMITATION ON ADDITIONAL INDEBTEDNESS.
(A) The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, incur (as defined) any
Indebtedness (including Acquired Indebtedness); PROVIDED that if no Default or
Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness, the Company may incur
Indebtedness (including Acquired Indebtedness) if after giving effect to the
incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, the Company's Consolidated Fixed Charge Coverage Ratio is greater than
or equal to 2.0 to 1.
(B) Notwithstanding the foregoing, the Company and, to the
extent applicable, the Restricted Subsidiaries may incur Permitted Indebtedness;
PROVIDED that the Company will not incur any Permitted Indebtedness that ranks
junior in right of payment to the Notes that has a maturity or mandatory sinking
fund payment prior to the maturity of the Notes. Notwithstanding any other
provisions of this Section 4.10, (i) the maximum amount of Indebtedness that the
Company or a Restricted Subsidiary may incur pursuant to this covenant shall not
be deemed to be exceeded, with respect to any outstanding Indebtedness, due
solely to the result of fluctuations in the exchange rates of currencies and
(ii) in the event that an item of Indebtedness meets the criteria of more than
one of the categories of Permitted Indebtedness, the Company may, in its sole
discretion, classify (or reclassify) such item of Indebtedness in any manner
that complies with this covenant and such items of Indebtedness will be treated
as having been incurred pursuant to only one of such categories. Accrual of
interest, accretion or amortization of original discount and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section and accruals of
dividends or the payment of dividends on Disqualified Capital Stock in the form
of additional shares of the same class of Disqualified Capital Stock will not be
deemed an issuance of Disqualified Capital Stock for purposes of this Section.
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Section 4.11. LIMITATION ON RESTRICTED PAYMENTS
The Company will not make, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment,
unless:
(1) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(2) immediately after giving PRO FORMA effect to such
Restricted Payment, the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section 4.10;
and
(3) immediately after giving effect to such Restricted
Payment, the aggregate of all Restricted Payments declared or made
after the Issue Date does not exceed the sum of
(a) 50% of the Company's Cumulative Consolidated Net
Income (or minus 100% of any cumulative deficit in
Consolidated Net Income during such period),
(b) 100% of the aggregate Net Proceeds received by
the Company from the issue or sale after the Issue Date of
Capital Stock (other than Disqualified Capital Stock or
Capital Stock of the Company issued to any Subsidiary of the
Company and other than from the issuance of Capital Stock
pursuant to the Make Well Agreement) of the Company or any
Indebtedness or other securities of the Company convertible
into or exercisable or exchangeable for Capital Stock (other
than Disqualified Capital Stock) of the Company that has been
so converted, exercised or exchanged, as the case may be,
(c) without duplication, the sum of:
(i) the aggregate amount returned in cash on
or with respect to Investments (other than Permitted
Investments) made subsequent to the Issue Date
whether through interest payments, principal
payments, dividends or other distributions;
(ii) the net proceeds received by the Company
or any of the Restricted Subsidiaries from the
disposition, retirement or redemption of all or any
portion of such Investments (other than to a
Subsidiary of the Company); and
(iii) upon redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the fair
market value of such Subsidiary at the time of
redesignation;
PROVIDED, HOWEVER, that the sum of clauses (i), (ii) and (iii) above
shall not exceed the aggregate amount of all such Investments made
after the Issue Date.
For purposes of determining under clause (3) above the amount
expended for Restricted Payments, cash distributed shall be valued at the face
amount thereof and property other than cash shall be valued at its fair market
value.
The provisions of this covenant shall not prohibit:
(1) the payment of any distribution within 60 days after the
date of declaration thereof, if at such date of declaration such
payment would comply with the provisions of this Indenture;
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(2) the repurchase, redemption or other acquisition or
retirement of any shares of Capital Stock of the Company or
Indebtedness subordinated to the Notes by conversion into, or by or in
exchange for, shares of Capital Stock of the Company (other than
Disqualified Capital Stock), or out of the Net Proceeds of the
substantially concurrent sale (other than to a Subsidiary of the
Company) of other shares of Capital Stock of the Company (other than
Disqualified Capital Stock);
(3) the redemption, repurchase, defeasance or retirement of
Indebtedness of the Company subordinated to the Notes in exchange for,
by conversion into, or out of the Net Proceeds of, a substantially
concurrent sale or incurrence of Indebtedness of the Company (other
than any Indebtedness owed to a Subsidiary) that is contractually
subordinated in right of payment to the Notes to at least the same
extent as the Indebtedness being redeemed or retired;
(4) the retirement of any shares of Disqualified Capital Stock
of the Company by conversion into, or by exchange for, shares of
Disqualified Capital Stock of the Company, or out of the Net Proceeds
of the substantially concurrent sale (other than to a Subsidiary of the
Company) of other shares of Disqualified Capital Stock of the Company;
(5) the payment to WSP and/or its Affiliates of no more than
$300,000 in the aggregate per year as reimbursement for expenses;
(6) repurchases by the Company of Capital Stock (other than
Disqualified Capital Stock) deemed to occur upon the exercises of stock
options if such Capital Stock represents a portion of the exercise
price of such option;
(7) repurchases by the Company of, or loans, advances,
dividends or distributions to Holdings or Holdings II to the extent
necessary to enable Holdings or Holdings II, as the case may be, to
repurchase or otherwise acquire, its Capital Stock, or options, stock
appreciation rights, or similar securities therefor, from directors,
officers or employees (or any authorized representative thereof) of
Holdings, Holdings II, the Company or any of the Restricted
Subsidiaries, upon the death, disability or termination of service or
employment of such directors, officers or employees; PROVIDED, that the
aggregate amount of Restricted Payments made pursuant to this clause
(8) shall not exceed $2 million in the aggregate during any fiscal year
after the Issue Date, except that any such unused portion in any fiscal
year may be rolled over into and used during the next fiscal year;
PROVIDED, HOWEVER, that repurchases pursuant to this clause (8) may not
exceed $2.5 million in the aggregate in any fiscal year;
(8) loans, advances, dividends or distributions by the Company
or any Restricted Subsidiary to Holdings or Holdings II not to exceed
an amount necessary to permit Holdings or Holdings II, as the case may
be, to (A) make payments in respect of its indemnification obligations
owing to directors, officers, employees or other Persons under its
charter or by-laws or pursuant to written agreements with any such
Person to the extent such payments relate to the Company and its
Subsidiaries, (B) pay all reasonable fees and expenses payable by it in
connection with the Merger and related transactions (including without
limitation the fees and expenses related to the financing thereof), (C)
pay its operational expenses (other than taxes) incurred in the
ordinary course of business and not exceeding $500,000 in the aggregate
in any fiscal year or (D) pay its costs (including all reasonable
professional fees and expenses) incurred to comply with its reporting
obligations under federal or state laws or under this Indenture;
(9) payments by the Company or any Restricted Subsidiary to
Holdings or Holdings II to pay or permit Holdings or Holdings II, as
the case may be, to pay (A) any taxes, charges or assessments required
to be paid by Holdings or Holdings II by virtue of its being
incorporated or having Capital Stock
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outstanding (but not by virtue of owning stock of any corporation
other than the Company or any of its Subsidiaries), or being a holding
company or receiving dividends from or other distributions in respect
of the Capital Stock of the Company or the Restricted Subsidiaries, or
having guaranteed any obligations of the Company or any of its
Subsidiaries, or having made any payment in respect of any of the
items for which the Company is permitted to make payments to Holdings
or Holdings II pursuant to this covenant, or (B) any other federal,
state, foreign, provincial or local taxes measured income of the
Company or its Subsidiaries for which Holdings or Holdings II is
liable;
(10) other Restricted Payments in an aggregate amount not to
exceed $2.5 million; and
(11) any payments or distributions to be made as a payment of
the Merger consideration;
PROVIDED that in calculating the aggregate amount of Restricted Payments made
subsequent to the Issue Date for purposes of clause (3) of the first paragraph
above, amounts expended pursuant to clauses (1), (2) and (10) shall be included
in such calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant described above were computed, which
calculations may be based upon the Company's latest available financial
statements, and that no Default or Event of Default has occurred and is
continuing and no Default or Event of Default will occur immediately after
giving effect to any such Restricted Payments.
Section 4.12. LIMITATION ON OTHER SENIOR SUBORDINATED INDEBTEDNESS.
The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, incur, contingently or
otherwise, any Indebtedness (other than the Notes and any Guarantees, as the
case may be) that is both (i) expressly subordinated in right of payment to any
Senior Indebtedness of the Company or any of the Restricted Subsidiaries, as the
case may be, and (ii) senior in right of payment to the Notes or any Guarantees,
as the case may be. For purposes of this covenant, Indebtedness is deemed to be
senior in right of payment to the Notes or any Guarantees if it is not expressly
subordinated in right of payment to Senior Indebtedness at least to the same
extent as the Notes and any Guarantees, as the case may be, are subordinated to
such Senior Indebtedness.
Section 4.13. LIMITATION ON CERTAIN ASSET SALES.
The Company will not, and will not permit any of the
Restricted Subsidiaries to, consummate an Asset Sale unless
(1) the Company or such Restricted Subsidiary, as the case may
be, receives consideration at the time of such sale or other
disposition at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by the Board of
Directors of the Company and evidenced by a Board Resolution);
(2) not less than 75% of the consideration received by the
Company or such Restricted Subsidiary, as the case may be, is in the
form of cash or Cash Equivalents; PROVIDED that the amount of
(a) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company
or any of the Restricted Subsidiaries (other
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than contingent liabilities and liabilities that are by their
terms subordinated to the Notes) that are assumed by the
transferee of any such assets shall be deemed to be cash for
purposes of this clause (2); and
(b) any promissory notes and other non-cash
consideration received by the Company or any Restricted
Subsidiary from such Asset Sale that are converted by the Company
or such Restricted Subsidiary into cash within 180 days of the
applicable Asset Sale shall be deemed to be cash for purposes of
this clause (2);
(3) the Asset Sale Proceeds received by the Company or such
Restricted Subsidiary are applied
(a) first, to the extent the Company or any
such Restricted Subsidiary, as the case may be,
elects, or is required, to prepay, repay or purchase
Indebtedness under any then existing Senior
Indebtedness of the Company or any such Restricted
Subsidiary within 270 days following the receipt of
the Asset Sale Proceeds from any Asset Sale; PROVIDED
that any such repayment shall result in a permanent
reduction of the commitments thereunder in an amount
equal to the principal amount so repaid;
(b) second, to the extent of the balance of
Asset Sale Proceeds after application as described
above, to the extent the Company elects, to an
investment in assets (including Capital Stock or
other securities purchased in connection with the
acquisition of Capital Stock or property of another
Person) used or useful in businesses similar or
ancillary to the business of the Company or any such
Restricted Subsidiary as conducted on the Issue Date;
PROVIDED that
(i) such investment occurs or the
Company or any such Restricted Subsidiary
enters into contractual commitments to make
such investment, subject only to customary
conditions (other than the obtaining of
financing), within 270 days following
receipt of such Asset Sale Proceeds and
(ii) the Asset Sale Proceeds so
contractually committed are so applied
within 360 days following the receipt of
such Asset Sale Proceeds; and
(c) third, if on such 270th day in the case
of clauses (3)(a) and (3)(b)(i) or on such 360th day
in the case of clause (3)(b)(ii) with respect to any
Asset Sale, the Available Asset Sale Proceeds exceed
$7.5 million, the Company shall apply an amount equal
to the Available Asset Sale Proceeds to an offer to
repurchase the Notes, at a purchase price in cash
equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the purchase
date (an "Excess Proceeds Offer"). If an Excess
Proceeds Offer is not fully subscribed, the Company
may retain the portion of the Available Asset Sale
Proceeds not required to repurchase Notes and use
such proceeds for general corporate purposes subject
to the other provisions of this Indenture.
Pending the final application of any Asset Sale Proceeds, the
Company or such Restricted Subsidiary may temporarily reduce Indebtedness under
a revolving credit facility, if any, or otherwise invest such Asset Sale
Proceeds in Cash Equivalents.
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If the Company is required to make an Excess Proceeds Offer,
the Company shall mail, within 30 days following the date specified in clause
(3)(c) above, a notice to the holders stating:
(1) that the Excess Proceeds Offer is being made pursuant to
this Section 4.13;
(2) that such Holders have the right to require the Company
to apply the Available Asset Sale Proceeds to repurchase such Notes at
a purchase price in cash equal to 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the purchase date which
shall be no earlier than 30 days and not later than 60 days from the
date such notice is mailed (the "EXCESS PROCEEDS PAYMENT DATE");
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that any Notes accepted for payment pursuant to the
Excess Proceeds Offer shall cease to accrue interest after the Excess
Proceeds Payment Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to an Excess Proceeds Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Excess Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their
acceptance of the Excess Proceeds Offer if the Paying Agent receives,
not later than the close of business on the third Business Day
preceding the Excess Proceeds Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have such
Notes purchased;
(7) that if the aggregate principal amount of Notes
surrendered by Holders exceeds the amount of Excess Proceeds, Company
shall select the Notes to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or integral multiples thereof, shall
be purchased);
(8) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, PROVIDED that each Note purchased and
each such new Note issued shall be in an original principal amount in
denominations of $1,000 and integral multiples thereof;
(9) the calculations used in determining the amount of
Available Asset Sale Proceeds to be applied to the purchase of such
Notes;
(10) any other procedures that a Holder must follow to accept
an Excess Proceeds Offer or effect withdrawal of such acceptance; and
(11) the name and address of the Paying Agent.
On the Excess Proceeds Payment Date, the Company shall, to the
extent lawful, (1) accept for payment, on a PRO RATA basis to the extent
necessary, Notes or portions thereof tendered pursuant to the Excess Proceeds
Offer, (2) deposit with the Paying Agent U.S. legal tender sufficient to pay the
purchase price plus accrued and unpaid interest, if any, on the Notes to be
purchased or portions thereof on or prior to 11:00 a.m., New
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York City time, (3) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 4.13. The Paying Agent shall promptly mail to each Holder,
whose Notes were so accepted, payment in an amount equal to the purchase price
for such Notes, and the Company shall execute and issue, and the Trustee shall
promptly authenticate and make available for delivery to such Holder, a new Note
equal in principal amount to any unpurchased portion of the Notes surrendered;
PROVIDED that each such new Note shall be issued in an original principal amount
in denominations of $1,000 and integral multiples thereof. The Company will
publicly announce the results of the Excess Proceeds Offer on the Excess
Proceeds Payment Date.
(C) In the event of the transfer of substantially all of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01 of this
Indenture, the successor Person shall be deemed to have sold the properties and
assets of the Company and the Restricted Subsidiaries not so transferred for
purposes of this Section 4.13, and shall comply with the provisions of this
Section 4.13 with respect to such deemed sale as if it were an Asset Sale.
(D) The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to an Excess Proceeds Offer. To the extent
that the provisions of any securities laws or regulations conflict with this
Section 4.13, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.13 by virtue thereof.
Section 4.14. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(A) The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, enter into or suffer to
exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate (each an "Affiliate Transaction") or extend, renew,
waive or otherwise modify the terms of any Affiliate Transaction entered into
prior to the Issue Date unless
(1) such Affiliate Transaction is between or among the
Company and the Restricted Subsidiaries or
(2) the terms of such Affiliate Transaction are fair
and reasonable to the Company or such Restricted Subsidiary, as the
case may be, and the terms of such Affiliate Transaction are at least
as favorable as the terms that could be obtained by the Company or
such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis between unaffiliated
parties.
In any Affiliate Transaction (or any series of related
Affiliate Transactions that are similar or part of a common plan) involving an
amount or having a fair market value in excess of $2.5 million that is not
permitted under clause (1) above, the Company must obtain a Board Resolution
certifying that such Affiliate Transaction complies with clause (2) above. In
any Affiliate Transaction (or any series of related Affiliate Transactions that
are similar or part of a common plan) involving an amount or having a fair
market value in excess of $5.0 million that is not permitted under clause (1)
above, the Company must obtain a favorable written opinion as to the fairness of
such transaction or transactions, as the case may be, from an Independent
Financial Advisor.
(B) The foregoing provisions will not apply to
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(1) any Restricted Payment that is not prohibited by the
provisions described under Section 4.11 or any Permitted Investment;
(2) reasonable fees and compensation paid to and indemnity
provided on behalf of, officers, directors or employees of the Company
or any Restricted Subsidiary as determined in good faith by the
Company's Board of Directors or senior management;
(3) any agreement as in effect as of the Issue Date or any
amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement
thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the holders in any material respect than the
original agreement as in effect on the Issue Date;
(4) any transaction permitted under Section 5.01; or
(5) transactions with Affiliates solely in their capacity as
holders of Indebtedness or Capital Stock of the Company or any of its
Subsidiaries where such Affiliates are treated no more favorably than
holders of such Indebtedness or such Capital Stock generally.
Section 4.15. LIMITATIONS ON LIENS.
(A) The Company will not, and will not permit any Restricted
Subsidiary to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind (other than Permitted Liens) upon any property
or asset of the Company or any of the Restricted Subsidiaries or any shares of
Capital Stock or Indebtedness of any Restricted Subsidiary that owns property or
assets, now owned or hereafter acquired, unless
(1) if such Lien secures Indebtedness that ranks equally with
the Notes, then the Notes are secured on an equal and ratable basis
with the obligations so secured until such time as such obligation is
no longer secured by a Lien or
(2) if such Lien secures Indebtedness that is subordinated to
the Notes, any such Lien shall be subordinated to the Lien granted to
the holders of the Notes to the same extent as such Indebtedness is
subordinated to the Notes.
Section 4.16. LIMITATIONS ON INVESTMENTS.
The Company will not, and will not permit any Restricted
Subsidiary to, make any Investment other than
(1) a Permitted Investment or
(2) an Investment that is made after the Issue Date as a
Restricted Payment in compliance with Section 4.11.
Section 4.17. CHANGE OF CONTROL.
(A) Upon the occurrence of a Change of Control, the Company
shall be obligated to make an offer to purchase (the "CHANGE OF CONTROL OFFER")
each Holder's outstanding Notes at a purchase price (the
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"CHANGE OF CONTROL PURCHASE PRICE") equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the Change of Control
Payment Date in accordance with the procedures set forth below.
(B) Within 20 days of the occurrence of a Change of Control,
the Company shall (i) cause a notice of the Change of Control Offer to be sent
at least once to the Dow Jones News Service or similar business new service in
the United States and (ii) send by first-class mail, postage prepaid, to the
Trustee and to each holder of the Notes, at the address appearing in the
register maintained by the Registrar of the Notes, a notice stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.17 and that all Notes tendered will be accepted for
payment;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 30 days nor later than
60 days from the date such notice is mailed (the "CHANGE OF CONTROL
PAYMENT DATE"));
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their acceptance
if the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment Date, a
telegram, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Notes delivered for purchase,
and a statement that such Holder is withdrawing his election to have
such Notes purchased;
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered;
(8) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the
extent lawful,
(1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered; and
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(3) deliver or cause to be delivered to the Trustee for
cancellation Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof tendered to the Company.
The Paying Agent shall promptly mail to each holder of Notes
so accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and mail to such holder, a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; PROVIDED that each such new Note shall be
issued in an original principal amount in denominations of $1,000 and integral
multiples thereof.
(C) If the Senior Credit Facility is in effect, or any amounts
are owing thereunder or in respect thereof, at the time of the occurrence of a
Change of Control, prior to the mailing of the notice to Holders described in
the second preceding paragraph, but in any event within 20 days following any
Change of Control, the Company covenants to
(1) repay in full all obligations and terminate all
commitments under or in respect of the Senior Credit Facility and all
other Senior Indebtedness the terms of which require repayment upon a
Change of Control or offer to repay in full all obligations and
terminate all commitments under or in respect of the Senior Credit
Facility and all such Senior Indebtedness and repay the Indebtedness
owed to each such lender who has accepted such offer or
(2) obtain the requisite consents under the Senior Credit
Facility and all such other Senior Indebtedness to permit the
repurchase of the Notes as described above.
The Company must first comply with the covenant described in
the preceding sentence before it shall be required to purchase Notes in the
event of a Change of Control; PROVIDED that the Company's failure to comply with
the covenant described in the preceding sentence constitutes an Event of Default
described in clause (C) under Section 6.01 if not cured within 60 days after the
notice required by such clause.
(D) (1) If the Company or any Restricted Subsidiary has issued
any (a) outstanding Indebtedness that is subordinated in right of payment to the
Notes or (b) Preferred Stock, and the Company or such Restricted Subsidiary is
required to make a Change of Control Offer or to make a distribution with
respect to such subordinated Indebtedness or Preferred Stock in the event of a
Change of Control, the Company shall not consummate any such offer or
distribution with respect to such subordinated Indebtedness or Preferred Stock
until such time as the Company shall have paid the Change of Control Purchase
Price in full to the Holders of Notes that have accepted the Company's Change of
Control Offer and shall otherwise have consummated the change of control offer
made to Holders and
(2) the Company will not issue Indebtedness that is
subordinated in right of payment to the Notes or Preferred Stock with change of
control provisions requiring the payment of such Indebtedness or Preferred Stock
prior to the payment of the Notes in the event of a Change in Control under this
Indenture.
(E) The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
this Section 4.17, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.17 by virtue thereof.
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Section 4.18. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to
(1) pay dividends or make any other distributions to the
Company or any Restricted Subsidiary
(a) on its Capital Stock or
(b) with respect to any other interest or participation
in, or measured by, its profits; or
(2) repay any Indebtedness or any other obligation owed to the
Company or any Restricted Subsidiary; or
(3) make loans or advances or capital contributions to the
Company or any of the Restricted Subsidiaries; or
(4) transfer any of its properties or assets to the Company or
any of the Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of
(1) encumbrances or restrictions existing on the Issue Date
(including pursuant to the Senior Credit Facility) to the extent and
in the manner such encumbrances and restrictions are in effect on the
Issue Date;
(2) this Indenture, the Notes and the Guarantees;
(3) applicable law, rules, regulations or orders;
(4) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person (including any Subsidiary of the
Person), so acquired;
(5) customary non-assignment provisions in leases or other
agreements entered in the ordinary course of business and consistent
with past practices;
(6) Refinancing Indebtedness; PROVIDED that such restrictions
are no more restrictive than those contained in the agreements
governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(7) customary restrictions in security agreements or mortgages
securing Indebtedness of the Company or a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements and mortgages;
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(8) customary restrictions with respect to a Restricted
Subsidiary pursuant to an agreement that has been entered into for the
sale or disposition of all or substantially all of the Capital Stock
or assets of such Restricted Subsidiary;
(9) customary restrictions in Purchase Money Indebtedness,
Capitalized Lease Obligations or security agreements or mortgages
securing Indebtedness of the Company or a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such Purchase Money Indebtedness, Capitalized Lease Obligations,
security agreements or mortgages; or
(10) any agreement or instrument governing Capital Stock of
any Person that is acquired by the Company or a Restricted Subsidiary;
PROVIDED that no such restriction is created in contemplation of the
acquisition of such Capital Stock.
Section 4.19. LIMITATION ON CONDUCT OF BUSINESS.
The Company and the Restricted Subsidiaries will not engage in
any businesses that are not the same, or reasonably similar, ancillary or
related to the businesses in which the Company and the Restricted Subsidiaries
are engaged in on the Issue Date, except to such extent as would not be material
to the Company and the Restricted Subsidiaries taken as a whole.
Section 4.20. LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES.
The Company will not permit any Restricted Subsidiary to issue
any Preferred Stock (except Preferred Stock issued to the Company or a
Restricted Subsidiary or to directors of a foreign Restricted Subsidiary as
qualifying shares to the extent required by applicable law, or permit any Person
(other than the Company or a Restricted Subsidiary or a director of a foreign
Restricted Subsidiary) to hold any such Preferred Stock unless (1) such
Restricted Subsidiary would be entitled to incur or assume Indebtedness (other
than Permitted Indebtedness) under Section 4.10 in the aggregate principal
amount equal to the aggregate liquidation value of the Preferred Stock to be
issued or (2) such Preferred Stock is sold as part of a sale of all of the
Capital Stock of the Company or a Restricted Subsidiary in compliance with the
terms of Section 4.13.
Section 4.21. LIMITATION ON CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
The Company will not
(1) sell, pledge, hypothecate or otherwise convey or dispose
of any Capital Stock of a Restricted Subsidiary (other than any such
transaction resulting in a Lien which constitutes a Permitted Lien and
other than the sale of up to 40% of the outstanding Capital Stock of
Thermalloy Malaysia Sdn Bhd in accordance with Malaysian law) or
(2) permit any Restricted Subsidiary to issue any Capital
Stock, other than to the Company or a Restricted Subsidiary and other
than issuances of Capital Stock by a Restricted Subsidiary to its
employees, officers, directors or consultants in an aggregate amount
not to exceed 10% of such Restricted Subsidiary's outstanding Capital
Stock.
The foregoing restrictions shall not apply to (i) an Asset
Sale made in compliance with Section 4.13 (provided that if such Asset Sale is
for less than all of the outstanding Capital Stock of any Restricted Subsidiary
held by the Company or any of the Restricted Subsidiaries, such Asset Sale shall
also comply with Section
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4.11), (ii) the issuance of Preferred Stock in compliance with Section 4.20 or
(iii) the issuance of 95% of the common membership interests of Aavid Thermalloy
LLC to Heat Holdings II Corp. and the other restructuring transactions set forth
on Schedule A-1 hereto.
Section 4.22. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS.
The Company will not, and will not permit any Restricted
Subsidiary to, enter into any Sale and Lease-Back Transaction unless:
(1) the consideration received in such Sale and Lease-Back
Transaction is at least equal to the fair market value of the property
sold, as determined in good faith by the Board of Directors of the
Company and evidenced by a board resolution and
(2) the Company could incur the Attributable Indebtedness in
respect of such Sale and Lease-Back Transaction in compliance with
Section 4.10.
Section 4.23. PAYMENTS FOR CONSENT.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such consideration
is offered to be paid or agreed to be paid to all Holders that so consent, waive
or agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
Section 4.24. LIMITATION ON CREATION OF SUBSIDIARIES.
The Company will not create or acquire, and will not permit
any Restricted Subsidiary to create or acquire, any Subsidiary other than
(1) a Restricted Subsidiary existing as of the Issue Date that
has executed a Guarantee,
(2) a Restricted Subsidiary that is acquired or created after
the Issue Date; PROVIDED, HOWEVER, that each domestic Restricted
Subsidiary acquired or created pursuant to this clause (2) shall have
executed a Guarantee in the form attached hereto as Exhibit F,
pursuant to which such domestic Restricted Subsidiary will become a
Guarantor; PROVIDED, FURTHER, in the event the Company or any of its
Restricted Subsidiaries incurs Acquired Indebtedness (assuming such
incurrence is in accordance with Section 4.10) as a result of the
acquisition of a Restricted Subsidiary and as long as the terms of
such Acquired Indebtedness prohibit the Guarantee of the Notes by such
newly-acquired Restricted Subsidiary or such newly-acquired Restricted
Subsidiary would be in breach or default of the terms of the Acquired
Indebtedness as a result of such Guarantee, such Restricted Subsidiary
will not be required to execute a Guarantee; PROVIDED that, until such
domestic Restricted Subsidiary executes and delivers a Guarantee in
accordance with this Section 4.24, (a) none of the Company or any
other Restricted Subsidiary of the Company will transfer any assets
(other than in the ordinary course of business) to such newly-acquired
Restricted Subsidiary, (b) such newly-acquired Restricted Subsidiary
will not transfer such Acquired Indebtedness to the Company or any
other Restricted Subsidiary and (c) neither the Company nor any
Restricted Subsidiary of the Company shall provide any
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guarantee of, or similar credit support for, or otherwise become
directly or indirectly liable for any Indebtedness of such
newly-acquired Restricted Subsidiary,
(3) an Unrestricted Subsidiary, or
(4) Restricted Subsidiaries created or acquired in connection
with the restructuring transactions set forth in Schedule A-1.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. LIMITATION ON CONSOLIDATION, MERGER AND SALE OF ASSETS.
The Company will not consolidate with, merge with or into, or
sell, assign, transfer, lease, convey or otherwise dispose of (or cause or
permit any Restricted Subsidiary to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of its assets (determined on a
consolidated basis for the Company and the Restricted Subsidiaries), whether as
an entirety or substantially as an entirety in one transaction or a series of
related transactions, to any Person unless:
(1) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which
the Company is merged or to which the properties and assets of the
Company are sold, assigned, transferred, leased, conveyed or otherwise
disposed of shall be a corporation or a limited liability company
organized and existing under the laws of the United States or any
State thereof or the District of Columbia and shall expressly assume,
by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all of the obligations of the
Company under this Indenture and the Notes and the obligations
thereunder shall remain in full force and effect;
(2) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred
and be continuing;
(3) immediately after giving effect to such transaction on a
PRO FORMA basis the Company or such Person could incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) under
Section 4.10; and
(4) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and the
supplemental indenture in respect thereto comply with this provision
and that all conditions precedent herein provided for relating to such
transaction or transactions have been complied with.
Notwithstanding the foregoing, the Company or any Guarantor
may merge or consolidate with or transfer substantially all of its assets to an
Affiliate that has no significant assets or liabilities and was formed solely
for the purpose of changing the jurisdiction of organization of the Company or
the form of organization of the Company so long as the amount of Indebtedness of
the Company and its Restricted Subsidiaries is not
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increased thereby and that the successor assumes all obligations of the Company
or such Restricted Subsidiary, as the case may be, under this Indenture, the
Notes and the Registration Rights Agreement.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the Company
shall be deemed to be the transfer of all or substantially all of the properties
and assets of the Company.
Each Guarantor (other than any Guarantor whose Guarantee is to
be released in accordance with the terms of the Guarantee and the Indenture in
connection with any transaction complying with Section 4.13) will not, and the
Company will not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:
(1) the entity formed by or surviving any such consolidation
or merger (if other than the Guarantor) or to which such sale, lease,
conveyance or other disposition shall have been made is a corporation
or limited liability company organized and existing under the laws of
the United States or any State thereof or the District of Columbia;
(2) such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee;
(3) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction and
the use of any net proceeds therefrom on a PRO FORMA basis, the
Company could satisfy the provisions of clause (3) of the first
paragraph of this Section;
PROVIDED, HOWEVER, that the foregoing provision shall not
apply in the case of the merger of a Guarantor with another person in a
transaction that constitutes an Asset Sale.
Any merger or consolidation of a Guarantor with and into the
Company (with the Company being the surviving entity) or another Guarantor that
is a Restricted Subsidiary of the Company need only comply with clause (4) of
the first paragraph of this Section.
Nothing in this Section shall be deemed to prevent the
consummation of the Merger or the conversion of the Company's domestic
Restricted Subsidiaries into limited liability companies immediately following
consummation of the Merger.
Section 5.02. SUCCESSOR PERSON SUBSTITUTED.
Upon any consolidation, merger, conveyance or any transfer of
all or substantially all of the assets of the Company in accordance with Section
5.01 above, the successor entity formed by such consolidation or into which the
Company or any such Restricted Subsidiary is merged or to which such transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company or such Restricted Subsidiary, as the case may be, under
this Indenture with the same effect as if such successor entity had been named
as the Company or such Restricted Subsidiary, as the case may be, herein, and
thereafter the predecessor entity shall be relieved of all obligations and
covenants under this Indenture and the Notes.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if
(a) there is a default in payment of any principal of, or
premium, if any, on the Notes whether at maturity, upon redemption
(including the failure to make a payment to purchase notes pursuant to
a Change of Control Offer or an Excess Proceeds Offer) or otherwise
(whether or not such payment shall be prohibited by Article 10 or
Article 11);
(b) there is a default for 30 days in payment of any interest
on the Notes (whether or not such payment shall be prohibited by
Article 10 or Article 11);
(c) there is a default by the Company or any Restricted
Subsidiary in the observance or performance of any other covenant in
the Notes or this Indenture for 45 days after written notice from the
Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding (except in the case of a default
with respect to Section 4.17 or Section 5.01, which shall constitute an
Event of Default with such notice requirement but without such passage
of time requirement);
(d) there is a failure to pay when due principal, interest or
premium with respect to any Indebtedness of the Company or any
Restricted Subsidiary thereof, which failure to pay, other than a
failure to pay principal at the final maturity thereof, shall not be
cured, waived or postponed pursuant to an agreement with the holders of
such Indebtedness within 60 days after written notice to the Company by
the Trustee or any Holder, or the acceleration of any such
Indebtedness, which acceleration shall not be rescinded or annulled
within 20 days after written notice to the Company by the Trustee or
any Holder, if the aggregate amount of such Indebtedness, together with
the amount of any other such Indebtedness in default for failure to pay
principal, interest or premium or that has been accelerated, aggregates
$7,500,000 or more at any time;
(e) any final judgment or judgments not fully covered by
insurance that can no longer be appealed for the payment of money in
excess of $7,500,000 shall be rendered against the Company or any
Restricted Subsidiary thereof, and shall not be discharged for any
period of 60 consecutive days during which a stay of enforcement shall
not be in effect;
(f) the Company or any Significant Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its Property,
(D) makes a general assignment for the benefit
of its creditors,
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(E) generally is not able to pay its debts as
they become due, or
(F) takes any corporate action to authorize or
effect any of the foregoing;
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Restricted Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Restricted Subsidiary or for all or substantially
all of the Property of the Company or any Significant
Restricted Subsidiary, or
(C) orders the liquidation of the Company or any
Significant Restricted Subsidiary,
and the order or decree remains unstayed and in effect for
60 days;
(h) any of the Guarantees ceases to be in full force and
effect or any of the Guarantees is declared to be null and void and
unenforceable or any of the Guarantees is found to be invalid or any
of the Guarantors denies its liability under its Guarantee other than
by reason of release of a Guarantor in accordance with the terms of
this Indenture; and
(i) a failure to make the contributions required under and in
accordance with the Make Well Agreement.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
Section 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default of the
type described in Section 6.01(f) or (g)) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration and (1) the same shall become
immediately due and payable or (2) if there are any amounts outstanding under
the Senior Credit Facility, the same shall become immediately due and payable
upon the first to occur of an acceleration under the Senior Credit Facility and
five Business Days after receipt by the Company and the representative under the
Senior Credit Facility of a notice of acceleration; PROVIDED, HOWEVER, that
after such acceleration but before a judgment or decree based on such
acceleration is obtained by the Trustee, the Holders of a majority in aggregate
principal amount of outstanding Notes may rescind and annul such acceleration
if:
(1) all Events of Default, other than nonpayment of principal,
premium, if any, or interest that has become due solely because of the
acceleration, have been cured or waived;
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(2) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of
acceleration, has been paid;
(3) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements
and advances; and
(4) in the event of the cure or waiver of an Event of Default
of the type described in Section 6.01(f) or (g) above, the Trustee
shall have received an Officers' Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto. In case an Event of Default with respect to the Company of
the type described in Section 6.01(f) or (g) above shall occur, the principal,
premium and interest amount with respect to all of the Notes shall be due and
payable immediately without any declaration or other act on the part of the
Trustee or the Holders.
Section 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee,
in its own name or as trustee of an express trust, may pursue any available
remedy by proceeding at law or in equity to collect the payment of principal of,
or premium, if any, and interest on the Notes or to enforce the performance of
any provision of the Notes or this Indenture and may take any necessary action
requested of it as Trustee to settle, compromise, adjust or otherwise conclude
any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Noteholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.04. WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 2.09, 6.02, 6.07 and 8.02, the Holders of
a majority in aggregate principal amount of the Notes then outstanding have the
right, on behalf of all Holders, to waive any past or existing Default or
compliance with any provision under this Indenture EXCEPT a Default in the
payment of the principal of, or interest or premium, if any, on any Note as
specified in clauses (a) and (b) of Section 6.01 or in respect of a covenant or
a provision that cannot be modified or amended without the consent of all
Holders as provided for in Section 8.02. The Company shall deliver to the
Trustee an Officers' Certificate stating that the requisite percentage of
Holders have consented to such waiver and providing evidence reasonably
satisfactory to the Trustee of such consents. In case of any such waiver, the
Company, the Trustee and the Holders shall be restored to their former positions
and rights hereunder and under the Notes, respectively. This paragraph of this
Section 6.04 shall be in lieu of ss. 316(a)(1)(B) of the TIA and such ss.
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
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Section 6.05. CONTROL BY MAJORITY.
Subject to Section 2.09, the Holders of a majority in
aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee by this Indenture. The Trustee, however, may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of another Noteholder not
taking part in such direction, and the Trustee shall have the right to decline
to follow any such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken or if the
Trustee in good faith shall, by a Responsible Officer, determine that the
proceedings so directed may involve it in personal liability; PROVIDED that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification satisfactory to it against any loss or expense caused by
taking such action or following such direction. This Section 6.05 shall be in
lieu of ss. 316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA.
Section 6.06. LIMITATION ON SUITS.
Subject to Section 6.07 below, no Holder has any right to
institute any proceeding with respect to this Indenture or any remedy hereunder
unless:
(1) the Holder gives the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the outstanding Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense
which may be incurred in compliance with such request;
(4) the Trustee fails to institute such proceeding within 60
days after receipt of such notice and the offer of indemnity; and
(5) the Trustee has not received directions inconsistent with
such written request during such 60-day period by the Holders of a
majority in aggregate principal amount of the outstanding Notes.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
Section 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of, or premium, if any, or
accrued interest of any Note held by such Holder on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, is absolute and unconditional and
shall not be impaired or affected without the consent of such Holder.
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Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal, premium, if
any, or interest specified in Section 6.01(a) or (b) occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of unpaid principal, premium and
accrued interest remaining unpaid, together with, to the extent that payment of
such interest is lawful, interest on overdue principal and interest on overdue
installments of interest, in each case at the rate set forth in Section 4.01,
and such further amounts as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings and any
custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan or reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceedings.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: if the Holders are forced to proceed against the
Company or any Guarantor directly without the Trustee, to Holders for
their collection costs;
THIRD: to Holders for amounts due and unpaid on the Notes
for principal, premium, if any, and interest as to each, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes; and
FOURTH: to the Company or, to the extent the Trustee collects
any amounts from any Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Holders pursuant to this
Section 6.10.
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Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
(b) Except during the continuance of a Default or an
Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform in form to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is conclusively
determined by a court of competent jurisdiction that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any liability, financial or
otherwise, in the performance of any of its duties hereunder or
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to take or omit to take any action under this Indenture or take any action at
the request or direction of Holders if it shall have reasonable grounds for
believing that repayment of such funds is not assured to it or it does not
receive from such Holders an indemnity satisfactory to it against such risk,
liability, loss, fee or expense which might be incurred by it in compliance with
such request or direction.
(e) Whether or not herein expressly provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
or assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any officers'
certificate, opinion of counsel, resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order
or document reasonably believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting with
respect to any matters contemplated by this Indenture or the Notes it
may consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, or both, which shall conform to the provisions of
Section 12.05. The Trustee shall be fully protected and shall not be
liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent so long as the appointment of such attorney or agent was made
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers conferred on it by this
Indenture.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) In no event shall the Trustee be liable for the selection
of investments or for investment losses thereon. The Trustee shall have
no liability in respect of losses incurred as a result of the
liquidation of any investment prior to its stated maturity or the
failure of the Company to provide timely written instructions.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may make loans to, accept deposits from,
perform services for or otherwise deal with the Company, or any
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Affiliates thereof, with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. The Trustee, however, shall be
subject to Sections 7.10 and 7.11.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the sale of
Notes or any money paid to the Company pursuant to the terms of this Indenture
and it shall not be responsible for any statement of the Company in this
Indenture or the Notes other than the Trustee's certificate of authentication.
Section 7.05. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing
and if a Responsible Officer of the Trustee has actual knowledge of such Default
or Event of Default, the Trustee shall mail to each Noteholder notice of the
uncured Default or Event of Default within 30 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, premium or interest on, any Note, including an
accelerated payment and the failure to make payment on the Change of Control
Payment Date pursuant to a Change of Control Offer or on the Excess Proceeds
Payment Date pursuant to an Excess Proceeds Offer and, except in the case of a
failure to comply with Article 5. This Section 7.05 shall be in lieu of the
proviso to Section 315(b) of the TIA, and such proviso of Section 315(b) of the
TIA is hereby expressly excluded from this Indenture and the Notes, as permitted
by the TIA.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS.
If required by TIA Section 313(a), within 60 days after May 15
of any year, commencing the May 15 following the date of this Indenture, the
Trustee shall mail to each Noteholder a brief report dated as of such May 15
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b), (c) and (d).
Reports pursuant to this Section 7.06 shall be transmitted by
mail:
(1) to all registered Holders, as the names and addresses of
such Holders appear on the Registrar's books; and
(2) to such Holder as have, within the two years preceding
such transmission, filed their names and addresses with the Trustee for
that purpose.
A copy of each report at the time of its mailing to Holders
shall be filed with the Commission and each stock exchange, if any, on which the
Notes are listed. The Company shall promptly notify the Trustee when the Notes
are listed on any stock exchange or of any delisting thereof.
Section 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company and the Trustee
for the Trustee's services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable fees, disbursements,
advances and expenses, including out-of-pocket expenses incurred or made by it
in connection with the performance of its duties under this Indenture (except
for such
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expenses as may be attributable to its negligence, bad faith or willful
misconduct as conclusively determined by a court of competent jurisdiction) or
in connection with the collection of any funds. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents, counsel and others not
regularly in its employ.
The Company shall indemnify each of the Trustee (in its
capacity as Trustee) and its agents, employees, stockholders and directors and
officers for, and hold them harmless against, any loss, claim, damage, injury,
liability or expense incurred by them except for such actions to the extent
caused by any negligence, bad faith or willful misconduct on their part,
directly or indirectly arising out of or in connection with the administration
of this trust, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise or
performance of any of their rights, powers or duties hereunder. The Trustee
shall notify the Company promptly, in writing, of any claim asserted against the
Trustee for which it may seek indemnity. At the Trustee's discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; PROVIDED that any settlement of a claim shall be
approved in writing by the Trustee. The Company need not pay for any settlement
made without its written consent, which consent shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss or liability to the extent incurred by the Trustee through its negligence,
bad faith or willful misconduct as conclusively determined by a court of
competent jurisdiction.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Notes on all assets or money
held or collected by the Trustee, in its capacity as Trustee, except assets or
money held in trust to pay principal of, premium, if any, or interest on
particular Notes.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) occurs, such expenses and
the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligation of the Company under this Section 7.07 shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.
Section 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Company
in writing. The Holders of a majority in aggregate principal amount of the
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company in writing and may appoint a successor Trustee with the Company's
consent, such consent not to be unreasonably withheld. The Company may remove
the Trustee at its election if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in aggregate principal amount of the outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Noteholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in aggregate principal amount of the
outstanding Notes may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, subject to this Article 7, the successor corporation without any
further act shall (if it is otherwise eligible hereunder) be the successor
Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Company shall comply with the provisions
of TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.10, the Trustee
shall resign immediately in the manner and with the effect hereinbefore
specified in this Article 7.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein. The provisions of TIA Section 311 shall apply to the Company
as obligors of the Notes.
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ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Guarantors, when authorized by a Board
Resolution, and the Trustee may amend or supplement this Indenture, the Notes or
the Guarantees without notice to or consent of any Noteholder:
(1) to cure any ambiguity, defect or inconsistency; PROVIDED
that such amendment or supplement does not, in the opinion of the
Trustee, adversely affect the rights of any Holder in any material
respect;
(2) to provide for uncertificated Notes in addition to or in
place of Certificated Notes;
(3) to comply with Article 5;
(4) to comply with any requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
TIA;
(5) to make any change that would provide any additional
benefit or rights to the Holders;
(6) to make any other change that does not adversely affect
the rights of any Holder under this Indenture;
(7) to add to the covenants of the Company or a Guarantor for
the benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or any Guarantor;
(8) to secure the Notes pursuant to the requirements of
Section 4.15 or otherwise; and
(9) to reflect the release of a Guarantor from its obligations
with respect to its Guarantee pursuant to Section 11.05 or to add a
Guarantor pursuant to Section 4.24.
Section 8.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Company and the Guarantors, when
each is authorized by a Board Resolution, and the Trustee may amend or
supplement this Indenture, the Notes or the Guarantees with the written consent
of the Holders of at least a majority in aggregate principal amount of the
outstanding Notes. Subject to Section 6.07, the Holders of a majority in
aggregate principal amount of the outstanding Notes may waive compliance by the
Company or any Guarantor with any provision of this Indenture, the Notes or the
Guarantees. However, without the consent of each Noteholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) reduce the amount of Notes whose Holders must consent to
an amendment, supplement or waiver, or consent to take any action under
this Indenture or the Notes;
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(2) reduce the rate of or change the time for payment of
interest, including defaulted interest, on any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note or change the date on which any Notes may be
subject to redemption or repurchase or reduce the redemption or
repurchase price therefor;
(4) make any Note payable in money other than that stated in
the Note or change the place of payment from New York, New York;
(5) waive a Default in the payment of the principal of,
interest on, or redemption payment with respect to, any Note;
(6) make any changes in Sections 6.04 or 6.07 or this
sentence of Section 8.02;
(7) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the Notes
or any Guarantee in a manner that adversely affects the Holders;
(8) amend, change or modify in any material respect the
obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control, make and consummate an
Excess Proceeds Offer with respect to any Asset Sale that has been
consummated or modify any of the provisions or definitions with respect
thereto; or
(9) release any Guarantor from any of its obligations under
its Guarantee or this Indenture otherwise than in accordance with the
terms of this Indenture.
In addition, without the consent of the Holders of 90% in
principal amount of the Notes then outstanding, no amendment may release any
Guarantor from any of its obligations under its Guarantee or this Indenture
otherwise than in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section
8.02 becomes effective, the Company shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the receipt by the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders as aforesaid and upon receipt by the Trustee of the
documents described in Section 8.06, the Trustee shall join with the Company and
the Guarantors in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture, in which case the Trustee may in its discretion, but shall
not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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Section 8.03. COMPLIANCE WITH TIA.
Every amendment to or supplement of this Indenture, the Notes
or the Guarantees shall comply with the TIA as then in effect.
Section 8.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
written notice to the Trustee or the Company received before the date on which
the Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Noteholder, unless it makes a change described in any of
clauses (1) through (8) of Section 8.02, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Note who has consented to
it and every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder's Note; PROVIDED that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Note, on or after the respective due dates expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
Section 8.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement, or waiver changes the terms of a
Note, the Trustee may request the Holder to deliver it to the Trustee. In such
case, the Trustee shall place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determine, in exchange for the Note the Company shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment supplement or waiver.
Section 8.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article 8 is
authorized or permitted by this Indenture that all requisite consents have been
obtained or that no consents are required and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
any Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which materially adversely affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
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ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and shall cease to be of
further effect (except those obligations referred to in the penultimate
paragraph of this Section 9.01) and the Trustee, on written demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either:
(a) all Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.07 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the
Trustee for cancellation; or
(b) (i) either (A) pursuant to Article 3, the Company shall
have given written notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the Notes under
arrangements satisfactory to the Trustee for the giving of such notice
or (B) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable; (ii) the Company has
irrevocably deposited or caused to be deposited with the Trustee in
trust for the purpose an amount of U.S. legal tender and/or U.S.
Government Obligations sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest to
the date of such deposit; (iii) no Default or Event of Default with
respect to this Indenture or the Notes shall have occurred and be
continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company is a party or by which it is bound; (iv) the Company has paid
or caused to be paid all other sums payable hereunder by the Company;
(v) the Company has delivered to the Trustee (A) irrevocable
instructions to apply the deposited money toward payment of the Notes
at the maturity thereof, and (B) an Officers' Certificate and an
Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with and that such satisfaction and
discharge does not result in a default under the Senior Credit Facility
(if then in effect) or any other agreement or instrument then known to
such counsel which binds or affects the Company; and (vi) that from and
after the time of deposit, the money deposited shall not be subject to
the rights of holders of Senior Indebtedness pursuant to the provisions
of Article 10 or to the rights of holders of Guarantor Senior
Indebtedness pursuant to the provisions of Article 11.
Notwithstanding the foregoing paragraph, the Company's
obligations in Article 2 and Sections 4.01, 4.07, 7.07, 9.05 and 9.06 shall
survive until the Notes are no longer outstanding pursuant to the last paragraph
of Section 2.08. After the Notes are no longer outstanding, the Company's
obligations in Sections 7.07 and 9.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of the Company's and each
Guarantor's obligations under the Notes, the Guarantees and this Indenture
except for those surviving obligations specified above.
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Section 9.02. LEGAL DEFEASANCE.
(a) The Company and the Guarantors may, at the option of the
Company, by a Board Resolution, at any time, elect to have this Section be
applied to all outstanding Notes and any Guarantees upon compliance with the
conditions set forth in Section 9.04.
(b) Upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (b), the Company and each Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 9.04,
be deemed to have been discharged from their respective obligations with respect
to all outstanding Notes and any Guarantees on the date the conditions set forth
below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal
Defeasance means that the Company and each Guarantor shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
and any Guarantees, which shall thereafter be deemed to be "outstanding" only
for the purposes of Section 9.05 and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all their other
respective obligations under such Notes and this Indenture (and the Trustee, on
written demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), and Holders and any amounts deposited under
Section 9.04 shall cease to be subject to any obligations to, or the rights of,
any holder of Senior Indebtedness under Article 10 or otherwise or any holder of
Guarantor Senior Indebtedness under Article 11 or otherwise, except for the
following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 9.05, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if any,
and interest on such Notes when such payments are due, (ii) the Company's
obligations with respect to such Notes under Article 2 and Section 4.07, (iii)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
the Company's obligations in connection therewith and (iv) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option
under this Section 9.02 notwithstanding the prior exercise of its option under
Section 9.03 below with respect to the Notes.
Section 9.03. COVENANT DEFEASANCE.
(a) The Company may, at its option by a resolution of the
Board of Directors of the Company, at any time, elect to have this Section be
applied to all outstanding Notes upon compliance with the conditions set forth
in Section 9.04.
(b) Upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (b), the Company and each Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 9.04,
be released from their respective obligations under the covenants contained in
Sections 4.05, 4.08, 4.09 and 4.10 through 4.26, inclusive, and Article 5 with
respect to the outstanding Notes and any Guarantees on and after the date the
conditions set forth below are satisfied (hereinafter, "COVENANT DEFEASANCE"),
and the Notes and any Guarantees shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
and Holders and any amounts deposited under Section 9.04 shall cease to be
subject to any obligations to, or the rights of, any holder of Senior
Indebtedness under Article 10 or otherwise or any holder of Guarantor Senior
Indebtedness under Article 11 or otherwise. For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Notes and the Guarantees,
the Company and each Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event or Default under Section
6.01(c), but, except as specified above, the remainder of this Indenture, such
Notes and
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any Guarantees shall be unaffected thereby. In addition, upon the Company's
exercise under paragraph (a) above of the option applicable to this paragraph
(b), subject to the satisfaction of the conditions set forth in Section 9.04,
Sections 6.01(c), 6.01(d) and 6.01(e) shall not constitute Events of Default.
Section 9.04. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 9.02 or 9.03 to the outstanding Notes and any Guarantees:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit or cause to be
irrevocably deposited with the Trustee, in trust, for the benefit of
the Holders, U.S. legal tender or U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on
the Notes on the scheduled due dates therefore or on the applicable
Redemption Date, as the case may be, PROVIDED that the Trustee shall
have received an irrevocable written order from the Company instructing
the Trustee to apply such U.S. legal tender or the proceeds of such
U.S. government obligations to said payments with respect to the Notes;
(b) in the case of an election under Section 9.02, the Company
shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 9.03, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming
that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 6.01(f)
and 6.01(g) are concerned, at any time in the period ending on the 91st
day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company;
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(g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with;
(h) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that (i) the trust funds will not be subject
to any rights of any holders of Senior Indebtedness or Guarantor Senior
Indebtedness, including, without limitation, those arising hereunder,
and (ii) assuming no intervening event of the type described in
Sections 6.01(f) and 6.01(g) and that no Holder is an insider of the
Company, after the 91st day following the deposit or, if longer, ending
on the day following the expiration of the longest preference period
under any Bankruptcy Law (it being understood that this condition
should not be deemed to be satisfied until the expiration of such
period) the trust funds will not be subject to the effect of any
applicable Bankruptcy Law;
(i) such Legal Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest for purposes of the
TIA with respect to any securities of the Company; and
(j) the Company shall have delivered to the Trustee an Opinion
of Counsel stating that, as a result of such Legal Defeasance or
Covenant Defeasance, neither the trust nor the Trustee will be required
to register as an investment company under the Investment Company Act
of 1940, as amended.
Section 9.05. APPLICATION OF TRUST MONEY.
All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 9.01 or 9.04 in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes, of all sums due and to become due
thereon in respect of principal, premium, if any, and accrued interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee and its
officers, directors, agents and employees against any tax, fee or other charge
imposed on or assessed against any U.S. Government Obligations deposited
pursuant to Section 9.01 or 9.04 or the principal, premium, if any, and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon a written
request of the Company in the form of an Officers' Certificate any money or U.S.
Government Obligations held by it as provided in Section 9.01 or 9.04 which, in
the opinion of a nationally-recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance, and thereupon
shall be relieved from all liability with respect to such money.
Section 9.06. REPAYMENT TO THE COMPANY.
Subject to Sections 9.01, 9.02, 9.03, 9.04, 9.05 and 9.07, the
Trustee and the Paying Agent shall promptly pay to the Company upon written
request any excess U.S. legal tender or U.S. Government Obligations held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the
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payment of principal, premium, if any, or interest that remains unclaimed for
two years; PROVIDED that the Trustee or such Paying Agent, before being required
to make any payment, may at the expense of the Company cause to be published
once in a newspaper of general circulation in the City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed, and
that after a date specified therein which shall be at least 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
Section 9.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S.
legal tender or U.S. Government Obligations in accordance with Section 9.01,
9.02 or 9.03 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's and each Guarantor's
obligations under this Indenture, the Notes and the Guarantees shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 9
until such time as the Trustee or Paying Agent is permitted to apply all such
U.S. legal tender or U.S. Government Obligations in accordance with Section
9.01; PROVIDED, HOWEVER, that if the Company or the Guarantors have made any
payment of principal of, premium, if any, or accrued interest on any Notes
because of the reinstatement of their obligations, the Company and each such
Guarantor shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. legal tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
ARTICLE 10
SUBORDINATION OF NOTES
Section 10.01. NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and the Trustee and each
Holder by its acceptance of Notes likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article 10, the payment
of all Obligations on the Notes by the Company are hereby expressly made
subordinate and subject in right of payment as provided in this Article 10 to
the prior indefeasible payment in full in cash of all Senior Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter incurred.
This Section 10.01 and the following Sections 10.02 through
10.11 shall constitute a continuing offer to all Persons who, in reliance on
such provisions, become holders of or continue to hold Senior Indebtedness of
the Company; and such provisions are made for the benefit of all the holders of
Senior Indebtedness of the Company; and such holders are made obligees hereunder
and they or each of them may enforce such provisions.
Section 10.02. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, whether voluntary or involuntary or (b)
any liquidation, dissolution or other winding-up or other similar case or
proceeding in connection therewith whether or not involving insolvency or
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bankruptcy, relative to the Company or to its creditors, as such, or to the
Company's assets, whether voluntary or involuntary, or (c) any general
assignment by the Company for the benefit of its creditors or (d) any other
marshalling of assets or liabilities of the Company (except in connection with
the merger or consolidation of the Company or its liquidation or dissolution
following the transfer of all or substantially all of its assets, upon the terms
and conditions permitted under the circumstances described under Section 5.01)
(all of the foregoing events described in clauses (a) through (d) referred to
herein individually as a "BANKRUPTCY PROCEEDING" and collectively as "BANKRUPTCY
PROCEEDINGS"):
(1) the holders of Senior Indebtedness of the Company will be
entitled to receive payment and satisfaction in full in cash of all
amounts due on or in respect of all Senior Indebtedness of the Company
before the Holders are entitled to receive any payment or distribution
of any kind on account of the Notes (except that the Holders may
receive payments of amounts previously deposited in trust in accordance
with the defeasance provisions of this Indenture described under
Article 9); and
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the Holders or the Trustee would be
entitled but for the provisions of this Article 10 shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued,
ratably according to the aggregate amounts remaining unpaid on account
of the Senior Indebtedness held or represented by each, to the extent
necessary to make payment in full in cash of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing
provisions of this Section 10.02, the Trustee or any Holder shall have
received any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of the
principal of, premium, if any, and interest on the Notes before all
Senior Indebtedness is indefeasibly paid in full, then and in such
event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of
all such Senior Indebtedness remaining unpaid, to the extent necessary
to pay all Senior Indebtedness in full in cash or, as acceptable to the
holders of such Senior Indebtedness, any other manner, after giving
effect to any concurrent payment or distribution, to or for the holders
of such Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 5 shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Company for the purposes of this Article 10 if the Person
formed by such consolidation or the surviving entity of such merger or the
Person which acquires by conveyance, transfer or lease such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article 5.
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Section 10.03. SUSPENSION OF PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
(a) Unless Section 10.02 shall be applicable, upon the
occurrence of a Payment Default on Designated Senior Indebtedness, no payment or
distribution (other than a payment or distribution of amounts previously
deposited in trust in accordance with the defeasance provisions described under
Article 9) of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Notes by the Company) may be made by or on
behalf of the Company or any Restricted Subsidiary, including, without
limitation, by way of set-off or otherwise, for or on account of the Notes, or
for or on account of the purchase, redemption or other acquisition of any Notes,
and neither the Trustee nor any holder or owner of any Notes shall take or
receive from the Company or any Restricted Subsidiary, directly or indirectly in
any manner, payment in respect of all or any portion of Notes commencing on the
date of receipt by the Trustee of written notice from the representative of the
holders of Designated Senior Indebtedness (the "Representative") of the
occurrence of such Payment Default, and in any such event, such prohibition
shall continue until such Payment Default is cured, waived in writing or
otherwise ceases to exist. At such time as the prohibition set forth in the
preceding sentence shall no longer be in effect, subject to the provisions of
the following paragraph, the Company shall resume making any and all required
payments in respect of the Notes, including any missed payments.
(b) Unless Section 10.02 shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness,
no payment or distribution (other than a payment or distribution of amounts
previously deposited in trust in accordance with the defeasance provisions
described under Article 9) of any kind or character (including, without
limitation, cash, property and any payment or distribution that may be payable
or deliverable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Notes by the Company) may be made by
the Company or any Restricted Subsidiary, including, without limitation, by way
of set-off or otherwise, for or on account of the Notes, or for or on account of
the purchase, redemption or other acquisition of any Notes, and neither the
Trustee nor any holder or owner of any Notes shall take or receive from the
Company or any Restricted Subsidiary, directly or indirectly in any manner,
payment in respect of all or any portion of the Notes for a period (a "PAYMENT
BLOCKAGE PERIOD") commencing on the date of receipt by the Trustee of written
notice from the Representative of such Non-Payment Event of Default unless and
until (subject to any blockage of payments that may then be in effect under the
preceding paragraph) the earliest of
(1) more than 179 days shall have elapsed since receipt of
such written notice by the Trustee,
(2) such Non-Payment Event of Default shall have been cured or
waived in writing or otherwise shall have ceased to exist or such
Designated Senior Indebtedness shall have been paid in full, or
(3) such Payment Blockage Period shall have been terminated by
written notice to the Company or the Trustee from such Representative,
after which, in the case of clause (1), (2) or (3), the Company shall resume
making any and all required payments in respect of the Notes, including any
missed payments. Notwithstanding any other provision of this Indenture, in no
event shall a Payment Blockage Period commenced in accordance with the
provisions of this Indenture described in this paragraph extend beyond 179 days
from the date of the receipt by the Trustee of the notice referred to above (the
"INITIAL BLOCKAGE PERIOD"). Any number of additional Payment Blockage Periods
may be commenced during the Initial Blockage Period; PROVIDED, HOWEVER, that no
such additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no
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Payment Blockage Period may be commenced until at least 180 consecutive days
have elapsed from the last day of the Initial Blockage Period. Notwithstanding
any other provision of this Indenture, no Non-Payment Event of Default with
respect to Designated Senior Indebtedness that existed or was continuing on the
date of the commencement of any Payment Blockage Period initiated by the
Representative shall be, or be made, the basis for the commencement of a second
Payment Blockage Period initiated by the Representative, whether or not within
the Initial Blockage Period, unless such Non-Payment Event of Default shall have
been cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the
Trustee or any holder of Notes receives any payment or distribution of assets of
the Company of any kind, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of the Notes
before all Senior Indebtedness of the Company is paid and satisfied in full in
cash, then such payment or distribution (other than a payment or distribution of
amounts previously deposited in trust in accordance with the defeasance
provisions described under Article 9) will be held by the recipient in trust for
the benefit of holders of Senior Indebtedness and will be immediately paid over
or delivered to the holders of Senior Indebtedness or their representative or
representatives to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of Senior
Indebtedness.
Section 10.04. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.
The Trustee and any agent of the Company or the Trustee shall
be entitled to all the rights set forth in this Article 10 with respect to any
Senior Indebtedness which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and the
Trustee shall not be liable to any holder of Senior Indebtedness if it shall
mistakenly pay over or deliver to Holders, the Company or any other person
moneys or assets to which any holder of Senior Indebtedness shall be entitled by
virtue of this Article 10 or otherwise. Nothing in this Section 10.04 shall
affect the obligation of any other such Person receiving such payment or
distribution from the Trustee or any other Agent to hold such payment for the
benefit of, and to pay such payment over to, the holders of Senior Indebtedness.
Section 10.05. SUBROGATION.
Upon the payment in full of all Senior Indebtedness, the
Holders shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any and interest on the Notes shall be paid in full. For purposes of
such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders or the
Trustee would be entitled except for the provisions of this Article 10, and no
payments pursuant to the provisions of this Article 10 to the holders of Senior
Indebtedness by Holders or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders, be deemed
to be a payment or distribution by the Company to or on account of the Senior
Indebtedness.
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If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article 10 shall
have been applied, pursuant to the provisions of this Article 10, to the payment
of all amounts payable under the Senior Indebtedness of the Company, then and in
such case the Holders shall be entitled to receive from the holders of such
Senior Indebtedness at the time outstanding any payments or distributions
received by such holders of such Senior Indebtedness in excess of the amount
sufficient to pay all amounts payable under or in respect of such Senior
Indebtedness in full in cash.
Section 10.06. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article 10 are and are intended solely
for the purpose of defining the relative rights of the Holders on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article 10 or elsewhere in this Indenture or in the Notes is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest on the Notes as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative rights against the
Company of the Holders and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
10 of the holders of Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Company referred
to in Section 10.02, to receive, pursuant to and in accordance with such
section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 10.03,
to prevent any payment prohibited by such section or enforce their rights
pursuant to Section 10.03(c).
The failure to make a payment on account of principal of,
premium, if any, or interest on the Notes by reason of any provision of this
Article 10 shall not be construed as preventing the occurrence of a Default or
an Event of Default hereunder.
Section 10.07. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 10 and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of the Company owing to such Holder in the form required in
such proceedings.
Section 10.08. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of paragraph (a) of this
Section, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided
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in this Article 10 or the obligations hereunder of the Holders to the holders of
Senior Indebtedness, do any one or more of the following: (1) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; PROVIDED, HOWEVER, that in no
event shall any such actions limit the right of the Holders to take any action
to accelerate the maturity of the Notes pursuant to Article 6 or to pursue any
rights or remedies hereunder or under applicable laws if the taking of such
action does not otherwise violate the terms of this Indenture.
Section 10.09. NOTICE TO TRUSTEE.
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee at its Corporate Trust Office in respect of the
Notes. Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee in respect of the Notes, unless and until the Trustee shall have
received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
this Section 10.09, shall be entitled in all respects to assume that no such
facts exist; PROVIDED, HOWEVER, that if the Trustee shall not have received the
notice provided for in this Section 10.09 at least two Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose under this Indenture (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Note), then, anything herein
contained to the contrary notwithstanding but without limiting the rights and
remedies of the holders of Senior Indebtedness or any trustee, fiduciary or
agent therefor, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(b) In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 10, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 10.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee, subject to the provisions of
Section 7.01, and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and
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other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
Section 10.11. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article 10 shall limit the right of
the Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article 10 of
the holders, from time to time, of Senior Indebtedness.
ARTICLE 11
GUARANTEE OF NOTES
Section 11.01. GUARANTEE.
Subject to the provisions of this Article 11, each Guarantor,
by execution of a Guarantee will, jointly and severally unconditionally
guarantee on a senior subordinated basis to each Holder and to the Trustee, on
behalf of the Holders, (i) the due and punctual payment of the principal of, and
premium, if any, and interest on each Note, when and as the same shall become
due and payable, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest (including Additional Interest, if any) on the
overdue principal of, and premium, if any, and interest on the Notes, to the
extent lawful, and the due and punctual payment of all other Obligations of the
Company to the Holders or the Trustee (including without limitation amounts due
to the Trustee under Section 7.07) all in accordance with the terms of such Note
and this Indenture, and (ii) in the case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at stated maturity, by acceleration or otherwise. Each
Guarantor, by execution of a Guarantee, will, agree that its obligations
hereunder shall be absolute and unconditional, irrespective of, and shall be
unaffected by, any invalidity, irregularity or unenforceability of any such Note
or this Indenture, any failure to enforce the provisions of any such Note or
this Indenture, any waiver, modification or indulgence granted to the Company
with respect thereto by the Holder of such Note or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or such Guarantor.
Each Guarantor, by execution of a Guarantee, will waive
diligence, presentment, demand for payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to any such
Note or the Indebtedness evidenced thereby and all demands whatsoever, and will
covenant that the Guarantee will not be discharged as to any such Note except by
payment in full of the principal thereof, premium, if any, and interest thereon
as provided in Section 9.01. Each Guarantor, by execution of a Guarantee, will
further agree that, as between such Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (i) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (ii) in the event of any declaration of acceleration of such Obligations as
provided in Article 6, such Obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the purpose of this
Guarantee. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article 6, the Trustee shall promptly
make a demand for payment on the Notes
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under the Guarantee provided for in this Article 11 and not discharged. Failure
to make such a demand shall not affect the validity or enforceability of the
Guarantee upon any Guarantor.
A Guarantee shall not be valid or become obligatory for any
purpose with respect to a Note until the certificate of authentication on such
Note shall have been signed by or on behalf of the Trustee.
A Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Notes shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
No stockholder, member, officer, director, employee or
incorporator, past, present or future, of any Guarantor, as such, shall have any
personal liability under this Guarantee by reason of his, her or its status as
such stockholder, member, officer, director, employee or incorporator.
A Guarantor, by execution of a Guarantee, will have the right
to seek contribution from any non-paying Guarantor so long as the exercise of
such right does not impair the rights of the Holders under such Guarantee.
Section 11.02. EXECUTION AND DELIVERY OF GUARANTEE.
A Guarantee shall be executed by either manual or facsimile
signature (promptly followed by the original signature page) of an Officer or an
Officer of a general partner, as the case may be, of such Guarantor.
If an officer of a Guarantor whose signature is on the
Guarantee no longer holds that office, such Guarantor's Guarantee shall be valid
nevertheless.
Section 11.03. LIMITATION OF GUARANTEE.
Each Guarantor, and by its acceptance hereof each Holder and
the Trustee, hereby confirms that it is the intention of all such parties that
the Guarantee does not constitute a fraudulent transfer or conveyance for
purposes of Title 11 of the United States Code, as amended, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
U.S. Federal or state law. To effectuate the foregoing intention, each Holder,
the Trustee and each Guarantor hereby irrevocably agree that the obligations of
a Guarantor under its Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of such Guarantor in respect of the obligations of such Guarantor
pursuant to this Article 11, result in the obligations of such Guarantor not
constituting such a fraudulent transfer or conveyance.
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Section 11.04. ADDITIONAL GUARANTORS.
Any Person may become a Guarantor by executing and delivering
to the Trustee (a) a supplemental indenture in form and substance satisfactory
to the Trustee, which subjects such Person to the provisions of this Indenture
as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning fraudulent conveyance laws,
creditors' rights and equitable principles as may be acceptable to the Trustee
in its discretion).
Section 11.05. RELEASE OF GUARANTOR.
A Guarantor shall be released from all of its obligations
under its Guarantee if:
(i) the Guarantor has sold all or substantially all of its
assets or the Company and the Restricted Subsidiaries have sold all of
the Capital Stock of the Guarantor owned by them, in each case in a
transaction in compliance with the terms of this Indenture (including
Sections 4.13, 4.17, 4.24 and 5.01);
(ii) the Guarantor merges with or into or consolidates with,
or transfers all or substantially all of its assets to, the Company or
another Guarantor in a transaction in compliance with the terms of this
Indenture (including Section 5.01); or
(iii) the Guarantor is designated an Unrestricted Subsidiary
in compliance with the terms of this Indenture (including Section
4.11);
and in each such case, such Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with and that such release is authorized and permitted hereunder.
The Trustee shall execute any documents reasonably requested
by the Company or a Guarantor in order to evidence the release of such Guarantor
from its obligations under its Guarantee endorsed on the Notes and under this
Article 11.
Section 11.06. SUBORDINATION OF SUBROGATION AND OTHER RIGHTS; SUBROGATION.
Each Guarantor hereby agrees that any claim against the
Company that arises from the payment, performance or enforcement of such
Guarantor's obligations under the Guarantee or this Indenture, including,
without limitation, any right of subrogation, shall be subject and subordinate
to, and no payment with respect to any such claim of such Guarantor shall be
made before, the payment in full in cash of all outstanding Senior Indebtedness
and Guarantor Senior Indebtedness in accordance with the provisions provided
therefor in this Indenture.
Section 11.07. GUARANTEE OBLIGATIONS SUBORDINATED TO GUARANTOR SENIOR
INDEBTEDNESS.
Each Guarantor, by execution of a Guarantee, will covenant and
agree, and each Holder, by its acceptance thereof, will likewise covenant and
agree, that to the extent and in the manner hereinafter set forth in this
Article 11, the Indebtedness represented by the Guarantee and the payment of the
principal of, premium, if any, and interest on the Notes pursuant to the
Guarantee by such Guarantor are hereby expressly made subordi-
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nate and subject in right of payment as provided in this Article 11 to the prior
indefeasible payment and satisfaction in full in cash of all existing and future
Guarantor Senior Indebtedness of such Guarantor.
This Section 11.07 and the following Sections 11.08 through
11.16 shall constitute a continuing offer to all Persons who, in reliance upon
such provisions, become holders of or continue to hold Guarantor Senior
Indebtedness of any Guarantor; and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness of each Guarantor; and such holders
are made obligees hereunder and they or each of them may enforce such
provisions.
Section 11.08. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC., OF A GUARANTOR.
In the event of:
(1) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar
case or proceeding in connection therewith, relative to a Guarantor or
to its creditors, as such, or to its assets, whether voluntary or
involuntary; or
(2) any liquidation, dissolution or other winding-up or other
similar case or proceeding in connection therewith whether or not
involving insolvency or bankruptcy, relative to a Guarantor or to its
creditors, as such, or to such Guarantor's assets, whether voluntary or
involuntary; or
(3) any general assignment for the benefit of creditors of a
Guarantor; or
(4) any other marshaling of assets or liabilities of a Guarantor
(except in connection with the merger or consolidation of a Guarantor or
its liquidation or dissolution following the transfer of substantially
all of its assets, upon the terms and conditions permitted under the
circumstances described under Section 5.01).
(all of the foregoing events described in clauses (1) through (4) referred to
herein individually as a "GUARANTOR BANKRUPTCY PROCEEDING" and collectively as
"GUARANTOR BANKRUPTCY PROCEEDINGS"), the holders of Guarantor Senior
Indebtedness will be entitled to receive payment and satisfaction in full in
cash of all amounts due on or in respect of all Guarantor Senior Indebtedness
before the Holders are entitled to receive or retain any payment or distribution
of any kind on account of the Notes (except that Holders may receive payments of
amounts previously deposited in trust in accordance with the defeasance
provisions of this Indenture described under Article 9).
Any payment or distribution of assets of a Guarantor of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for the
provisions of this Article 11 shall be paid by the liquidating trustee or agent
or other Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Guarantor Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Guarantor Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Guarantor Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash of all Guarantor Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Indebtedness.
In the event that, notwithstanding the foregoing, the Trustee
or any Holder receives any payment or distribution of assets of a Guarantor of
any kind, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Guarantor Senior Indebtedness of
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a Guarantor is paid and satisfied in full in cash, then such payment or
distribution will be held by the recipient in trust for the benefit of holders
of Guarantor Senior Indebtedness and will be immediately paid over or delivered
to the holders of Guarantor Senior Indebtedness or their representative or
representatives to the extent necessary to make payment in full of all Guarantor
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to or for the holders of
Guarantor Senior Indebtedness.
The consolidation of a Guarantor with, or the merger of a
Guarantor with or into, another Person or the liquidation or dissolution of a
Guarantor following the conveyance, transfer or lease of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article 5 shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of a Guarantor for the purposes of this
Article 11 if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in Article 5.
Section 11.09. SUSPENSION OF GUARANTEE OBLIGATIONS WHEN GUARANTOR SENIOR
INDEBTEDNESS IN DEFAULT.
---------------------------------------------------------------
(a) Unless Section 11.08 shall be applicable, upon the
occurrence of a Payment Default on Designated Senior Indebtedness, no payment or
distribution (other than a payment or distribution of amounts previously
deposited in trust in accordance with the defeasance provisions described under
Article 9) of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to the payment of its Obligations on its Guarantee) may be made by
or on behalf of such Guarantor or any Restricted Subsidiary of such Guarantor,
including, without limitation, by way of set-off or otherwise, for or on account
of its Obligations on its Guarantee or for or on account of the purchase or
redemption or other acquisition of its Obligations under its Guarantee, and
neither the Trustee nor any holder or owner of any Notes shall take or receive
from any Guarantor or any Restricted Subsidiary of such Guarantor, directly or
indirectly in any manner, payment in respect of all or any portion of its
Obligations on its Guarantee commencing on the date of receipt by the Trustee of
written notice from the representative of the holders of Designated Senior
Indebtedness which constitutes Guarantor Senior Indebtedness (the "GUARANTOR
REPRESENTATIVE") of the occurrence of such Payment Default, and in any such
event, such prohibition shall continue until such Payment Default is cured,
waived in writing or otherwise ceases to exist. At such time as the prohibition
set forth in the preceding sentence shall no longer be in effect, subject to the
provisions of the following paragraph, such Guarantor shall resume making any
and all required payments in respect of its Obligations under its Guarantee,
including any missed payments.
(b) Unless Section 11.08 shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness
which constitutes Guarantor Senior Indebtedness, no payment or distribution
(other than a payment or distribution of amounts previously deposited in trust
in accordance with the defeasance provisions described under Article 9) of any
kind or character (including, without limitation, cash, property and any payment
or distribution which may be payable or deliverable by reason of the payment of
any other Indebtedness of such Guarantor being subordinated to the payment of
its Obligations on its Guarantee) may be made by such Guarantor or any
Restricted Subsidiary of such Guarantor, including, without limitation, by way
of set-off or otherwise, for or on account of its Obligations under its
Guarantee, or for or on account of the purchase or redemption or other
acquisition of its Obligations under its Guarantee, and neither the Trustee nor
any holder or owner of any Notes shall take or receive from such Guarantor or
any Restricted Subsidiary of such Guarantor, directly or indirectly in any
manner, payment in respect of or for any portion of its Obligations under its
Guarantee for a period (a "GUARANTOR PAYMENT BLOCKAGE PERIOD") commencing on the
date of receipt by the Trustee of written notice from the Guarantor
Representative of such Non-Payment Event of Default unless and
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until (subject to any blockage of payments that may then be in effect under the
preceding paragraph) the earliest of
(1) more than 179 days shall have elapsed since receipt of
such written notice by the Trustee,
(2) such Non-Payment Event of Default shall have been
cured or waived in writing or shall have ceased to exist or
such Designated Senior Indebtedness which constitutes
Guarantor Senior Indebtedness shall have been paid in full or
(3) such Guarantor Payment Blockage Period shall have been
terminated by written notice to such Guarantor or the Trustee
from such Guarantor Representative
after which, in the case of clause (1), (2) or (3), such Guarantor shall resume
making any and all required payments in respect of its Obligations under its
Guarantee, including any missed payments. Notwithstanding any other provision of
this Indenture, in no event shall a Guarantor Payment Blockage Period commenced
in accordance with the provisions of this Section 11.09(b) extend beyond 179
days from the date of the receipt by the Trustee of the notice referred to above
(the "INITIAL GUARANTOR BLOCKAGE PERIOD"). Any number of additional Guarantor
Payment Blockage Periods may be commenced during the Initial Guarantor Blockage
Period; PROVIDED, HOWEVER, that no such additional Guarantor Payment Blockage
Period shall extend beyond the Initial Guarantor Blockage Period. After the
expiration of the Initial Guarantor Blockage Period, no Guarantor Payment
Blockage Period may be commenced until at least 180 consecutive days have
elapsed from the last day of the Initial Guarantor Blockage Period.
Notwithstanding any other provision of this Indenture, no Non-Payment Event of
Default with respect to Designated Senior Indebtedness which constitutes
Guarantor Senior Indebtedness that existed or was continuing on the date of the
commencement of any Guarantor Payment Blockage Period initiated by the Guarantor
Representative shall be, or be made, the basis for the commencement of a second
Guarantor Payment Blockage Period initiated by the Guarantor Representative,
whether or not within the Initial Guarantor Blockage Period, unless such
Non-Payment Event of Default shall have been cured or waived for a period of not
less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the holder of Notes receives any payment or distribution of assets of
a Guarantor of any kind, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of such
Guarantor's Obligations under its Guarantee before all Senior Indebtedness which
constitutes Guarantor Senior Indebtedness is paid and satisfied in full in cash,
then such payment or distribution (other than a payment or distribution of
amounts previously deposited in trust in accordance with the defeasance
provisions described under Article 9) will be held by the recipient in trust for
the benefit of holders of such Senior Indebtedness and will be immediately paid
over or delivered to the holders of such Senior Indebtedness or their
representative or representatives to the extent necessary to make payment in
full of all such Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution, or provision therefor, to or for holders
of such Senior Indebtedness.
Section 11.10. TRUSTEE'S RELATION TO GUARANTOR SENIOR INDEBTEDNESS.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article 11 with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder. Nothing in this Article 11
shall apply to claims of, or payments to, the Trustee for its compensation owing
pursuant to and in accordance with the first sentence of Section 7.07.
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With respect to the holders of Guarantor Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 11, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and the Trustee shall not be liable to any holder of Guarantor
Senior Indebtedness (other than for its willful misconduct or gross negligence)
if it shall in good faith mistakenly pay over or deliver to the Holders, the
Company or any other Person moneys or assets to which any holder of Guarantor
Senior Indebtedness shall be entitled by virtue of this Article 11 or otherwise.
Nothing in this Section 11.10 shall affect the obligation of any other such
Person, the Company, or the Holders to hold such money or assets for the benefit
of, and to pay such money or assets over to, the holders of the Guarantor Senior
Indebtedness or their applicable representative or representatives.
Section 11.11. SUBROGATION TO RIGHTS OF HOLDERS OF GUARANTOR SENIOR
INDEBTEDNESS.
Upon the payment in full of all amounts payable under or in
respect of all Guarantor Senior Indebtedness of a Guarantor, the Holders shall
be subrogated to the rights of the holders of such Guarantor Senior Indebtedness
to receive payments and distributions of cash, property and securities of such
Guarantor made on such Guarantor Senior Indebtedness until all amounts due to be
paid under the Guarantee shall be paid in full. For the purposes of such
subrogation, no payments or distributions to holders of Guarantor Senior
Indebtedness of any cash, property or securities to which Holders would be
entitled except for the provisions of this Article 11 and no payments over
pursuant to the provisions of this Article 11 to holders of Guarantor Senior
Indebtedness by Holders, shall, as among each Guarantor, its creditors other
than holders of Guarantor Senior Indebtedness and the Holders, be deemed to be a
payment or distribution by such Guarantor to or on account of such Guarantor
Senior Indebtedness.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article 11 shall
have been applied, pursuant to the provisions of this Article 11, to the payment
of all amounts payable under Guarantor Senior Indebtedness, then and in such
case, the Holders shall be entitled to receive from the holders of such
Guarantor Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of Guarantor Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of such Guarantor Senior Indebtedness in full in cash.
Section 11.12. GUARANTEE SUBORDINATION PROVISIONS SOLELY TO DEFINE RELATIVE
RIGHTS.
The subordination provisions of this Article 11 are and are
intended solely for the purpose of defining the relative rights of the Holders
on the one hand and the holders of Guarantor Senior Indebtedness on the other
hand. Nothing contained in this Article 11 or elsewhere in this Indenture or in
the Notes is intended to or shall (a) impair, as among each Guarantor, its
creditors other than holders of its Guarantor Senior Indebtedness and the
Holders, the obligation of such Guarantor, which is absolute and unconditional,
to make payments to the Holders in respect of its Obligations on its Guarantee
in accordance with its terms; or (b) affect the relative rights against such
Guarantor of the Holders and creditors of such Guarantor other than the holders
of the Guarantor Senior Indebtedness; or (c) prevent any Holder from exercising
all remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
11 of the holders of Guarantor Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of any Guarantor
referred to in Section 11.08, to receive, pursuant to and in accordance with
such Section, cash, property and securities otherwise payable or deliverable to
such Holder, or (2) under the conditions specified in Section 11.09, to prevent
any payment prohibited by such Section or enforce their rights pursuant to
Section 11.09(c).
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The failure by any Guarantor to make a payment in respect of
its obligations on its Guarantee by reason of any provision of this Article 11
shall not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
Section 11.13. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by his acceptance of a Guarantee agrees to be
bound by such provisions and authorizes and directs the Trustee, on his behalf,
to take such action as may be necessary or appropriate to effectuate the
subordination provisions in this Article 11 and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
Guarantor Bankruptcy Proceeding or other dissolution, winding-up, liquidation or
reorganization of a Guarantor whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the prompt and timely filing of a claim for the
unpaid balance of the indebtedness of such Guarantor owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Guarantor Senior Indebtedness,
or any Guarantor Representative, may, and hereby are authorized to, file such a
claim on behalf of Holders of the applicable Notes.
Section 11.14. NOTICE TO TRUSTEE.
(a) The Company or any Guarantor shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
or any such Guarantor which would prohibit the making of any payment to or by
the Trustee at its Corporate Trust Office in respect of the Guarantees pursuant
to the provisions of this Article 11. Notwithstanding the provisions of this
Article 11 or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Guarantees, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Guarantor Senior Indebtedness or from any trustee,
fiduciary, representative, or agent therefor no later than two Business Days
prior to such payment; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of this Section 11.14, and subject to the
provisions of Sections 7.01 and 7.02, shall be entitled in all respects to
assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice referred to in this Section 11.14 at least one
Business Day prior to the date upon which by the terms hereof any such payment
may become payable for any purpose under this Indenture (including, without
limitation, the payment of the principal of, premium, if any, or interest on any
Note), then, anything herein contained to the contrary notwithstanding but
without limiting the rights and remedies of the holders of Guarantor Senior
Indebtedness or any trustee, fiduciary, representative, or agent therefor as
against the Holders or any other Person, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it less than one Business Day prior to such date; nor
shall the Trustee be charged with knowledge of the curing of any such applicable
default in respect of Designated Senior Indebtedness or the elimination of the
act or condition preventing any such payment unless and until the Trustee shall
have received an Officers' Certificate to such effect (subject to the rights of
the holders of the Designated Senior Indebtedness under Section 11.09). Nothing
contained in this Section 11.14 shall limit the right of holders of Senior
Indebtedness to recover payments as contemplated by Section 11.08. The Trustee
shall be entitled to rely upon the delivery to it of a written notice by a
Person representing himself or itself to be a holder of any Senior Indebtedness
(or a trustee on behalf of, or other representative of, such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
(b) Subject to the provisions of Section 7.01, the Trustee
shall be entitled to rely (to the extent reasonable and in good faith) on the
delivery to it of a written notice to the Trustee and the Company or a
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Guarantor by a Person representing itself to be a holder of Guarantor Senior
Indebtedness (or a trustee, fiduciary, representative, or agent therefor) for
purposes of establishing that such notice actually has been given by a holder of
Guarantor Senior Indebtedness (or a trustee, fiduciary, representative, or agent
therefor); PROVIDED, HOWEVER, that failure to give such notice to the Company or
a Guarantor shall not affect in any way the ability of the Trustee to rely on
such notice. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence not unsatisfactory to the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article 11, and if such evidence is not
furnished, the Trustee, acting in good faith, may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
Section 11.15. APPLICATION OF CERTAIN ARTICLE 11 PROVISIONS.
The provisions of Sections 10.08, 10.10 and 10.11 shall apply,
MUTATIS MUTANDIS, to each Guarantor and their respective holders of Guarantor
Senior Indebtedness and the rights, duties and obligations set forth therein
shall govern the rights, duties and obligations of each Guarantor, the holders
of Guarantor Senior Indebtedness and the Holders with respect to the Guarantee
and all references therein to Article 10 shall mean this Article 11.
ARTICLE 12
MISCELLANEOUS
Section 12.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
Section 12.02. NOTICES.
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier, by overnight express service or by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to the Company :
Aavid Thermal Technologies, Inc.
One Eagle Square
Suite 509
Concord, New Hampshire 03301
Attention: General Counsel
Tel: (603) 224-6191
Fax: (603) 224-6673
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Copy to:
Fulbright & Jaworski
666 Fifth Avenue
New York, NY 10103
Attention: Roy L. Goldman
Tel: (212) 318-3000
Fax: (212) 752-5958
and
Bartlit, Beck, Herman, Palenchar & Scott
511 16th Street, Suite 700
Denver, CO 80202
Attention: Polly Swartzfager
Tel: (303) 592-3100
Fax: (303) 592-3140
If to the Trustee:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Susan Johnson
Corporate Trust and Agency Group:
Corporate Marketing Services
Tel: (212) 250-6569/6702
Fax: (212) 250-6961
The Company, any Guarantor or the Trustee by written notice to
the others may designate additional or different addresses for subsequent
notices or communications. Any notice or communication to the Company, any
Guarantor or the Trustee, shall be deemed to have been given or made as of the
date so delivered if personally delivered; when answered back, if telexed; when
receipt is acknowledged, if telecopied; one (1) business day after mailing if by
overnight courier; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Noteholder shall be
mailed to him by first-class mail, postage prepaid, at his address shown on the
register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication to a Noteholder is mailed in the manner provided
above, it shall be deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
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Section 12.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Guarantors, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
Section 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any
Guarantor to the Trustee to take any action under this Indenture, the Company or
such Guarantor, as the case may be, shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 12.05 below) stating that, in the
opinion of the signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel (which shall include the statements
set forth in Section 12.05 below) stating that, in the opinion of such
counsel, all such conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE AND OPINION.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition and the definitions
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he
has made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with.
Section 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at
meetings of Holders. The Registrar and Paying Agent may make reasonable rules
for their functions.
Section 12.07. BUSINESS DAYS; LEGAL HOLIDAYS.
A "Business Day" is a day that is not a Legal Holiday. A
"Legal Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day
on which banking institutions are not required to be open in the State of New
York. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
<PAGE>
-93-
Section 12.08. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan, security or debt agreement of the Company or any Subsidiary thereof. No
such indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 12.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, member or stockholder, as such,
of the Company or any Guarantor shall not have any liability for any obligations
of the Company or any Guarantor under the Notes, the Guarantees or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Noteholder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
Section 12.11. SUCCESSORS.
All agreements of each of the Company and each Guarantor in
this Indenture and the Notes shall bind their respective successors. All
agreements of the Trustee, any additional trustee and any Paying Agents in this
Indenture shall bind its successor.
Section 12.12. MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 12.14. SEPARABILITY.
Each provision of this Indenture shall be considered separable
and if for any reason any provision which is not essential to the effectuation
of the basic purpose of this Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
<PAGE>
-94-
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed all as of the date and year first written above.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ Bharatan Patel
---------------------------------
Name: Bharatan Patel
Title: Chief Executive Officer
BANKERS TRUST COMPANY
as Trustee
By: /s/ Susan Johnson
---------------------------------
Name: Susan Johnson
Title: Assistant Vice President
<PAGE>
-95-
FLUENT HOLDINGS, INC.
AAVID THERMAL PRODUCTS, INC.
THERMALLOY INVESTMENT CO., INC.
THERMALLOY, INC.
AAVID THERMALLOY, LLC
APPLIED THERMAL TECHNOLOGIES, LLC
AAVID THERMALLOY SW, LLC
AAVID THERMALLOY OF TEXAS, LLC
as Guarantors
By: /s/ Bharatan Patel
Name: Bharatan Patel
Title: Chief Executive Officer
<PAGE>
-96-
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT IT
(1) WILL NOT, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST
DATE ON WHICH THE ISSUER OF THIS NOTE, OR ANY AFFILIATE OF THE ISSUER, WAS THE
OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE), RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES
(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(2) WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED
TRANSFER IS BEING MADE PURSUANT TO CLAUSE (C) OR (E) ABOVE, PRIOR TO SUCH
TRANSFER, THE HOLDER WILL BE REQUIRED TO FURNISH TO THE TRUSTEE AND THE ISSUER
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSONS" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO
A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF
THE INDENTURE.
<PAGE>
-97-
CUSIP No.:
AAVID THERMAL TECHNOLOGIES, INC.
12 3/4% SENIOR SUBORDINATED NOTE DUE 2007, Series A
No. $
AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum of $150,000,000 on
February 1, 2007.
Interest Payment Dates: February 1 and August 1, commencing
August 1, 2000.
Record Dates: and .
Reference is made to the further provisions of this Note
contained herein and the Indenture (as defined), which will for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
AAVID THERMAL TECHNOLOGIES, INC.
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
<PAGE>
-98-
CERTIFICATE OF AUTHENTICATION
This is one of the 12 3/4% Senior Subordinated Notes due 2007,
Series A, referred to in the within-mentioned Indenture.
February 2, 2000
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By: __________________________
Authorized Signatory
<PAGE>
-99-
(REVERSE OF SECURITY)
12 3/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
1. INTEREST. AAVID THERMAL TECHNOLOGIES, INC., a Delaware
corporation (the "COMPANY"), promises to pay interest on the principal amount of
this Note at the rate PER ANNUM shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from the date of the original issuance of the Notes. The Company will
pay interest semi-annually in arrears on each Interest Payment Date, commencing
August 1, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and on
overdue installments of interest (without regard to any applicable grace
periods) to the extent lawful from time to time on demand at the rate borne by
the Notes.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on July 15 or January 15 immediately preceding the
Interest Payment Date (whether or not such day is a Business Day) even if the
Notes are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Notes to a Paying Agent to
collect principal payments. Payments of principal and premium, if any, will be
made (on presentation of such Notes if in certificated form) in money of the
United States that at the time of payment is legal tender for payment of public
and private debts; PROVIDED, HOWEVER, that the Company may pay principal,
premium, if any, and interest by check payable or wire transfer in such money.
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, Bankers Trust
Company, a New York banking corporation organized under the laws of the state of
New York (the "TRUSTEE"), will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. Neither the Company nor any of its Subsidiaries or Affiliates may act
as Paying Agent but may act as Registrar or co-Registrar.
4. INDENTURE. The Company issued this Note under an
Indenture, dated as of, 2000 (the "INDENTURE"), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of
Initial Notes of the Company designated as its 12 3/4% Senior Subordinated Notes
due 2007, Series A (the "NOTES"). The Notes are limited in aggregate principal
amount to $150,000,000. The Notes include the Initial Notes and the Exchange
Notes (as defined below) issued in exchange for the Initial Notes pursuant to
the Indenture. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb)(the "TIA"), as in effect on the date of the Indenture. Notwithstanding
anything to the contrary herein, the Notes are subject to all such terms, and
Holders of Notes are referred to the Indenture and the TIA for a statement of
them.
5. SUBORDINATION. Except to the extent set forth in paragraph
10, the Notes are general unsecured obligations of the Company and subordinated
in right of payment, in the manner and to the extent set forth in the Indenture,
to the prior payment in full in cash of all Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by his acceptance hereof agrees to
be bound by such provisions and authorizes and expressly directs the Trustee, on
his behalf, to take such action as may be necessary or appropriate to effectuate
the subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
<PAGE>
-100-
6. GUARANTEE. The obligations of the Company hereunder are
guaranteed on a senior subordinated basis by the Guarantors. Each Guarantee by a
Guarantor is subordinated in right of payment to all Guarantor Senior
Indebtedness of such Guarantor to the same extent that the Notes are
subordinated to Senior Indebtedness of the Company.
7. REDEMPTION.
(a) The Notes will be redeemable at the option of the Company,
in whole or in part, during the 24-month period beginning February 1, 2004 at a
price equal to 100% of the principal amount thereof, plus an applicable Make
Whole Premium, and thereafter at 102% of the principal amount, in each case,
with accrued and unpaid interest, if any, to the date of redemption; PROVIDED,
HOWEVER, that at maturity the Notes shall be redeemable at 100% of principal
amount outstanding.
For the purposes of the foregoing, the "Make Whole Premium"
means, with respect to a Note, an amount equal to the excess, if any, of (1) the
present value as of the date of such prepayment of the remaining semi-annual
interest payments, if any, and the principal payment including premium due on
such Note as if such Note were redeemed on February 1, 2006, computed using a
discount rate equal to the Treasury Rate plus 75 basis points, over (2) the
outstanding principal amount of such Note. In no case shall the Make Whole
Premium be negative.
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERINGS.
Notwithstanding the foregoing, the Company may redeem in the aggregate up to 35%
of the original principal amount of Notes at any time and from time to time
prior to February 2, 2003 at a Redemption Price equal to 112.75% of the
aggregate principal amount so redeemed, plus accrued and unpaid interest, if
any, to the Redemption Date out of the Net Proceeds of one or more Public Equity
Offerings; provided that
(1) at least 65% of the principal amount of Notes originally
issued remains outstanding immediately after the occurrence of any such
redemption and
(2) any such redemption occurs within 60 days following the
closing of any such Public Equity Offering.
8. NOTICE OF REDEMPTION. Notice of redemption under paragraphs
6(a) and 6(b) of this Note will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address.
Except as set forth in the Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued interest, if any,
the Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued interest, if any.
9. OFFERS TO PURCHASE. The Indenture provides that, after
certain Asset Sales and upon the occurrence of a Change of Control (as defined
in the Indenture), and subject to further limitations contained therein, the
Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Indenture.
10. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement by and among the Company, the Guarantors and the Initial Purchasers,
the Company will be obligated to consummate an exchange offer pursuant to which
the Holder of this Note shall have the right to exchange this Note for the
Company's % Senior Subordinated Notes due 2007, Series B (the "EXCHANGE NOTES"),
which have been registered under
<PAGE>
-101-
the Securities Act, in like principal amount and having terms identical in all
material respects other than this paragraph 10 to the Initial Notes. The Holders
of the Initial Notes shall be entitled to receive certain Additional Interest
payments in the event such exchange offer is not consummated and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement.
11. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof. A Holder shall register the transfer or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.
12. PERSONS DEEMED OWNERS. The registered Holder of a Note
shall be treated as the owner of it for all purposes.
13. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, Holders entitled to money must
look to the Company for payment as general creditors unless an "abandoned
property" law designates another person.
14. DEFEASANCE AND COVENANT DEFEASANCE. If the Company at any
time deposits with the Trustee U.S. legal tender and/or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating to defeasance, the Company will be discharged from certain provisions
of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
15. AMENDMENTS, SUPPLEMENTS, AND WAIVERS. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder
of a Note.
16. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock, enter into transactions with Affiliates, create dividend or
other payment restrictions affecting Subsidiaries, merge or consolidate with any
other person, or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the Company's or any Guarantor's assets. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
17. SUCCESSOR ENTITY. When a successor entity assumes, in
accordance with the Indenture, all the obligations of its predecessor under the
Notes and the Indenture, and immediately before and thereafter no Default exists
and certain other conditions are satisfied, the predecessor entity will be
released from those obligations.
18. DEFAULTS AND REMEDIES. Events of Default are set forth in
the Indenture. If an Event of Default (other than an Event of Default pursuant
to Section 6.01(f) or (g) of the Indenture) shall have occurred and be
continuing, then the Trustee or the holders of not less than 25% in aggregate
principal amount of the
<PAGE>
-102-
Notes then outstanding, may declare to be immediately due and payable the entire
principal amount of all the Notes then outstanding plus accrued interest to the
date of acceleration; PROVIDED, HOWEVER, that after such acceleration but before
a judgment or decree based on such acceleration is obtained by the Trustee, the
holders of a majority in aggregate principal amount of the outstanding Notes may
rescind and annul such acceleration and its consequences if all existing Events
of Default, other than the nonpayment of principal, premium, if any, or interest
that has become due solely because of the acceleration, have been cured or
waived. No such rescission shall affect any subsequent Default or impair any
right consequent thereto. In case an Event of Default specified in Section
6.01(f) or (g) of the Indenture occurs, such principal amount, together with
premium, if any, and interest with respect to all of the Notes, shall be due and
payable immediately without any declaration or other act on the part of the
Trustee or the Holders.
19. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company, and may otherwise deal with
the Company, its Subsidiaries or their respective Affiliates as if it were not
the Trustee.
20. NO RECOURSE AGAINST OTHERS. As more fully described in the
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Noteholder by accepting a Note
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
21. AUTHENTICATION. This Note shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Note.
22. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
23. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations
may be used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
24. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the Holders.
No representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
25. INDENTURE. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note in larger type. Requests may be made to: Aavid Thermal Technologies, Inc.,
One Eagle Square, Suite 509, Concord, New Hampshire 03301, Attention: General
Counsel.
<PAGE>
-103-
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint------------------------------------------------------,
agent to transfer this Note on the books of the Company. The agent may substi-
tute another to act for him.
Date:--------------------------------- Signed:--------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Medallion Guarantee:----------------------------------
<PAGE>
-104-
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.13 or Section 4.17 of the Indenture, check the
appropriate box:
Section 4.13 |_|
Section 4.17 |_|
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.13 or Section 4.17 of the Indenture, state
the amount you elect to have purchased:
$ ------------------
Date:------------------
--------------------------
NOTICE: The signature on
this assignment must
correspond with the name as
it appears upon the face of
the within Note in every
particular without
alteration or enlargement
or any change whatsoever
and be guaranteed by the
endorser's bank or broker.
Medallion Guarantee:----------------------------
<PAGE>
-105-
EXHIBIT B
Bankers Trust Company
Four Albany Street
New York, New York 10006
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO
A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF
THE INDENTURE.
ISIN No.:
AAVID THERMAL TECHNOLOGIES, INC.
% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
No. $
AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum of $150,000,000 on ,
2007.
Interest Payment Dates: February 1 and August 1, commencing
August 1, 2000.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Note
contained herein and the Indenture (as defined), which will for all purposes
have the same effect as if set forth at this place.
<PAGE>
-106-
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
AAVID THERMAL TECHNOLOGIES, INC.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
<PAGE>
-107-
CERTIFICATE OF AUTHENTICATION
This is one of the 12 3/4% Senior Subordinated Notes due 2007,
Series B, referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
not in its individual capacity, but solely
as Trustee
By: __________________________________
Authorized Signatory
<PAGE>
-108-
(REVERSE OF SECURITY)
12 3/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
1. INTEREST. AAVID THERMAL TECHNOLOGIES, INC., a Delaware
corporation (the "COMPANY"), promises to pay interest on the principal amount of
this Note at the rate PER ANNUM shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from the date of the original issuance of the Notes. The Company will
pay interest semi-annually in arrears on each Interest Payment Date, commencing
August 1, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and on
overdue installments of interest (without regard to any applicable grace
periods) to the extent lawful from time to time on demand at the rate borne by
the Notes.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on July 15 or January 15 preceding the Interest Payment
Date (whether or not such day is a Business Day) even if the Notes are cancelled
on registration of transfer or registration of exchange after such Record Date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
Payments of principal and premium, if any, will be made (on presentation of such
Notes if in certificated form) in money of the United States that at the time of
payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that the Company may pay principal, premium, if any, and interest by
check payable in such money. The Company may deliver any such interest payment
to the Paying Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, Bankers Trust
Company, a banking organization organized under the laws of New York (the
"TRUSTEE"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders. Neither
the Company nor any of its Subsidiaries or Affiliates may act as Paying Agent
but may act as Registrar or co-Registrar.
4. INDENTURE. The Company issued this Note under an Indenture,
dated as of February 2, 2000 (the "INDENTURE"), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of Notes
of the Company designated as its 12 3/4% Senior Subordinated Notes due 2007,
Series B (the "EXCHANGE NOTES"), issued in exchange for the initial 12 3/4%
Senior Subordinated Notes due 2007, Series A (the "INITIAL NOTES" and, together
with the Exchange Notes, the "NOTES"). The Notes are limited in aggregate
principal amount to $150,000,000. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them.
5. SUBORDINATION. Except to the extent set forth in paragraph
10, the Notes are general unsecured obligations of the Company and subordinated
in right of payment, in the manner and to the extent set forth in the Indenture,
to the prior payment in full in cash of all Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by his acceptance hereof agrees to
be bound by such provisions and authorizes and expressly directs the Trustee, on
his behalf, to take such action as may be necessary or appropriate to effectuate
the subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
<PAGE>
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6. GUARANTEE. The obligations of the Company hereunder are
guaranteed on a senior subordinated basis by the Guarantors. Each Guarantee by a
Guarantor is subordinated in right of payment to all Guarantor Senior
Indebtedness of such Guarantor to the same extent that the Notes are
subordinated to Senior Indebtedness of the Company.
7. REDEMPTION.
(a) The Notes will be redeemable at the option of the Company,
in whole or in part, during the 24-month period beginning February 1, 2004 at a
price equal to 100% of the principal amount thereof, plus and applicable Make
Whole Premium, and thereafter at 102% of the principal amount, in each case,
with accrued and unpaid interest, if any, to the date of redemption; PROVIDED,
HOWEVER, that at maturity the Notes shall be redeemable at 100% of principal
amount outstanding.
For the purposes of the foregoing, the "Make Whole Premium"
means, with respect to a Note, an amount equal to the excess, if any, of (1) the
present value as of the date of such prepayment of the remaining semi-annual
interest payments, if any, and the principal payment including premium due on
such Note as if such Note were redeemed on February 1, 2006, computed using a
discount rate equal to the Treasury Rate plus 75 basis points, over (2) the
outstanding principal amount of such Note. In no case shall the Make Whole
Premium be negative.
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERINGS.
Notwithstanding the foregoing, the Company may redeem in the aggregate up to 35%
of the original principal amount of Notes at any time and from time to time
prior to February 2, 2003 at a Redemption Price equal to 112.75% of the
aggregate principal amount so redeemed, plus accrued and unpaid interest, if
any, to the Redemption Date out of the Net Proceeds of one or more Public Equity
Offerings; provided that
(1) at least 65% of the principal amount of Notes originally
issued remains outstanding immediately after the occurrence of any such
redemption and
(2) any such redemption occurs within 60 days following the
closing of any such Public Equity Offering.
8. NOTICE OF REDEMPTION. Notice of redemption under paragraphs
6(a) and 6(b) of this Note will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address.
Except as set forth in the Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued interest, if any,
the Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued interest, if any.
9. OFFERS TO PURCHASE. The Indenture provides that, after
certain Asset Sales and upon the occurrence of a Change of Control (as defined
in the Indenture), and subject to further limitations contained therein, the
Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Indenture.
10. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof. A Holder shall register the transfer or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental
<PAGE>
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charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange of any Notes or portions
thereof selected for redemption.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note
shall be treated as the owner of it for all purposes.
12. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, Holders entitled to money must
look to the Company for payment as general creditors unless an "abandoned
property" law designates another person.
13. DEFEASANCE AND COVENANT DEFEASANCE. If the Company at any
time deposits with the Trustee U.S. legal tender and/or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating to defeasance, the Company will be discharged from certain provisions
of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
14. AMENDMENTS, SUPPLEMENTS, AND WAIVERS. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder
of a Note.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock, enter into transactions with Affiliates, create dividend or
other payment restrictions affecting Subsidiaries, merge or consolidate with any
other person, or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the Company's or any Guarantor's assets. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
16. SUCCESSOR ENTITY. When a successor entity assumes, in
accordance with the Indenture, all the obligations of its predecessor under the
Notes and the Indenture, and immediately before and thereafter no Default exists
and certain other conditions are satisfied, the predecessor entity will be
released from those obligations.
17. DEFAULTS AND REMEDIES. Events of Default are set forth in
the Indenture. If an Event of Default (other than an Event of Default pursuant
to Section 6.01(f) or (g) of the Indenture) shall have occurred and be
continuing, then the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding, may declare to be immediately
due and payable the entire principal amount of all the Notes then outstanding
plus accrued interest to the date of acceleration; PROVIDED, HOWEVER, that after
such acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 6.01(f) or (g) of the Indenture occurs, such
principal amount, together with premium, if any, and interest
<PAGE>
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with respect to all of the Notes, shall be due and payable immediately without
any declaration or other act on the part of the Trustee or the Holders.
18. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company, and may otherwise deal with
the Company, its Subsidiaries or their respective Affiliates as if it were not
the Trustee.
19. NO RECOURSE AGAINST OTHERS. As more fully described in the
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Noteholder by accepting a Note
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
20. AUTHENTICATION. This Note shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Note.
21. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
22. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations
may be used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the Holders.
No representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. INDENTURE. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note in larger type. Requests may be made to: Aavid Thermal Technologies, Inc.,
One Eagle Square, Suite 509, Concord, New Hampshire 03301, Attention: General
Counsel.
<PAGE>
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint--------------------------------------------------------
agent to transfer this Note on the books of the Company.The agent may substitute
another to act for him.
Date:-------------------------------- Signed:--------------------------------
(Sign exactly as your name appears
on the other side of this Note)
Medallion Guarantee:--------------------------
<PAGE>
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.13 or Section 4.17 of the Indenture, check the
appropriate box:
Section 4.13 |_|
Section 4.17 |_|
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.13 or Section 4.17 of the Indenture, state
the amount you elect to have purchased:
$ ------------------
Date:--------------------------
--------------------------
NOTICE: The signature on
this assignment must
correspond with the name as
it appears upon the face of
the within Note in every
particular without
alteration or enlargement
or any change whatsoever
and be guaranteed by the
endorser's bank or broker.
Medallion Guarantee:------------------------
<PAGE>
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EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: Aavid Thermal Technologies, Inc. (the "Company")
12 3/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A (THE "NOTES")
This Certificate relates to $_______ principal amount of Notes
held in the form of* ___ a beneficial interest in a Global Note or* _______
Certificated Notes by ______ (the "TRANSFEROR").
The Transferor:
|_| has requested by written order that the Registrar deliver
in exchange for its beneficial interest in the Global Note held by the
Depository a Certificated Note or Certificated Notes in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Note (or the portion thereof indicated above); or
|_| has requested by written order that the Registrar exchange
or register the transfer of a Certificated Note or Certificated Notes.
In connection with such request and in respect of each such
Note, the Transferor does hereby certify that the Transferor is familiar with
the Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "SECURITIES ACT"), because*:
|_| Such Note is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.16 of the Indenture).
|_| Such Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act), in
reliance on Rule 144A.
|_| Such Note is being transferred to an institutional
"accredited investor" (within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act) which delivers a certificate to the
Trustee in the form of EXHIBIT D to the Indenture.
|_| Such Note is being transferred in reliance on Regulation S
under the Securities Act and a transfer certificate for Regulation S transfers
in the form of EXHIBIT E to the Indenture accompanies this certification. An
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this certification.
|_| Such Note is being transferred in reliance on Rule 144
under the Securities Act. An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.
<PAGE>
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|_| Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule 144 under the Securities Act to a
person other than an institutional "accredited investor." An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.
-----------------------------
[INSERT NAME OF TRANSFEROR]
By:--------------------------
[Authorized Signatory]
Date:--------------------
*Check applicable box.
<PAGE>
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EXHIBIT D
FORM OF TRANSFEREE LETTER OF REPRESENTATION
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Services
Ladies and Gentlemen:
This certificate is delivered to request a transfer of
$________ principal amount of the 12 3/4% Senior Subordinated Notes due 2007,
Series A, of Aavid Thermal Technologies, Inc. (the "COMPANY") and any guarantee
thereof (the "NOTES"). Upon transfer, the Notes would be registered in the name
of the new beneficial owner as follows:
Name:---------------------------------------------
Address:------------------------------------------
Taxpayer ID Number:-------------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"SECURITIES ACT")) purchasing Notes for our own account or for the account of
such an institutional "accredited investor" and we are acquiring the Notes not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of our investment in the Notes and we invest in or purchase securities
similar to the Notes in the normal course of our business. We and any accounts
for which we are acting are each able to bear the economic risk of our or its
investment.
2. We acknowledge that we have had access to such financial
and other information, and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers thereto, as we
deem necessary.
3. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes that we will not prior to
the date (the "RESALE RESTRICTION TERMINATION DATE") that is two years after the
later of the original issuance of the Note and the last date on which the
Company or any affiliate of the Company was the owner of such Notes (or any
predecessor thereto) offer, sell or otherwise transfer such Notes except (a) to
the Company or any subsidiary of the Company, (b) inside the United States to a
"qualified institutional buyer" in compliance with Rule 144A under the
Securities Act (c) inside the United States to an "institutional accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to the Trustee a signed letter substantially in the form of
this letter (d) outside the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act (e) pursuant to any other
available exemption from the registration requirements of the Securities Act or
(f) pursuant to an effective registration statement under the Securities Act. We
acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the applicable Notes pursuant to clause (c) or (e) above to require the
delivery of an opinion of counsel, certification and/or other information
satisfactory to the Company and the Trustee.
<PAGE>
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We understand that the Trustee will not be required to accept
for registration of transfer any Notes acquired by us, except upon presentation
of evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that any
Notes purchased by us will be in the form of definitive physical certificates
and that such certificates will bear a legend reflecting the substance of
paragraph 3 of this letter. We further agree to provide to any person acquiring
any of the Notes from us a notice advising such person that transfers of such
Notes are restricted as stated herein and that certificates representing such
Notes will bear a legend to that effect.
We represent that the Company and the Trustee and others are
entitled to rely upon the truth and accuracy of our acknowledgments,
representations and agreements set forth herein, and we agree to notify you
promptly in writing if any of our acknowledgments, representations or agreements
herein cease to be accurate and complete. You are also irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
We represent to you that we have full power to make the
foregoing acknowledgments, representations and agreements on our own behalf and
on behalf of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United
States" and "U.S. person" have the respective meanings given to them in
Regulation S under the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Dated: __________ TRANSFEREE:
By:--------------------
<PAGE>
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EXHIBIT E
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
--------------, ----
Attention: Corporate Trust Administration
Re: Aavid Thermal Technologies, Inc. 12 3/4% Senior
SUBORDINATED NOTES DUE 2007, SERIES A (THE "NOTES")
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "SECURITIES ACT"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a) or Rule
904(a) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:---------------------------
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date and year first above
written.
AAVID THERMAL TECHNOLOGIES, INC.
By:-----------------------------
Name:
Title:
By:-----------------------------
Name:
Title:
EXISTING GUARANTORS:
By:-----------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:-----------------------------
Name:
Title:
<PAGE>
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EXHIBIT F
FORM OF GUARANTEE
SENIOR SUBORDINATED GUARANTEE
Each Guarantor (capitalized terms used herein have the
meanings given such terms in the Indenture referred to in the Note upon which
this notation is endorsed) hereby unconditionally guarantees on a senior
subordinated basis (such guarantee being referred to herein as the "GUARANTEE")
the due and punctual payment of the principal of, premium, if any, and interest
on the Notes, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal, premium and interest on
the Notes, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee, all in accordance with the terms set
forth in Article 11 of the Indenture.
The obligations of each Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are expressly subordinated and subject in right of payment to the prior payment
in full of all Guarantor Senior Indebtedness of each Guarantor, to the extent
and in the manner provided in Article 11 of the Indenture.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Notes upon which this
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
This Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Guarantee is subject to release upon the terms set forth
in the Indenture.
By:------------------------------------
Name:
Title:
By:------------------------------------
Name:
Title:
<PAGE>
================================================================================
WARRANT AGREEMENT
Dated as of February 2, 2000
By and Between
AAVID THERMAL TECHNOLOGIES, INC.
and
BANKERS TRUST COMPANY
as Warrant Agent
----------------------
Warrants to Purchase Class A Common Stock, Par Value
$.0001 Per Share, and Class H
Common Stock, Par Value $.0001 Per Share
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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Article I Issuance, Form, Execution, Delivery And Registration Of Warrant Certificates ....................2
Section 1.01. Issuance Of Warrants................................................................2
Section 1.02. Form Of Warrant Certificates .......................................................2
Section 1.03. Execution Of Warrant Certificates ..................................................3
Section 1.04. Authentication And Delivery ........................................................3
Section 1.05. Temporary Warrant Certificates .....................................................4
Section 1.06. Separation Of Warrants And Notes ...................................................4
Section 1.07. Registration .......................................................................5
Section 1.08. Registration Of Transfers Or Exchanges .............................................5
Section 1.09. Lost, Stolen, Destroyed, Defaced Or Mutilated Warrant Certificates.................11
Section 1.10. Offices For Exercise, Etc .........................................................12
Section 1.11. Book-Entry Provisions For Global Warrants..........................................13
Article Ii Duration, Exercise Of Warrants; Exercise Price And Repurchase Of Warrants
14
Section 2.01. Duration Of Warrants ..............................................................14
Section 2.02. Exercise, Exercise Price, Settlement And Delivery .................................15
Section 2.03. Cancellation Of Warrant Certificates ..............................................19
Section 2.04. Notice Of An Exercise Event .......................................................19
Article Iii Other Provisions Relating To Rights Of Holders Of Warrants
Section 3.01. Enforcement Of Rights .............................................................19
Article Iv Certain Covenants Of The Company
Section 4.01. Payment Of Taxes ..................................................................20
Section 4.02. Rules 144 And 144a ................................................................20
Section 4.03. Form Of Initial Public Equity Offering ............................................20
Section 4.04. Registration Of Shares ............................................................20
Article V Adjustments
Section 5.01. Adjustment Of Exercise Rate; Notices ..............................................21
Section 5.02. Fractional Shares .................................................................26
Section 5.03. Certain Distributions .............................................................27
-i-
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Article Vi Concerning The Warrant Agent
<S> <C>
Section 6.01. Warrant Agent .....................................................................27
Section 6.02. Conditions Of Warrant Agent's Obligations .........................................28
Section 6.03. Resignation And Appointment Of Successor ..........................................32
Article Vii Miscellaneous
Section 7.01. Amendment .........................................................................33
Section 7.02. Notices And Demands To The Company And Warrant Agent ..............................34
Section 7.03. Addresses For Notices To Parties And For Transmission Of Documents ................34
Section 7.04. Notices To Holders ................................................................35
Section 7.05. Applicable Law; Submission
To Jurisdiction ...................................................................35
Section 7.06. Persons Having Rights Under Agreement .............................................35
Section 7.07. Headings ..........................................................................36
Section 7.08. Counterparts ......................................................................36
Section 7.09. Inspection Of Agreement ...........................................................36
Section 7.10. Availability Of Equitable Remedies ................................................36
Section 7.11. Obtaining Of Governmental Approvals ...............................................36
EXHIBIT A - Form of Warrant Certificate.........................................................A-1
EXHIBIT B - Form of Legend for Global Warrant...................................................B-1
EXHIBIT C - Certificate To Be Delivered upon
Exchange or Registration of Trans-
fer of Warrants.................................................................C-1
EXHIBIT D - Form of Transferee Certificate for
Institutional Accredited Investors................................................D-1
EXHIBIT E - Form of Transferee Certificate for
Regulation S Transfers............................................................E-1
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<PAGE>
INDEX OF DEFINED TERMS
<CAPTION>
Defined Term Section
<S> <C>
Affiliate............................................................................. 5.01(b)
Agreement............................................................................. Recitals
Business Day.......................................................................... 2.01
Capital Stock......................................................................... 5.01(1)
Cashless Exercise..................................................................... 2.02(c)
Cashless Exercise Ratio............................................................... 2.02(c)
Class A Common Stock.................................................................. Recitals
Class H Common Stock.................................................................. Recitals
Common Stock.......................................................................... Recitals
Company............................................................................... Recitals
Current Market Value.................................................................. 5.01(1)
Definitive Warrants................................................................... 1.02
Depository............................................................................ 1.08
Distribution.......................................................................... 5.03
Distribution Rights................................................................... 5.03
Election To Exercise.................................................................. 2.02(b)
Exercisability Date................................................................... 2.02(a)
Exercise Date......................................................................... 2.02(d)
Exercise Event........................................................................ 2.02(a)
Exercise Price........................................................................ 2.02(a)
Exercise Rate......................................................................... 2.02(a)
Expiration Date....................................................................... 2.01
Fundamental Transaction............................................................... 5.01(d)
Global Shares......................................................................... 2.02(f)
Global Warrants....................................................................... 1.02
Indenture............................................................................. Recitals
Independent Financial Expert.......................................................... 5.01(1)
Initial Public Equity Offering........................................................ 2.02(a)
Initial Purchasers.................................................................... Recitals
Notes................................................................................. Recitals
Notice Date........................................................................... 2.05(b)
Officers' Certificate................................................................. 1.08(d)
144A Global Warrant................................................................... 1.03
Person................................................................................ 2.02(a)
Private Placement Legend.............................................................. 1.08(g)
Prospectus............................................................................ 4.02
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<PAGE>
<S> <C>
Registrar............................................................................. 1.07
Registration Rights Agreement......................................................... Recitals
Regulation S Global Warrant........................................................... 1.03
Related Parties....................................................................... 6.02(e)
Requisite Warrant Holders............................................................. 7.01
Resale Restriction Termination Date................................................... 1.08
Securities Act........................................................................ 1.06
Separability Date..................................................................... 1.06
Separation............................................................................ 1.06
Shares................................................................................ 1.01
Subject Class......................................................................... 4.04
Surviving Person...................................................................... 5.01(d)
Time of Determination................................................................. 5.01(1)
Trustee............................................................................... Recitals
Units................................................................................. Recitals
Warrant Agent......................................................................... Recitals
Warrant Agent Office.................................................................. 1.10
Warrant Certificates.................................................................. Recitals
Warrant Exercise Office............................................................... 2.02(b)
Warrant Register...................................................................... 1.07
Warrants.............................................................................. Recitals
</TABLE>
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<PAGE>
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of February 2, 2000 by and
between AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (together
with any successor thereto, the "Company"), and BANKERS TRUST COMPANY, as
warrant agent (with any successor Warrant Agent, the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement
(the "Purchase Agreement") dated January 31, 2000 with CIBC World Markets Corp.
("CIBC") and FleetBoston Robertson Stephens Inc. (together, the "Initial
Purchasers") in which the Company has agreed to sell to the Initial Purchasers
150,000 units (the "Units") consisting in the aggregate of (i) $150,000,000
aggregate principal amount of 12-3/4% Senior Subordinated Notes due 2007 (the
"Notes") of the Company to be issued under an indenture dated as of February 2,
2000 (the "Indenture"), among the Company, the Guarantors party thereto and
Bankers Trust Company, as trustee (in such capacity, the "Trustee"), and (ii)
Warrants (the "Warrants"), each Warrant initially entitling the holder thereof
to purchase 0.0004 shares of Class A Common Stock, par value $.0001 per share,
of the Company (the "Class A Common Stock"), and 0.0004 shares of Class H Common
Stock, par value $.0001 per share, of the Company (the "Class H Common Stock"
and, together with the Class A Common Stock, the "Common Stock"). The
certificates evidencing the Warrants are herein referred to collectively as the
"Warrant Certificates"; and
WHEREAS, each Unit will consist of one Note in the principal
amount of $1,000 and one Warrant; the Notes and the Warrants comprising part of
the Units shall not be separately transferable until the Separability Date (as
defined below); and
WHEREAS, the holders of the Warrants are entitled to the
benefits of a Common Stock Registration Rights Agreement dated as of February 2,
2000 between the Company, certain investors in the Company and the Initial
Purchasers (the "Registration Rights Agreement"); and
WHEREAS, the Company desires the Warrant Agent as warrant
agent to assist the Company in connection with the issuance, exchange,
cancellation, replacement and exercise of the Warrants, and in this Agreement
wishes to set forth, among other things, the terms and conditions on which the
Warrants may be issued, exchanged, cancelled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Warrants comprising part
of the Units shall be originally issued in connection with the issuance of the
Units and such Warrants shall not be separately transferable from the Notes
until on or after the Separability Date as provided in Section 1.06 hereof.
Each Warrant Certificate shall evidence the number of Warrants
specified therein, and each Warrant evidenced thereby shall, when exercisable as
provided herein and therein, represent the right, subject to the provisions
contained herein and therein, to purchase from the Company (and the Company
shall issue and sell to the holder of such Warrant upon exercise thereof) 0.0004
fully paid and non-assessable shares of the Company's Class A Common Stock at an
exercise price of $0.01 per share and 0.0004 fully paid and non-assessable
shares of the Company's Class H Common Stock at an exercise price of $0.01 per
share. The shares purchasable upon exercise of a Warrant are hereinafter
referred to as the "Shares" and are subject to adjustment as provided herein and
in the Warrant, and, unless the context otherwise requires, such term shall also
include any other securities or property purchasable and deliverable upon
exercise of a Warrant as provided in Article V, subject to adjustment as
provided herein and in the Warrant.
SECTION 1.02. Form of Warrant Certificates. The Warrant
Certificates will initially be issued either in global form as 144A Global
Warrants or Regulation S Global Warrants (collectively, the "Global Warrants"),
substantially in the form of Exhibit A hereto, or in registered form as
definitive Warrant Certificates (the "Definitive Warrants") substantially in the
form of Exhibit A attached hereto. Any Global Warrants to be delivered pursuant
to this Agreement shall bear the legend set forth in Exhibit B attached hereto.
Such Global Warrants shall represent such of the outstanding Warrants as shall
be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Warrants from time to time endorsed thereon and
that the aggregate amount of outstanding Warrants represented thereby may from
time to time be reduced or increased, as appropriate. Any endorsement of a
Global Warrant to reflect the amount of any increase or decrease in the amount
of outstanding Warrants represented thereby shall be made by the Warrant Agent
and the Depository (as defined below) in accordance with instructions given by
the holder thereof. The Depository Trust Company shall act as the Depository
with respect to the Global Warrants until a successor shall be appointed by the
Company and the Warrant Agent. Upon written request, a holder of record of
Warrants may receive from the Warrant Agent or the Depository Definitive
Warrants as set forth in Section 1.08 hereof.
<PAGE>
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"144A Global Warrant" means a permanent global security in
registered form representing the aggregate principal amount of Warrants sold in
reliance on Rule 144A.
"Regulation S Global Warrant" means a permanent global
security in registered form representing the aggregate principal amount of
Warrants sold in reliance on Regulation S under the Securities Act.
SECTION 1.03. Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. Typographical and other
minor errors or defects in any such reproduction of any such signature shall not
affect the validity or enforceability of any Warrant Certificate that has been
duly countersigned and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the
immediately following paragraph, Warrant Certificates shall be authenticated by
manual signature and dated the date of authentication by the Warrant Agent and
shall not be valid for any purpose unless so authenticated and dated. The
Warrant Certificates shall be numbered and shall be registered in the Warrant
Register (as defined in Section 1.07 hereof).
Upon the receipt by the Warrant Agent of a written order of
the Company, which order shall be signed by the chairman of its Board of
Directors, its president or any vice president and attested by its secretary or
assistant secretary, and shall specify the amount of Warrants to be
authenticated, whether the Warrants are to be Global Warrants or Definitive
Warrants, the date of such Warrants and such other information as the Warrant
Agent may reasonably request, without any further action by the Company, the
Warrant Agent is authorized, upon receipt from the Company at any time and from
time to time of the Warrant Certificates, duly executed as provided in Section
1.03 hereof, to authenticate the Warrant Certificates and upon the holder's
request deliver them. Such authentication shall be by a duly
<PAGE>
-4-
authorized signatory of the Warrant Agent (although it shall not be necessary
for the same signatory to sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who
shall have authenticated any of the Warrant Certificates shall cease to be such
authorized signatory before the Warrant Certificate shall be disposed of by the
Company or the Warrant Agent, such Warrant Certificate nevertheless may be
delivered or disposed of as though the person who authenticated such Warrant
Certificate had not ceased to be such authorized signatory of the Warrant Agent;
and any Warrant Certificate may be authenticated on behalf of the Warrant Agent
by such persons as, at the actual time of authentication of such Warrant
Certificates, shall be the duly authorized signatories of the Warrant Agent,
although at the time of the execution and delivery of this Agreement any such
person is not such an authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates
shall be in substantially the form set forth in Exhibit A hereto.
SECTION 1.05. Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and the
Warrant Agent shall authenticate and deliver, temporary Warrant Certificates,
which are printed, lithographed, typewritten or otherwise produced,
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Warrant
Certificates may determine, as evidenced by their execution of such Warrant
Certificates.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall authenticate and deliver in exchange therefor, one or more definitive
Warrant Certificates representing in the aggregate a like number of Warrants.
Until so exchanged, the holder of a temporary Warrant Certificate shall in all
respects be entitled to the same benefits under this Agreement as a holder of a
definitive Warrant Certificate.
SECTION 1.06. Separation of Warrants and Notes. The Notes and
the Warrants will not be separately transferable until the Separability Date.
"Separability Date" shall mean the earliest to occur of: (1) 180 days after the
Issue Date (as defined in the Indenture); (2) the occurrence of a Change of
Control (as defined in the Indenture); (3) the
<PAGE>
-5-
occurrence of an Event of Default (as defined in the Indenture); (4) the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Notes or the Exchange Notes
(as defined in the Indenture); or (5) such earlier date as determined by CIBC in
its discretion and specified to the Company, the Trustee and the Warrant Agent
in writing. The surrender of a Unit certificate for separate Warrant
certificates and Note certificates is herein referred to as a "Separation." The
Company shall promptly notify the Warrant Agent of the Separability Date.
Following the Separability Date, no Unit certificates shall be issued.
SECTION 1.07. Registration. The Company will keep, at the
office or agency maintained by the Company for such purpose, a register or
registers in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of, and registration of transfer
and exchange of, Warrants as provided in this Article. Each person designated by
the Company from time to time as a person authorized to register the transfer
and exchange of the Warrants is hereinafter called, individually and
collectively, the "Registrar." The Company hereby initially appoints the Warrant
Agent as Registrar. Upon written notice to the Warrant Agent and any acting
Registrar, the Company may appoint a successor Registrar for such purposes.
The Company will at all times designate one person (who may be
the Company and who need not be a Registrar) to act as repository of a master
list of names and addresses of the holders of Warrants (the "Warrant Register").
The Warrant Agent will act as such repository unless and until some other person
is, by written notice from the Company to the Warrant Agent and the Registrar,
designated by the Company to act as such. The Company shall cause each Registrar
to furnish to such repository, on a current basis, such information as to all
registrations of transfer and exchanges effected by such Registrar, as may be
necessary to enable such repository to maintain the Warrant Register on as
current a basis as is practicable.
SECTION 1.08. Registration of Transfers or Exchanges.
(a) Transfer or Exchange of Definitive Warrants. When
Definitive Warrants are presented to the Warrant Agent with a request from the
holder:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.08 hereof for such
<PAGE>
-6-
transactions are met; provided, however, that the Definitive Warrants presented
or surrendered by a holder for registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer or exchange in form satisfactory to the Company
and the Warrant Agent, duly executed by such holder or by his
attorney, duly authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not
been registered under the Securities Act and are presented for
transfer or exchange prior to (X) the date which is two years
(or such shorter period as may be prescribed by Rule 144(k)
(or any successor provision thereto)) after the later of the
date of original issuance of the Warrants and the last date on
which the Company or any affiliate of the Company was the
owner of such Warrants, or any predecessor thereto, and (Y)
such later date, if any, as may be required by any subsequent
change in applicable law (the "Resale Restriction Termination
Date"), such Warrants shall be accompanied by the following
additional information and documents, as applicable:
(A) If such Warrants are being delivered to the Warrant
Agent by a holder for registration in the name of
such holder, without transfer, a certification from
such holder to that effect (in substantially the
form of Exhibit C hereto); or
(B) if such Warrants are being transferred to a qualified
institutional buyer (as defined in Rule 144A under
the Securities Act) (a "QIB") in accordance with Rule
144A under the Securities Act, a certification from
the transferor to that effect (in substantially the
form of Exhibit C hereto); or
(C) if such Warrants are being transferred to an
institutional "accredited investor" within the
meaning of subparagraphs (a)(1), (a)(2), (a)(3) or
(a)(7) of Rule 501 under the Securities Act (an
"Institutional Accredited Investor"), delivery by the
transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and
delivery by the proposed transferee of a Transferee
Certificate for Institutional Accredited Investors
(in substantially the form of Exhibit D hereto); or
(D) if such Warrants are being transferred in reliance on
Regulation S under the Securities Act, delivery by
the transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and a
Certificate for Regulation S Transfers in the form of
Exhibit E hereto; or
<PAGE>
-7-
(E) if such Warrants are being transferred in reliance on
Rule 144 under the Securities Act, delivery by the
transferor of (i) a certification from the transferor
to that effect (in substantially the form of Exhibit
C hereto), and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Warrants are being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification from the
transferor to that effect (in substantially the form
of Exhibit C hereto) and an opinion of counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; provided that the Company may, based
upon the views of its own counsel, instruct the
Warrant Agent not to register such transfer in any
case where the proposed transferee is not a QIB,
Non-U.S. Person or Institutional Accredited Investor.
(b) Restrictions on Transfer of a Definitive Warrant for a
Beneficial Interest in a Global Warrant. A Definitive Warrant may not be
transferred by a holder for a beneficial interest in a Global Warrant except
upon satisfaction of the requirements set forth below. Upon receipt by the
Warrant Agent of a Definitive Warrant, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Warrant Agent,
together with:
(A) certification from such holder (in substantially the
form of Exhibit C hereto) that such Definitive
Warrant is being transferred to (I) a QIB in
accordance with Rule 144A under the Securities Act,
(II) to an Institutional Accredited Investor or (III)
in an offshore transaction in reliance on Regulation
S and, with respect to (II) or (III), at the option
of the Company or the Warrant Agent, an Opinion of
Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the
Securities Act; and
(B) written instructions directing the Warrant Agent to
make, or to direct the Depository to make, an
endorsement on the applicable Global Warrant to
reflect an increase in the aggregate amount of the
Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depository to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Warrant Agent, the number of
Shares represented by the applicable Global Warrant to be increased accordingly.
If no 144A Global Warrant or Regulation S
<PAGE>
-8-
Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall upon written instructions from the Company authenticate a new Global
Warrant in the appropriate amount.
(c) Transfer or Exchange of Global Warrants. The transfer or
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depository, in accordance with this Section 1.08, the Private
Placement Legend, this Agreement (including the restrictions on transfer set
forth herein) and the procedures of the Depository therefor. Upon receipt by the
Registrar or Co-Registrar of written instructions, or such other instruction as
is customary for the Depository, from the Depository or its nominee, requesting
the registration of transfer of an interest in a 144A Global Warrant, a
Regulation S Global Warrant, as the case may be, to another type of Global
Warrant, together with the applicable Global Warrants (or, if the applicable
type of Global Warrant required to represent the interest as requested to be
obtained is not then outstanding, only the Global Warrant representing the
interest being transferred), the Registrar or Co-Registrar shall reflect on its
books and records (and the applicable Global Warrant) the applicable increase
and decrease of the principal amount of Warrants represented by such types of
Global Warrants, giving effect to such transfer. If the applicable type of
Global Warrant required to represent the interest as requested to be obtained is
not outstanding at the time of such request, the Company shall issue and the
Warrant Agent shall, upon written instructions from the Company in accordance
with Section 1.08, authenticate a new Global Warrant of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer or Exchange of a Beneficial Interest in a Global
Warrant for a Definitive Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may transfer or exchange such beneficial interest for a
Definitive Warrant; provided, however, that prior to the
Registration, a transferee that is a QIB or Institutional
Accredited Investor may not exchange a beneficial interest
in a Global Warrant for a Definitive Warrant until receipt
by the Warrant Agent of written instructions or such other
form of instructions as is customary for the Depository
from the Depository or its nominee on behalf of any person
having a beneficial interest in a Global Warrant, including
a written order containing registration instructions and,
in the case of any such transfer or exchange of a
beneficial interest in Warrants the offer and sale of which
have not been registered under the Securities Act, the
following additional information and documents:
(A) if such beneficial interest is being transferred to
the person designated by the Depository as being the
beneficial owner, a certification from such person
<PAGE>
-9-
to that effect (in substantially the form of Exhibit
C hereto); or
(B) if such beneficial interest is being transferred in
reliance on Regulation S under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially the form of Exhibit C
hereto), and (ii) a Certificate for Regulation S
Transfers in the form of Exhibit E hereto; or
(C) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially the form of Exhibit C
hereto) and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
from the transferor to that effect (in substantially
the form of Exhibit C hereto) and an opinion of
counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the
Securities Act; provided that the Company may instruct
the Warrant Agent not to register such transfer in any
case where the proposed transferee is not a QIB,
Non-U.S. Person or Institutional Accredited Investor.
then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depository and the Warrant Agent, the aggregate amount of the
Global Warrant to be reduced and, following such reduction,
the Company will execute and, upon receipt of an
authentication order in the form of an officers' certificate
(a certificate signed by two officers of the Company, one of
whom must be the principal executive officer, principal
financial officer or principal accounting officer) (an
"Officers' Certificate"), the Warrant Agent will authenticate
and deliver to the transferee a Definitive Warrant. The
Warrant Agent shall not be deemed to have knowledge of any
registration under the Securities Act unless it receives an
Officers' Certificate specifying such registration.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 1.08(d)
shall be registered in such names and in such authorized
denominations as the Depository, shall instruct the Warrant
Agent in writing. The Warrant Agent shall deliver such
Definitive Warrants
<PAGE>
-10-
to the persons in whose names such Warrants are so registered
and adjust the Global Warrant pursuant to paragraph (h) of
this Section 1.08.
(e) Restrictions on Transfer or Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred or exchanged as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Authentication of Definitive Warrants in Absence of
Depository. If at any time:
(i) the Depository for the Global Warrants notifies the Company
and the Warrant Agent that the Depository is unwilling or
unable to continue as Depository for the Global Warrants and a
successor Depository for the Global Warrants is not appointed
by the Company within 90 days after delivery of such notice;
or
(ii) The Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants for all Global Warrants under this
Agreement,
then the Company will execute, and the Warrant Agent will, upon receipt of an
Officers' Certificate requesting the authentication and delivery of Definitive
Warrants, authenticate and deliver Definitive Warrants, in an aggregate number
equal to the aggregate number of warrants represented by the Global Warrant, in
exchange for such Global Warrant.
(g) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Warrant Certificates not bearing the legend
set forth in the first paragraph of Exhibit A attached hereto (the "Private
Placement Legend"), the Warrant Agent shall deliver Warrant Certificates that do
not bear the Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Warrant Certificates bearing the Private Placement
Legend, the Warrant Agent shall deliver Warrant Certificates that bear the
Private Placement Legend unless, and the Warrant Agent is hereby authorized to
deliver Warrant Certificates without the Private Placement Legend if, (i) the
requested transfer is not prior to the date which is two years (or such shorter
period as may be prescribed by Rule 144(k) (or any successor provision thereto)
under the Securities Act or any successor provision thereunder) after the later
of the original Issue Date of the Warrants or the last day on which the Company
or any of its Affiliates was the owner of the Warrant or any predecessor
security, (ii) there is delivered to the Warrant Agent an opinion of counsel
reasonably satisfactory to the Company and the Warrant Agent to the effect that
neither such legend nor the related restrictions on
<PAGE>
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transfer are required in order to maintain compliance with the provisions of the
Securities Act or (iii) the Warrants to be transferred or exchanged represented
by such Warrant Certificates are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act.
(h) Cancellation or Adjustment of a Global Warrant. At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to the Company or, upon written order to the Warrant Agent in
the form of an Officers' Certificate from the Company, retained and cancelled by
the Warrant Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for Definitive Warrants, redeemed,
repurchased or cancelled, the number of Warrants represented by such Global
Warrant shall be reduced and an endorsement shall be made on such Global Warrant
by the Warrant Agent to reflect such reduction.
(i) Obligations with Respect to Transfers or Exchanges of
Definitive Warrants.
(i) To permit registrations of transfers or exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant
Agent shall authenticate Definitive Warrants and Global
Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement as
the Definitive Warrants or Global Warrants surrendered upon
the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat
the person in whose name any Warrant is registered as the
absolute owner of such Warrant, and neither the Warrant Agent
nor the Company shall be affected by notice to the contrary.
"Depository" means, with respect to the Warrants issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates. Upon receipt by the Company and the Warrant Agent (or any
agent of the Company or the Warrant Agent, if requested by the Company) of
evidence satisfactory to them of
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the loss, theft, destruction, defacement, or mutilation of any Warrant
Certificate and of an indemnity bond satisfactory to them and, in the case of
mutilation or defacement, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser or
holder in due course, the Company shall execute, and an authorized signatory of
the Warrant Agent shall manually authenticate and deliver, in exchange for or in
lieu of the lost, stolen, destroyed, defaced or mutilated Warrant Certificate, a
new Warrant Certificate representing a like number of Warrants, bearing a number
or other distinguishing symbol not contemporaneously outstanding. The Company or
the Warrant Agent may require an indemnity bond that is sufficient in the
judgment of the Company and the Warrant Agent to protect the Company and the
Warrant Agent from any loss which any of them may suffer if a Warrant
Certificate is replaced. Upon the issuance of any new Warrant Certificate under
this Section in a name other than the prior registered holder of the lost,
stolen, destroyed, defaced or mutilated Warrant Certificate, the Company may
require the payment from the holder of such Warrant Certificate of a sum
sufficient to cover any tax, stamp tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent and the Registrar) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this Section
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of (but shall be subject to all
the limitations of rights set forth in) this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 1.09 are exclusive with
respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates and shall preclude (to the extent lawful) any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates.
The Warrant Agent is hereby authorized to authenticate in
accordance with the provisions of this Agreement, and deliver the new Warrant
Certificates required pursuant to the provisions of this Section.
SECTION 1.10. Offices for Exercise, etc. So long as any of the
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where the
Warrant Certificates may be presented for exercise, (b) an office or agency
where the Warrant Certificates may be presented for registration of transfer and
for exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 1.05 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or
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rescind such designation, as it may deem desirable or expedient; provided,
however, that an office or agency shall at all times be maintained in the
Borough of Manhattan, The City of New York, as provided in the first sentence of
this Section. In addition to such office or offices or agency or agencies, the
Company may from time to time designate and maintain one or more additional
offices or agencies within or outside The City of New York, where Warrant
Certificates may be presented for exercise or for registration of transfer or
for exchange, and the Company may from time to time change or rescind such
designation, as it may deem desirable or expedient. The Company will give to the
Warrant Agent written notice of the location of any such office or agency and of
any change of location thereof. The Company hereby designates the Warrant Agent
at its corporate trust office identified at Four Albany Street, New York, New
York 10006 (the "Warrant Agent Office"), as the initial agency maintained for
each such purpose. In case the Company shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notice may be served
at the Warrant Agent Office and the Company appoints the Warrant Agent as its
agent to receive all such presentations, surrenders, notices and demands.
SECTION 1.11. Book-Entry Provisions for Global Warrants. (a)
The Global Warrants initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Warrant
Agent as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Warrant Agreement with respect
to any Global Warrant held on their behalf by the Depository, or the Warrant
Agent as its custodian, or under the Global Warrant, and the Depository may be
treated by the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent as the absolute owner of the Global Warrant for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the Warrant Agent from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and
Participants, the operation of customary practices governing the exercise of the
rights of a beneficial owner in a Global Warrant.
(b) Transfers of Global Warrants shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Warrants may be
transferred or exchanged for Definitive Warrants in accordance with the rules
and procedures of the Depository and the provisions of Section 1.08; provided,
however, that Definitive Warrants shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Warrants if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Warrant and a successor Depository is not appointed by
the Company within 90 days of such notice,
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(ii) the Company, at its option, notifies the Warrant Agent in writing that it
elects to cause the issuance of the Warrants as Definitive Warrants or (iii) an
Event of Default has occurred and is continuing and the Registrar has received a
request from the Depository to issue Definitive Warrants.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in a Global Warrant to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Definitive Warrants are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Warrant in an amount equal to the principal
amount of the beneficial interest in the Global Warrant to be transferred, and
the Company shall execute, and the Warrant Agent shall authenticate and deliver,
one or more Definitive Warrants of like tenor and amount.
(d) In connection with the transfer of Global Warrants as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 1.11,
the Global Warrants shall be deemed to be surrendered to the Warrant Agent for
cancellation, and the Company shall execute, and the Warrant Agent shall upon
written instructions from the Company authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Warrants, an equal aggregate principal amount of
Definitive Warrants of authorized denominations.
(e) Any Definitive Warrants constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 1.11 shall, except as otherwise provided by Section 1.08,
bear the Private Placement Legend.
(f) The Holder of any Global Warrant may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Warrant Agreement or the Warrants and the Warrant Agent is
entitled to rely upon any electronic instructions from beneficial owners to the
Holder of any Global Warrant.
ARTICLE II
DURATION, EXERCISE OF WARRANTS; EXERCISE PRICE
AND REPURCHASE OF WARRANTS
SECTION 2.01. Duration of Warrants. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., New York
City time, on February 1, 2007. The applicable date of expiration of a
particular Warrant is referred to herein as the "Expiration Date" of such
Warrant. Each Warrant may be exercised on any
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Business Day (as defined below) on or after the Exercisability Date (as defined
in Section 2.02) and on or prior to the close of business on the Expiration
Date.
Any Warrant not exercised before the close of business on the
Expiration Date shall become void, and all rights of the holder under the
Warrant Certificate evidencing such Warrant and under this Agreement shall
cease.
"Business Day" shall mean any day on which (i) banks in New
York City, (ii) the principal U.S. securities exchange or market, if any, on
which any Common Stock is listed or admitted to trading and (iii) the principal
U.S. securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
SECTION 2.02. Exercise, Exercise Price, Settlement and
Delivery. (a) Subject to the provisions of this Agreement, a holder of a Warrant
shall have the right to purchase from the Company on or after the Exercisability
Date and on or prior to the close of business on the Expiration Date the number
of fully paid, registered and non-assessable shares of Common Stock specified in
Section 1.01, subject to adjustment in accordance with Article V hereof, at the
purchase price of $0.01 for each share purchased (the "Exercise Price"). The
number of Shares for which a particular Warrant may be exercised (the "Exercise
Rate") shall be subject to adjustment from time to time as set forth in Article
V hereof.
"Exercisability Date" means, with respect to each Warrant, the
date as of which an Exercise Event shall have occurred.
"Exercise Event" means, with respect to each Warrant, the date
of the occurrence of the earliest of: (1) an Initial Public Equity Offering, (2)
a class of equity securities of the Company is listed on a United States
national securities exchange or authorized for quotation on the Nasdaq National
Market or is otherwise subject to registration under the Exchange Act or (3) the
Separability Date. The Company will promptly notify the Warrant Agent of an
Exercise Event.
"Initial Public Equity Offering" means a primary public
offering (whether or not underwritten, but excluding any offering pursuant to
Form S-4 or Form S-8 under the Securities Act or any other publicly registered
offering pursuant to the Securities Act pertaining to an issuance of shares of
capital stock of the Company or securities exercisable therefor under any
benefit plan, employee compensation plan, or employee or director stock purchase
plan) of common stock of the Company pursuant to an effective registration
statement under the Securities Act in which the Company receives aggregate gross
proceeds of at least $75 million.
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"Registrable Securities" means any of (i) the Common Stock
issued and issuable upon exercise of the Warrants and (ii) any other securities
issued or issuable with respect to the Warrants or Shares by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, reorganization or otherwise. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the offering of
such securities by the holder thereof shall have been declared effective under
the Securities Act and such securities shall have been disposed of by such
holder pursuant to such registration statement, (b) such securities have been
sold to the public pursuant to, or are eligible for sale to the public without
volume or manner of sale restrictions under, Rule 144(k) (or any similar
provision then in force, but not Rule 144A) promulgated under the Securities
Act, (c) such securities shall have been otherwise transferred and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(d) such securities shall have ceased to be outstanding.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity, including any predecessor of any such
entity.
(b) Warrants may be exercised on or after the date they are
exercisable hereunder by (i) surrendering at any office or agency maintained for
that purpose by the Company pursuant to Section 1.10 (each a "Warrant Exercise
Office") the Warrant Certificate evidencing such Warrants with the form of
election to exercise Shares set forth on the reverse side of the Warrant
Certificate (the "Election to Exercise") duly completed and signed by the
registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, and in the case of a
transfer, such signature shall be guaranteed by an eligible guarantor
institution, and (ii) paying in full the Exercise Price for each such Warrant
exercised. Each Warrant may be exercised only in whole. No exercise of Warrants
may be effected which does not call for the issuance of a number of shares of
Common Stock in direct proportion (subject only to rounding with respect to
fractional shares) to the aggregate number of shares of Common Stock then
issuable upon exercise of the Warrants evidenced by the relevant Warrant
Certificate.
(c) Simultaneously with the exercise of each Warrant, payment
in full of the aggregate Exercise Price may be made, at the option of the
holder, (i) by wire transfer or by certified check, (ii) by the surrender (which
surrender shall be evidenced by cancellation of the number of Warrants
represented by any Warrant Certificate presented in connection with a Cashless
Exercise) of a Warrant or Warrants (represented by one or more Warrant
Certifi-
<PAGE>
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cates), and without payment of the Exercise Price in cash, for such number of
Shares equal to the product of (1) the number of Shares for which such
Warrant is exercisable with payment in cash of the aggregate Exercise Price
as of the date of exercise and (2) the applicable Cashless Exercise Ratio or
(iii) with any combination of (i) and (ii). For purposes of this Agreement,
the "Cashless Exercise Ratio" shall equal a fraction, the numerator of which
is the excess of the Current Market Value per share of the Class A Common
Stock or Class H Common Stock, as applicable, on the date of exercise over
the Exercise Price per share as of the date of exercise and the denominator
of which is the Current Market Value per share of the Class A Common Stock or
Class H Common Stock, as applicable, on the date of exercise. An exercise of
a Warrant in accordance with the immediately preceding sentences is herein
called a "Cashless Exercise." Upon surrender of a Warrant Certificate
representing more than one Warrant in connection with the holder's option to
elect a Cashless Exercise, the number of Shares deliverable upon a Cashless
Exercise shall be equal to the Cashless Exercise Ratio multiplied by the
product of (a) the number of Warrants that the holder specifies is to be
exercised pursuant to a Cashless Exercise and (b) the number of Shares for
which such Warrant is then exercisable (without giving effect to the Cashless
Exercise option). All provisions of this Agreement shall be applicable with
respect to an exercise of a Warrant Certificate pursuant to a Cashless
Exercise for less than the full number of Warrants represented thereby. No
payment or adjustment shall be made on account of any dividends on the Shares
issued upon exercise of a Warrant. If the Company has not effected the
registration under the Securities Act of the offer and sale of the Shares by
the Company to the holders of the Warrants upon the exercise thereof, the
Company may elect to require that holders of the Warrants effect the exercise
of the Warrants solely pursuant to the Cashless Exercise option and may also
amend the Warrants to eliminate the requirement for payment of the Exercise
Price with respect such Cashless Exercise option. The Warrant Agent shall
have no obligation under this section to calculate the Cashless Exercise
Ratio. The Company shall calculate the Exercise Price and the Cashless
Exercise Ratio whenever such calculation is necessary and shall deliver an
Officers' Certificate to the Warrant Agent specifying such numbers.
(d) Upon such surrender of a Warrant Certificate and payment
and collection of the Exercise Price at any Warrant Exercise Office (other than
any Warrant Exercise Office that also is an office of the Warrant Agent), such
Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "Exercise Date" for a Warrant shall be the date when all of the items
referred to in the first sentence of paragraphs (b) and (c) of this Section 2.02
are received by the Warrant Agent at or prior to 11:00 a.m., New York City time,
on a Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in the first sentence of paragraphs (b)
and (c) are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be effective on the
next succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on the Expiration Date, if all of the items
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referred to in the first sentence of paragraphs (b) and (c) are received by the
Warrant Agent at or prior to 5:00 p.m., New York City time, on the Expiration
Date, the exercise of the Warrants to which such items relate will be effective
on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the
terms hereof, the receipt of a Warrant Certificate and payment of the Exercise
Price (or election of the Cashless Exercise option), the Warrant Agent shall:
(i) except to the extent exercise of the Warrant has been effected through
Cashless Exercise, cause an amount equal to the aggregate Exercise Price to be
paid to the Company by crediting the same to the account designated by the
Company in writing to the Warrant Agent for that purpose; (ii) advise the
Company immediately by telephone of the amount so deposited to the Company's
account and promptly confirm such telephonic advice in writing; and (iii) as
soon as practicable, advise the Company in writing of the number of Warrants
exercised in accordance with the terms and conditions of this Agreement and the
Warrant Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable
after the exercise of any Warrant or Warrants in accordance with the terms
hereof, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of the Warrant Certificate evidencing such
exercised Warrant or Warrants, a certificate or certificates evidencing the
Shares to which such holder is entitled, in fully registered form, registered in
such name or names as may be directed by such holder pursuant to the Election to
Exercise, as set forth on the reverse of the Warrant Certificate. Such
certificate or certificates evidencing the Shares shall be deemed to have been
issued and any persons who are designated to be named therein shall be deemed to
have become the holder of record of such Shares as of the close of business on
the Exercise Date; the Shares may initially be issued in global form (the
"Global Shares"). Such Global Shares shall represent such of the outstanding
Shares as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Shares from time to time endorsed
thereon and that the aggregate amount of outstanding Shares represented thereby
may from time to time be reduced or increased, as appropriate. Any endorsement
of a Global Share to reflect the amount of any increase or decrease in the
amount of outstanding Shares represented thereby shall be made by the registrar
for the Shares and the Depository (referred to below) in accordance with
instructions given by the holder thereof. The Depository Trust Company shall (if
possible) act as the Depository with respect to the Global Shares until a
successor shall be appointed by the Company and the registrar for the Shares.
After such exercise of any Warrant or Shares, the Company shall also issue or
cause to be issued to or upon the written order of the registered holder of such
Warrant Certificate, a new Warrant Certificate, countersigned by the Warrant
Agent pursuant to written instruction, evidencing the number of Warrants, if
any, remaining unexercised unless such Warrants shall have expired.
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SECTION 2.03. Cancellation of Warrant Certificates. In the
event the Company shall purchase or otherwise acquire Warrants, the Warrant
Certificates evidencing such Warrants may thereupon be delivered to the Warrant
Agent, and if so delivered, shall at the Company's written instruction be
canceled by it and retired. The Warrant Agent shall cancel all Warrant
Certificates properly surrendered for exchange, substitution, transfer or
exercise in accordance with its customary procedures.
SECTION 2.04. Notice of an Exercise Event. The Company shall,
as soon as practicable after the occurrence of an Exercise Event, send or cause
to be sent to each holder of Warrants, by first-class mail, at the addresses
appearing on the Warrant Register, a notice prepared by the Company advising
such holder of the Exercise Event which has occurred, which notice shall
describe the type of Exercise Event and the date of the occurrence thereof, as
applicable, and the date of expiration of the right to exercise the Warrants
prominently set forth in the face of such notice. The Company agrees to make
available the foregoing right notwithstanding any other provision herein to the
contrary.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any
of the provisions of this Agreement, any holder of any Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Shares or the holder
of any other Warrant Certificate, may, in and for his own behalf, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall
entitle the holders thereof to any of the rights of a holder of Shares,
including, without limitation, the right to vote or to receive any dividends or
other payments or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company,
except as expressly provided herein (including Section 5.03 hereof).
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ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrants and of
the Shares upon the exercise of Warrants; provided, however, that the Company
shall not be required to pay any tax or other governmental charge which may be
payable in respect of any transfer or exchange of any Warrant Certificates or
any certificates for Shares in a name other than the registered holder of a
Warrant Certificate surrendered upon the exercise of a Warrant. In any such
case, no transfer or exchange shall be made unless or until the person or
persons requesting issuance thereof shall have paid to the Company the amount of
such tax or other governmental charge or shall have established to the
satisfaction of the Company that such tax or other governmental charge has been
paid or an exemption is available therefrom.
SECTION 4.02. Rules 144 and 144A. The Company covenants that
it will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
holder or beneficial owner of Warrants, make available such information
necessary to permit sales pursuant to Rule 144A under the Securities Act.
SECTION 4.03. Form of Initial Public Equity Offering. The
Company agrees that it will not make an Initial Public Equity Offering of any
class of its Capital Stock (other than the class to which the Shares belong)
without amending the terms of the Company's certificate of incorporation to
provide that the Class A Common Stock is convertible into the class of Capital
Stock subject to the Initial Public Equity Offering (the "Subject Class") on a
share-for-share basis and that the rights, conditions and privileges of the
Subject Class shall not be adverse to the holders of the Class A Common Stock.
SECTION 4.04. Registration of Shares. The Company agrees that
it will comply with all applicable laws, including the Securities Act and any
applicable state securities laws, in connection with any offer and sale of
Common Stock (and other securities and property deliverable) upon exercise of
the Warrants.
<PAGE>
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ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices. The
Exercise Rate is subject to adjustment from time to time as provided in this
Section.
(a) Adjustment for Change in Capital Stock. If, after the
date hereof, the Company:
(i) subdivides any of its outstanding shares of Common
Stock into a greater number of shares;
(ii) combines any of its outstanding shares of Common Stock
into a smaller number of shares;
(iii) pays a dividend or makes a distribution on any of its
Common Stock in shares of any of its Capital Stock (as defined below)
(other than Common Stock or rights, warrants or options for its Common
Stock to the extent such issuance or distribution is covered by Section
5.03); or
(iv) issues by reclassification of any of its Common Stock
any shares of any of its Capital Stock;
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted so that the holder of a Warrant
thereafter exercised may receive the number of shares of Capital Stock of the
Company which such holder would have owned immediately following such action if
such holder had exercised the Warrant immediately prior to such action or
immediately prior to the record date applicable thereto, if any (regardless of
whether the Warrants then outstanding are then exercisable and without giving
effect to the Cashless Exercise option). If there are no outstanding shares of
Common Stock that are of the same class as the Shares at the time of any such
action and such action has therefore been taken only in respect of the Shares,
the adjustment shall relate to the Shares in their same form if it would not
frustrate the intent and purposes of this Section 5.01.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification. In
the event that such dividend or distribution is not so paid or made or such
subdivision, combination or reclassification is not effected, the Exercise Rate
shall again be adjusted to be the Exercise Rate which would then be in effect if
such record date or effective date had not been so fixed.
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If after an adjustment a holder of a Warrant upon exercise of
such Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article V with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article V.
(b) Adjustment for Sale of Common Stock Below Current Market
Value. If, after the date hereof, the Company grants or sells to any Affiliate
of the Company (other than a wholly-owned subsidiary) any Common Stock or any
securities convertible into or exchangeable or exercisable for any Common Stock
at a price below the then Current Market Value (other than (1) pursuant to the
exercise of the Warrants, (2) pursuant to any security convertible into, or
exchangeable or exercisable for shares of Common Stock outstanding as of the
date of this Agreement, (3) upon the conversion, exchange or exercise of any
convertible, exchangeable or exercisable security as to which upon the issuance
thereof an adjustment pursuant to this Article V has been made and (4) upon the
conversion, exchange or exercise of convertible, exchangeable or exercisable
securities of the Company outstanding on the date of this Agreement (to the
extent in accordance with the terms of such securities as in effect on the date
of this Agreement), the Exercise Rate for each Warrant then outstanding shall be
adjusted in accordance with the formula:
E' = E x (O + N)
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate for such class of Common Stock;
E = the then current Exercise Rate for such class of Common Stock;
O = the number of shares of such class of Common Stock
outstanding on a fully diluted basis immediately prior to the
sale of Common Stock or issuance of securities convertible,
exchangeable or exercisable for Common Stock;
N = the number of shares of such class of Common Stock so sold
or the maximum stated number of shares of Common Stock
issuable upon the conversion, exchange or exercise of any such
convertible, exchangeable or exercisable securities, as the
case may be;
P = the proceeds per share of Common Stock received by the
Company, which (i) in the case of shares of Common Stock is
the amount received by the Company in consideration for the
sale and issuance of such shares; and (ii) in the case of
securities convertible into or exchangeable or exercisable for
shares of
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Common Stock is the amount received by the Company in
consideration for the sale and issuance of such convertible or
exchangeable or exercisable securities, plus the minimum
aggregate amount of additional consideration, other than the
surrender of such convertible or exchangeable securities,
payable to the Company upon exercise, conversion or exchange
thereof; and
M = the Current Market Value as of the Time of Determination or at
the time of sale, as the case may be.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, warrants or options to which this paragraph (b) applies or upon
consummation of the sale of Common Stock, as the case may be. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Exercise Rate for each Warrant then outstanding shall be
readjusted to the Exercise Rate which would otherwise be in effect had the
adjustment made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Exercise Rate for each Warrant then outstanding shall again be adjusted to be
the Exercise Rate which would then be in effect if such date fixed for
determination of stockholders entitled to receive such rights or warrants had
not been so fixed.
No adjustment shall be made under this paragraph (b) if the
application of the formula stated above in this paragraph (b) would result in a
value of E' that is lower than the value of E.
No adjustment in the Exercise Rate shall be made under this
paragraph (b) upon the conversion, exchange or exercise of options to acquire
shares of Common Stock by officers, directors, employees or consultants of the
Company; provided that the exercise price of such options, at the time of
issuance thereof, is at least equal to the then Current Market Value of the
Common Stock underlying such options.
"Affiliate" of any specified Person means any other Person
which, directly or indirectly, controls, is controlled by or is under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
(c) Notice of Adjustment. Whenever the Exercise Rate is
adjusted, the Company shall promptly mail to holders of Warrants then
outstanding at the addresses appearing
<PAGE>
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on the Warrant Register a notice of the adjustment. The Company shall file with
the Warrant Agent and any other Registrar such notice and a certificate from the
Company's independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Warrant Agent nor any such
Registrar shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same during normal business hours to any
holder desiring inspection thereof.
(d) Reorganization of Company; Special Distributions. (i) If
the Company, in a single transaction or through a series of related
transactions, merges, consolidates or amalgamates with or into any other person
or sells, assigns, transfers, leases, conveys or otherwise disposes of all or
substantially all of its properties and assets to another person or group of
affiliated persons or is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock (a "Fundamental
Transaction"), as a condition to consummating any such transaction the person
formed by or surviving any such consolidation or merger if other than the
Company or the person to whom such transfer has been made (the "Surviving
Person") shall enter into a supplemental warrant agreement. The supplemental
warrant agreement shall provide that the holder of a Warrant then outstanding
may exercise it for the kind and amount of securities, cash or other assets
which such holder would have received immediately after the Fundamental
Transaction if such holder had exercised the Warrant immediately before the
effective date of the transaction (regardless of whether the Warrants are then
exercisable and without giving effect to the Cashless Exercise option), assuming
(to the extent applicable) that such holder (i) was not a constituent person or
an affiliate of a constituent person to such transaction, (ii) made no election
with respect thereto, and (iii) was treated alike with the plurality of
non-electing holders.
(ii) Notwithstanding the foregoing, if the Company enters into
a Fundamental Transaction with another Person (other than a subsidiary of the
Company) and consideration is payable to holders of shares of Capital Stock (or
other securities or property) issuable or deliverable upon exercise of the
Warrants that are exercisable in exchange for their shares in connection with
such Fundamental Transaction which consists solely of cash, then the holders of
Warrants shall be entitled to receive distributions on the date of such event on
an equal basis with holders of such shares (or other securities issuable upon
exercise of the Warrants) as if the Warrants had been exercised immediately
prior to such event, less the Exercise Price therefor. Upon receipt of such
payment, if any, the rights of a holder of such a Warrant shall terminate and
cease and such holder's Warrants shall expire.
(iii) If this paragraph (d) applies, it shall supersede the
application of paragraph (a) of this Section 5.01.
<PAGE>
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(e) Company Determination Final. Any determination that the
Company or the Board of Directors of the Company must make pursuant to this
Article V is conclusive.
(f) Warrant Agent's Adjustment Disclaimer. The Warrant Agent
has no duty to determine when an adjustment under this Article V should be made,
how it should be made or what it should be. The Warrant Agent has no duty to
determine whether a supplemental warrant agreement under paragraph (f) need be
entered into or whether any provisions of any supplemental warrant agreement are
correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Article V.
(g) Adjustment for Tax Purposes. The Company may make such
increases in the Exercise Rate, in addition to those otherwise required by this
Section, as it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(h) Underlying Shares. The Company shall at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock or Common Stock held in the treasury of the Company, for
the purpose of effecting the exercise of Warrants, the full number of Shares
then deliverable upon the exercise of all Warrants then outstanding and payment
of the exercise price, and the shares so deliverable shall be fully paid and
nonassessable and free from all liens and security interests.
(i) Specificity of Adjustment. Irrespective of any adjustments
in the number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or thereafter issued may continue to express
the same number and kind of Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(j) Voluntary Adjustment. The Company from time to time may
increase the Exercise Rate by any number and for any period of time (provided
that such period is not less than 20 Business Days). Whenever the Exercise Rate
is so increased, the Company shall mail to holders at the addresses appearing on
the Warrant Register and file with the Warrant Agent a notice of the increase.
The Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
does not change or adjust the Exercise Rate otherwise in effect as determined by
this Section 5.01.
(k) Multiple Adjustments. After an adjustment to the Exercise
Rate for outstanding Warrants under this Article V, any subsequent event
requiring an adjustment under
<PAGE> -26-
this Article V shall cause an adjustment to the Exercise Rate for outstanding
Warrants as so adjusted.
(l) Definitions.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such person's capital stock,
whether outstanding on the Issue Date (as defined in the Indenture) or issued
after the Issue Date, and any and all rights, warrants or options exchangeable
for or convertible into such capital stock.
"Current Market Value" per share of Common Stock of the
Company or any other security at any date means (i) if the security is not
registered under the Exchange Act, the fair market value of the security,
determined in good faith by the Board of Directors of the Company if the
aggregate amount of such security to be issued is less than or equal to $50.0
million, or if the aggregate amount of such security exceeds $50.0 million, as
determined by an Independent Financial Expert (provided that, in the case of the
calculation of Current Market Value for determining the cash value of fractional
shares, any such determination within six months that is, in the good faith
judgment of the Board, a reasonable determination of value, may be utilized) or
(ii) (a) if the security is registered under the Exchange Act, the average of
the daily closing sales prices of the securities for the 20 consecutive days
immediately preceding such date, or (b) if the security has been registered
under the Exchange Act for less than 20 consecutive days immediately preceding
such date, then the offering price of the security in the transaction causing
registration under the Exchange Act, in the case of each of (ii)(a) and (ii)(b),
as certified to the Warrant Agent by the President, any Vice President or the
Chief Financial Officer of the Company. The closing sales price for each such
trading day shall be: (A) in the case of a security listed or admitted to
trading on any United States national securities exchange or quotation system,
the closing sales price, regular way, on such day, or if no sale takes place on
such day, the average of the closing bid and asked prices on such day, (B) in
the case of a security not then listed or admitted to trading on any United
States national securities exchange or quotation system, the last reported sale
price on such day, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, as reported by a reputable quotation
source designated by the Company, (C) in the case of a security not then listed
or admitted to trading on any United States national securities exchange or
quotation system and as to which no such reported sale price or bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York
customarily published on each Business Day, designated by the Company, or, if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than 30
days prior to the date in question) for which prices have been so reported and
(D) if
<PAGE>
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there are not bid and asked prices reported during the 30 days prior to the date
in question, the Current Market Value shall be determined as if the Shares (or
other securities) were not registered under the Exchange Act.
"Independent Financial Expert" means a United States
investment banking firm of national or regional standing in the United States
(i) which does not, and whose directors, officers and employees or Affiliates do
not have a direct or indirect material financial interest for its proprietary
account in the Company or any of its Affiliates and (ii) which, in the judgment
of the Board of Directors of the Company, is otherwise independent with respect
to the Company and its Affiliates and qualified to perform the task for which it
is to be engaged.
"Time of Determination" means, (i) in the case of any
distribution of securities or other property to existing stockholders to which
paragraph (b) applies, the time and date of the determination of stockholders
entitled to receive such securities or property or (ii) in the case of any other
issuance and sale to which paragraph (b) applies, the time and date of such
issuance or sale.
(m) When De Minimis Adjustment may be Deferred. No adjustment
in the Exercise Rate need be made unless the adjustment would require an
increase of at least 1% in the Exercise Rate. Any adjustments that are not made
shall be carried forward and taken into account in any subsequent adjustments.
All calculations under this Section 5 shall be made to the nearest 1/1000th of a
share, as the case may be.
SECTION 5.02. Fractional Shares. The Company will not be
required to issue fractional Shares upon exercise of the Warrants or distribute
Share certificates that evidence fractional Shares. In the event a holder is
required by Section 2.02(c) to make a Cashless Exercise, and the Company
determines not to issue fractional Shares, the number of Shares issuable shall
be rounded up to the nearest whole number. In addition, in no event shall any
holder of Warrants be required to make any payment of a fractional cent. In lieu
of fractional Shares, the Company may pay to the registered holders of Warrant
Certificates at the time Warrants evidenced thereby are exercised as herein
provided an amount in cash equal to the same fraction of the Current Market
Value, per Share on the Business Day preceding the date the Warrant Certificates
evidencing such Warrants are surrendered for exercise. Such payments will be
made by check or by transfer to an account maintained by such registered holder
with a bank in The City of New York. If any holder surrenders for exercise more
than one Warrant Certificate, the number of Shares deliverable to such holder
may, at the option of the Company, be computed on the basis of the aggregate
amount of all the Warrants exercised by such holder.
<PAGE>
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SECTION 5.03. Certain Distributions. If at any time the
Company grants, issues or sells options, convertible securities, or rights to
purchase Capital Stock, warrants or other securities pro rata to the record
holders of any Common Stock (the "Distribution Rights") or, without duplication,
makes any dividend or otherwise makes any distribution, including, subject to
applicable law, pursuant to any plan of liquidation but excluding dividends and
distributions permitted by clauses (7), (8), (9), (10) and (11) of the third
paragraph of Section 4.11 of the Indenture, but, in the case of (10), only to
the extent such payments are not paid as dividends or distributions to Heat
Holding Corp.'s equity holders ("Distribution") on Common Stock (whether in
cash, property, evidences of indebtedness or otherwise), then the Company shall
grant, issue, sell or make to each registered holder of Warrants then
outstanding, the aggregate Distribution Rights or Distribution, as the case may
be, which such holder would have acquired if such holder had held the maximum
number of Shares acquirable upon complete exercise of such holder's Warrants
(regardless of whether the Warrants are then exercisable and without giving
effect to the Cashless Exercise option) immediately before the record date for
the grant, issuance or sale of such Distribution Rights or Distribution, as the
case may be, or, if there is no such record date, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Distribution Rights or Distribution, as the case may be.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company hereby appoints
Bankers Trust Company as Warrant Agent of the Company in respect of the Warrants
and the Warrant Certificates upon the terms and subject to the conditions herein
and in the Warrant Certificates set forth; and Bankers Trust Company hereby
accepts such appointment. The Warrant Agent shall have the powers and authority
specifically granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it and it shall accept in
writing. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof. The Warrant Agent may act through agents and
shall not be responsible for the misconduct or negligence of any such agent
appointed with due care.
SECTION 6.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof and in the Warrant Certificates, including the following, to
all of which the Company agrees and to all of which the rights hereunder of the
holders from time to time of the Warrant Certificates shall be subject:
<PAGE>
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(a) The Warrant Agent shall be entitled to compensation to be
agreed upon with the Company in writing for all services rendered by it
and the Company agrees promptly to pay such compensation and to
reimburse the Warrant Agent for its reasonable out-of-pocket expenses
(including reasonable fees and expenses of counsel) incurred without
gross negligence or willful misconduct on its part in connection with
the services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent and any predecessor Warrant Agent, their
directors, officers, affiliates, agents and employees for, and to hold
them and their directors, officers, affiliates, agents and employees
harmless against, any loss, liability or expense of any nature
whatsoever (including, without limitation, reasonable fees and expenses
of counsel) incurred without gross negligence or willful misconduct on
the part of the Warrant Agent, arising out of or in connection with its
acting as such Warrant Agent hereunder and its exercise of its rights
and performance of its obligations hereunder. The obligations of the
Company under this Section 6.02 shall survive the exercise and the
expiration of the Warrant Certificates and the resignation and removal
of the Warrant Agent.
(b) In acting under this Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of
the Company and does not assume any obligation or relationship of
agency or trust for or with any of the owners or holders of the Warrant
Certificates.
(c) The Warrant Agent may consult with counsel of its
selection and any advice or written opinion of such counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur
no liability for or in respect of any action taken or omitted to be
taken or thing suffered by it in reliance upon any Warrant Certificate,
notice, direction, consent, certificate, affidavit, opinion of counsel,
instruction, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper
parties.
(e) The Warrant Agent, and its officers, directors, affiliates
and employees ("Related Parties"), may become the owners of, or acquire
any interest in, Warrant Certificates, shares or other obligations of
the Company with the same rights that it or they would have it if were
not the Warrant Agent hereunder and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial
or other transaction with the Company and may act on, or as Depository,
trustee or agent for, any committee or body of holders of shares or
other obligations of the Company as freely as if it were not the
Warrant Agent hereunder. Nothing in this Agreement shall
<PAGE>
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be deemed to prevent the Warrant Agent or such Related Parties from
acting in any other capacity for the Company.
(f) The Warrant Agent shall not be under any liability for
interest on, and shall not be required to invest, any monies at any
time received by it pursuant to any of the provisions of this Agreement
or of the Warrant Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision
hereof) or the execution and delivery hereof (except the due execution
and delivery hereof by the Warrant Agent) or in respect of the validity
or execution of any Warrant Certificate (except its authentication
thereof).
(h) The recitals and other statements contained herein and in
the Warrant Certificates (except as to the Warrant Agent's
authentication thereon) shall be taken as the statements of the Company
and the Warrant Agent assumes no responsibility for the correctness of
the same. The Warrant Agent does not make any representation as to the
validity or sufficiency of this Agreement or the Warrant Certificates,
except for its due execution and delivery of this Agreement; provided,
however, that the Warrant Agent shall not be relieved of its duty to
authenticate the Warrant Certificates as authorized by this Agreement.
The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may
require:
(1) an Officers' Certificate (as defined in the
Indenture) stating on behalf of the Company that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Warrant Agreement relating to the
proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of
the Warrant Agent, an opinion of counsel for the Company
stating that, in the opinion of such counsel, all such
conditions precedent have been complied with provided that
such matter is one customarily opined on by counsel.
Each Officers' Certificate or, if requested, an opinion of
counsel with respect to compliance with a condition or covenant
provided for in this Warrant Agreement shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
<PAGE> -31-
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person,
he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has been complied
with.
(j) The Warrant Agent shall be obligated to perform such
duties as are herein and in the Warrant Certificates specifically set
forth and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to
the Company pursuant to this Agreement. The Warrant Agent shall have no
duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained in the Warrant
Certificates or in the case of the receipt of any written demand from a
holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 7.02 hereof, to make
any demand upon the Company.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company made or given under any provision of this Agreement shall be
sufficient if signed by its chairman of the Board of Directors, its
president, its treasurer, its controller or any vice president or its
secretary or any assistant secretary.
(l) The Warrant Agent shall have no responsibility in respect
of any adjustment pursuant to Article V hereof.
(m) the Company agrees that it will perform, execute,
acknowledge and deliver, or cause to be performed, executed,
acknowledged and delivered, all such further and other acts,
instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing by the Warrant Agent of the
provisions of this Agreement.
<PAGE>
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(n) The Warrant Agent is hereby authorized and directed to
accept written instructions with respect to the performance of its
duties hereunder from any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice
president or the secretary or assistant secretary of the Company or any
other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or
officials for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions with respect to any
matter arising in connection with the Warrant Agent's duties and
obligations arising under this Agreement. Such application by the
Warrant Agent for written instructions from the Company may, at the
option of the Warrant Agent, set forth in writing any action proposed
to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such
action shall be taken and the Warrant Agent shall not be liable for any
action taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein (which date
shall be not less than 10 Business Days after the Company receives such
application unless the Company consents to a shorter period), provided
that (i) such application includes a statement to the effect that it is
being made pursuant to this paragraph (n) and that unless objected to
prior to such date specified in the application, the Warrant Agent will
not be liable for any such action or omission to the extent set forth
in such paragraph (n) and (ii) prior to taking or omitting any such
action, the Warrant Agent has not received written instructions
objecting to such proposed action or omission.
(o) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed on behalf of the Company by any one of the chairman
of the Board of Directors, the president, the treasurer, the
controller, any vice president or the secretary or assistant secretary
of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and
delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend
its own funds in the performance of its obligations and duties
hereunder.
<PAGE>
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SECTION 6.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent
by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall be at least 30 days after the date on
which such notice is given unless the Company agrees to accept less notice. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor Warrant Agent, qualified as provided in Section 6.03(d) hereof, by
written instrument in duplicate signed on behalf of the Company, one copy of
which shall be delivered to the resigning Warrant Agent and one copy to the
successor Warrant Agent. As provided in Section 6.03(d) hereof, such resignation
shall become effective upon the earlier of (x) the acceptance of the appointment
by the successor Warrant Agent or (y) 30 days after receipt by the Company of
notice of such resignation. The Company may, at any time and for any reason, and
shall, upon any event set forth in the next succeeding sentence, remove the
Warrant Agent and appoint a successor Warrant Agent by written instrument in
duplicate, specifying such removal and the date on which it is intended to
become effective, signed on behalf of the Company, one copy of which shall be
delivered to the Warrant Agent being removed and one copy to the successor
Warrant Agent. The Warrant Agent shall be removed as aforesaid if it shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Warrant Agent or of its property shall be appointed, or any
public officer shall take charge or control of it or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation. Any removal of
the Warrant Agent and any appointment of a successor Warrant Agent shall become
effective upon acceptance of appointment by the successor Warrant Agent as
provided in Section 6.03(d). As soon as practicable after appointment of the
successor Warrant Agent, the Company shall cause written notice of the change in
the Warrant Agent to be given to each of the registered holders of the Warrants
in the manner provided for in Section 8.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the
Company shall fail to appoint a successor Warrant Agent within a period of 60
days after receipt of such notice of resignation or removal, then the holder of
any Warrant Certificate or the retiring Warrant Agent may apply to a court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to the Warrant Agent, either by the Company
or by such a court, the duties of the Warrant Agent shall be carried out by the
Company.
(d) Any successor Warrant Agent, whether appointed by the
Company or by a court, shall be a bank or trust company in good standing,
incorporated under the laws of the United States of America or any State thereof
and having, at the time of its appointment, a
<PAGE>
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combined capital surplus of at least $250 million. Such successor Warrant
Agent shall execute and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder and all the provisions of this
Agreement, and thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Warrant Agent hereunder, and such predecessor shall thereupon become
obligated to (i) transfer and deliver, and such successor Warrant Agent shall be
entitled to receive, all securities, records or other property on deposit with
or held by such predecessor as Warrant Agent hereunder and (ii) upon payment of
the amounts then due it pursuant to Section 6.02(a) hereof, pay over, and such
successor Warrant Agent shall be entitled to receive, all monies deposited with
or held by any predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent
hereunder may be merged or converted, or any corporation or bank with which the
Warrant Agent may be consolidated, or any corporation or bank resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party,
or any corporation or bank to which the Warrant Agent shall sell or otherwise
transfer all or substantially all of its corporate trust business, shall be the
successor to the Warrant Agent under this Agreement (provided that such
corporation or bank shall be qualified as aforesaid) without the execution or
filing of any document or any further act on the part of any of the parties
hereto.
(f) No Warrant Agent under this Warrant Agreement shall be
personally liable for any action or omission of any successor Warrant Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement and the terms
of the Warrants may be amended by the Company and the Warrant Agent, without
the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective
or inconsistent provision contained herein or therein, or to effect any
assumptions of the Company's obligations hereunder and thereunder by a
successor corporation under the circumstances described in Section 5.01(d)
hereof or in any other manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of the Warrant Certificates.
The Company and the Warrant Agent may amend, modify or
supplement this Agreement and the terms of the Warrants, and waivers to
departures from the terms hereof and thereof may be given, with the consent of
the Requisite Warrant Holders (as defined below) for the purpose of adding any
provision to or changing in any manner or eliminating any
<PAGE>
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of the provisions of this Agreement or modifying in any manner the rights of the
holders of the outstanding Warrants; provided, however, that no such
modification that increases the Exercise Price or decreases the Exercise Rate,
makes any change to the last paragraph of Section 5.01(d), reduces the period of
time during which the Warrants are exercisable hereunder, or effects any change
to this Section 7.01 may be made with respect to any Warrant without the consent
of the holder of such Warrant. "Requisite Warrant Holders" means (i) in the case
of any amendment, modification, supplement or waiver affecting Warrant Holders,
the holders of a majority in number of the outstanding Warrants so affected, or
(ii) in the case of any amendment, modification, supplement or waiver affecting
Warrant Holders, a majority in number of Shares represented by the Warrants that
would be issuable assuming exercise thereof at the time such amendment,
modification, supplement or waiver is voted upon. Notwithstanding any other
provision of this Agreement, the Warrant Agent's consent must be obtained
regarding any supplement or amendment which alters the Warrant Agent's rights or
duties (it being expressly understood that the foregoing shall not be in
derogation of the right of the Company to remove the Warrant Agent in accordance
with Section 6.03 hereof). For purposes of any amendment, modification or waiver
hereunder, Warrants held by the Company or any of its Affiliates shall be
disregarded.
Any modification or amendment made in accordance with this
Agreement will be conclusive and binding on all present and future holders of
Warrant Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
SECTION 7.02. Notices and Demands to the Company and
Warrant Agent. If the Warrant Agent shall receive any notice or demand
addressed to the Company by the holder of a Warrant Certificate pursuant to
the provisions hereof or of the Warrant Certificates, the Warrant Agent shall
promptly forward such notice or demand to the Company.
SECTION 7.03. Addresses for Notices to Parties and for
Transmission of Documents. All notices hereunder to the parties hereto shall
be deemed to have been given when sent by certified or registered mail,
postage prepaid, or by facsimile transmission, confirmed by first class mail,
postage prepaid, addressed to any party hereto as follows:
<PAGE> -36-
To the Company:
Aavid Thermal Technologies, Inc.
One Eagle Square
Suite 509
Concord, NH 03301
Attention: General Counsel
Facsimile: (603) 224-6673
Telephone: (603) 224-6191
To the Warrant Agent:
Bankers Trust Company
Four Albany Street
New York, NY 10006
Attention: Susan Johnson
Corporate Trust and Agency Services
Structural Finance Team
Facsimile: (212) 250-6961
Telephone: (212) 250-6569-6702
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.04. Notices to Holders. Notices to holders of
Warrants shall be mailed to such holders at the addresses of such holders as
they appear in the Warrant Register. Any such notice shall be sufficiently given
if sent by first-class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW; SUBMISSION TO JURISDICTION. THE
VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER AND OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 7.06. Persons Having Rights Under Agreement. Nothing
in this Agreement expressed or implied and nothing that may be inferred from any
of the provi-
<PAGE>
-37-
sions hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the Company, the Warrant Agent, the holders of
the Warrant Certificates and, with respect to Sections 4.04 and 4.05, the
holders of Shares issued pursuant to Warrants, any right, remedy or claim under
or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement hereof; and all covenants (except for Section 4.04 which
shall be for the benefit of all holders of Shares issued pursuant to Warrants),
conditions, stipulations, promises and agreements in this Agreement contained
shall be for the sole and exclusive benefit of the Company and the Warrant Agent
and their successors and of the holders of the Warrant Certificates.
SECTION 7.07. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.08. Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original; but such counterparts shall together constitute but
one and the same instrument.
SECTION 7.09. Inspection of Agreement. A copy of this
Agreement shall be available during regular business hours at the principal
corporate trust office of the Warrant Agent, for inspection by the holder of any
Warrant Certificate. The Warrant Agent may require such holder to submit his
Warrant Certificate for inspection by it.
SECTION 7.10. Availability of Equitable Remedies. Since a
breach of the provisions of this Agreement could not adequately be compensated
by money damages, holders of Warrants shall be entitled, in addition to any
other right or remedy available to them, to an injunction restraining such
breach or a threatened breach and to specific performance of any such provision
of this Agreement, and in either case no bond or other security shall be
required in connection therewith, and the parties hereby consent to such
injunction and to the ordering of specific performance.
SECTION 7.11. Obtaining of Governmental Approvals. The Company
will from time to time take all action required to be taken by it which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities acts filings
under United States Federal and state laws, and the rules and regulations of all
stock exchanges on which the Warrants are listed which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the
Warrant Certificates, the exercise of the Warrants or the issuance, sale,
transfer and delivery of the Shares issued upon exercise of the Warrants.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
S-1
IN WITNESS WHEREOF, this Warrant Agreement has been duly
executed by the parties hereto as of the day and year first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ Bharatan Patel
-----------------------------------
Name: Bharatan Patel
Title: Chief Executive Officer
BANKERS TRUST COMPANY,
as Warrant Agent
By: /s/ Susan Johnson
-----------------------------------
Name: Susan Johnson
Title: Vice President
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY OTHER DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER
(A FORM OF WHICH MAY BE OB-
A- 1
<PAGE>
TAINED FROM THE COMPANY OR THE WARRANT AGENT) COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE COMPANY AND THE WARRANT AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A COMMON STOCK REGISTRATION RIGHTS AGREEMENT DATED AS OF FEBRUARY 2, 2000 AMONG
THE COMPANY, CIBC WORLD MARKETS CORP. AND FLEETBOSTON ROBERTSON STEPHENS INC., A
COPY OF WHICH IS ON FILE WITH THE WARRANT AGENT.
A- 2
<PAGE>
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
AAVID THERMAL TECHNOLOGIES, INC.
This Warrant Certificate certifies that [ ], or registered
assigns, is the registered holder of [ ] Warrants (the "Warrants") to purchase
shares of Class A Common Stock, par value $0.0001 per share (the "Class A Common
Stock"), and shares of Class H Common Stock, par value $0.0001 per share (the
"Class H Common Stock", together with the Class A Common Stock, the "Common
Stock") of AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
"Company", which term includes its successors and assigns). Each Warrant
entitles the holder to purchase from the Company at any time from 9:00 a.m. New
York City time on or after the Exercisability Date until 5:00 p.m., New York
City time, on February 1, 2007 (the "Expiration Date"), [ ] fully paid,
registered and non-assessable shares of Class A Common Stock and [ ] fully paid,
registered and non-assessable shares of Class H Common Stock, in each case
subject to adjustment as provided in Article V of the Warrant Agreement, at the
exercise price of $0.01 for each share purchased (the "Exercise Price") (the
shares of Common Stock purchasable upon exercise of a Warrant being herein
referred to as the "Shares" and, unless the context otherwise requires, such
term shall also mean the other securities or property purchasable and
deliverable upon exercise of a Warrant as provided in the Warrant Agreement),
upon surrender of this Warrant Certificate and payment of the Exercise Price (i)
by wire transfer or certified check, (ii) pursuant to the next sentence or (iii)
in any combination of (i) and (ii), at any office or agency maintained for that
purpose by the Company (the "Warrant Agent Office"), subject to the conditions
set forth herein and in the Warrant Agreement. A Warrant may also be exercised
solely by the surrender of the Warrant, and without the payment of the Exercise
Price in cash, for such number of Shares equal to the product of (1) the number
of Shares for which such Warrant is exercisable with payment of the Exercise
Price as of the date of exercise and (2) the Cashless Exercise Ratio. For
purposes of this Warrant, the "Cashless Exercise Ratio" shall equal a fraction,
the numerator of which is the excess of the Current Market Value per share of
the Common Stock on the date of exercise over the Exercise Price per share as of
the date of exercise and the denominator of which is the Current Market Value
per share of the Common Stock on the date of exercise. An exercise of a Warrant
in accordance with the immediately preceding sentences is herein called a
"Cashless Exercise." Upon surrender of a Warrant Certificate representing more
than one Warrant in connection with the Holder's option to elect a Cashless
Exercise, the number of Shares deliverable upon a Cashless Exercise shall be
equal to the Cashless Exercise Ratio multiplied by the product of (a) the number
of Warrants that the holder specifies is to be exercised pursuant to a Cashless
Exercise and (b) the number of Shares for which such Warrant is then exercisable
(without giving effect to the Cashless Exercise Option). If the Company has not
effected the registration under the Securities Act of the
A- 3
<PAGE>
offer and sale of the Shares by the Company to the holders of the Warrants upon
the exercise thereof, the Company may elect to require that holders of the
Warrants effect the exercise of the Warrants solely pursuant to the Cashless
Exercise option and may also amend the Warrants to eliminate the requirement for
payment of the Exercise Price with respect to such Cashless Exercise option. All
provisions of the Warrant Agreement shall be applicable with respect to an
exercise of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby. Capitalized terms used herein
without being defined herein shall have the definitions ascribed to such terms
in the Warrant Agreement.
"Current Market Value" per share of Common Stock of the
Company or any other security at any date means (i) if the security is not
registered under the Exchange Act, (a) the fair market value of the security,
determined in good faith by the Board of Directors of the Company if the
aggregate amount of such security to be issued is less than or equal to $20.0
million, or if the aggregate amount of such security exceeds $20.0 million, as
determined by an Independent Financial Expert (provided that, in the case of the
calculation of Current Market Value for determining the cash value of fractional
shares, any such determination within six months that is, in the good faith
judgment of the Board, a reasonable determination of value, may be utilized) or
(ii) (a) if the security is registered under the Exchange Act, the average of
the daily closing sales prices of the securities for the 20 consecutive trading
days immediately preceding such date, or (b) if the security has been registered
under the Exchange Act for less than 20 consecutive trading days before such
date, then the average of the closing sales prices for all of the trading days
before such date for which closing sales prices are available, in the case of
each of (ii)(a) and (ii)(b), as certified to the Warrant Agent by the President,
any Vice President or the Chief Financial Officer of the Company. The closing
sales price for each such trading day shall be: (A) in the case of a security
listed or admitted to trading on any United States national securities exchange
or quotation system, the closing sales price, regular way, on such day, or if no
sale takes place on such day, the average of the closing bid and asked prices on
such day, (B) in the case of a security not then listed or admitted to trading
on any United States national securities exchange or quotation system, the last
reported sale price on such day, or if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reputable quotation source designated by the Company, (C) in the case of a
security not then listed or admitted to trading on any United States national
securities exchange or quotation system and as to which no such reported sale
price or bid and asked prices are available, the average of the reported high
bid and low asked prices on such day, as reported by a reputable quotation
service, or a newspaper of general circulation in the Borough of Manhattan, City
and State of New York customarily published on each Business Day, designated by
the Company, or, if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most recent
day (not more than 30 days prior to the date in question) for which prices have
been so reported and (D) if there are not bid and asked prices reported during
the 30 days prior to the date in question, the Current Market Value shall be
determined as if the Shares (or other securities) were not registered under the
Exchange Act.
A- 4
<PAGE>
"Exercise Event" means, with respect to each Warrant, the date
of the occurrence of the earliest of: (1) an Initial Public Equity Offering (as
defined in the Warrant Agreement), (2) a class of equity securities of the
Company is listed on a national securities exchange or authorized for quotation
on the Nasdaq National Market or is otherwise subject to registration under the
Exchange Act or (3) the Separability Date.
"Independent Financial Expert" means a United States
investment banking firm of national or regional standing, (i) which does not,
and whose directors, officers and employees or Affiliates do not have a direct
or indirect material financial interest for its proprietary account in the
Company or any of its Affiliates and (ii) which, in the judgment of the Board of
Directors of the Company, is otherwise independent with respect to the Company
and its Affiliates and qualified to perform the task for which it is to be
engaged.
"Separability Date" shall mean the earliest to occur of: (1)
180 days after the Issue Date (as defined in the Indenture); (2) the occurrence
of a Change of Control (as defined in the Indenture); (3) the occurrence of an
Event of Default (as defined in the Indenture); (4) the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Notes or the Exchange Notes (as defined in
the Indenture); or (5) such earlier date as determined by CIBC in its discretion
and specified to the Company, the Trustee and the Warrant Agent in writing. The
separation of the Warrants and the Notes is herein referred to as a
"Separation."
No exercise of the Warrants may be effected which does not
call for the issuance of a number of shares of Common Stock in direct proportion
(subject only to rounding with respect to fractional shares) to the aggregate
number of shares of Common Stock then issuable upon exercise of the Warrants
evidenced hereby.
The Company has initially designated the principal corporate
trust office of the Warrant Agent in the Borough of Manhattan, The City of New
York, as the initial Warrant Agent Office. The number of Shares issuable upon
exercise of the Warrants ("Exercise Rate") is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
Any Warrants not exercised on or prior to 5:00 p.m., New York
City time, on February 1, 2007 shall thereafter be void.
If the Company merges, amalgamates or consolidates with or
into, or sells all or substantially all of its property and assets to, another
Person solely for cash, the holders of Warrants shall be entitled to receive
distributions on the date of such event on an equal basis with holders of Shares
(or other securities issuable upon exercise of the Warrants) as if the Warrants
had been exercised immediately prior to such event (less the Exercise Price).
Reference is hereby made to the further provisions on the
reverse hereof which provisions shall for all purposes have the same effect as
though fully set forth at this place.
A- 5
<PAGE>
This Warrant Certificate shall not be valid unless
authenticated by the Warrant Agent, as such term is used in the Warrant
Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
A- 6
<PAGE>
WITNESS the seal of the Company and signatures of its duly
authorized officers.
Dated:
AAVID THERMAL TECHNOLOGIES, INC.
By: _____________________________
Name:
Title:
Attest:
By: _____________________________
Name:
Title:
Certificate of Authentication:
This is one of the Warrants
referred to in the within
mentioned Warrant Agreement:
BANKERS TRUST COMPANY,
as Warrant Agent
By: _____________________________
Authorized Signatory
A-7
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
AAVID THERMAL TECHNOLOGIES, INC.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m., New York City time,
on [ ], 2007 (the "Expiration Date"), each of which represents the right to
purchase at any time on or after the Exercisability Date (as defined in the
Warrant Agreement) and on or prior to the Expiration Date [ ] shares of Class A
Common Stock and [ ] shares of Class H Common Stock, in each case subject to
adjustment as set forth in the Warrant Agreement. The Warrants are issued
pursuant to a Warrant Agreement dated as of February [ ], 2000 (the "Warrant
Agreement"), duly executed and delivered by the Company to Bankers Trust
Company, as Warrant Agent (the "Warrant Agent"), which Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Warrant Agent, the Company
and the holders (the words "holders" or holder" meaning the registered holders
or registered holder) of the Warrants.
Warrants may be exercised by (i) surrendering at any Warrant
Agent Office this Warrant Certificate with the form of Election to Exercise set
forth hereon duly completed and executed and (ii) to the extent such exercise is
not being effected through a Cashless Exercise by paying in full the Warrant
Exercise Price for each such Warrant exercised and any other amounts required to
be paid pursuant to the Warrant Agreement.
If all of the items referred to in the preceding paragraph are
received by the Warrant Agent at or prior to 11:00 a.m., New York City time, on
a Business Day, the exercise of the Warrant to which such items relate will be
effective on such Business Day. If any items referred to in the preceding
paragraph are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be deemed to be
effective on the next succeeding Business Day. Notwithstanding the foregoing, in
the case of an exercise of Warrants on February 1, 2007, if all of the items
referred to in the preceding paragraph are received by the Warrant Agent at or
prior to 5:00 p.m., New York City time, on such Expiration Date, the exercise of
the Warrants to which such items relate will be effective on the Expiration
Date.
As soon as practicable after the exercise of any Warrant or
Warrants, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of this Warrant Certificate, a certificate or
certificates evidencing the Share or Shares to which such holder is entitled, in
fully registered form, registered in such name or names as may be directed by
such holder pursuant to the Election to Exercise, as set forth on the reverse of
this Warrant Certificate. Such certificate or certificates evidencing the Share
or Shares shall be deemed to have been issued and any persons who are designated
to be named therein shall be
A-8
<PAGE>
deemed to have become the holder of record of such Share or Shares as of the
close of business on the date upon which the exercise of this Warrant was deemed
to be effective as provided in the preceding paragraph.
The Company will not be required to issue fractional shares of
Common Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered Holder of this Warrant
Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the same fraction of the Current Market Value per share of Common Stock
on the Business Day preceding the date this Warrant Certificate is surrendered
for exercise.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this
Warrant Certificate at any office or agency maintained by the Company for that
purpose, a new Warrant Certificate evidencing in the aggregate a like number of
Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to the
contrary.
The term "Business Day" shall mean any day on which (i) banks
in New York City, (ii) the principal U.S. securities exchange or market, if any,
on which the Common Stock is listed or admitted to trading and (iii) the
principal U.S. securities exchange or market, if any, on which the Warrants are
listed or admitted to trading are open for business.
The Warrants and the Shares are entitled to the benefits of a
registration rights agreement relating to the Warrants and the shares of Common
Stock issuable upon exercise thereof (the "Common Stock Registration Rights
Agreement"). The Common Stock Registration Rights Agreement provides the holders
of Registrable Securities with the right, subject to the conditions and
limitations contained therein, to include the Registrable Securities in certain
registration statements filed by the Company for its account or for the account
of any of its securityholders.
A-9
<PAGE>
(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise [ ] of
the Warrants represented by this Warrant Certificate and purchase the whole
number of Shares issuable upon the exercise of such Warrants and herewith
tenders payment for such Shares as follows:
$[ ] in cash or by certified or official bank check; or by
surrender of Warrants pursuant to a Cashless Exercise (as defined in the Warrant
Agreement) for [ ] shares of Class A Common Stock at the current Cashless
Exercise Ratio. $[ ] in cash or by certified or official bank check; or by
surrender of Warrants pursuant to a Cashless Exercise (as defined in the Warrant
Agreement) for [ ] shares of Class H Common Stock at the current Cashless
Exercise Ratio.
The undersigned requests that a certificate representing such
Shares be registered in the name of ____________________ whose address is
_________________________ and that such shares be delivered to
__________________________ whose address is __________________________. Any cash
payments to be paid in lieu of a fractional Share should be made to
__________________ whose address is ________________________ and the check
representing payment thereof should be delivered to ______________________ whose
address is_____________________.
Dated __________________, ____
Name of holder of
Warrant Certificate: _______________________________
(Please Print)
Tax Identification or
Social Security Number: ____________________________
Address: ___________________________________________
___________________________________________
Signature: _________________________________________
Note: The above signature must
correspond with the nameas
written upon the face of this
Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever and if the
certificate representing the
Shares or any Warrant
Certificate representing
Warrants not exercised is to be
registered in a name other than
that in which this Warrant
Certificate is regis-
A-10
<PAGE>
tered, or if any cash payment to
be paid in lieu of a fractional
share is to be made to a person
other than the registered holder
of this Warrant Certificate, the
signature of the holder hereof
must be guaranteed as provided
in the Warrant Agreement.
Dated ____________________, ___
Signature: ________________________________________
Note: The above signature must
correspond with the name as
written upon the face of
this Warrant Certificate in
every particular, without
alteration or enlargement
or any change whatever.
Signature Guaranteed: _____________________________
[FORM OF ASSIGNMENT]
For value received _______________________ hereby sells,
assigns and transfers unto _____________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________________ attorney, to transfer said
Warrant Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated ____________________, ____
Signature: ________________________________________
Note: The above signature must
correspond with the name as
written upon the face of
this Warrant Certificate in
every particular, without
alteration or enlargement
or any change whatever.
Signature Guaranteed: _____________________________
A-11
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(1)
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
<TABLE>
<S> <C> <C> <C> <C>
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
Number of Number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------------------
(1) This is to be included only if the Warrant is in golbal form.
A-12
<PAGE>
EXHIBIT B
FORM OF LEGEND FOR GLOBAL WARRANT
Any Global Warrant authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL WARRANT WITHIN THE MEANING OF THE
WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
B-1
<PAGE>
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "War-
rants") of AAVID THERMAL TECHNOLOGIES,
INC.
This Certificate relates to ____ Warrants held in* ___ book-entry
or* _______ certificated form by ______ (the "Transferor").
The Transferor:*
/ / has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depository a Warrant or Warrants in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above); or
/ / has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:
/ / Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 1.08(a)(y)(A) or Section
1.08(d)(i)(A) of the Warrant Agreement).
/ / Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act), in reliance on Rule 144A.
/ / Such Warrant is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act).
/ / Such Warrant is being transferred in reliance on Regulation S under
the Act.
/ / Such Warrant is being transferred in accordance with Rule 144 under
the Act.
C-1
<PAGE>
/ / Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act.
------------------------------
[INSERT NAME OF TRANSFEROR]
By: _________________________
Date: _________________
*Check applicable box.
`
C-2
<PAGE>
EXHIBIT D
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
-------------, ----
Bankers Trust Company
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of warrants (the
"Warrants") to purchase Common Stock of Aavid Thermal Technologies, Inc. (the
"Company"), we confirm that:
1. We have received such information as we deem
necessary in order to make our investment decision.
2. We understand that any subsequent transfer of the
Warrants is subject to certain restrictions and conditions set forth in the
Warrant Agreement and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Warrants except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the offer and sale of the Warrants
have not been registered under the Securities Act, and that the Warrants may not
be offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Warrants prior to (x) the date which is two
years after the later of the date of original issuance of the Warrants (or such
shorter period as may be prescribed by Rule 144(k) under the Securities Act or
any successor provision thereto) or the last day on which the Company or any
affiliate of the Company was owner of such Warrants, or any predecessor thereto,
and (y) such later date, if any, as may be required by applicable laws, we will
do so only (A) to the Company, (B) inside the United States in accordance with
Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by
D-1
<PAGE>
a U.S. broker-dealer) to the Warrant Agent a signed letter substantially in the
form hereof, (D) outside the United States in accordance with Regulation S under
the Securities Act, (E) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available) or (F) pursuant to an effective
registration statement under the Securities Act and (G) pursuant to another
available exemption under the Securities Act, and we further agree to provide to
any person purchasing Warrants from us a notice advising such purchaser that
resales of the Warrants are restricted as stated herein.
4. We understand that, on any proposed resale of
Warrants, we will be required to furnish to the Warrant Agent and the Company,
such certification, legal opinions and other information as the Warrant Agent
and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the
Warrants purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Warrants, and we and any accounts for which we are acting are each able to bear
the economic risk of our or their investment, as the case may be.
6. We are acquiring the Warrants purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
D- 2
<PAGE>
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
[Authorized Signatory]
Upon transfer the Warrants would be registered in the name of
the new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
D- 3
<PAGE>
EXHIBIT E
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
---------------, ----
Bankers Trust Company
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of Warrants of Aavid
Thermal Technologies, Inc. (the "Company"), we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent
that:
(1) the offer of the Warrants was not made to a
person in the United States;
(2) either (a) at the time the buy offer was
originated, the transferee was outside the United States or we
and any person acting on our behalf reasonably believed that
the transferee was outside the United States, or (b) the
transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any
person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities
Act, as applicable;
(4) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer
restrictions applicable to the Warrants; and
E- 1
<PAGE>
(6) if the circumstances set forth in Rule 904(c)
under the Securities Act are applicable, we have complied with
the additional conditions therein, including (if applicable)
sending a confirmation or other notice stating that the
Warrants may be offered and sold during the restricted period
specified in Rule 903(c)(2) or (3), as applicable, in
accordance with the provisions of Regulation S; pursuant to
registration of the Warrants under the Securities Act; or
pursuant to an available exemption from the registration
requirements under the Act.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S under the
Securities Act.
Very truly yours,
[Name of Transferee]
By:
[Authorized Signatory]
Upon transfer the Warrants would be registered in the name of
the new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
E- 2
<PAGE>
Exhibit 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
AAVID THERMAL TECHNOLOGIES, INC.,
HEAT HOLDINGS CORP.,
HEAT HOLDINGS II CORP.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CIBC WORLD MARKETS CORP.
AS LEAD ARRANGER AND BOOKRUNNER,
BANKBOSTON, N.A., AS DOCUMENTATION AGENT,
AND
CANADIAN IMPERIAL BANK OF COMMERCE
AS ISSUER AND ADMINISTRATIVE AGENT
DATED AS OF FEBRUARY 2, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1. DEFINITIONS 2
1.1 DEFINED TERMS 2
1.2 OTHER DEFINITIONAL PROVISIONS 34
ARTICLE 2. AMOUNT AND TERMS OF LOANS 34
2.1 REVOLVING CREDIT COMMITMENTS 34
2.2 REVOLVING CREDIT NOTES 35
2.3 PROCEDURE FOR REVOLVING CREDIT BORROWING 35
2.4 COMMITMENT FEE; ADMINISTRATIVE FEE 36
2.5 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS 36
2.6 TERM LOANS 36
2.7 TERM NOTES 37
2.8 PROCEDURES FOR TERM LOAN BORROWING 38
2.9 OPTIONAL AND MANDATORY PREPAYMENTS 38
2.10 CONVERSION AND CONTINUATION OPTIONS 40
2.11 MAXIMUM AMOUNTS OF TRANCHES 41
2.12 INTEREST RATES AND PAYMENT DATES 41
2.13 COMPUTATION OF INTEREST AND FEES 42
2.14 INABILITY TO DETERMINE INTEREST RATE 42
2.15 PRO RATA TREATMENT AND PAYMENTS; FUNDING RELIANCE 43
2.16 ILLEGALITY 44
2.17 REQUIREMENTS OF LAW 44
2.18 TAXES 45
2.19 INDEMNITY 48
2.20 DISCRETION OF LENDER AS TO MANNER OF FUNDING 48
2.21 LETTERS OF CREDIT 48
2.22 DEFAULTING LENDERS 51
ARTICLE 52
3. REPRESENTATIONS AND WARRANTIES 52
3.1 FINANCIAL CONDITION 52
3.2 NO CHANGE 53
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW 54
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS 54
3.5 NO LEGAL BAR 54
3.6 NO MATERIAL LITIGATION 55
3.7 NO DEFAULT 55
3.8 OWNERSHIP OF PROPERTY; LIENS 55
<PAGE>
3.9 INTELLECTUAL PROPERTY 55
3.10 NO BURDENSOME RESTRICTION 56
3.11 TAXES 56
3.12 FEDERAL REGULATIONS 56
3.13 ERISA 56
3.14 HOLDING COMPANY; INVESTMENT COMPANY ACT; OTHER REGULATIONS 57
3.15 PURPOSE OF LOANS 57
3.16 ENVIRONMENTAL MATTERS 58
3.17 MERGER 59
3.18 CAPITALIZATION OF PARENT 59
3.19 CAPITALIZATION OF HEAT HOLDINGS II 59
3.20 CAPITALIZATION OF THE BORROWER 59
3.21 SUBSIDIARIES 59
3.22 LABOR MATTERS 60
3.23 INSURANCE 60
3.24 MERGER DOCUMENTS 60
3.25 OPERATIONS 61
3.26 SECURITY DOCUMENTS 61
3.27 ACCURACY AND COMPLETENESS OF INFORMATION 62
3.28 LEASEHOLDS, PERMITS, ETC 62
3.29 SOLVENCY 62
3.30 EXISTING INDEBTEDNESS 63
3.31 INACTIVE SUBSIDIARIES 63
3.32 YEAR 2000 COMPLIANCE 63
3.33 SENIOR INDEBTEDNESS 63
ARTICLE 4. CONDITIONS PRECEDENT 63
4.1 CONDITIONS TO INITIAL CREDIT EXTENSION 63
4.2 CONDITIONS TO EACH CREDIT EXTENSION 69
ARTICLE 5. AFFIRMATIVE COVENANTS 70
5.1 FINANCIAL STATEMENTS 70
5.2 CERTIFICATES; OTHER INFORMATION 71
5.3 PAYMENT OF OBLIGATIONS 72
5.4 MAINTENANCE OF EXISTENCE 72
5.5 MAINTENANCE OF PROPERTY; INSURANCE 72
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS 72
5.7 NOTICES 73
5.8 ENVIRONMENTAL LAWS 74
5.9 YEAR 2000 COMPLIANCE 74
5.10 ERISA 74
5.11 USE OF PROCEEDS 75
<PAGE>
5.12 POST-CLOSING MATTERS 76
5.13 FURTHER ASSURANCES 76
ARTICLE 6. NEGATIVE COVENANTS 76
6.1 FINANCIAL CONDITION COVENANTS 76
6.2 LIMITATION ON INDEBTEDNESS 78
6.3 LIMITATION ON LIENS 79
6.4 LIMITATION ON GUARANTEE OBLIGATIONS 80
6.5 LIMITATION ON FUNDAMENTAL CHANGES 80
6.6 LIMITATION ON SALE OF ASSETS 81
6.7 LIMITATION ON DIVIDENDS; PREPAYMENT OF INDEBTEDNESS 82
6.8 LIMITATION ON CAPITAL EXPENDITURES 82
6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES 82
6.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES 83
6.11 LIMITATION ON SALES AND LEASEBACKS 83
6.12 LIMITATION ON CHANGES IN FISCAL YEAR 83
6.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES 83
6.14 LIMITATION ON LINES OF BUSINESS 84
6.15 NEW SUBSIDIARIES 84
6.16 AMENDMENTS TO MATERIAL AGREEMENTS 84
ARTICLE 7. EVENTS OF DEFAULT 84
ARTICLE 8. GUARANTEE 87
8.1 PARENT GUARANTEE 87
8.2 CONTINUING GUARANTEE 88
8.3 REINSTATEMENT. 89
ARTICLE 9. THE AGENTS 89
9.1 APPOINTMENT 89
9.2 DELEGATION OF DUTIES 90
9.3 EXCULPATORY PROVISIONS 90
9.4 RELIANCE BY ADMINISTRATIVE AGENT 90
9.5 NOTICE OF DEFAULT 91
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS 91
9.7 INDEMNIFICATION 92
9.8 AGENT IN ITS INDIVIDUAL CAPACITY 92
9.9 SUCCESSOR AGENTS 92
9.10 RELEASE OF COLLATERAL 93
ARTICLE 10. MISCELLANEOUS 93
10.1 AMENDMENTS AND WAIVERS 93
<PAGE>
10.2 NOTICES 94
10.3 NO WAIVER; CUMULATIVE REMEDIES 96
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES 96
10.5 PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION 96
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS 97
10.7 ADJUSTMENTS; SETOFF 99
10.8 CONFIDENTIALITY 100
10.9 EFFECTIVENESS 100
10.10 COUNTERPARTS 101
10.11 SEVERABILITY 101
10.12 INTEGRATION 101
10.13 GOVERNING LAW 101
10.14 SUBMISSION TO JURISDICTION; WAIVERS 101
10.15 ACKNOWLEDGMENTS 102
10.16 WAIVER OF EXISTING CREDIT AGREEMENT 102
10.17 WAIVERS OF JURY TRIAL 102
</TABLE>
<PAGE>
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit A -- Form of Amended and Restated Revolving Credit Note
Exhibit B -- Form of Amended and Restated Term Note
Exhibit C -- Form of Notice of Borrowing
Exhibit D -- Form of Notice of Conversion/Continuation
Exhibit E-1 -- Form of Domestic Custody Agreement
Exhibit E-2 -- Form of Foreign Subsidiary Custody Agreement
Exhibit F-1 -- Form of Borrower Custody Agreement
Exhibit F-2 -- Form of Borrower Intellectual Property Security Agreement
Exhibit G-1 -- Form of Borrower Security Agreement
Exhibit G-2 -- Form of Borrower Pledge Agreement
Exhibit H -- Form of Assignment and Assumption Agreement
Exhibit I -- Form of Contribution Agreement
Exhibit J -- Form of Heat Holdings II Guarantee
Exhibit K -- Form of Heat Holdings II Pledge Agreement
Exhibit L -- Form of Heat Holdings II Security Agreement
Exhibit M -- Form of Parent Pledge Agreement
Exhibit N -- Form of Parent Security Agreement
Exhibit O -- Form of Domestic Subsidiary Guarantee
Exhibit P -- Form of Subsidiary Pledge Agreement
Exhibit Q -- Form of Subsidiary Intellectual Property Security Agreement
Exhibit R -- Form of Compliance Certificate
Exhibit S -- Form of Subsidiary Security Agreement
Exhibit T -- Form of Joinder Agreement
Exhibit U -- Form of Opinion of New York Counsel
Exhibit V -- Form of Opinion of New Hampshire/Texas Counsel
Exhibit W -- Provisions of Foreign Counsel Legal Opinion
Exhibit X -- Form of Closing Certificate
Exhibit Y -- Form of Commitment Transfer Supplement
Exhibit Z -- Form of Management Shares Agreement
SCHEDULES
Schedule I Lenders, Addresses and Commitments
Schedule 1.1 Subsidiary Guarantors
Schedule 1.2 Restructuring
Schedule 1.3 Entities
Schedule 3.1(d) Guarantee Obligations, Liabilities, Transfers and Dispositions
Schedule 3.1(f) Business Forecast
<PAGE>
Schedule 3.4 Consents, Authorizations and Filings
Schedule 3.6 Litigation
Schedule 3.8 Ownership of Property and Liens; Corporate Names and Jurisdictions
Schedule 3.11 Tax Liens and Claims
Schedule 3.13 ERISA, Employee Benefit Plans
Schedule 3.16 Environmental Matters
Schedule 3.17 Terms of Merger
Schedule 3.18 Capitalization of Parent
Schedule 3.19 Capitalization of Heat Holdings II
Schedule 3.20 Capitalization of Borrower
Schedule 3.21 Subsidiaries
Schedule 3.22 Labor Matters
Schedule 3.24 Merger Documents
Schedule 3.26 UCC Filings
Schedule 3.30 Existing Indebtedness
Schedule 3.31 Inactive Subsidiaries
Schedule 4.1(s) Filings, Registrations and Recordings
Schedule 4.1(u) Sources and Uses
Schedule 4.1(x) Landlord Waivers
Schedule 4.1(y) Material Adverse Effect
Schedule 5.12 Post-Closing Matters
Schedule 6.3(g) Liens
Schedule 6.5(h) Certain Facilities
</TABLE>
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 2, 2000, among
AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER"), HEAT
HOLDINGS CORP., a Delaware corporation (the "PARENT"), HEAT HOLDINGS II CORP., a
Delaware corporation ("HEAT HOLDINGS II"), the several banks and other financial
institutions from time to time parties to this Agreement (the "LENDERS"), CIBC
WORLD MARKETS CORP., as lead arranger and bookrunner (in such capacity, the
"LEAD ARRANGER"), CANADIAN IMPERIAL BANK OF COMMERCE, as issuer of certain
letters of credit (the "ISSUER"), BANKBOSTON, N.A., as documentation agent (the
"Documentation Agent") and CANADIAN IMPERIAL BANK OF COMMERCE, as agent for the
Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S E T H
WHEREAS, the Parent and the Borrower are engaged, directly and indirectly
through their respective Subsidiaries, in the Thermal Management Solutions
Business (as hereinafter defined);
WHEREAS, the Borrower has entered into the Agreement and Plan of Merger
dated as of August 23, 1999 (the "MERGER AGREEMENT") among the Parent, Heat
Merger Corp., a Delaware corporation (the "MERGER SUB"), and the Borrower,
pursuant to which the Merger Sub shall be merged with and into the Borrower,
with the Borrower as the surviving corporation pursuant to and in accordance
with the terms and conditions of the Merger Agreement (the "MERGER");
WHEREAS, pursuant to the Credit Agreement dated as of October 21, 1999 (the
"EXISTING CREDIT AGREEMENT") among the Borrower, the several banks and other
financial institutions from time to time parties thereto (the "EXISTING
LENDERS"), CIBC World Markets Corp., as Lead Arranger and Bookrunner (in such
capacity, the "EXISTING LEAD ARRANGER"), Canadian Imperial Bank of Commerce, as
issuer of certain letters of credit (the "EXISTING ISSUER"), and Canadian
Imperial Bank of Commerce, as agent for the Lenders hereunder (in such capacity,
the "EXISTING ADMINISTRATIVE AGENT"), the Existing Lenders agreed to make loans
and other financial accommodations in the aggregate principal amount not to
exceed $100,000,000 for the purposes set forth therein;
WHEREAS, the Existing Administrative Agent, the Existing Lead Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have concurrently herewith
entered into an Assignment and Assumption Agreement dated as of February 2, 2000
(the "ASSIGNMENT AND ASSUMPTION AGREEMENT"), pursuant to which (a) the Existing
Lenders have assigned all their right, title and interest in, to and under the
Existing Credit Agreement, the "Loan Documents" (as defined in the Existing
Credit Agreement) and the Collateral (as defined in such Loan Documents) and
<PAGE>
delegated all their obligations with respect thereto to the Lenders and the
Lenders have accepted such assignment and assumed such obligations, and (b) the
Borrower has consented to such assignment and delegation;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the Issuer and the
Administrative Agent desire to amend and restate the Existing Credit Agreement
to provide extensions of credit on the Effective Date for the purposes set forth
in SECTION 3.15; PROVIDED that all extensions of credit are subject to the terms
and conditions set forth in, and have the benefit of, the Loan Documents and the
Collateral and are evidenced by one or more Notes;
WHEREAS, the Borrower desires that the Existing Credit Agreement be amended
and restated as set forth herein and the Lenders, the Lead Arranger, the Issuer,
the Administrative Agent, subject to the terms and conditions set forth herein,
are willing to amend and restate the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. ARTICLE DEFINITIONS
1.1 DEFINED TERMS . As used in this Agreement, the following terms shall have
the following meanings:
"ADMINISTRATIVE AGENT" shall have the meaning ascribed thereto in the
heading hereto and shall include such other Lender or financial institution
as shall have subsequently been appointed as the successor Administrative
Agent pursuant to SECTION 9.9.
"AFFILIATE" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person shall mean the power, directly or indirectly, either
(a) to vote 10% or more of the securities having ordinary voting power for
the election of directors of such Person or (b) to direct or cause the
direction of the management and policies of such Person, whether by
contract or otherwise.
"AGENTS" shall mean the collective reference to the Administrative
Agent, the Documentation Agent and the Lead Arranger.
"AGREEMENT" shall mean this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
<PAGE>
"ALTERNATE BASE RATE" shall mean, on any particular date, a rate of
interest per annum equal to the higher of:
(a) the rate of interest most recently announced by CIBC-Bank at its
Domestic Lending Office as its prime rate (which rate is not
necessarily intended to be the lowest rate of interest charged by
CIBC-Bank in connection with extensions of credit); and
(a) the Federal Funds Rate for such date plus 0.50%.
"ALTERNATE BASE RATE LOANS" shall mean Loans the rate of interest
applicable to which is based upon the Alternate Base Rate.
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender,
such Lender's Domestic Lending Office in the case of an Alternate Base Rate
Loan and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Loan.
"APPLICABLE MARGIN" shall mean a percentage per annum determined by
reference to the Total Leverage Ratio as set forth below:
<TABLE>
<CAPTION>
Alternate Base
Total Leverage Ratio Rate Loans Eurodollar Loans
-------------------- ---------------- -----------------
<S> <C> <C>
Greater than 4.50 to 1.00 1.00% 2.25%
Less than or equal to 4.50
to 1.00, but greater than
4.00 to 1.00 0.75% 2.00%
Less than or equal to 4.00
to 1.00, but greater than
3.50 to 1.00 0.50% 1.75%
Less than or equal to 3.50
to 1.00 0.25% 1.50%
</TABLE>
The Total Leverage Ratio shall be determined initially on the basis of the
Compliance Certificate provided pursuant to SECTION 4.1(bb) and
subsequently on the basis of the most recent Compliance Certificate
delivered by the Borrower pursuant to SECTION 5.2(c). Any change in the
Applicable Margin as a result of a change in the Total Leverage Ratio shall
<PAGE>
be adjusted to the Applicable Margin set forth for such Type of Loan
opposite the Total Leverage Ratio in effect on such Business Day; PROVIDED
that if the Borrower fails timely to deliver such certificate, without
otherwise limiting the rights of the Lenders under this Agreement, the
Total Leverage Ratio shall be deemed to be greater than 4.50 to 1.0 for
purposes of calculating the Applicable Margin hereunder until such time as
such certificate is delivered.
"APPROVED SUBSIDIARY" shall mean
(i) each Domestic Subsidiary (other than the Schedule 1.3 Entities)
and
(ii) each Foreign Subsidiary:
(a) that either (x) has entered into an agreement in form and
substance satisfactory to the Administrative Agent pursuant to which
such Foreign Subsidiary becomes an additional borrower under this
Agreement and in respect of which the Administrative Agent, for the
benefit of the Lenders, shall have a first priority perfected Lien on
all the Capital Stock and all the assets of such Subsidiary, in each
case in a manner acceptable to the Administrative Agent, or (y) is
wholly-owned, directly or indirectly, by a Foreign Subsidiary that has
satisfied the requirements of the foregoing clause (a)(x), in which
case the Administrative Agent shall have received a pledge of all the
Capital Stock and a first priority perfected Lien on all the assets of
such Subsidiary; or
(b) either (x) 65% of the outstanding Capital Stock of which has
been pledged to the Administrative Agent, for the benefit of the
Lenders, pursuant to the applicable Borrower Pledge Agreement with the
remaining 35% of such outstanding Capital Stock delivered in
accordance with the terms of the Domestic Custody Agreement to the
custodian named therein, or (y) that is wholly-owned, directly or
indirectly, by a Foreign Subsidiary that has satisfied the
requirements of the foregoing clause (b)(x), in which case such
Subsidiary shall have delivered a Foreign Subsidiary Custody Agreement
for 100% of the Capital Stock of such Subsidiary.
No Inactive Subsidiary shall be an Approved Subsidiary.
"ASSIGNEE" shall have the meaning ascribed thereto in SECTION
10.6(c).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have the meaning
ascribed thereto in the recitals.
"AT" shall mean Aavid Thermalloy, LLC, a Delaware limited
liability company.
"ATPUK" shall mean Aavid Thermal Products UK Holdings Ltd., a
company organized under the laws of England and Wales.
<PAGE>
"AVAILABLE REVOLVING CREDIT COMMITMENT" shall mean, as to any
Revolving Credit Lender at any time, an amount equal to the product
obtained by multiplying (i) such Lender's Revolving Credit Commitment
Percentage at such time by (ii) (A) an amount equal to the aggregate
principal amount of all Revolving Credit Commitments at such time MINUS (B)
the sum of (i) the aggregate principal amount of all Revolving Credit Loans
then outstanding, (ii) the Stated Amount of the Letters of Credit then
outstanding and (iii) the aggregate amount drawn under the Letters of
Credit (including interest thereon computed in accordance with SECTION
2.21(d)) for which the Issuer has not been reimbursed.
"BENEFIT PLAN" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which the
Borrower or any Commonly Controlled Entity is an "employer" as defined in
Section 3(5) of ERISA.
"BORROWER" shall have the meaning ascribed thereto in the heading
hereto and shall include any Foreign Subsidiary that has entered into an
agreement in form and substance satisfactory to the Administrative Agent
pursuant to which such Foreign Subsidiary becomes an additional borrower
under this Agreement.
"BORROWER CUSTODY AGREEMENT" shall mean the Amended and Restated
Borrower Custody Agreement between the Borrower and the Administrative
Agent, for the benefit of the Lenders, substantially in the form of EXHIBIT
F-1.
"BORROWER INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean the
Amended and Restated Intellectual Property Security Agreement between the
Borrower and the Administrative Agent, for the benefit of the Lenders,
substantially in the form of EXHIBIT F-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"BORROWER PLEDGE AGREEMENTS" shall mean the (i) Amended and Restated
Pledge Agreement between the Borrower and the Administrative Agent, for the
benefit of the Lenders, substantially in the form of EXHIBIT G-1, and (ii)
each other agreement, in form and substance satisfactory to the
Administrative Agent, between the Borrower and the Administrative Agent
pursuant to which the Capital Stock of a Foreign Subsidiary is pledged by
the Borrower under applicable law, in each case of clause (i) and (ii), as
the same may be amended, supplemented or otherwise modified from time to
time.
"BORROWER SECURITY AGREEMENT" shall mean the Amended and Restated
Security Agreement between the Borrower and the Administrative Agent, for
the benefit of the Lenders, substantially in the form of EXHIBIT G-2, as
the same may be amended, supplemented or otherwise modified from time to
time.
<PAGE>
"BORROWING" shall mean a borrowing hereunder consisting of Loans made
on the same Business Day by the Lenders ratably in accordance with their
respective Commitment Percentages and, in the case of Eurodollar Loans,
having the same Interest Periods.
"BORROWING DATE" shall mean any Business Day specified in a notice
pursuant to SECTION 2.3 or SECTION 2.8, as a date on which the Borrower
requests that a Borrowing be made.
"BUSINESS" shall have the meaning ascribed thereto in SECTION 3.16(B).
"BUSINESS DAY" shall mean (a) a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close; and (b) with respect to the date of:
(i) making or continuing any Loans as, or converting such Loans from
or into, Eurodollar Loans,
(ii) making any payment or prepayment or principal of or payment of
interest on any portion of the principal amount of any such Loans
being maintained as Eurodollar Loans, or
(iii) the Borrower giving any notice (or the number of Business Days to
elapse prior to the effectiveness thereof) in connection with any
matter referred to in the immediately preceding clause (b)(i) or
(b)(ii),
any such day on which dealings are also carried on in the interbank market
in London.
"CAPITAL EXPENDITURES" of the Parent and its Subsidiaries for any
period shall mean any expenditure in respect of the purchase or other
acquisition of (including any expenditures under any Financing Leases with
respect to) fixed or capital assets of the Borrower or such Subsidiary, but
during such period shall exclude any fixed or capital assets purchased or
acquired in connection with normal replacement and maintenance programs
that, in accordance with U.S. GAAP, would be properly charged to current
operations.
"CAPITAL STOCK" shall mean any and all shares, share capital, ordinary
shares, quota, company shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
<PAGE>
"CASH EQUIVALENTS" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States Government or any agency
or instrumentality thereof having maturities of not more than twelve months
from the date of acquisition, (b) securities issued or directly and fully
guaranteed or insured by any state of the United States of America or any
agency or instrumentality thereof having maturities of not more than twelve
months from the date of acquisition and, at the time of acquisition, having
the highest rating generally obtainable from either S&P or Moody's, (c)
time deposits and certificates of deposit of any Lender or any domestic
commercial bank having capital and surplus in excess of $500,000,000, in
each case, having maturities of not more than twelve months from the date
of acquisition, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (a),
(b) and (c) above entered into with any Lender or any domestic commercial
bank meeting the qualifications specified in clause (c) above, (e)
commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1
or the equivalent thereof by Moody's and (f) shares of money market mutual
or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (e) of this definition.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following:
(a) with respect to the Parent and Heat Holdings II, the failure of
WSP to own directly or indirectly, free and clear of all Liens, at least
51% of the Fully Diluted Outstanding Voting Securities of each of the
Parent and Heat Holdings II;
(b) with respect to the Borrower, (i) prior to the consummation of an
Initial Public Offering, the failure of the Parent, at all times, to own
directly or indirectly, through one or more wholly-owned Subsidiaries, free
and clear of all Liens (other than Liens in favor of the Administrative
Agent, for the benefit of the Lenders), 100% of the outstanding Capital
Stock of the Borrower and (ii) at any time on or after consummation of an
Initial Public Offering, the occurrence of any of the following (w) the
failure of WSP to beneficially own, directly or indirectly, free and clear
of all Liens (other than the Liens created under the Loan Documents) at
least 35% of the Capital Stock of the Borrower; (x) the acquisition
directly or indirectly by any Person, or two or more Persons (other than
WSP, the Parent or the Persons listed on Schedule 3.18) acting in concert,
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934) of 20%
or more of the Fully Diluted Outstanding Voting Securities of the Borrower;
(y) during any period of up to 24 consecutive months, commencing on the
Effective Date, individuals who at the beginning of such 24-month period
were directors of the Borrower and Persons who were recommended for
election by a majority of directors then in office shall cease for any
reason to constitute a majority of the board of directors of the Borrower;
or (z) any Person or two or more Persons (other than WSP, the Parent or the
Persons listed on Schedule 3.18) acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their
<PAGE>
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower;
(c) with respect to AT and its Subsidiaries, (i) the failure of the
Borrower and Heat Holdings II, at all times, to own directly or indirectly,
through one or more wholly-owned Subsidiaries, free and clear of all Liens
(other than Liens in favor of the Administrative Agent, for the benefit of
the Lenders), 100% of the outstanding common Capital Stock (other than any
Management Shares) of AT and such Subsidiaries (excluding Thermalloy
Malaysia and Curamik), and (ii) the failure of the Borrower, at all times,
to own directly or indirectly, through one or more wholly-owned
Subsidiaries, free and clear of all Liens (other than Liens in favor of the
Administrative Agent, for the benefit of the Lenders), 100% of the
outstanding preferred Capital Stock of AT (other than any Management
Shares), in each case except as may be permitted pursuant to SECTION
6.6(h);
(d) with respect to Fluent and its Subsidiaries, the failure of the
Borrower, at all times, to own directly or indirectly, through one or more
wholly-owned Subsidiaries, free and clear of all Liens (other than Liens in
favor of the Administrative Agent, for the benefit of the Lenders), 100% of
the outstanding Capital Stock of Fluent (other than any Management Shares)
and such Subsidiaries, except as may be permitted pursuant to SECTION
6.6(h); or
(e) the Parent, Heat Holdings II, the Borrower or any Subsidiary
(other than any Inactive Subsidiary) shall be liquidated or dissolved
except as may be permitted pursuant to SECTION 6.5.
"CIBC-BANK" shall mean Canadian Imperial Bank of Commerce, a Canadian
chartered bank, or one or more of its agencies, branches or affiliates in
its or their respective capacity or capacities, as the case may be, as the
Issuer or a Lender or Lenders hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean all assets of the Parent, Heat Holdings II,
the Borrower or any Subsidiary, now owned or hereafter acquired, upon which
a Lien is purported to be created by any Security Document.
"COMMITMENTS" shall mean the collective reference to the Term Loan
Commitments and the Revolving Credit Commitments.
"COMMITMENT PERCENTAGE" shall mean, as to any Lender, such Lender's
Revolving Credit Commitment Percentage or Term Loan Commitment Percentage,
as applicable.
<PAGE>
"COMMITMENT TRANSFER SUPPLEMENT" shall have the meaning ascribed
thereto in SECTION 10.6(c).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"COMPLIANCE CERTIFICATE" shall have the meaning ascribed thereto in
SECTION 5.2(c).
"CONTRACTUAL OBLIGATION" shall mean, as to the Parent, the Borrower or
any Subsidiary, any provision of any security issued by the Parent, the
Borrower or such Subsidiary or of any agreement, instrument or other
undertaking to which the Parent, the Borrower or such Subsidiary is a party
or by which it or any of its property is bound.
"CONTRIBUTION AGREEMENT" shall mean the Amended and Restated
Contribution Agreement among the Subsidiary Guarantors and substantially in
the form of EXHIBIT I, as the same may be amended, supplemented or
otherwise modified from time to time.
"CONVERSION/CONTINUATION DATE" shall mean the date on which any Loan
is converted or continued pursuant to SECTION 2.10.
"CREDIT EXTENSION" shall mean the collective reference to (a) any Loan
by a Lender and (b) any participation by a Revolving Credit Lender in a
Letter of Credit.
"CURAMIK" shall mean Curamik Electronics GmbH, a German corporation.
"CURAMIK DOCUMENTS" shall mean the collective reference to each of the
agreements, notes, guarantees, consents, instruments, certificates and
opinions delivered by the Borrower or any other Person in connection with
the proposed sale of the Capital Stock of Curamik to the Borrower by the
minority shareholders.
"CUSTODY AGREEMENTS" shall mean the collective reference to the
Domestic Custody Agreement and the Foreign Subsidiary Custody Agreements.
"DEFAULT" shall mean any of the events specified in SECTION 7.1,
whether or not any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"DEFAULTING LENDER" shall have the meaning ascribed thereto in SECTION
2.22.
<PAGE>
"DOCUMENTATION AGENT" shall have the meaning ascribed hereto in the
heading hereto.
"DOLLAR EQUIVALENT" shall mean (a) as to any amount denominated in
Dollars, such amount in Dollars and (b) as to any amount denominated in any
Foreign Currency, the equivalent in Dollars of such Foreign Currency on any
date as determined by using the quoted Spot Rate at which the
Administrative Agent's principal office in London offers to exchange
Dollars for such Foreign Currency in London prior to 4:00 p.m. (London
time) on such date.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC CUSTODY AGREEMENT" shall mean the collective reference (a)
the Amended and Restated Custody Agreement between the Borrower and the
Administrative Agent, for the benefit of the Lenders, and (b) each other
Custody Agreement between each Domestic Subsidiary that owns the
outstanding Capital Stock of any Foreign Subsidiary that does not become an
additional borrower hereunder, in each case substantially in the form of
EXHIBIT E-1, as the same may be amended, supplemented or otherwise modified
from time to time.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such in SCHEDULE I (or designated pursuant to a
Commitment Transfer Supplement), and thereafter, such other office of such
Lender, if any, which shall be making or maintaining Alternate Base Rate
Loans as may be designated from time to time by notice from such Lender to
the Borrower, and the Administrative Agent.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary other than a Foreign
Subsidiary.
"EBITDA" shall mean, for any period of determination, an amount equal
to the sum of (without duplication) (i) Net Income for such period, after
exclusion of (x) all items which should be classified as extraordinary, all
determined in accordance with U.S. GAAP, (y) all insurance proceeds (other
than proceeds of business interruption insurance) received during such
period to the extent, if any, included in Net Income and (z) tax gains and
losses upon the disposition of capital assets, PLUS (ii) all amounts
deducted in computing such Net Income in respect of (1) Interest Expense
(after giving effect to all Hedging Agreements and payments and receipts
thereunder), (2) non-cash amortization expense (including amortization of
financing costs, noncurrent assets and non-cash charges), (3) depreciation,
(4) income taxes, (5) all other non-cash charges including but not limited
to write-offs of intangible assets (other than for minority interests) LESS
extraordinary gains, (6) non-recurring transaction expenses and
underwriting fees, (7) the Thermalloy Management Fees, (8) one-time,
non-recurring expenses accrued on or prior to December 31, 2000 associated
with facility closings and headcount reductions related
<PAGE>
to the Thermalloy Acquisition and agreed to by the Borrower's independent
accounting firm and one-time severance expenses incurred on or prior to
December 31, 2000 and related to the Merger; provided that all such
severance expenses shall not exceed $3,000,000 in the aggregate, (9) solely
for purposes of calculating EBITDA for any period including December 31,
2000, the excess of (A) the value of the inventory sold during such period
as would be set forth on the balance sheet of the Thermalloy Companies on
the date the Thermalloy Acquisition was consummated (after giving effect to
the Thermalloy Acquisition) over (B) the value of such inventory (based
upon the standard cost inventory valuation methodology adopted by the
Borrower at the date of the Thermalloy Acquisition) as would be set forth
on the balance sheet of the Thermalloy Companies on such date (immediately
prior to giving effect to the Thermalloy Acquisition), (10) solely for
purposes of calculating EBITDA for any period including September 30, 2001,
the excess of (A) the value of the inventory sold during such period as
would be set forth on the balance sheet of the Borrower on the date the
Merger was consummated (after giving effect to the Merger) over (B) the
value of such inventory as would be set forth on the balance sheet of the
Borrower on such date (immediately prior to giving effect to the Merger),
(11) solely for purposes of calculating EBITDA for any period including
July 3, 1999, the corporate overhead costs and expenses allocated to the
Thermalloy Companies by the Sellers and paid to the Sellers during such
period and (12) to the extent not duplicative, the amount attributable to
the minority interests owned by Heat Holdings II in AT as reflected on the
books and records of Heat Holdings II as such, PLUS (iii) for any period of
determination which occurs after the Thermalloy Acquisition or a Permitted
Acquisition but incorporates fiscal quarters prior thereto, the EBITDA
attributable to the assets or Capital Stock so acquired (it being
understood that, in calculating such EBITDA, (x) all references to the
Borrower in the definition thereof (or in any other defined term contained
therein) shall be deemed to be references to the Person or attributable to
the assets so acquired), (y) such acquisition shall be deemed to have
occurred as of the first day of the period being measured and (z) EBITDA
for any Permitted Acquisition shall be adjusted for changes in the value of
inventory resulting from such Permitted Acquisition being accounted for as
a "purchase" for financial reporting purposes), MINUS (iv) for any period
which occurs after a Permitted Disposition but incorporates fiscal quarters
prior thereto, the EBITDA attributable to the assets or Capital Stock so
disposed (it being understood that, in calculating such EBITDA, such
disposition shall be deemed to have occurred as of the first day of the
period being measured, minus (v) solely for purposes of calculating EBITDA
for any period prior to the date that the German Lease is deemed to be an
operating lease for financial accounting purposes and not a financing
lease, the amount by which EBITDA during such period is increased as a
result of such lease being deemed a financing lease for financial
accounting purposes.
"EFFECTIVE DATE" shall mean the date on which the conditions precedent
set forth in SECTION 4.1 shall be satisfied or waived.
<PAGE>
"ENVIRONMENTAL LAWS" shall mean any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning public health, public
and workplace safety or protection of the environment, as now or may at any
time hereafter be in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EURODOLLAR BASE RATE" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a period
equal to such Interest Period commencing on the first day of such Interest
Period and appearing on Page 3750 of the Telerate screen at or about 11:00
a.m., London time, two Business Days prior to the commencement of such
Interest Period or, if such rate does not appear on such page or otherwise
on such service, such rate shall be determined by reference to such other
publicly available service for displaying Eurodollar rates as may be agreed
between the Administrative Agent and the Borrower or, in the absence of
such agreement, the "Eurodollar Base Rate" shall be the rate of interest
per annum equal to the average (rounded upwards, if necessary, to the
nearest 1/100 of 1%) of the rates per annum at which deposits in Dollars in
immediately available funds are offered by CIBC-Bank to prime international
banks in the offshore dollar market at or about 11:00 a.m., New York time,
two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of CIBC-Bank's Eurodollar Loan and for a
period approximately equal to such Interest Period.
"EURODOLLAR LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such in SCHEDULE I (or designated pursuant to a
Commitment Transfer Supplement), and thereafter, such other office of such
Lender, if any, which shall be making or maintaining Eurodollar Loans as
may be designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent.
"EURODOLLAR LOANS" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR RATE" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------
1.00 - Eurodollar Reserve Requirements
<PAGE>
"EURODOLLAR RESERVE REQUIREMENTS" shall mean, for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"EVENT OF DEFAULT" shall mean any of the events specified in SECTION
7.1; PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"EXCESS CASH FLOW" shall mean, with respect to any fiscal year, EBITDA
for such fiscal year LESS the sum of (a) optional prepayments of principal
of the Term Loans during such fiscal year, PLUS (b) Fixed Charges for such
fiscal year, PLUS (c) optional permanent prepayments of principal in
respect of the Revolving Credit Loans paid during such fiscal year.
"EXISTING AGENT" shall have the meaning ascribed thereto in the
recitals.
"EXISTING CREDIT AGREEMENT" shall have the meaning ascribed thereto in
the recitals.
"EXISTING INDEBTEDNESS" shall mean all Indebtedness of the Parent, the
Borrower and the Subsidiaries as set forth on SCHEDULE 3.30.
"EXISTING ISSUER" shall have the meaning ascribed thereto in the
recitals.
"EXISTING LEAD ARRANGER" shall have the meaning ascribed thereto in
the recitals.
"EXISTING LENDERS" shall have the meaning ascribed thereto in the
recitals.
"EXPIRY DATE" shall mean, as to any Letter of Credit, the earlier of
(a) the one year anniversary of the issuance of such Letter of Credit and
(b) the Maturity Date.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FEDERAL FUNDS RATE" shall mean for any particular date, an interest
rate per annum equal to the interest rate offered in the interbank market
to the Administrative Agent as the overnight Federal Funds Rate at or about
10:00 a.m., New York City time, on such day (or, if such day is not a
Business Day, on the next preceding Business Day).
<PAGE>
"FEE LETTER" shall mean the letter dated as of the Effective Date
among the Parent, the Borrower and the Administrative Agent, as the same
may be amended, supplemented or otherwise modified from time to time.
"FINANCING LEASE" shall mean any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with U.S. GAAP to be capitalized on a balance sheet of the
lessee.
"FIXED CHARGES" shall mean, with respect to any period, the sum
(without duplication) of (a) cash Interest Expense for such period, (b)
Capital Expenditures during such period, (c) income or other taxes actually
paid or payable during such period, (d) regularly scheduled payments of
principal on the Term Loans during such period and (e) regularly scheduled
payments of principal on other Funded Debt of the Borrower and its
Subsidiaries on a consolidated basis during such period.
"FIXED CHARGES RATIO" shall mean, in respect of any period, the ratio
of :
(i) EBITDA for the preceding four consecutive fiscal quarters to
(ii) Fixed Charges for such four quarters.
"FLUENT" shall mean Fluent Holdings, Inc., a Delaware corporation.
"FOREIGN CURRENCY" shall mean any lawful currency (other than Dollars)
that is freely transferable or convertible into Dollars.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary of the Borrower that is
a "controlled foreign corporation" within the meaning of Section 957(a) of
the Code and the regulations thereunder.
"FOREIGN SUBSIDIARY CUSTODY AGREEMENTS" shall mean the collective
reference to each Custody Agreement entered into by each Foreign Subsidiary
which does not become an additional borrower with respect to 100% of the
Capital Stock of such Foreign Subsidiary, in substantially the form of
EXHIBIT E-2, in each case as amended, supplemented or otherwise modified
from time to time.
"FULLY DILUTED OUTSTANDING" shall mean with respect to the
determination of the number of Voting Securities outstanding on any date,
the sum of (a) all Voting Securities outstanding on such date and (b) all
Voting Securities that would be outstanding if all outstanding rights,
warrants or options that may be exercised, exchanged or converted into
Voting Securities were exercised, exchanged or converted on such date but
shall exclude any warrants or options held by any Lender or any affiliate
thereof.
<PAGE>
"FUNDED DEBT" shall mean, as of any date of determination, the sum of
the aggregate outstanding amount of all Indebtedness (other than
Indebtedness of the type set forth in clause (f), (g) or (h) (to the extent
arising under the Guarantee Obligations of a liability arising under clause
(f) or (g) of the definition of Indebtedness) of the definition of
Indebtedness) of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with U.S. GAAP.
"GERMAN LEASE" shall mean the lease agreement between Curamik
Electronics GmbH and Sario G-UmbH & Co. relating to the property Am
Stadtwald 2, 92676 Eschenbach which is presently accounted for general
reporting purposes as an operating lease; PROVIDED that if any time after
the Effective Date such lease is required to be accounted as a capital
lease, the amount of such lease shall be excluded from Funded Debt in an
amount not to exceed the Dollar Equivalent of $4,200,000.
"GOVERNMENTAL AUTHORITY" shall mean any national government (United
States or foreign), any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE OBLIGATION" shall mean as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counter-indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation (the "PRIMARY OBLIGATION") of any other third Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth, liquidity or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof;
PROVIDED that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
<PAGE>
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"GUARANTEES" shall mean the collective reference to the Parent
Guarantee, the Subsidiary Guarantees and the Heat Holdings II Guarantee.
"HEAT HOLDINGS II" shall mean Heat Holdings II Corp., a Delaware
corporation.
"HEAT HOLDINGS II GUARANTEE" shall mean the guarantee by Heat Holdings
II of the Obligations of the Borrower in favor of the Administrative Agent,
for the benefit of the Lenders, substantially in the form of EXHIBIT J, as
the same may be amended, supplemented or otherwise modified from time to
time.
"HEAT HOLDINGS II PLEDGE AGREEMENT" shall mean the Pledge Agreement
between Heat Holdings II and the Administrative Agent, for the benefit of
the Lenders, substantially in the form of EXHIBIT K, as the same may be
amended, supplemented or otherwise modified from time to time.
"HEAT HOLDINGS II SECURITY AGREEMENT" shall mean the Security
Agreement between Heat Holdings II and the Administrative Agent, for the
benefit of the Lenders, substantially in the form of EXHIBIT L, as the same
may be amended, supplemented or otherwise modified from time to time.
"HEDGING AGREEMENTS" shall mean (a) any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement under which
the Borrower is a party or a beneficiary and (b) any other agreement or
arrangement designed to limit or eliminate the risk and/or exposure of the
Borrower to fluctuations in currency exchange rates.
"INACTIVE SUBSIDIARY" shall mean any Subsidiary of the Borrower (i)
the operations of which are inactive, (ii) the tangible assets of which do
not exceed the Dollar Equivalent of $50,000 in the aggregate and (iii) that
does not own any of the Capital Stock of AT or Fluent, except as set forth
on Schedule 3.31.
"INDEBTEDNESS" of any Person at any date shall mean, without
duplication, (a) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (other than current
trade liabilities and accrued expenses incurred in the ordinary course of
business and payable within 180 days), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under Financing Leases, (d) all
obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations issued or
<PAGE>
created for the account of such Person, (e) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, (f) liabilities
arising under Hedging Agreements (other than interest rate caps) of such
Person, (g) withdrawal liabilities of such Person or any Commonly
Controlled Entity under any Plan and (h) all Guarantee Obligations of such
Person, if the primary obligations would constitute Indebtedness of another
Person under clauses (a) through (g) of this definition.
"INDENTURE" shall mean the Indenture dated as of February 2, 2000
between Borrower and Bankers Trust Company, as trustee, in respect of the
Permitted High Yield Securities.
"INITIAL PUBLIC OFFERING" shall mean an underwritten public offering
made on a primary basis pursuant to a registration statement filed with,
and declared effective by, the Securities and Exchange Commission in
accordance with the Securities Act of 1933.
"INSOLVENCY" shall mean with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT" shall mean pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY" shall have the meaning ascribed thereto in
SECTION 3.9.
"INTEREST COVERAGE RATIO" shall mean, as of any date of determination,
the ratio of:
(i) EBITDA for the preceding four consecutive fiscal quarters to
(ii) cash Interest Expense for such four quarters; PROVIDED that
for purposes of calculating the Interest Coverage Ratio for (a) the
last day of the first full fiscal quarter of 2000, Interest Expense
shall be based on Interest Expense for such fiscal quarter MULTIPLIED
by 4, (b) the last day of the second full fiscal quarter 2000,
Interest Expense shall be based on Interest Expense for the six month
period ending on such date MULTIPLIED by 2 and (c) the last day of the
third full fiscal quarter of 2000, Interest Expense shall be based on
Interest Expense for the nine month period ending on such date
MULTIPLIED by 4/3.
"INTEREST EXPENSE" shall mean, for any period, the sum of (a) all
interest in respect of all Indebtedness of the Parent, the Borrower and
their respective Subsidiaries accrued, accreted or capitalized during such
period (whether or not actually paid during such period) in accordance with
GAAP, PLUS (b) the net amounts payable (or minus the net amounts
receivable) under Hedging Agreements accrued during such period, PLUS (c)
all financing or commitment fees or costs in respect of Indebtedness
(exclusive of any transaction or "up front" fees incurred in establishing
or entering into any such Hedging
<PAGE>
Agreement) of the Parent, the Borrower or any Subsidiary and any management
fees accrued or capitalized during such period (whether or not actually
paid during such period) but shall exclude any arrangement, underwriting or
similar fees or costs (including attorneys' fees) paid in respect of the
Indebtedness created under this Agreement or the Permitted High Yield
Securities.
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate
Loan, the last day of each March, June, September and December to occur
while such Loan is outstanding, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of
such Interest Period.
"INTEREST PERIOD" with respect to any Eurodollar Loan shall mean:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
PROVIDED that, the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date;
(iii) any Interest Period pertaining to a Eurodollar Loan that begins
on the last Business Day of a calendar month (or on a day for
which there
<PAGE>
is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day
of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
"INVENTORY" shall mean any "inventory" (as such term is defined in
Section 9-109(4) of the Uniform Commercial Code of the State of New York as
in effect from time to time) of the Parent, the Borrower or any of their
respective Subsidiaries.
"ISSUER" shall have the meaning ascribed thereto in the heading hereto
and shall include CIBC-Bank or any other Lender or financial institution
which shall be the issuer of the Letters of Credit hereunder. The Issuer
shall be deemed a Lender for purposes of SECTION 5.7, SECTION 5.8(C), and
ARTICLE 9 of this Agreement and for purposes of having the benefit of each
of the Security Documents.
"JOINDER AGREEMENT" shall mean the collective reference to each
Joinder Agreement substantially in the form of EXHIBIT T entered into from
time to time by any Subsidiary of the Borrower which executes a Subsidiary
Guarantee in favor of the Administrative Agent, for the benefit of the
Lenders.
"LANDLORD WAIVERS" shall mean the collective reference to the Landlord
Waivers, delivered pursuant to the Existing Credit Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"LEAD ARRANGER" shall have the meaning ascribed thereto in the heading
hereto.
"LENDERS" shall have the meaning ascribed thereto in the heading
hereto and each other bank and financial institution that becomes a party
hereto as Lender pursuant to a Commitment Transfer Supplement.
"LETTERS OF CREDIT" shall mean the collective reference to each
irrevocable standby letter of credit opened by the Issuer for the account
of the Borrower from time to time pursuant to the terms hereof.
"LIEN" shall mean (a) any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction), (b) any
<PAGE>
arrangement or agreement which prohibits the Parent, Heat Holdings II, the
Borrower or any of their respective Subsidiaries from creating any
mortgage, pledge, hypothecation, deposit arrangement, encumbrance, lien,
charge or other security interest, or from entering into any agreement or
arrangement described in clause (a) of this definition or (c) the sale,
assignment, pledge or transfer for security of any accounts, general
intangibles or chattel paper of the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries with or without recourse.
"LOAN" shall mean any loan made by any Lender pursuant to this
Agreement.
"LOAN DOCUMENTS" shall mean this Agreement and each other agreement,
instrument or certificate executed and delivered to any Agent, the Issuer
or any Lender pursuant hereto including, without limitation, the Assignment
and Assumption Agreement, the Notes, the Security Documents, the
Guarantees, each Letter of Credit, the Custody Agreements, the Contribution
Agreement, each Joinder Agreement, the Landlord Waivers and the Fee Letter.
"LOAN PARTIES" shall mean the Parent, Heat Holdings II, the Borrower,
their respective Subsidiaries and any other Person (other than any Agent,
the Issuer or any of the Lenders) which is or becomes a party to a Loan
Document.
"MAKE-WELL AGREEMENT" shall mean the Make-Well Agreement dated as of
February 2, 2000 among the Borrower, the Parent and Bankers Trust Company,
as trustee.
"MANAGEMENT SHARES" shall mean the shares of Capital Stock of Fluent
or AT, if any, issued by Fluent or AT, as the case may be, to directors,
officers, employees or consultants of ATP, Fluent, the Parent, Heat
Holdings II or the Borrower and PROVIDED that (i) after giving effect to
such issuance, the Parent and its Subsidiaries will continue to have the
benefit of Section 1504(a)(2) of the Code, and (ii) such shares of Capital
Stock shall be issued pursuant to an agreement, that shall contain the
provisions contained in EXHIBIT Z pursuant to which the recipient of such
Capital Stock shall agree for the benefit of the other holders of the
Capital Stock of such issuer and the Administrative Agent, on behalf of the
Lenders, that in the event of the sale of all or substantially all the
other Capital Stock of such issuer to a third party, such recipient shall
sell such shares to such third party and which agreement shall not contain
any other provisions which materially affect the foregoing rights of the
Administrative Agent unless such provisions are reasonably satisfactory to
the Administrative Agent, and (iii) in the case of the issuance of shares
of Capital Stock to Persons who are, on the date of such issuance, or were
during the 90 days prior thereto, officers or directors of the Parent, Heat
Holdings II, the Borrower, Fluent or AT, PROVIDED such shares of Capital
Stock are pledged, to the Administrative Agent for the benefit of the
Lenders, pursuant to an agreement reasonably satisfactory to the
Administrative Agent.
<PAGE>
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, operations, properties, condition (financial or otherwise) or
prospects of Fluent and its Subsidiaries, taken as a whole, of AT and its
Subsidiaries, taken as a whole, of the Borrower and its Subsidiaries, taken
as a whole, or of the Parent and its Subsidiaries, taken as a whole, (b)
the validity or enforceability of this Agreement, any of the Notes or any
of the other Loan Documents, the Liens created hereunder or thereunder or
the rights or remedies of the Administrative Agent or the Lenders hereunder
or thereunder or (c) the ability of any Loan Party to perform its
Obligations under any Loan Document or Merger Document to which it is or is
to be a party.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes, defined
or regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"MATURITY DATE" means the earlier of March 31, 2005 and the date of
termination in whole of the Revolving Credit Commitments and the Term Loan
Commitments as provided herein.
"MERGER" shall have the meaning ascribed thereto in the recitals.
"MERGER AGREEMENT" shall have the meaning ascribed thereto in the
recitals.
"MERGER DOCUMENTS" shall mean the collective reference to the Merger
Agreement, the Proxy Statement and each of the agreements, real property
leases, notes, guarantees, consents, instruments, certificates and opinions
delivered by the Borrower, Merger Sub or any other Person in connection
with the Merger.
"MERGER SUB" shall have the meaning ascribed thereto in the recitals.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"MORTGAGE MODIFICATIONS" shall mean the collective reference to the
mortgage modifications to each Mortgage delivered by the applicable Loan
Party on the Effective Date, in form and substance satisfactory to the
Administrative Agent.
"MORTGAGES" shall mean the collective reference to (a) the Mortgage
delivered by Fluent on the Original Closing Date in respect of the premises
at 10 Cavendish Court, Lebanon, New Hampshire, (b) the Mortgage delivered
by Aavid Thermal Technologies of Texas, LLC (as successor to Aavid Thermal
Technologies of Texas, Inc.) on the Original Closing Date in respect of the
premises at 250 Apache Trail, Terrell, Texas, (c) the Mortgage delivered by
AT (as successor to Aavid Thermal Products, Inc.) on the Original
<PAGE>
Closing Date in respect of the premises at 67 Primrose Drive, Laconia, New
Hampshire and (d) any other Mortgage delivered by any Loan Party in
connection with this Agreement, in each case, as modified by the Mortgage
Modifications and as further amended, supplemented or otherwise modified
from time to time.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"NET DEBT PROCEEDS" shall mean the excess of (a) the gross cash
proceeds received by the Parent, Heat Holdings II, the Borrower or any of
their respective Subsidiaries from the issuance of any Indebtedness (other
than the (i) Permitted High Yield Securities, (ii) Refinancing Securities
issued in an aggregate amount equal to or less than the sum of (x) the
aggregate principal amount, premium, if any, and any accrued but unpaid
interest outstanding under the Permitted High Yield Securities, plus (y)
fees and expenses relating to the Refinancing Securities, and (iii) other
Indebtedness permitted to be incurred pursuant to SECTION 6.2), over (b)
all reasonable fees and expenses incurred in connection with such issuance
(including, but not limited to, customary underwriting commissions and
legal, investment banking, brokerage and accounting, trustee fees and other
professional fees, sales commission and disbursements) paid to
non-affiliated third parties.
"NET DISPOSITION PROCEEDS" shall mean the gross cash proceeds
(including any cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise but only as and when
received) received by the Parent, the Borrower or any Subsidiary from the
sale (other than a sale in the ordinary course of business), lease (other
than a lease in the ordinary course of business), transfer or other
disposition of any of its assets less the sum of (a) reasonable and
customary selling expenses paid to non-affiliated third parties, (b) any
Indebtedness secured by a Lien on such asset or property permitted to exist
under clause (e) of SECTION 6.3 to the extent the Parent, the Borrower or
such Subsidiary is required to make a payment with respect thereto, (c) the
amount of taxes payable by the Parent, the Borrower or such Subsidiary with
respect to any gain realized as a result of such sale, lease, transfer or
other disposition and which taxes are payable by the Parent, the Borrower
or such Subsidiary within two years of the date of such sale, lease,
transfer or other disposition or within two years of any installment
payment with respect thereto; PROVIDED that any such amounts not actually
paid within such two-year period shall be deemed, at the end of such two
year period, to be Net Disposition Proceeds and (d) any amounts required to
be placed in escrow in connection with such transaction or amounts that the
Parent, the Borrower or such Subsidiary reasonably determines are required
to meet post-closing purchase price adjustments in connection with such
transactions, in either case, to the extent any such amounts are actually
applied from escrow or to such post-closing purchase price adjustments.
<PAGE>
"NET INCOME" for any period shall mean net income (or deficit) of the
Parent, the Borrower and their respective Subsidiaries determined on a
consolidated basis in accordance with U.S. GAAP; PROVIDED that, for
purposes of such determination, Thermalloy Malaysia and the 85.40% interest
in Curamik shall be deemed to have been owned by the Borrower as of the
first day of such period.
"NET INSURANCE PROCEEDS" shall mean the proceeds (including any
proceeds from the termination or unwinding of any interest rate cap) and
awards of compensation received by the Parent, the Borrower or any of their
respective Subsidiaries from the damage to or destruction or condemnation
of all or any portion of its assets or property (regardless of whether such
compensation is from any action in tort or contract or otherwise or from
any governmental proceeding or action).
"NON-EXCLUDED TAXES" shall have the meaning ascribed thereto in
SECTION 2.19.
"NON-RECOURSE INDEBTEDNESS" shall mean the Indebtedness of any Person
acquired pursuant to a Permitted Acquisition if, and for so long as, the
documentation governing such Indebtedness contains terms and conditions
customary for industrial development bonds and industrial revenue bonds or
other similar kinds of financings, including without limitation, limiting
the recourse of the lender or lenders against such Person for the payment
of such Indebtedness directly to the property or assets that were the
subject of the transaction pursuant to which such Indebtedness was created.
"NOTICE OF BORROWING" shall have the meaning ascribed thereto in
SECTION 2.3.
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning ascribed
thereto in SECTION 2.11.
"NOTES" shall mean the collective reference to the Revolving Credit
Notes and the Term Notes.
"OBLIGATIONS" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Parent, Heat Holdings II, the Borrower or any of their
respective Subsidiaries, as applicable, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding and
whether the Administrative Agent, for the benefit of the Lenders, is
oversecured or undersecured with respect to such Loans) the Notes and all
other obligations and liabilities of the Parent, Heat Holdings II, the
Borrower or any such Subsidiary, as applicable, to the Agents and the
Lenders or any of their respective Affiliates, including any Reimbursement
Obligations and any obligation of the Borrower under any Hedging Agreement
entered into with any Agent, any Lender or any of their respective
Affiliates, whether direct or
<PAGE>
indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, the Notes, the other Loan Documents or any Hedging
Agreement with any Agent, any Lender or any of their respective Affiliates
or any other document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to any Agent or to the
Lenders that are required to be paid by the Parent, Heat Holdings II, the
Borrower or any Subsidiary, as applicable, pursuant to the terms of the
Credit Agreement, any other Loan Document or any Hedging Agreement with any
Agent, any Lender or any of their respective Affiliates) or otherwise.
"OFFERING MEMORANDUM" shall mean the Offering Memorandum of the
Borrower, dated January 31, 2000, relating to the Permitted High Yield
Securities and the Warrants.
"ORIGINAL CLOSING DATE" shall mean October 21, 1999.
"PARENT" shall have the meaning ascribed thereto in the heading
hereto.
"PARENT GUARANTEE" shall have the meaning ascribed thereto in SECTION
8.1.
"PARENT PLEDGE AGREEMENT" shall mean the Pledge Agreement between the
Parent and the Administrative Agent, for the benefit of the Lenders,
substantially in the form of EXHIBIT M, as the same may be amended,
supplemented or otherwise modified from time to time.
"PARENT SECURITY AGREEMENT" shall mean the Security Agreement between
the Parent and the Administrative Agent, for the benefit of the Lenders,
substantially in the form of EXHIBIT N, as the same may be amended,
supplemented or otherwise modified from time to time.
"PARTICIPANT" shall have the meaning ascribed thereto in SECTION
10.6(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"PERMITTED ACQUISITION" shall mean any acquisition by the Borrower or
any of its Subsidiaries of all or substantially all the assets or all the
Capital Stock of any Person engaged in the Thermal Management Solutions
Business; PROVIDED that the Parent and the Borrower shall have complied
with the following conditions:
<PAGE>
(i) NO DEFAULT. No Default or Event of Default shall have occurred and be
continuing immediately prior to and after giving effect to such
acquisition;
(ii) FINANCIAL CONDITION AND DUE DILIGENCE. At least 5 Business Days prior
to the closing date for such acquisition, (A) the Borrower shall have
delivered a Compliance Certificate demonstrating that on the closing
date of such acquisition (or series of related acquisitions) after
giving effect thereto, the Borrower will be in PRO FORMA compliance
with the financial covenants set forth in this Agreement and (B) if
the consideration for such acquisition (or series of related
acquisitions) exceeds the Dollar Equivalent of $10,000,000 in the
aggregate, the Borrower shall have also provided to the Administrative
Agent and the Lenders PRO FORMA financial statements of the Borrower
and its Subsidiaries certified by a Responsible Officer of the
Borrower demonstrating, as of such closing date, PRO FORMA compliance
with all terms set forth in this Agreement to and including the
Maturity Date. The Parent or the Borrower shall provide the
Administrative Agent and the Lenders with such additional information
regarding such acquisition as the Administrative Agent shall
reasonably request;
(iii) SECURITY INTERESTS, DOCUMENTS, UCC SEARCHES. On the closing date for
such acquisition, the Administrative Agent (for the benefit of itself
and the Lenders) shall have, and shall have received satisfactory
evidence that it has, a valid and perfected first priority security
interest in the assets and Capital Stock being acquired pursuant to
such acquisition, subject only to Liens permitted to exist under
SECTION 6.3(a), (b), (c), (d), (e), (h) and (j) together with, if
requested by the Administrative Agent, opinions of legal counsel in
all applicable jurisdictions in form and substance and from counsel
reasonably satisfactory to the Administrative Agent and certified
copies of UCC or other similar search reports listing all effective
Liens that name each seller under the transaction documents and other
applicable documents under the laws of any jurisdiction.
(iv) CERTIFICATIONS. On the closing date for such acquisition, the Parent
and the Borrower shall deliver or cause to be delivered to the
Administrative Agent a certificate executed by a Responsible Officer
of the Parent and the Borrower, stating that, on such closing date,
after giving effect to such acquisition: (A) no Default or Event of
Default has occurred and is continuing; (B) the representations and
warranties set forth in ARTICLE 3 are true and correct in all material
respects on and as of such date with the same effect as though made on
and as of such date (except for representations and warranties made as
of a specific date, which shall be true and correct in all material
respects on such date); and (C) the documents for such acquisition
have not been modified in any material respect from those previously
delivered to the Administrative Agent (if the Administrative Agent has
so requested), and none of the Parent, the Borrower
<PAGE>
nor any Subsidiary has waived compliance with any material condition
precedent or covenant set forth therein;
(v) AGGREGATE PURCHASE PRICE. The aggregate purchase price payable for all
such acquisitions shall not exceed (A) the Dollar Equivalent of
$25,000,000 in any fiscal year or (B) the Dollar Equivalent of
$75,000,000 from the Effective Date to and including the Maturity
Date; and
(vi) PERMITTED ACQUISITION DOCUMENTS. As promptly as practicable after the
closing date for such acquisition, the Administrative Agent shall have
received executed or conformed copies of all closing documents
(including opinions of counsel, if any, and letters permitting the
Administrative Agent to rely on such opinions as if it were an
addressee thereof) delivered under such transaction documents and
satisfactory evidence of any necessary filing of the documents
effecting such acquisitions, certified as true and complete by a
Responsible Officer of the Parent and the Borrower.
"PERMITTED DISPOSITION" shall mean the sale, lease (other than a lease
in the ordinary course of business), transfer or other disposition of any
of the assets of any of the Borrower or any Subsidiary; PROVIDED that the
Parent and the Borrower shall have complied with the following conditions:
(i) NO DEFAULT. No Default or Event of Default shall have occurred and be
continuing immediately prior to and after giving effect to such
disposition;
(ii) CONSIDERATION PAID. The consideration for such disposition (or series
of related dispositions) shall not be less than the fair market value
of the assets sold, leased, transferred or otherwise disposed and, if
the aggregate consideration for such disposition (or series of related
dispositions) exceeds the Dollar Equivalent of $10,000,000 in the
aggregate, the Borrower shall have provided to the Administrative
Agent and the Lenders a certificate of the Board of Directors of the
Borrower as to the good faith determination of the fair market value
of the assets so disposed;
(iii) FINANCIAL CONDITION. At least 5 Business Days prior to the closing
date for such disposition, (A) the Borrower shall have delivered a
Compliance Certificate demonstrating that on the closing date of such
disposition (or series of related dispositions) after giving effect to
such disposition (or series of related dispositions) the Borrower will
be in PRO FORMA compliance with the financial covenants contained in
this Agreement and (B) if the aggregate consideration for such
disposition (or series of related dispositions) exceeds the Dollar
Equivalent of $10,000,000 in the aggregate, the Borrower shall have
also provided to the Administrative Agent and the Lenders PRO FORMA
financial statements of the
<PAGE>
Parent and its Subsidiaries certified by a Responsible Officer of the
Parent and the Borrower demonstrating PRO FORMA compliance with all
terms set forth in this Agreement to and including the Maturity Date;
(iv) EBITDA. The aggregate EBITDA provided by the assets so disposed (A)
for the immediately preceding twelve-month period, shall not exceed
10% of EBITDA of the Borrower for such twelve month period or (B) for
the period from the Effective Date to the date of such disposition,
shall not exceed 25% of EBITDA of the Borrower for such period; and
(v) APPLICATION OF PROCEEDS. The Net Disposition Proceeds from any such
disposition shall be applied to the Loans in accordance with SECTION
2.9(C).
Notwithstanding the foregoing, the Borrower may dispose of assets
pursuant to a Significant Disposition; PROVIDED that the Borrower shall be
in compliance with clauses (i), (ii), (iii) and (v) above.
"PERMITTED HIGH YIELD SECURITIES" shall mean the 12 3/4% Senior
Subordinated Notes of the Borrower issued under the Indenture in the
aggregate principal amount of $150,000,000.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"PLAN" shall mean at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Parent, the Borrower
or any of their respective Subsidiaries is, an "employer" as defined in
Section 3(5) of ERISA, other than a Multiemployer Plan.
"PLEDGE AGREEMENTS" shall mean the collective reference to (i) the
Borrower Pledge Agreements, (ii) the Subsidiary Pledge Agreements, (iii)
the Parent Pledge Agreement, (iv) the Heat Holdings II Pledge Agreement and
(v) any other Pledge Agreement entered into by any Person in favor of the
Administrative Agent, for the benefit of the Lenders to secure the
Obligations or to secure the obligations of such Person under a Guarantee.
"PLEDGED STOCK" shall have the meaning ascribed thereto in each Pledge
Agreement.
"PRO FORMA BALANCE SHEET" shall have the meaning ascribed thereto in
SECTION 3.1(c).
"PROPERTIES" shall have the meaning ascribed thereto in SECTION
3.16(a).
<PAGE>
"PROXY STATEMENT" shall mean the proxy statement of the Borrower filed
with the Securities and Exchange Commission on December 30, 1999 and mailed
to the stockholders of the Borrower on December 30, 1999.
"QFL NOTE" shall have the meaning ascribed thereto in SECTION 2.18(c).
"QUALIFIED FOREIGN LENDER" shall have the meaning ascribed thereto in
SECTION 2.18(c).
"REFINANCING SECURITIES" shall mean subordinated debt issued by the
Borrower solely for the purpose of refinancing the Permitted High Yield
Securities on terms and conditions substantially similar to and no less
favorable in all material respects to the Lenders than the terms and
conditions governing the Permitted High Yield Securities, and shall include
related fees and expenses incurred in connection therewith.
"REGISTER" shall have the meaning ascribed thereto in SECTION 10.6(d).
"REGULATION T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"REGULATION U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"REGULATION X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" shall mean the obligation of the Borrower
to reimburse the Issuer and the Revolving Credit Lenders for all amounts
drawn under the Letters of Credit and any other amounts under SECTION 2.21.
"REORGANIZATION" shall mean with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPLACED NOTE" shall have the meaning ascribed thereto in SECTION
2.18(c).
"REPLACEMENT ASSETS" shall have the meaning ascribed thereto in
SECTION 2.9(c).
"REPLACEMENT LENDER" shall have the meaning ascribed thereto in
SECTION 2.22(b).
<PAGE>
"REPORTABLE EVENT" shall mean any of the events set forth in section
4043(c) of ERISA other than those events for which the notice requirement
has been waived under applicable regulations.
"REQUIRED LENDERS" at any time shall mean Lenders whose Commitment
Percentages aggregate at least 51% at such time.
"REQUIREMENT OF LAW" as to any Person shall mean the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case,
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" shall mean, with respect to any Person, the
chairman of the board of directors, the chief executive officer, the
president, executive vice president or vice president of such Person or,
with respect to financial matters, the chief financial officer, vice
president, treasurer or secretary of such Person.
"RESTRUCTURING" shall mean the restructuring of the Borrower and its
Subsidiaries as set forth on SCHEDULE 1.2.
"REVOLVING CREDIT COMMITMENT" shall mean, as to any Revolving Credit
Lender, the obligation of such Lender to make Revolving Credit Loans to the
Borrower in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth under the heading "Revolving Credit
Commitments" opposite such Lender's name on SCHEDULE I, as such amount may
be reduced from time to time pursuant to this Agreement. As of the date of
this Agreement, the aggregate amount of the Revolving Credit Commitments is
equal to $22,000,000.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, as to any
Revolving Credit Lender at any time, the percentage which such Lender's
Revolving Credit Commitment then constitutes of the aggregate Revolving
Credit Commitments.
"REVOLVING CREDIT COMMITMENT PERIOD" shall mean the period from and
including the date hereof to, but not including, the Maturity Date or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"REVOLVING CREDIT LENDERS" shall mean the collective reference to all
Lenders having Revolving Credit Commitments or holding outstanding
Revolving Credit Loans or participating interests in any Letter of Credit.
"REVOLVING CREDIT LOANS" shall have the meaning ascribed thereto in
SECTION 2.1.
<PAGE>
"REVOLVING CREDIT NOTE" shall have the meaning ascribed
thereto in SECTION 2.2.
"S&P" shall mean Standard & Poor's Rating Group.
"SCHEDULE 1.3 ENTITIES" shall mean the Persons listed on
SCHEDULE 1.3.
"SECURITY AGREEMENTS" shall mean the collective reference to
the Parent Security Agreement, the Heat Holdings II Security Agreement,
the Borrower Security Agreement, the Borrower Intellectual Property
Security Agreement, the Subsidiary Security Agreements, the Subsidiary
Intellectual Property Security Agreements and any other security
agreements entered into by any Person in favor of the Administrative
Agent, for the benefit of the Lenders, to secure the Obligations or to
secure the Obligations of such Person under a Guarantee.
"SECURITY DOCUMENTS" shall mean the collective reference to
the Pledge Agreements, the Security Agreements, the Mortgages and all
other security documents hereafter delivered to the Administrative
Agent granting a Lien on any asset or assets of the Parent, Heat
Holdings II, the Borrower or any of their respective Subsidiaries to
secure the obligations and liabilities of the Borrower under the Notes
and/or under any of the other Loan Documents or to secure any guarantee
by such Loan Party of any such obligations and liabilities.
"SELLERS" shall mean the collective reference to Bowthorpe
plc, a company organized under the laws of England and Wales, Bowthorpe
B.V., a Netherlands corporation, Bowthorpe International Inc., a
Delaware corporation, and Bowthorpe GmbH, a German corporation.
"SENIOR LEVERAGE RATIO" shall mean, as of any date of
determination, the ratio of
(a) Funded Debt outstanding as of such date
MINUS the outstanding aggregate principal amount of the
Permitted High Yield Securities, or the outstanding aggregate
principal amount of the Refinancing Securities, as applicable,
to
(b) EBITDA for the preceding four consecutive
fiscal quarters.
"SIGNIFICANT DISPOSITION" shall mean (i) the sale of all or
substantially all the assets of AT or Fluent or (ii) the consummation
of an Initial Public Offering of the Capital Stock of AT or Fluent.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
<PAGE>
"SOLVENT" shall mean, with respect to the Parent, Heat
Holdings II, the Borrower or any Subsidiary (a) the property of the
Parent, Heat Holdings II, the Borrower or such Subsidiary, at fair
valuation, will exceed the debts of the Parent, Heat Holdings II, the
Borrower or such Subsidiary, as the case may be, (b) the Parent, Heat
Holdings II, the Borrower or such Subsidiary will be able to pay its
debts as such debts become absolute and matured, and (c) the Parent,
Heat Holdings II, the Borrower or such Subsidiary will have, as of such
date, sufficient capital with which to conduct its business. For
purposes of this definition, "debt" means "liability on a claim" and
"claim" means (i) any right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (ii) any right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.
"SPOT RATE" shall mean, as of any date of determination (a)
with respect to the conversion of an amount in any Foreign Currency to
U.S. Dollars at the rate of exchange quoted by CIBC-Bank in London,
England at 11:00 a.m. (London, England time) on such date of
determination to prime banks in London, England for the spot purchase
in the foreign exchange market of such city of such amount of such
Foreign Currency with U.S. Dollars and (b) with respect to the
conversion of an amount in U.S. Dollars to any Foreign Currency at the
rate of exchange quoted by CIBC-Bank in New York, New York at 11:00
a.m. (New York time) on such date of determination to prime banks in
New York, New York for the spot purchase in the foreign exchange market
of such city of such amount of U.S. Dollars with such Foreign Currency.
"STATED AMOUNT" of a Letter of Credit shall mean the total
amount available to be drawn under such Letter of Credit upon the
issuance thereof.
"SUBORDINATED DEBT DOCUMENTS" shall mean the collective
reference to the Indenture, the Offering Memorandum, the Subordinated
Guarantees, the Warrant Agreement, the Warrants, the Make-Well
Agreement and any other document entered into by the Parent, Heat
Holdings II, the Borrower or any Subsidiary in connection with the
Permitted High Yield Securities and the Warrants.
"SUBORDINATED GUARANTEES" shall mean the collective reference
to the guarantees executed by each Domestic Subsidiary of the Borrower
in respect of the Borrower's obligations under the Permitted High Yield
Securities.
"SUBSIDIARY" of a Person shall mean a corporation, partnership
or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the occurrence of a
contingency) to elect a majority of the board of directors or other
<PAGE>
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless the context otherwise requires, all references to
Subsidiaries are to Subsidiaries of the Parent.
"SUBSIDIARY GUARANTEES" shall mean the collective reference to
the guarantees executed by each of the Subsidiary Guarantors in favor
of the Administrative Agent for the benefit of the Lenders,
substantially in the form of EXHIBIT O, as the case may be, in each
case, as the same may be amended, supplemented or otherwise modified
from time to time.
"SUBSIDIARY GUARANTORS" shall mean the collective reference to
the Subsidiaries listed on SCHEDULE 1.1 and any other Person who,
pursuant to the terms of this Agreement, shall enter into a guarantee
(in form and substance satisfactory to the Administrative Agent)
pursuant to which such Person shall guarantee the Obligations.
"SUBSIDIARY INTELLECTUAL PROPERTY SECURITY AGREEMENTS" shall
mean the collective reference to the Intellectual Property Security
Agreement between each Subsidiary party thereto and the Administrative
Agent, for the benefit of the Lenders, each substantially in the form
of EXHIBIT Q, in each case, as the same may be amended, supplemented or
otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENTS" shall mean the collective
reference to (i) the Pledge Agreement between each Domestic Subsidiary
that owns Capital Stock to pledge and the Administrative Agent, for the
benefit of the Lenders, substantially in the form of EXHIBIT P, and
(ii) each other agreement, in form and substance satisfactory to the
Administrative Agent, between a Foreign Subsidiary and the
Administrative Agent, for the benefit of the Lenders, pursuant to which
the Capital Stock of a Foreign Subsidiary is pledged under applicable
law, in the case of each of clause (i) and (ii) as such agreement may
be amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENTS" shall mean the collective
reference to the (i) Security Agreements between the Subsidiary
Guarantors and the Administrative Agent, for the benefit of the Lenders
substantially in the form of EXHIBIT S, as the case may be, and (ii) in
the case of any Foreign Subsidiary that becomes an additional Borrower
hereunder, each other agreement, in form and substance satisfactory to
the Administrative Agent, between such Foreign Subsidiary and the
Administrative Agent pursuant to which such Foreign Subsidiary grants a
first priority, perfected Lien on all its assets and properties in
favor of the Administrative Agent, for the benefit of the Lenders,
under applicable law, in each case of clause (i) and (ii), as the same
may be amended, supplemented or otherwise modified from time to time.
<PAGE>
"SUPPLEMENTAL EQUITY CONTRIBUTION" shall mean an amount of
cash equity provided to the Borrower to prepay Term Loans so that if
such prepayment had been made (a) as of December 31, 2000, the Total
Leverage Ratio of the Borrower and its Subsidiaries would not have been
greater than 4.50 to 1.00 and/or (b) as of December 31, 2001, the Total
Leverage Ratio of the Borrower and its Subsidiaries would not have been
greater than 4.25 to 1.00; PROVIDED that the aggregate amount of all
Supplemental Equity Contributions shall not exceed the Dollar
Equivalent of $25,000,000.
"TERM LENDERS" shall mean the collective reference to all
Lenders having Term Loan Commitments or holding outstanding Term Loans.
"TERM LOAN COMMITMENT" shall mean, with respect to each Term
Lender, the amount set forth under the heading "Term Loan Commitments"
opposite such Lender's name on Schedule I. As of the date of this
Agreement, the aggregate amount of the Term Loan Commitments is
$53,000,000.
"TERM LOAN COMMITMENT PERCENTAGE" shall mean, as to any Term
Lender, at any time, the percentage which such Lender's Term Loan
Commitment then constitutes of the aggregate Term Loan Commitments (or,
at any time after the Term Loan Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Term Loans then outstanding constitutes of the aggregate
principal amount of the Term Loans then outstanding).
"TERM LOANS" shall have the meaning ascribed thereto in
SECTION 2.6.
"TERM NOTE" shall have the meaning ascribed thereto in SECTION
2.7.
"THERMAL MANAGEMENT SOLUTIONS BUSINESS" shall mean (i) the
production and distribution of thermal management products and
computational fluid dynamics software, (ii) providing consulting
services relating to such production and distribution, (iii) the
production and distribution of direct bonded copper substrates used in
the packaging and cooling of high power electronic devices and (iv) any
business substantially related thereto.
"THERMALLOY ACQUISITION" shall mean the acquisition by the
Borrower of all the Capital Stock of the Thermalloy Companies other
than Curamik and 65.2% of the Capital Stock of Curamik pursuant to the
Thermalloy Acquisition Agreement and the related purchase of an
additional 20.2% of the Capital Stock of Curamik on October 28, 1999.
"THERMALLOY ACQUISITION AGREEMENT" shall mean the Stock
Purchase Agreement, dated as of August 23, 1999 among the Borrower and
the Sellers.
<PAGE>
"THERMALLOY ACQUISITION DOCUMENTS" shall mean the collective
reference to the Thermalloy Acquisition Agreement and each of the
agreements, real property leases, notes, guarantees, consents,
instruments, certificates and opinions delivered by the Borrower or any
other Person in connection with the Thermalloy Acquisition.
"THERMALLOY COMPANIES" shall mean the collective reference to
Redpoint Thermalloy Limited, a company formed under the laws of England
and Wales, El.Bo.Mec. S.r.l., an Italian corporation, Thermalloy
Malaysia, Thermalloy Limited (Hong Kong), a Hong Kong corporation,
Thermalloy Investment Company, a Texas corporation, and Curamik.
"THERMALLOY MALAYSIA" shall mean Thermalloy (Malaysia) Sdn
Bhd, a Malaysian corporation.
"THERMALLOY MANAGEMENT FEES" shall mean payments made by the
Thermalloy Companies to Bowthorpe, plc for management services provided
prior to the Thermalloy Acquisition and for purposes of calculating
EBITDA shall equal (i) $2,191,000 for the twelve month period ending on
the last day of the third fiscal quarter of 1999, (ii) $1,336,000 for
the twelve month period ending on the last day of the fourth fiscal
quarter of 1999, (iii) $1,090,000 for the twelve month period ending on
the last day of the first fiscal quarter of 2000, (iv) $358,000 for the
twelve month period ending on the last day of the second fiscal quarter
of 2000 and (v) $0 thereafter.
"TOTAL LEVERAGE RATIO" shall mean, as of any date of
determination, the ratio of
(a) Funded Debt outstanding as of such date to
(b) EBITDA for the preceding four consecutive
fiscal quarters.
"TRANCHE" shall mean the collective reference to Eurodollar
Loans, the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"TRANSFEREE" shall have the meaning ascribed thereto in
SECTION 10.6(F).
"TYPE" shall mean as to any Loan, its nature as an Alternate
Base Rate Loan or a Eurodollar Loan.
"UNIFORM CUSTOMS" shall mean the Uniform Customs Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended, supplemented or
modified from time to time and, if applicable,
<PAGE>
the rules of the "International Standby Practices 1998" (1 SP98), as
the same may be revised from time to time.
"U.S. GAAP" shall mean generally accepted accounting
principles in the United States of America consistent with those
utilized in preparing the audited financial statements of the Borrower
referred to in SECTION 3.1.
"VOTING SECURITIES" shall mean any class of Capital Stock of
the Parent, the Borrower or any of their respective Subsidiaries, as
applicable, pursuant to which the holders thereof have the general
voting power under ordinary circumstances to vote for the election of
directors (irrespective of whether or not at the time any other class
will have or might have voting power by reason of the occurrence of any
contingency).
"WARRANT AGREEMENT" shall mean the Warrant Agreement dated as
of February 2, 2000, among the Borrower, Heat Holdings II and Bankers
Trust Company, as warrant agent.
"WARRANTS" shall mean the 150,000 warrants to purchase an
aggregate of 60 shares of Class A common stock and 60 shares of Class H
common stock of the Borrower, issued pursuant to the Warrant Agreement
in connection with the Permitted High Yield Securities.
"WSP" shall mean the collective reference to the investment
funds managed by Willis Stein & Partners including Willis Stein &
Partners II, L.P. and Willis Stein & Partners Dutch, L.P.
"YEAR 2000 PROBLEM" shall mean any significant risk that
computer hardware or software used in the Parent's, the Borrower's or
any Subsidiary's business or operations will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
1.2 OTHER DEFINITIONAL PROVISIONS . (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have their respective
defined meanings when used in the Notes or any certificate or other document
made or delivered pursuant hereto.
(b) As used herein, in the Notes and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Parent, the
Borrower and any Subsidiary not defined in SECTION 1.1 and accounting terms
partly defined in SECTION 1.1, to the extent not defined, shall have the
respective meanings given to them under U.S. GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to
<PAGE>
any particular provision of this Agreement, and Article, Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
ARTICLE 2. AMOUNT AND TERMS OF LOANS
2.1 REVOLVING CREDIT COMMITMENTS . (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans in Dollars ("REVOLVING CREDIT LOANS") to the Borrower
from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed such
Lender's Revolving Credit Commitment; PROVIDED that no Lender shall be
permitted or required to make any Revolving Credit Loan if after giving
effect thereto
(i) the sum of the outstanding principal amount of
Revolving Credit Loans made by such Lender, such Lender's Revolving
Credit Commitment Percentage of the aggregate stated amount of all
Letters of Credit outstanding and such Lender's Percentage of the
aggregate amount drawn under all Letters of Credit for which the Issuer
has not been reimbursed would exceed such Lender's Revolving Credit
Commitment; or
(ii) the sum of the outstanding principal amount of
the Revolving Credit Loans made by all the Lenders, the aggregate
stated amount of all Letters of Credit outstanding and the aggregate
amount drawn under all Letters of Credit for which the Issuer has not
been reimbursed would exceed the Revolving Credit Commitments.
Subject to the foregoing, during the Revolving Credit
Commitment Period, the Borrower may use the Revolving Credit Commitments by
borrowing, repaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) Subject to the last sentence of SECTION 2.3, the Revolving Credit Loans
may from time to time be (i) Eurodollar Loans, (ii) Alternate Base Rate Loans or
(iii) a combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with SECTION 2.3 and SECTION 2.10; PROVIDED
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Maturity Date.
2.2 REVOLVING CREDIT NOTES . The Revolving Credit Loans made by each
Revolving Credit Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of EXHIBIT A, with appropriate insertions as to payee,
date and principal amount (each a "REVOLVING CREDIT NOTE"), payable to the order
of such Lender and in a principal amount equal to the lesser of (a) the amount
of the initial Revolving Credit Commitment of such
<PAGE>
Lender and (b) the aggregate unpaid principal amount of all Revolving Credit
Loans made by such Lender. Each Revolving Credit Lender is hereby authorized to
record the date, Type and amount of each Revolving Credit Loan made by such
Lender, each continuation thereof, each conversion of all or a portion thereof
to another Type, the date and amount of each payment or prepayment of principal
thereof and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto, on the schedule annexed to and constituting a part of its
Revolving Credit Note, and any such recordation shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded absent manifest error;
PROVIDED that neither the failure to so record nor any error in such recordation
shall affect the Borrower's obligations under the Revolving Credit Note. Each
Revolving Credit Note shall (i) be dated the Effective Date, (ii) be stated to
mature on the Maturity Date and (iii) provide for the payment of interest in
accordance with SECTION 2.12.
2.3 PROCEDURE FOR REVOLVING CREDIT BORROWING . The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day; PROVIDED that the Borrower shall give the
Administrative Agent an irrevocable notice substantially in the form of EXHIBIT
C (a "NOTICE OF BORROWING") (which notice must be received by the Administrative
Agent prior to 11:00 a.m., New York City time, (a) three Business Days prior to
the requested Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be Eurodollar Loans initially, and (b) one Business Day
prior to the requested Borrowing Date, in the case of Alternate Base Rate Loans,
specifying, in each case: (i) the amount of the Borrowing, (ii) the requested
Borrowing Date, (iii) whether the Borrowing is to be of Eurodollar Loans,
Alternate Base Rate Loans or a combination thereof, and (iv) if the Borrowing is
to be entirely or partly of Eurodollar Loans, the amounts of such Eurodollar
Loans and the lengths of the initial Interest Periods therefor. Each Borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Alternate Base Rate Loans, $100,000 or a whole multiple of $100,000 in
excess thereof (or, if the then Available Revolving Credit Commitments are less
than $100,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Revolving Credit Lender thereof. Each Revolving Credit Lender will
make the amount of its Revolving Credit Commitment Percentage of each Borrowing
available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Borrower at the office of the Administrative Agent
specified in SECTION 10.2 prior to 1:00 p.m., New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such Borrowing will then be made available to the Borrower
by the Administrative Agent in the manner specified by the Borrower in such
Notice of Borrowing in the aggregate of the amounts made available to the
Administrative Agent by the Revolving Credit Lenders and in like funds as
received by the Administrative Agent. Notwithstanding anything to the contrary
contained herein, Revolving Credit Loans, if any, made on the Effective Date
must be Alternate Base Rate Loans.
<PAGE>
2.4 COMMITMENT FEE; ADMINISTRATIVE FEE . (a) The Borrower agrees to pay
to the Administrative Agent for the account of each Revolving Credit Lender
(other than a Defaulting Lender for so long as such Lender is a Defaulting
Lender hereunder) a commitment fee for the period from and including the
first day of the Revolving Credit Commitment period to the Maturity Date,
payable quarterly in arrears on the last day of each March, June, September
and December and on the Maturity Date or such earlier date as the Revolving
Credit Commitments shall reduce or terminate as provided herein, commencing
on the first of such dates to occur after the date hereof. Such fee shall be
computed at the rate of 0.50% per annum on the average daily amount of the
Available Revolving Credit Commitment of such Lender.
(b) Each of the Parent and the Borrower jointly and severally agrees to pay
to the Administrative Agent, for its own account, the fees in the amounts and at
the times referred to in the Fee Letter.
2.5 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS Repayment. (a)
OPTIONAL. The Borrower shall have the right, upon not less than three Business
Days' notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments. Any such termination or reduction shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof; PROVIDED that no
such termination or reduction shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the sum of (a) aggregate principal amount of the Revolving Credit Loans
then outstanding and (b) the aggregate amount of the Stated Amount of all
Letters of Credit would exceed the Revolving Credit Commitments then in effect.
Any reduction of the Revolving Credit Commitments shall be accompanied by
payment in full of all accrued commitment fees on the amount so reduced to and
including the date of such reduction and, to the extent any Revolving Credit
Loans that are Eurodollar Loans are prepaid in connection with such reduction,
shall be accompanied by payment in full of all accrued interest thereon, to and
including the date of such prepayment, together with any additional amounts
owing pursuant to SECTION 2.19 and any outstanding fees and expenses due and
owing. The Administrative Agent agrees to promptly notify the Revolving Credit
Lenders of any notice of reduction or termination received by the Administrative
Agent.
(b) The Borrower shall repay the aggregate outstanding principal amount of
all Revolving Credit Loans on the Maturity Date.
2.6 TERM LOANS . Subject to the terms and conditions hereof, each Term
Lender severally agrees to make term loans in Dollars ("TERM LOANS") to the
Borrower on the Effective Date in an amount not to exceed the amount of the Term
Loan Commitment of such Lender then in effect. The Term Loans may from time to
time be (a) Eurodollar Loans, (b) Alternate Base Rate Loans or (c) a combination
thereof, as determined by the Borrower and set forth in a notice to the
Administrative Agent in accordance with SECTION 2.8 and SECTION 2.10; PROVIDED
that the
<PAGE>
Term Loans made on the Effective Date must be Alternate Base Rate
Loans. Any amounts borrowed under this SECTION 2.6 and repaid or prepaid may not
be reborrowed.
2.7 TERM NOTES . The Term Loan made by each Term Lender shall be evidenced
by a promissory note of the Borrower, substantially in the form of EXHIBIT B (a
"TERM NOTE"), with appropriate insertions therein as to payee, date and
principal amount, payable to the order of such Lender and in a principal amount
equal to the aggregate unpaid principal amount of all Term Loans made by such
Lender. Each Term Lender is hereby authorized to record the date, Type and
amount of each Term Loan made by such Lender, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof and, in the case of Eurodollar
Loans, the length of each Interest Period with respect thereto, on the schedule
annexed to and constituting a part of its Term Note, and any such recordation
shall constitute PRIMA FACIE evidence of the accuracy of the information so
recorded absent manifest error; PROVIDED that neither the failure to so record
nor any error in such recordation shall affect the Borrower's obligations under
any Term Note. The Term Note of each Term Lender (i) shall be dated the
Effective Date, (ii) shall be payable on the last day of each March, June,
September and December commencing on December 31, 2000; each of which payments
shall be in an amount equal to such Lender's Term Loan Commitment Percentage of
the amount set forth below opposite each such date:
DATE AMOUNT
December 31, 2000 $2,000,000
March 31, 2001 2,000,000
June 30, 2001 2,000,000
September 30, 2001 2,000,000
December 31, 2001 2,000,000
March 31, 2002 2,500,000
June 30,2002 2,500,000
September 30, 2002 2,500,000
December 31, 2002 2,500,000
March 31, 2003 2,750,000
June 30, 2003 2,750,000
September 30, 2003 2,750,000
December 31, 2003 2,750,000
March 31, 2004 3,200,000
June 30, 2004 3,200,000
<PAGE>
September 30, 2004 3,900,000
December 31, 2004 3,900,000
March 31, 2005 7,800,000
; PROVIDED that if the aggregate amount of Term Loans made by the Term Lenders
is less than the amount contemplated by the foregoing amortization schedule, an
appropriate PRO RATA adjustment shall be made to the amount due to each Term
Lender on each scheduled payment date, and (iii) shall provide for the payment
of interest in accordance with SECTION 2.12. The Borrower shall repay the
aggregate outstanding amount of all Term Loans on the Maturity Date.
2.8 PROCEDURES FOR TERM LOAN BORROWING . The Borrower may borrow under the
Term Loan Commitment on the Effective Date; PROVIDED that the Borrower shall
give the Administrative Agent an irrevocable Notice of Borrowing (which notice
must be received by the Administrative Agent prior to 11:00 a.m., New York City
time, one Business Day prior to the requested Borrowing Date requesting that the
Lenders make Term Loans and specifying (a) the amount to be borrowed and (b) the
requested Borrowing Date. The Borrowing under the Term Loan Commitments shall be
in an amount equal to $1,000,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Term Lender thereof. Each Term Lender shall
make available for the account of its Applicable Lending Office to the
Administrative Agent, for the account of the Borrower at the Administrative
Agent's office specified in SECTION 10.2 prior to 1:00 p.m., New York City time,
on the Effective Date, the amount of such Lender's Term Loan Commitment
Percentage of such Borrowing in immediately available funds. The Administrative
Agent shall on such date make available, in the manner specified by the Borrower
in its Notice of Borrowing, the aggregate of the amounts made available to the
Administrative Agent by the Term Lenders and in like funds as received by the
Administrative Agent. The Term Loan Commitments shall be reduced to zero on the
Effective Date to the extent not utilized by 5:00 p.m. (New York City time) on
such date.
2.9 OPTIONAL AND MANDATORY PREPAYMENTS . (a) Subject to SECTION 2.19,
the Borrower may, at any time and from time to time, prepay the Loans, in
whole or in part, without premium or penalty, upon at least three Business
Days' irrevocable written notice to the Administrative Agent, specifying the
date and amount of prepayment and whether the prepayment is of Eurodollar
Loans, Alternate Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of any such
notice, the Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with any amounts payable
pursuant to SECTION 2.19, accrued interest to such date on the amount prepaid
that constitutes Eurodollar Loans and any outstanding fees and expenses then
due and owing. Partial prepayments of the Revolving Credit Loans under this
SECTION 2.9(a) shall be applied to the Revolving Credit Loans but shall not
reduce the Revolving Credit Commitments unless the Borrower so specifies in a
written notice to the Administrative Agent in which case the
<PAGE>
Revolving Credit Commitments shall be reduced in the manner set forth in SECTION
2.5. Partial prepayments of the Term Loans under this SECTION 2.9(a) shall be
applied FIRST, PRO RATA to the scheduled installments of principal of the Term
Loans and SECOND, if the Term Loans have been repaid in full, to the Revolving
Credit Loans. Amounts prepaid on account of the Term Loans or to reduce the
Revolving Credit Commitments may not be reborrowed. Partial prepayments shall be
in an aggregate principal amount of $250,000 or a whole multiple of $100,000 in
excess thereof.
(b) With respect to any fiscal year of the Borrower, commencing with the
fiscal year ending December 31, 2001, the Borrower shall, within ninety days
after the end of such fiscal year, prepay an amount equal to 50% of the Excess
Cash Flow for such fiscal year, which prepayment shall be applied PRO RATA to
the scheduled installments of principal of the Term Loans; PROVIDED that no
prepayment shall be required if the Borrower shall have delivered a Compliance
Certificate demonstrating a Total Leverage Ratio less than or equal to 3.50 to
1.00 for the immediately preceding two consecutive fiscal quarters. Each
prepayment of the Loans pursuant to this SECTION 2.9(b) shall be accompanied by
payment in full of all accrued interest thereon, to and including the date of
such prepayment, together with any additional amounts owing pursuant to SECTION
2.19 and any outstanding fees and expenses due and owing.
(c) So long as any Term Loan is outstanding, the Borrower shall deliver to
the Administrative Agent, within three Business Days after receipt thereof, 100%
of any Net Disposition Proceeds; PROVIDED that the Borrower, by written notice
to the Administrative Agent delivered within such three Business Days (together
with a certificate in reasonable detail setting forth the calculation of such
Net Disposition Proceeds), may elect to defer applying up to $25,000,000 of such
Net Disposition Proceeds (other than any Net Disposition Proceeds from a
Significant Disposition) in such manner if and only if (i) concurrent with such
notice, such deferred proceeds are applied to repay the Revolving Credit Loans,
and (ii) within 270 days after receipt by the Administrative Agent of such
deferred proceeds, the Borrower, subject to SECTION 2.5 and SECTION 2.9 (a),
(b), (d), and (e), shall obtain Revolving Credit Loans for purposes of acquiring
replacement assets which are, in the ordinary course, used and useful in the
operation of the Thermal Management Solutions Business of the Borrower and its
Approved Subsidiaries ("Replacement Assets") (it being understood that upon
expiration of such 270-day period, any portion of such deferred proceeds that
has not been utilized by the Borrower as a Revolving Credit Loan to acquire such
Replacement Assets shall be applied in accordance with the next succeeding
sentence). Any Net Disposition Proceeds shall be applied PRO RATA to scheduled
installments of principal of the Term Loans. Notwithstanding the foregoing, the
Borrower shall deliver to the Administrative Agent 100% of the Net Disposition
Proceeds from a Significant Disposition within three Business Days after receipt
thereof and such proceeds shall be applied FIRST, PRO RATA to the scheduled
installments of principal of the Term Loans and SECOND, if the Term Loans have
been repaid in full, to the Revolving Credit Loans (with a concomitant reduction
in the Revolving Credit Commitments).
<PAGE>
(d) For so long as any Term Loan is outstanding, the Borrower shall deliver
to the Administrative Agent within three Business Days after receipt thereof
100% of any Net Insurance Proceeds which, in the aggregate during the term of
this Agreement, exceeds $25,000,000, for application in the manner set forth in
the next sentence; PROVIDED that the Borrower, by written notice to the
Administrative Agent delivered within such three Business Day period (together
with a certificate in reasonable detail setting forth the calculation of Net
Insurance Proceeds), may elect to defer applying Net Insurance Proceeds
aggregating less than $25,000,000 in such manner if and only if (i) concurrent
with such notice such deferred proceeds are applied to repay the Revolving
Credit Loans, and (ii) within 270 days after receipt by the Administrative Agent
of such deferred proceeds, the Borrower, subject to SECTION 2.5 and SECTION 2.9
(a), (b), (c), and (e), shall obtain Revolving Credit Loans for purposes of
acquiring Replacement Assets (it being understood that upon expiration of such
270-day period, any portion of such deferred proceeds that has not been utilized
by the Borrower as a Revolving Credit Loan to acquire such Replacement Assets
shall be applied in accordance with the next succeeding sentence). Any Net
Insurance Proceeds shall be applied PRO RATA to the scheduled installments of
principal of the Term Loans.
(e) The Borrower shall, concurrently with the receipt by the Parent, the
Borrower or any Subsidiary of any Net Debt Proceeds, pay to the Administrative
Agent an amount equal to such Net Debt Proceeds, which shall be applied PRO RATA
to scheduled installments of principal of the Term Loans.
(f) If the Total Leverage Ratio of the Borrower and its Subsidiaries on
December 31, 2000 (as set forth in the Compliance Certificate for the fiscal
year ended on such date) is greater than 4.50 to 1.00, or the Total Leverage
Ratio of the Borrower and its Subsidiaries on December 31, 2001 (as set forth in
the Compliance Certificate for the fiscal year ended on such date) is greater
than 4.25 to 1.00, the Parent shall, not later than May 15, 2001 (in respect of
the fiscal year ended December 31, 2000) and/or May 15, 2002 (in respect of the
fiscal year ended December 31, 2001) make the Supplemental Equity Contribution
to the Borrower. The Borrower shall deliver 100% of the proceeds of such
Supplemental Equity Contribution to the Administrative Agent and such proceeds
shall be applied PRO RATA to the scheduled installments of principal of the Term
Loans.
(g) If, at any time, the sum of (x) the outstanding aggregate principal
amount of the Revolving Credit Loans, (y) the aggregate Stated Amount of all
Letters of Credit then outstanding and (z) any amounts drawn under any Letter of
Credit (including interest thereon computed in accordance with SECTION 2.21(d))
for which the Issuer has not been reimbursed exceeds the then aggregate amount
of the Revolving Credit Commitments, then the Borrower shall prepay at such time
an aggregate principal amount of the Revolving Credit Loans in an aggregate
amount equal to such excess, and to the extent of any excess remaining, deliver
cash collateral for the Stated Amount of the Letter of Credit outstanding and
any amount drawn under the Letter of Credit for which the Issuer has not been
reimbursed.
<PAGE>
(h) Each prepayment of Term Loans and Revolving Credit Loans pursuant to
this SECTION 2.9 shall be accompanied by payment in full of any outstanding fees
and expenses then due and owing and, in the case of any prepayment of Eurodollar
Loans, by payment in full of all accrued interest thereon, to and including the
date of such prepayment and any additional amounts owing pursuant to SECTION
2.19.
2.10 CONVERSION AND CONTINUATION OPTIONS . (a) The Borrower, upon
irrevocable written notice to the Administrative Agent in accordance with this
SECTION 2.10 (i) may elect, as of any Business Day, in the case of its Alternate
Base Rate Loans, or as of the last day of the applicable Interest Period, in the
case of any other Type of Loans of the Borrower, to convert any such Loans (or
any part thereof in an amount not less than $1,000,000, or that is an integral
multiple of $100,000 in excess thereof) into Loans of any other Type; or (ii)
may elect, as of the last day of the applicable Interest Period, to continue any
such Loans having Interest Periods expiring on such day (or any part thereof in
an amount not less than $1,000,000, or that is in an integral multiple of
$100,000 in excess thereof.
(b) The Borrower shall deliver a written notice, substantially in the
form of EXHIBIT D (a "NOTICE OF CONVERSION/CONTINUATION") to be received by the
Administrative Agent not later than 11:00 a.m. (New York City time) (i) at least
three Business Days in advance of the Conversion/ Continuation Date, if the
Loans are to be converted from or into or continued as Eurodollar Rate Loans;
and (ii) on the Conversion/Continuation Date, if the Loans are to be converted
into Alternate Base Rate Loans.
(c) If, upon the expiration of any Interest Period applicable to
Eurodollar Rate Loans made to the Borrower, the Borrower has failed to select
timely a new Interest Period to be applicable to such Loans, or if any Default
or Event of Default then exists, the Borrower shall be deemed to have elected to
convert such Eurodollar Rate Loans into Alternate Base Rate Loans effective as
of the expiration date of such Interest Period.
(d) Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender thereof. All or any part
of the outstanding Eurodollar Loans and Alternate Base Rate Loans may be
converted or continued as provided herein; PROVIDED that (i) no Loan may be
converted into, or continued as, a Eurodollar Loan when any Default has occurred
and is continuing and (ii) no Loan may be converted into, or continued as, a
Eurodollar Loan after the date that is one month prior to the Maturity Date.
2.11 MAXIMUM AMOUNTS OF TRANCHES . All borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and shall be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Eurodollar Loans comprising each Tranche shall be equal to $500,000 or a
whole multiple of $100,000 in excess thereof. There shall never be more than six
Tranches at any one time outstanding.
<PAGE>
2.12 INTEREST RATES AND PAYMENT DATES . (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto
at a rate per annum equal to the Eurodollar Rate determined for the first day
of such Interest Period (subject to daily adjustments, if any, required by
changes in the Eurocurrency Reserve Requirements) PLUS the Applicable Margin.
(b) Each Alternate Base Rate Loan shall bear interest at a rate per annum
equal to the Alternate Base Rate PLUS the Applicable Margin.
(c) In the event an Event of Default under SECTION 7.1(a) or (e) has
occurred and is continuing, the Loans shall bear interest at a rate per annum
equal to the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section plus 2% from the date of occurrence of
such Event of Default until the date such Event of Default is cured or waived
(after as well as before judgment). In addition, should any interest on such
Loans or any commitment fee or other amount (other than principal) payable
hereunder not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest (to the
extent permitted by law in the case of interest on interest) at a rate per
annum which is the rate described in SECTION 2.12(b) plus 2%, in each case,
from the date of such non-payment until such amount is paid in full (after as
well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date;
PROVIDED that interest accruing pursuant to SECTION 2.12(c) shall be payable
from time to time on demand.
2.13 COMPUTATION OF INTEREST AND FEES. (a) Commitment fees and Alternate
Base Rate interest shall be calculated on the basis of a 365/366 day year and
Eurodollar Rate interest shall be calculated on the basis of a 360-day year
for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Alternate Base Rate or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent, at the request of the Borrower, shall deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to SECTION 2.12(a).
(c) All payments to be made by the Borrower shall be made without setoff,
recoupment or counterclaim. Except as otherwise expressly provided herein, all
payments by the Borrower shall be made to the Administrative Agent for the
account of the Lenders at the Administrative Agent's office specified in SECTION
10.2 and shall be made in Dollars. Such
<PAGE>
payments shall be made in like funds received, and no later than 12:00 p.m. (New
York City time) on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its pro rata share (or other applicable share
as expressly provided herein) of such principal, interest, fees or other
amounts, in like funds as received for the account of the Lenders' respective
Applicable Lending Office. Any payment which is received by the Administrative
Agent later than 12:00 p.m. (New York City time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue.
2.14 INABILITY TO DETERMINE INTEREST RATE . If the Administrative Agent
shall have determined (which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for any requested Interest Period, or that the Eurodollar Rate determined or to
be determined for such Interest Period will not adequately and fairly reflect
the cost to the Lenders of making or maintaining their affected Loans, the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given, (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Alternate Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Alternate Base Rate Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Alternate Base Rate Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made
or continued as such, nor shall the Borrower have the right to convert Alternate
Base Rate Loans to Eurodollar Loans.
2.15 PRO RATA TREATMENT AND PAYMENTS; FUNDING RELIANCE . (a) Each
Borrowing by the Borrower from the Lenders hereunder, each payment by the
Borrower on account of any commitment fee hereunder and any reduction of the
Revolving Credit Commitments or the Term Loan Commitments of the Lenders
shall be made PRO RATA according to the respective Revolving Credit
Commitments or Term Loan Commitments of the Lenders. Each payment (including
each prepayment) by the Borrower on account of principal of and interest on
the Loans or any Letter of Credit (except as may be required as a result of
SECTION 2.16) shall be made pro rata according to the respective Revolving
Credit Commitment Percentages or Term Loan Commitment Percentages, as
applicable. All payments (including prepayments) to be made by the Borrower
hereunder and under the Revolving Credit Notes or the Term Notes, whether on
account of principal, interest, fees or otherwise, or on account of any
Letter of Credit, shall be made without setoff or counterclaim and shall be
made prior to 12:00 p.m., New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in SECTION 10.2 and in immediately available funds.
The Administrative Agent shall distribute such payments to the Lenders for
the account of their respective Applicable Lending Offices promptly upon
receipt in like funds as received. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than
a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal and interest
thereon, shall be payable at the then applicable rate
<PAGE>
during such extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day (and, with respect to payments of
principal and interest thereon, shall be payable at the then applicable rate
during such extension) unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a Borrowing that such Lender will not make available to the
Administrative Agent the amount that would constitute its applicable Commitment
Percentage of such Borrowing, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Rate for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing under this Section shall be conclusive
in the absence of manifest error. If such Lender's applicable Commitment
Percentage of such Borrowing is not made available to the Administrative Agent
by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to Alternate Base Rate Loans hereunder,
on demand, from the Borrower.
2.16 ILLEGALITY . Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Alternate Base Rate Loans to Eurodollar Loans shall forthwith be
canceled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Alternate Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to SECTION 2.19.
2.17 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, or any Note or any Loan made by it, or
change the basis of
<PAGE>
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by SECTION 2.18 and changes in the rate of
tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Loans or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this Section, it
shall promptly notify the Borrower, through the Administrative Agent, of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this Section submitted by such Lender,
through the Administrative Agent, to the Borrower shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Obligations hereunder.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof has or shall have the effect of reducing the rate of return on
such Lender's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
This covenant shall survive the termination of this Agreement and the payment of
the Obligations hereunder.
2.18 TAXES . (a) All payments made by the Borrower under this Agreement and
the Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by
<PAGE>
any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or the Notes). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under the Notes,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes; PROVIDED that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter, the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The covenants in this Section shall
survive the termination of this Agreement and the payment of the Notes and
payment of the Obligations hereunder.
<PAGE>
(b) Each Lender shall:
(i) deliver to the Borrower and the Administrative Agent (A) in
the case of a Lender that is not organized under the laws of the United
States or any State thereof, either (x)one duly completed copy of
United States Internal Revenue Service Form W-8BEN or W-8ECI, or
successor applicable form, as the case may be, if such Lender intends
to claim exemption from withholding of U.S. Federal income tax on the
basis that such Lender is eligible for the benefits of an income tax
treaty or that such Lender's income received hereunder is effectively
connected with its conduct of a U.S. trade or business, or (y) if such
Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code and intends to claim exemption from withholding of U.S.
Federal income tax under Section 871(h) or Section 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8BEN, or any
successor applicable form, together with a certificate executed by such
Lender representing that (1) such Lender is not a bank for purposes of
Section 881(c) of the Code, is not a 10 percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not
a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code), claiming complete exemption
from withholding of U.S. Federal income tax on payments of interest by
the Borrower under this Agreement and the other Loan Documents and (2)
that the Lender has received in replacement of any Note held by or
assigned to it, a QFL Note in accordance with this SECTION 2.18, and
(B) in the case of any other Lender, an Internal Revenue Service Form
W-9, or successor applicable form;
(ii) deliver to the Borrower and the Administrative Agent a further
copy of any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form W-8BEN
or W-8ECI, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-9, that it is entitled to an exemption from United States
backup withholding tax. Each Person that shall become a Lender or a Participant
pursuant to SECTION 10.6 shall, upon the effectiveness of the related transfer,
be required to provide all the forms and statements required pursuant to this
<PAGE>
Section; PROVIDED that, in the case of a Participant, such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(c) Any Lender that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and satisfies the requirements of SECTION
2.18(b)(i)(A)(y), (a "QUALIFIED FOREIGN LENDER") shall upon receipt of the
written request of the Administrative Agent or the Borrower and may, upon its
own written request to the Administrative Agent, exchange any Note held by or
assigned to it for a qualified foreign lender Note ( a "QFL NOTE"). A QFL Note
shall be in the form of the Revolving Credit Note or Term Note, as applicable,
but shall contain the following legend, "This Note is a QFL Note, and as such,
ownership of the obligation represented by such QFL Note may be transferred only
in accordance with Section 2.18 of the Credit Agreement." Any QFL Note issued in
replacement of any existing Note pursuant to this Section shall be (i) dated the
Effective Date, (ii) issued in the name of the entity in whose name such
existing Note was issued and (iii) issued in the same principal amount as such
existing Note. Any Note replaced pursuant to this Section is sometimes referred
to herein as a "REPLACED NOTE".
(d) The Borrower agrees that, upon the request of or delivery of a request
to a Qualified Foreign Lender pursuant to paragraph (c) of this Section, it
shall execute and deliver a QFL Note to the Administrative Agent in replacement
of the Replaced Note surrendered in connection with such request conforming to
the requirements of this paragraph. Each Qualified Foreign Lender shall
surrender its Note in connection with any replacement pursuant to this SECTION
2.18. Upon receipt by the Administrative Agent, in connection with any
replacement, of a QFL Note and the existing Note to be replaced by such QFL Note
in accordance with this paragraph, the Administrative Agent shall forward the
QFL Note to the Lender which has surrendered its Note for replacement by such
QFL Note and shall forward the surrendered Note to the Borrower marked
"canceled". Once issued, QFL Notes (i) shall be deemed to and shall be "Notes"
for all purposes under the Loan Documents, (ii) may not be exchanged for Notes
which are not QFL Notes, notwithstanding anything to the contrary in the Loan
Documents and (iii) shall at all times thereafter be QFL Notes, including,
without limitation, following any transfer or assignment thereof.
(e) Notwithstanding anything to the contrary in the Loan Documents, the QFL
Notes are registered obligations as to both principal and interest with the
Borrower and transfer of the obligations underlying such QFL Note may be
effected only by surrender of the QFL Note to the Borrower and either reissuance
by the Borrower of such QFL Note to the transferee or issuance by the Borrower
of a new QFL Note to the transferee. A QFL Note shall only evidence the Lender's
or an assignee's right, title and interest in and to the related obligation, and
in no event is a QFL Note to be considered a bearer instrument or obligation.
This SECTION 2.18 shall be construed so that the obligations underlying the QFL
Notes are at all times maintained in "registered form" within the meaning of
Sections 871(h)(2) and 881(c)(3) of the Code.
<PAGE>
2.19 INDEMNITY . The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Borrower in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice
thereof or (d) the making of a prepayment or conversion of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto
including, without limitation, in each case, any such loss or expense arising
from the redeployment of funds obtained by it or from fees payable to terminate
the deposits from which such funds were obtained. This covenant shall survive
the termination of this Agreement and the payment of the Obligations hereunder.
2.20 DISCRETION OF LENDER AS TO MANNER OF FUNDING . Notwithstanding any
other provisions of this Agreement, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood that for the purposes of this Agreement all determinations
hereunder shall be made assuming each Lender had actually funded and maintained
each Eurodollar Loan through the purchase of deposits of Dollars for such Loan
in the eurocurrency interbank market having a maturity corresponding to each
Loan's Interest Period and bearing an interest rate equal to the Eurodollar Rate
for such Interest Period.
2.21 LETTERS OF CREDIT . (a) Subject to the terms and conditions hereof,
and in reliance on the agreements set forth in clauses (c) and (e) hereof,
from time to time, on any Business Day, the Issuer agrees to issue Letters of
Credit for the account of the Borrower in such form as may be approved from
time to time by the Issuer; PROVIDED that (i) the sum of the aggregate face
amount of all Letters of Credit outstanding and the aggregate amount drawn
under all Letters of Credit for which the Issuer has not been reimbursed at
any time shall not exceed $2,000,000 and (ii) the sum of the Revolving Credit
Loans, the aggregate face amount of all Letters of Credit outstanding and the
aggregate amount drawn under all Letters of Credit for which the Issuer has
not been reimbursed shall not, at any time, exceed the Revolving Credit
Commitment (as reduced from time to time pursuant to SECTION 2.5 and SECTION
2.9).
(b) Each Letter of Credit (i) shall be opened pursuant to a written request
from the Borrower on the Issuer's then current form of application for letter of
credit which application shall be completed to the satisfaction of the Issuer
and shall be delivered to the Issuer together with such other certificates,
documents and other instruments and information as the Issuer may reasonably
request, (ii) shall be denominated in Dollars, (iii) shall be governed by the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
State of New York and (iv) shall expire on the Expiry Date. The Issuer shall not
at any time be obligated to issue any Letter of Credit if such issuance would
conflict with, or cause the Issuer or any Revolving Credit Lender to exceed any
limits imposed by, an applicable Requirement of Laws.
<PAGE>
(c) The Issuer agrees to allot and does allot, to itself and each Revolving
Credit Lender and, to induce the Issuer to issue the Letter of Credit, each
Revolving Credit Lender severally and irrevocably agrees to take and does hereby
take for its own account and risk an undivided participating interest in a
percentage equal to such Revolving Credit Lender's Revolving Credit Commitment
Percentage of the Issuer's Obligations.
(d) The Borrower agrees (i) to reimburse the Issuer forthwith upon its
demand for any payment made by the Issuer under a Letter of Credit and (ii) to
pay interest on any unreimbursed portion of any such payment from the date of
such payment until reimbursement in full thereof at a rate per annum equal to
(A) prior to the date which is one Business Day after the day on which
reimbursement from the Borrower for such payment is due, the rate which would
then be payable on any outstanding Alternate Base Rate Loans which are not
overdue and (B) thereafter, the rate which would then be payable on any
outstanding Alternate Base Rate Loans which are overdue. In addition to the
foregoing, the Borrower shall reimburse the Issuer for any taxes, fees, charges
or other costs or expenses incurred by the Issuer in connection with such
payment. All payments hereunder shall be made to the Issuer at its address for
notices specified herein in Dollars in immediately available funds.
(e) (i) In the event that the Issuer makes a payment under a Letter of
Credit and is not reimbursed in full therefor forthwith, upon demand of the
Issuer referred to in SECTION 2.21(d), the Issuer shall promptly make demand
for such any amount for which it has not received reimbursement upon each
Revolving Credit Lender. Each Revolving Credit Lender unconditionally and
irrevocably agrees that forthwith upon its receipt of any such demand for
reimbursement, such Revolving Credit Lender shall transfer to the Issuer, in
immediately available funds, an amount equal to such Revolving Credit
Lender's PRO RATA share of the unreimbursed portion of such payment; PROVIDED
that, if such demand is made prior to 12:00 noon, New York City time, on a
Business Day, such Revolving Credit Lender shall make such payment to the
Issuer prior to the end of such Business Day and otherwise such Revolving
Credit Lender shall make such payment on the next succeeding Business Day.
Whenever, at any time after the Issuer has made a payment under a Letter of
Credit and has received from any Revolving Credit Lender such Revolving
Credit Lender's PRO RATA share of the unreimbursed portion of such payment,
the Issuer receives any reimbursement on account of such unreimbursed portion
or any payment of interest on account thereof, the Issuer shall distribute to
such Revolving Credit Lender its PRO RATA share thereof; PROVIDED that in the
event that the receipt by the Issuer of such reimbursement or such payment of
interest (as the case may be) is required to be returned, such Revolving
Credit Lender will return to the Issuer any portion thereof previously
distributed by the Issuer to such Revolving Credit Lender.
(ii) Upon the occurrence and during the continuation of any Event of Default
under SECTION 7.1(e) or SECTION 7.1(f) or, with notice from the Administrative
Agent, upon the occurrence of any other Event of Default that is continuing (x)
an amount equal to the outstanding Letters of Credit shall, without demand upon
or notice to the Borrower, be deemed to have been paid or disbursed by the
Issuer upon such Letters of Credit (notwithstanding that such
<PAGE>
amount may not in fact have been paid or disbursed); and (y) without further
notice in the case of an Event of Default under SECTION 7.1(e) or SECTION 7.1(f)
or, in the case of any other Event of Default that has occurred and is
continuing, upon notice by the Administrative Agent to the Borrower of its
Obligations hereunder, the Borrower shall be immediately obligated to reimburse
the Issuer for the amount deemed to have been paid or disbursed by the Issuer.
Any amount so payable by the Borrower shall be deposited by the Borrower in cash
into an account located in the United States designated by and under the sole
dominion and control of the Administrative Agent which cash and the proceeds
thereof shall be held as collateral security for the Obligations in connection
with any Letter of Credit issued by the Issuer. The Borrower hereby grants to
the Administrative Agent, for the benefit of the Issuer and the Revolving Credit
Lenders, a security interest in such cash collateral to secure all Obligations
of the Borrower under this Agreement and the other Loan Documents. Amounts held
in such cash collateral account shall be applied by the Administrative Agent to
the payments of drafts drawn under any Letter of Credit, and the unused portion
thereof after all Letters of Credit shall have expired or been fully drawn upon,
if any, shall be applied to repay other Obligations. After all Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been fully satisfied and all other Obligations shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Borrower. The Borrower shall execute and deliver to the Administrative
Agent, for the account of the Issuer, such further documents and instruments as
the Administrative Agent may request to evidence the creation and perfection of
the security interest in such cash collateral account.
(f) The Borrower shall pay to the Administrative Agent for the pro rata
account of the Issuer and the Revolving Credit Lenders in respect of each Letter
of Credit a fee in an amount equal to the Applicable Margin then in effect for
Revolving Credit Loans that bear interest at the Eurodollar Rate (calculated on
the basis of the actual number of days elapsed over a 360-day year) multiplied
by the Stated Amount of the Letter of Credit, such fee to be payable for the
period from the date of issuance to the Expiry Date of such Letter of Credit,
quarterly in arrears on each Interest Payment Date for each quarter prior to
such Expiry Date.
(g) The Borrower agrees to pay to the Issuer, for its own account, for
services rendered by the Issuer, an issuance fee for each Letter of Credit in
the amount equal to .25% of the Stated Amount of such Letter of Credit from the
date of issuance of such Letter of Credit, payable quarterly, in arrears. The
Borrower shall also pay or reimburse the Issuer for such normal and customary
costs and expenses as are incurred or charged by the Issuer on issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(h) The Reimbursement Obligations of the Borrower with respect to the
Letter of Credit related thereto shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following: (i) the existence
of any claim, set-off, defense or other right which the Borrower may have at any
time against any beneficiary, or any transferee, of such Letter of Credit (or
any Persons for whom any such beneficiary or any such transferee may be acting),
the
<PAGE>
Administrative Agent, the Issuer, any Lender or any other Person, whether in
connection with this Agreement or the transactions contemplated herein, or any
unrelated transaction; (ii) any statement or any other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iii) payment by the Issuer under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit or any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing (PROVIDED, that such payment by
the Issuer or such circumstance or happening does not constitute gross
negligence or willful misconduct of the Issuer).
(i) To the extent that any provision of any application for the opening of
a Letter of Credit is inconsistent with the provisions of this SECTION 2.21, the
provisions in this Section shall apply.
2.22 DEFAULTING LENDERS . (a) Any Lender which (i) has refused (which
refusal has not been retracted) to make available its portion of any Borrowing
or to fund its portion of any unreimbursed payment under SECTION 2.21(e) or (ii)
has given notice to the Administrative Agent and/or the Borrower that it does
not intend to comply with its obligations under SECTIONS 2.1, 2.6 or 2.21(e), as
a result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority (and
such non-compliance is continuing) (a "DEFAULTING LENDER"):
(x) shall not be deemed a Required Lender hereunder and such
Defaulting Lender's (A) Commitments, (B) Loans and (C) participation of
Letters of Credit shall be excluded from the calculations set forth in
the definition of Required Lenders; and
(y) shall not be entitled to receive any commitment fee
payable in respect of such Defaulting Lender's Revolving Loan
Commitment.
In addition to the foregoing, if any Lender shall fall within the description
set forth in CLAUSE (i) or (ii) above, the Issuer shall not be required to issue
any Letter of Credit, unless arrangements reasonably satisfactory to the Issuer
have been entered into to eliminate the Issuer's risk with respect to the
participation in Letters of Credit by such Lender, including providing cash
collateral for such Lender's portion of any outstanding Letters of Credit.
(b) The Borrower may designate another Person which is
reasonably acceptable to the Administrative Agent (a "REPLACEMENT LENDER") to
purchase for cash all the Notes of such Defaulting Lender and all such
Defaulting Lender's rights hereunder, without recourse to or warranty (other
than title) by, or expense to, such Defaulting Lender for a purchase price equal
to the outstanding principal amount of the Notes payable to such Defaulting
Lender plus any accrued but unpaid interest on such Notes and accrued but unpaid
commitment and other fees, expense reimbursements and indemnities in respect of
such Defaulting Lender's Commitments. Such Defaulting Lender shall consummate
such sale in accordance with such
<PAGE>
terms (and, if such Lender is an Issuer, such other terms as may be necessary to
compensate fully such Lender) within a reasonable time not exceeding 45 days
from the date the Borrower designates a Replacement Lender, and thereupon such
Defaulting Lender shall no longer be a party hereto or have any obligations or
rights hereunder (except rights which, pursuant to the provisions of this
Agreement, survive the termination of this Agreement and the repayment of the
Notes), and the Replacement Lender shall succeed to such obligations and rights.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Issuer and the Lenders
to enter into this Agreement, the Issuer to issue the Letter of Credit and the
Lenders to make the Loans, each of the Parent, Heat Holdings II and the Borrower
hereby represents and warrants to the Administrative Agent, the Issuer and each
Lender that:
3.1 FINANCIAL CONDITION . (a) The audited balance sheet of the Borrower
as at December 31, 1997 and 1998 and the related audited statements of
operations, stockholders equity and cash flows for the fiscal years ended on
such dates, certified as true and complete by a Responsible Officer of the
Borrower and reported on by Arthur Andersen LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct in all
material respects and present fairly in all material respects the financial
condition of the Borrower as at such dates, and the results of its operations
and its stockholders' equity and cash flows for each of the fiscal years then
ended. The unaudited balance sheet of the Borrower as at October 2, 1999 and
the related unaudited statements of operations, stockholders' equity and cash
flows for the nine-month period ended on such date, certified by a
Responsible Officer of the Borrower, copies of which have heretofore been
furnished to each Lender, present fairly in all material respects the
financial condition of the Borrower at such date, and the results of its
operations, stockholders equity and cash flows for the nine-month period then
ended (subject to normal year end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with U.S. GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible
Officer, as the case may be, and as disclosed therein and except that the
unaudited financial statements do not have all footnotes required).
(b) Prior to the Effective Date and excluding any obligations of the Parent
pursuant to the Merger Agreement, the Parent did not have liabilities in excess
of $1,000,000 in the aggregate.
(c) The PRO FORMA balance sheet of the Borrower and its Subsidiaries (the
"PRO FORMA BALANCE SHEET") is the balance sheet of the Borrower and its
Subsidiaries as at October 2, 1999, adjusted to give effect (as if such events
had occurred on the date the Merger is consummated) (i) to the Merger, (ii) to
the repayment of the Borrower's existing Indebtedness that is to be repaid on
the Effective Date, (iii) to the Loans expected to be made by the Lenders on the
Effective
<PAGE>
Date, (iv) to the Thermalloy Acquisition, (v) to the issuance of the Permitted
High Yield Securities and (vi) to the payment of fees and expenses in connection
with the foregoing. The Pro Forma Balance Sheet, together with the notes
thereto, presents fairly in all material respects on a PRO FORMA basis the
financial position of the Borrower and its Subsidiaries as at October 2, 1999
assuming that the events and the assumptions specified in the preceding sentence
had actually occurred on such date.
(d) Except as set forth in SCHEDULE 3.1(d), none of the Parent, Merger Sub,
the Borrower or any of their respective Subsidiaries has, at the date of the Pro
Forma Balance Sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not reflected in
the foregoing statements or in the notes thereto. Except as set forth in
SCHEDULE 3.1(d), during the period from December 31, 1998 to and including the
date hereof there has been no sale, transfer or other disposition by the Parent,
Merger Sub, the Borrower or any Subsidiary of any material part of its business
or property and no purchase or other acquisition of any business or property
(including any Capital Stock of any other Person) material in relation to the
financial condition of the Parent, Merger Sub, the Borrower or any Subsidiary at
such date other than the Merger and the Thermalloy Acquisition.
(e) All balance sheets, all statements of operations and stockholders'
equity and of cash flows and all other financial information which shall
hereafter be furnished by or on behalf of the Parent, the Borrower or any of
their respective Subsidiaries to the Administrative Agent or any Lender for the
purposes of, or in connection with, this Agreement or any transaction
contemplated hereby have been or will be prepared in accordance with U.S. GAAP
consistently applied throughout the periods involved (except as disclosed
therein) and do or will present fairly in all material respects the financial
condition of the Parent, the Borrower and their respective Subsidiaries in each
case, as at the dates thereof and the results of their operations and their
stockholders' equity and cash flows for the periods then ended.
(f) The business forecast of the Borrower and its Subsidiaries calculated
for the period commencing on the Effective Date to and including the Maturity
Date, prepared by a Responsible Officer of the Borrower (and presented on a
consolidated and segment by segment basis) all as set forth in SCHEDULE 3.1(f)
have been prepared in good faith and utilizing reasonable assumptions. Neither
the Parent nor the Borrower has any reason to believe such business forecast and
projections are materially incorrect or misleading in any material respect, it
being recognized by the Lenders that such business forecast as to future events
is not to be viewed as fact and that actual results during the periods covered
by such forecast may differ from the forecast results.
3.2 NO CHANGE . Since December 31, 1998, (a) there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect and (b) no dividends or other distributions have been declared,
paid or made upon the Capital Stock of the Parent, the Borrower or any
Subsidiary, nor has any of the Capital Stock
<PAGE>
of the Parent, Merger Sub, the Borrower or any Subsidiary been redeemed,
retired, purchased or otherwise acquired by the Parent, Merger Sub, the
Borrower, any Subsidiary or any Person under the control of the Parent, Merger
Sub, the Borrower or any Subsidiary for value, except for (i) the purchase of
the Capital Stock of the Borrower in accordance with the terms and conditions of
the Merger Documents, (ii) dividends and distributions contemplated or permitted
by the Thermalloy Acquisition Documents, (iii) dividends and distributions
reflected in the financial statements delivered pursuant to SECTION 3.1, (iv)
dividends and distributions by a Subsidiary to its stockholders, (v) the
purchase of Capital Stock of the Thermalloy Companies by Subsidiaries of the
Borrower and (vi) dividends and distributions paid pursuant to the Restructuring
and as described in SCHEDULE 1.2.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW . Each of the Parent, Heat
Holdings II, the Borrower and each of their respective Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate or other power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation or other legal
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect and except for
jurisdictions not recognizing the concept of good standing and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not reasonably be expected to have a Material Adverse
Effect.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS . Each of the
Parent, Heat Holdings II, the Borrower and each of their respective Subsidiaries
has the corporate or other power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to authorize
the execution, delivery and performance of the Loan Documents to which it is a
party. The Borrower has appropriate power and authority to borrow hereunder and
has taken all necessary corporate action to authorize the borrowings on the
terms and conditions set forth in this Agreement and in the Notes. Except as set
forth in SCHEDULE 3.4, (a) no consent or authorization of, filing with, notice
to or other act by or in respect of, any Governmental Authority (including any
filing, termination of any notice period or consent under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) is required in connection with
the Merger or any borrowings hereunder or with the execution, delivery or
performance by the Parent, the Borrower or any Subsidiary of, or the validity or
enforceability of the Merger Documents or the Loan Documents, other than any of
the foregoing which have previously been obtained and are in full force and
effect and (b) no consent or authorization of, filing with, notice to or other
act by or in respect of any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents or the Merger Documents to which the
Parent, the Borrower or any of their respective Subsidiaries is a party. This
Agreement has been, and each
<PAGE>
other Loan Document to which it is a party will be, duly executed and delivered
on behalf of the Parent, the Borrower and each Subsidiary party thereto. This
Agreement constitutes, and each other Loan Document to which the Parent, the
Borrower or any of their respective Subsidiaries, as the case may be, is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of the Parent, the Borrower or such Subsidiary, as the case may be,
enforceable against the Parent, the Borrower or such Subsidiary, as the case may
be, in accordance with its terms, except as the enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
3.5 NO LEGAL BAR . The execution, delivery and performance of the Loan
Documents to which the Parent, the Borrower or any of their respective
Subsidiaries is a party, the borrowings by the Borrower hereunder and the use of
the proceeds thereof will not violate any Requirement of Law applicable to the
Parent, the Borrower or any Subsidiary or Contractual Obligation of the Parent,
the Borrower or any Subsidiary, except such violations which, in the aggregate,
could not reasonably be expected to result in liability in excess of the Dollar
Equivalent of $500,000, will not accelerate or result in the acceleration of any
payment obligations of the Parent, the Borrower or any Subsidiary and will not
result in, or require, the creation or imposition of any Lien on any of the
respective properties or revenues of the Parent, the Borrower or any Subsidiary
pursuant to any such Requirement of Law or Contractual Obligation other than as
contemplated by the Security Documents.
3.6 NO MATERIAL LITIGATION . Except as set forth in SCHEDULE 3.6, no
litigation or proceeding or, to the Parent's or the Borrower's actual and
constructive knowledge, investigation of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Parent, the
Borrower or any Subsidiary, threatened by or against the Parent, Merger Sub, or
the Borrower or any Subsidiary or against any of the respective properties or
revenues of the Parent, Merger Sub, the Borrower or any Subsidiary (a) which
purports to affect the legality, validity or enforceability of the Merger, any
Merger Document, the Thermalloy Acquisition, this Agreement or any other Loan
Document or the consummation of any transaction contemplated thereby or hereby
or (b) which could reasonably be expected to have a Material Adverse Effect.
3.7 NO DEFAULT . None of the Parent, the Borrower or any Subsidiary is in
default under, or with respect to, any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
3.8 OWNERSHIP OF PROPERTY; LIENS . Except as set forth in SCHEDULE 3.8,
each of the Parent, the Borrower and their respective Subsidiaries has good
record and marketable title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other property, other than property having a value equal to the Dollar
Equivalent of $500,000 in the aggregate. None of such property is subject to any
Lien except as permitted by SECTION 6.3. The corporate names and the
jurisdictions set forth below each such
<PAGE>
corporate name on SCHEDULE 3.8 are the only corporate names and jurisdictions
for which lien searches with respect to the assets of the Parent, Merger Sub,
the Borrower or any Domestic Subsidiary of the Borrower are necessary to confirm
such assets are not subject to any Liens, other than Liens in favor of the
Administrative Agent, for the benefit of the Lenders, or Liens permitted by
SECTION 6.3.
3.9 INTELLECTUAL PROPERTY . The Parent does not own or license any
Intellectual Property. Each of the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, technology, know-how,
processes, logos and insignia necessary for the conduct of its business as
currently conducted except for those which the failure to own or license could
not reasonably be expected to have a Material Adverse Effect (the "INTELLECTUAL
PROPERTY"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Parent, the
Borrower or any such Subsidiary know of any valid basis for any such claim. To
the knowledge of the Parent and the Borrower, the use of such Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
3.10 NO BURDENSOME RESTRICTIONS . No Contractual Obligation of the Parent,
the Borrower or any Subsidiary could reasonably be expected to have a Material
Adverse Effect.
3.11 TAXES . Each of the Parent, the Borrower and the Subsidiaries has filed
or caused to be filed all tax returns which, to the knowledge of the Parent and
the Borrower, are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any tax, fee or other charge
the amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
U.S. GAAP have been provided on the books of the Parent, the Borrower or such
Subsidiary, as the case may be); and, except as set forth in SCHEDULE 3.11, no
tax Lien has been filed, and, to the knowledge of the Parent and the Borrower,
no claim is being asserted, with respect to any such tax, fee or other charge.
3.12 FEDERAL REGULATIONS . No part of the proceeds of any Loans and no part
of any Letter of Credit will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation T, U and X of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect or for any purpose which violates
the provisions of the Regulations of such Board of Governors. If requested by
any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-1 and FR Form U-1. No proceeds of
any Loan or drawings under any Letter of Credit will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
<PAGE>
3.13 ERISA . None of the Parent, the Borrower or any Subsidiary maintains
or contributes to any Plan other than those listed on SCHEDULE 3.13. Except as
disclosed in SCHEDULE 3.13, none of the Parent, the Borrower or any Subsidiary
maintains, contributes to or has any material obligation with respect to, any
welfare plan (as defined in Section(3)(1) of ERISA) which provides benefits to
employees after termination of employment other than as required by Part 6 of
Title I of ERISA or similar state laws regarding continuation of benefits.
Except as disclosed on SCHEDULE 3.13, each Plan has complied and is in
compliance in all material respects with the applicable provisions of ERISA and
the Code. None of the Parent, the Borrower or any Subsidiary has breached any of
the responsibilities, obligations or duties imposed on it by ERISA, the Code, or
regulations promulgated thereunder with respect to any Plan, which breach could
reasonably be expected to have a Material Adverse Effect. None of the Parent,
the Borrower or any Subsidiary nor any fiduciary of any Plan who is an officer
or an employee of the Parent, the Borrower or any Subsidiary has engaged in a
nonexempt prohibited transaction described in Section 406 of ERISA or 4975 of
the Code with respect to a Plan which could reasonably be expected to have a
Material Adverse Effect. With respect to any employee benefit plan (as defined
in Section 3(3) of ERISA) currently or formerly maintained or contributed to by
any Commonly Controlled Entity, no liability exists and no event has occurred
which could subject the Parent, the Borrower or any Subsidiary to any liability.
Except as disclosed on SCHEDULE 3.13, none of the Parent, the Borrower or any
Subsidiary has maintained, contributed to, or had an obligation to contribute to
any Multiemployer Plan or any Single Employer Plan, at any time during the six
years prior to the date on which this representation is made or deemed made.
Except as disclosed on SCHEDULE 3.13, none of the Parent, the Borrower or any
Subsidiary has any material obligation to make any payment to any employee
pursuant to any existing employment contract or arrangement. The Parent and the
Borrower have given to the Administrative Agent copies of all the following:
each Single Employer Plan and related trust agreement (including all amendments
to such Plan and trust) in existence as of the Effective Date and the most
recent summary plan description, actuarial report, determination letter issued
by the IRS and Form 5500 (including all schedules thereto) filed in respect of
each existing Single Employer Plan; a listing of all the Multiemployer Plans
with the aggregate amount of the most recent annual contributions required to be
made by the Parent, the Borrower or any Subsidiary to each such Multiemployer
Plan, the most recent information which has been provided to the Parent, the
Borrower or any Subsidiary regarding withdrawal liability under any
Multiemployer Plan and the collective bargaining agreement pursuant to which
such contribution is required to be made. Except as disclosed in SCHEDULE 3.13,
none of the Parent, the Borrower or any Subsidiary has liability, direct or
indirect, contingent or otherwise, under Section 4201 or 4204 or 4212(c) of
ERISA. None of the Parent, the Borrower or any Subsidiary has any outstanding
liability in respect of (i) a failure to make a required contribution or payment
to a Multiemployer Plan or (ii) a complete or partial withdrawal under Section
4203 or 4205 of ERISA from such a plan.
3.14 HOLDING COMPANY; INVESTMENT COMPANY ACT; OTHER REGULATIONS . None of
the Parent, the Borrower or any Subsidiary is a "holding company", a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. None of the Parent, the Borrower or any Subsidiary is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended; PROVIDED that WSP is
deemed to be an investment company for purposes of the limitations set forth in
subparagraphs (A)(i) and (B)(i) of Section 12(d)(1) of such Act for purposes of
the limitations set forth therein governing the purchase or other acquisition by
WSP of any security issued by any registered investment company and the sale of
any security issued by any registered open-end investment company to WSP. None
of the Parent, the Borrower or any Domestic Subsidiary entering into any Loan
Document is subject to regulation under any Federal or state statute,
regulation, decree or order which limits its ability to incur Indebtedness or
conditions such ability upon any act, approval or consent of any Governmental
Authority.
3.15 PURPOSE OF LOANS . The proceeds of the Term Loans shall be used to
repay existing Indebtedness (including Indebtedness under the Existing Credit
Agreement). The proceeds of the Revolving Credit Loans shall be used (i) to fund
working capital, Capital Expenditures and Permitted Acquisitions by the Borrower
and its Subsidiaries, (ii) for general corporate purposes, including, but not
limited to, fees and expenses relating to the Merger, the issuance of the
Permitted High Yield Securities and the transactions contemplated by this
Agreement and (iii) to fund Letters of Credit in an amount not to exceed
$2,000,000 in the aggregate.
3.16 ENVIRONMENTAL MATTERS . Except as set forth on SCHEDULE 3.16:
(a) The facilities and properties owned, leased or operated by the Parent,
the Borrower or any Subsidiary (the "PROPERTIES") do not contain, and have not
previously contained, any materials of Environmental Concern in amounts or
concentrations which could reasonably be expected to have a Material Adverse
Effect or to materially affect the value of any of the Properties.
(b) The Properties and all operations at the Properties are in compliance
with all applicable Environmental Laws, and there is no contamination at, under
or about the Properties in violation of Environmental Laws or for which under
Environmental Laws there is a remedial obligation or violation of any
Environmental Law with respect to the Properties or the business operated by the
Parent, the Borrower and the Subsidiaries (the "BUSINESS") which could interfere
with the continued operation of any of the Properties, except where the failure
to satisfy the same could not reasonably be expected to have a Material Adverse
Effect or to materially affect the sale of any of the Properties owned by the
Parent, the Borrower or any Subsidiary.
(c) None of the Parent, the Borrower or any Subsidiary has received any
written notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the
<PAGE>
Properties or the Business which has not been remedied, nor does the Parent, the
Borrower or any Subsidiary have knowledge that any such notice will be received
or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of by the Parent, the Borrower or any Subsidiary from any of the
Properties in violation of, or, to the knowledge of the Parent or the Borrower,
in a manner or to a location which could reasonably be expected to have a
Material Adverse Effect, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law that could reasonably be
expected to have a Material Adverse Effect or to materially affect the value of
any of the Properties.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Parent or the Borrower, threatened, under
any Environmental Law to which the Parent, the Borrower or any Subsidiary is or,
to the knowledge of the Parent or the Borrower, will be named as a party with
respect to any of the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties or the Business.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from any of the Properties, or arising from or
related to the operations of the Parent, the Borrower or any Subsidiary in
connection with any of the Properties or otherwise in connection with the
Business, in violation of Environmental Laws or in amounts or in a manner that
could reasonably be expected to have a Material Adverse Effect or to materially
affect the value of any of the Properties.
3.17 MERGER . SCHEDULE 3.17 sets forth the terms of the Merger, including
all material steps to be taken in connection therewith (including the sources
and uses of funds) upon completion of the Merger.
3.18 CAPITALIZATION OF PARENT . As of the Effective Date the authorized
Capital Stock of the Parent consists of 7,500,000 shares of Class A common
stock, $0.01 par value, 7,359,333.5 of which are issued and outstanding and
7,500,000 shares of Class B common stock, $0.01 par value, 7,359,333.5 of which
are issued and outstanding.All the issued and outstanding Capital Stock of the
Parent is owed by WSP and the Persons set forth on Schedule 3.18. Except as set
forth in SCHEDULE 3.18, there are no outstanding subscriptions, options,
warrants, calls, puts, or similar contractual rights (including preemptive
rights) or any other agreements or commitments of any nature with respect to
such Capital Stock of the Parent.
3.19 CAPITALIZATION OF HEAT HOLDINGS II . As of the Effective Date the
authorized Capital Stock of Heat Holdings II consists of 250,000 shares of Class
A common stock, $0.01 par value, 216,600 of which are issued and outstanding and
250,000 shares of Class B common
<PAGE>
stock, $0.01 par value, 216,600 of which are issued and outstanding. All the
issued and outstanding Capital Stock of Heat Holdings II is owned by WSP and the
Persons set forth in Schedule 3.18. Except as set forth in SCHEDULE 3.19, there
are no outstanding subscriptions, options, warrants, calls, puts, or similar
contractual rights (including preemptive rights) or any other agreements or
commitments of any nature with respect to such Capital Stock of Heat Holdings
II.
3.20 CAPITALIZATION OF THE BORROWER . As of the Effective Date and after
giving effect to the Merger, the authorized Capital Stock of the Borrower shall
consist of 1,000 shares of Class A common stock, $0.0001 par value, 940 of which
are issued outstanding, 1,000 shares of Class B common stock, $0.0001 par value,
all of which are issued and outstanding, and 1,000 shares of Class H common
stock, $0.0001 par value, of which 40 shares are issued and outstanding. After
giving effect to the Merger, all the issued and outstanding Capital Stock of the
Borrower shall be owned by the Parent. Except as set forth in SCHEDULE 3.20,
there are no outstanding subscriptions, options, warrants, calls, puts, or
similar contractual rights (including preemptive rights) or any other agreements
or commitments of any nature with respect to such Capital Stock of the Borrower.
All the issued and outstanding Capital Stock of the Borrower has been issued in
compliance in all material respects with all applicable Federal and state
securities laws and regulations.
3.21 SUBSIDIARIES . On the Effective Date and upon consummation of the
Merger and the Restructuring, the Parent's only Subsidiaries are those listed on
SCHEDULE 3.21. The authorized issued and outstanding Capital Stock of each
Subsidiary is set forth in SCHEDULE 3.21. Except as set forth in SCHEDULE 3.21,
all the issued and outstanding Capital Stock of each Subsidiary is owned
beneficially and of record by the Parent or the Subsidiary indicated as the
owner thereof on such date, free and clear of all liens, options or rights of
others except as provided in the Pledge Agreements. No Person has or will have
any preemptive rights to subscribe for any additional Capital Stock of any
Subsidiary.
3.22 LABOR MATTERS . Except as set forth in SCHEDULE 3.22, none of the Loan
Parties is a party to any collective bargaining agreements. There are no
strikes, lockouts or, except as set forth in SCHEDULE 3.22, other labor disputes
pending or, to the knowledge of the Parent, Heat Holdings II or the Borrower,
threatened against any Loan Party which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. The hours worked and
payments made to employees of the Borrower or any Subsidiary have not been in
violation of the Fair Labor Standards Act of 1938, as amended, or any other
applicable Requirement of Law, except to the extent such violations could not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. Except as set forth in SCHEDULE 3.22, all material payments due
from the Borrower or any Subsidiary, as applicable, on account of wages and
employee health and welfare insurance and other benefits have been paid or
accrued as a liability on the books of such Loan Party.
<PAGE>
3.23 INSURANCE . All policies of insurance of any kind or nature maintained
by or issued to the Borrower or any Subsidiary, including, without limitation,
policies of life, fire, theft, earthquake, business interruption, product
liability, public liability, property damage, other casualty, employee fidelity,
worker's compensation, employee health and welfare, title, property and
liability insurance, are in full force and effect in all material respects and
are of a nature and provide such coverage as is sufficient and as is customarily
carried by companies of similar size and character.
3.24 MERGER DOCUMENTS . (a) The Borrower has delivered to the Lenders and
the Administrative Agent true, complete and correct copies of each of the
Merger Documents (including all exhibits, schedules and disclosure letters
referred to therein or delivered pursuant thereto, if any) and all amendments
thereto, waivers relating thereto and other side letters or agreements
affecting the terms thereof, each of which is set forth on SCHEDULE 3.24.
None of such documents and agreements has been amended or supplemented, nor
have any of the provisions thereof been waived, except pursuant to a written
agreement or instrument which has heretofore been consented to by the Lenders
and no consent or waiver has been granted by the Parent, the Borrower, Merger
Sub, or any Subsidiary thereunder. Each of the Merger Documents has been duly
executed and delivered by the Loan Party thereto and each other party thereto
and is a legal, valid and binding obligation of each party thereto
enforceable, in all material respects, in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or other similar
laws affecting the rights of creditors generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
(b) Each party to the Merger Documents has complied in all material
respects with all terms and provisions contained therein on its part to be
observed and the Merger has been duly consummated in accordance with the terms
of the Merger Documents.
3.25 OPERATIONS . Neither Parent nor Heat Holdings II is engaged in any
business other than (i) acting as a holding company for its subsidiaries, (ii)
undertaking the Obligations of such Loan Party under the Loan Documents to which
it is a party, (iii) the acquisition of, and the ownership, management and
pledging pursuant to the applicable Pledge Agreement of the Pledged Stock owned
by such Loan Party, and (iv) engaging in any other activities necessary to
accomplish the foregoing or reasonably related thereto, including undertaking
its obligations under the Merger Agreement.
3.26 SECURITY DOCUMENTS . Each Security Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in all right, title and interest of the
Loan Party which is party thereto in the collateral described therein except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). When financing
statements have been filed in the offices in the jurisdictions listed in
SCHEDULE 3.26, each such Security Agreement shall, except as set forth therein
and
<PAGE>
except for Liens contemplated under SECTION 6.3(a), (c), (e) or (g),
constitute a fully perfected first Lien on, and security interest in, all right,
title and interest of such Loan Party in the Collateral in which a Lien can be
perfected by filing a financing statement.
(b) Except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law), each Pledge Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Pledged
Stock and the proceeds thereof and, when stock certificates representing such
Pledged Stock have been delivered to the Administrative Agent, such Pledge
Agreement shall constitute a fully perfected first Lien on, and security
interest in, all right, title and interest of the Loan Party which is a party
thereto in the pledged securities and the proceeds thereof described therein
subject to continuous possession of the pledged securities by the Administrative
Agent or its representatives. Each Custody Agreement is effective to transfer
custody of the Capital Stock subject to such agreement.
(c) Except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law), each Mortgage is
effective to grant to the Administrative Agent, for the benefit of the Lenders,
a legal, valid and enforceable mortgage lien on all right, title and interest of
the applicable Loan Party in the mortgaged property described therein. Each such
Mortgage constitutes a fully perfected Lien, on, and security interest in, such
mortgaged property and when a financing statement has been filed in the
governmental office for the state and county named in the schedule to such
Mortgage, such Mortgage shall also create a legal, valid, enforceable and
perfected security interest in, all right, title and interest of the applicable
Loan Party in all real and personal property which is the subject of such
Mortgage.
3.27 ACCURACY AND COMPLETENESS OF INFORMATION . All information, reports and
other papers and data (other than forecasts, projections and pro forma financial
information) with respect to any Loan Party (in each case, prior to and after
giving effect to the Merger furnished in writing to the Lenders by or on behalf
of such Loan Party, and all information and data contained in the Proxy
Statement and the Offering Memorandum, were, at the time furnished, complete and
correct in all material respects, or have been subsequently supplemented by
other information, reports or other papers or data, to the extent necessary to
give the Lenders a true and accurate knowledge of the subject matter in all
material respects. All projections, forecasts and pro forma financial
information with respect to any Loan Party, furnished by the Parent, Heat
Holdings II or the Borrower in connection with this Agreement, were prepared and
presented in good faith by the Parent, Heat Holdings II and the Borrower based
upon facts and assumptions that the Parent, Heat Holdings II and the Borrower
believe to be reasonable in light of current and foreseeable conditions, it
being recognized by the Lenders that such projections, forecasts and pro forma
financial information as to future events are not to be viewed as facts and that
actual results
<PAGE>
during the period or periods covered by any such projections,
forecasts and pro forma financial information may differ from the projected
results. No document furnished or statement made in writing to the Lenders by or
on behalf of the Parent, Heat Holdings II, the Borrower or any Subsidiary in
connection with the negotiation, preparation or execution of this Agreement, or
any information or data contained in the Proxy Statement or the Offering
Memorandum, at the time furnished, contains any untrue statement of a material
fact, or omits to state any such material fact necessary in order to make the
statements contained therein not misleading, in either case which has not been
corrected, supplemented or remedied by subsequent documents furnished or
statements made in writing to the Lenders. As of each date this representation
and warranty is made or deemed made, there is no fact relating to the Parent,
Heat Holdings II, the Borrower or any Subsidiary or their respective businesses
(other than facts relating to the economy in general) known to the Parent, Heat
Holdings II, the Borrower or any Subsidiary which has, or could reasonably be
expected to have, a Material Adverse Effect.
3.28 LEASEHOLDS, PERMITS, ETC . Each of the Borrower and the Subsidiaries
possesses or has the right to use, all leaseholds, easements, franchises and
permits and all authorizations and other rights which are material to and
necessary for the conduct of its business. Except for such noncompliance with
the foregoing which could not reasonably be expected to have a Material Adverse
Effect, all the foregoing are in full force and effect, and each of the Borrower
and the Subsidiaries is in substantial compliance with the foregoing without any
known conflict with the valid rights of others. No event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such leasehold, easement, franchise, license or other
right, which termination or revocation, considered as a whole, could reasonably
be expected to have a Material Adverse Effect.
3.29 SOLVENCY . On the Effective Date, after giving effect to the Merger,
and on each date on which Borrowings are made or any Letter of Credit is issued
hereunder, each of the Parent, Heat Holdings II, the Borrower and their
respective Subsidiaries is Solvent. None of the Parent, Heat Holdings II, the
Borrower or any Subsidiary has incurred any obligations or liabilities
(contingent or otherwise) under this Agreement, any other Loan Document, any
Merger Document or any Thermalloy Acquisition Document, nor has the Parent, Heat
Holdings II, the Borrower or any Subsidiary made any conveyance pursuant to or
in connection therewith, in each case with actual intent to hinder, delay or
defraud either present or future creditors of such Loan Parties.
3.30 EXISTING INDEBTEDNESS . Set forth on SCHEDULE 3.30 hereto is a complete
and accurate list of all Existing Indebtedness, showing as of the date hereof
the principal amount outstanding thereunder, the maturity date thereof and, if
applicable, the property upon which any Liens have been granted to secure the
repayment thereof.
3.31 INACTIVE SUBSIDIARIES . Set forth on SCHEDULE 3.31 hereto is a complete
and accurate list of all Inactive Subsidiaries, showing the corporate name and
principal location of each such Inactive Subsidiary.
<PAGE>
3.32 YEAR 2000 COMPLIANCE . The Borrower (a) has reviewed its operations and
those of the Subsidiaries with a view to assessing whether each of its
Subsidiaries' respective businesses will, in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data, be vulnerable to a Year 2000 Problem, and (b) has taken
into account the costs to be incurred by the Borrower and the Subsidiaries to
address any Year 2000 Problem in the preparation of all projections provided to
the Lenders with respect to the Borrower and any such Subsidiary. Based on the
review in clause (a) of the previous sentence, none of the Parent, Heat Holdings
II nor the Borrower has any reason to believe that a Material Adverse Effect
will occur with respect to its or any Subsidiary's businesses or operations
resulting from a Year 2000 Problem.
3.33 SENIOR INDEBTEDNESS . The Obligations constitute "Senior Indebtedness",
as such term is defined in the Indenture.
ARTICLE 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL CREDIT EXTENSION . The agreement of each Lender
to make the Loans on the Effective Date, or of the Issuer to issue any Letter of
Credit, is subject to the satisfaction, immediately prior to or concurrently
with such Credit Extension, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer
of the Borrower, the Parent and Heat Holdings II, in each case, with a
counterpart for each Lender, (ii) for the account of each Lender, a
Revolving Credit Note and Term Notes conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower, (iii)
the Pledge Agreements, executed and delivered by a duly authorized
officer of each of the pledgors party thereto, with a counterpart or a
conformed copy for each Lender, (iv) the Security Agreements, executed
and delivered by a duly authorized officer of each of the Parent, Heat
Holdings II, the Borrower and the Domestic Subsidiaries party thereto,
with a counterpart or a conformed copy for each Lender, (v) the
Mortgage Modifications, executed and delivered by a duly authorized
officer of Fluent and AT, as applicable, (vi) the Guarantees, executed
and delivered by a duly authorized officer of each Subsidiary Guarantor
party thereto, (vii) the Custody Agreements, executed and delivered by
a duly authorized officer of each Loan Party party thereto, (viii) the
Contribution Agreement, executed by a duly authorized officer of each
Loan Party party thereto, (ix) the Fee Letter, executed and delivered
to the Administrative Agent by a duly authorized officer of each of the
Parent and the Borrower, and (x) the Assignment and Assumption
Agreement, executed by the parties thereto.
<PAGE>
(b) CORPORATE PROCEEDINGS OF THE BORROWER. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy
of the resolutions, in form and substance satisfactory to the
Administrative Agent, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which it is a
party, (ii) the borrowings contemplated hereunder and (iii) the
execution, delivery and performance of the Merger Documents and all
closing documents delivered in connection therewith, certified by the
Secretary or an Assistant Secretary of the Borrower as of the Effective
Date, which certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and
shall be in form and substance satisfactory to the Administrative
Agent.
(c) BORROWER INCUMBENCY CERTIFICATES. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate
of the Borrower, dated the Effective Date, as to the incumbency and
signature of the officers of the Borrower executing any Loan Document
and any related documents, satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or an Assistant Secretary of the Borrower.
(d) CORPORATE PROCEEDINGS OF THE PARENT. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions of the Board of Directors of the Parent authorizing (i) the
execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party and all closing documents
delivered in connection therewith and (ii) the execution, delivery and
performance of the Merger Documents and all closing documents delivered
in connection therewith, certified by the Secretary or an Assistant
Secretary of the Parent, as of the Effective Date, which certificate
shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded and shall be in form and
substance satisfactory to the Administrative Agent.
(e) PARENT INCUMBENCY CERTIFICATE. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of the
Parent, dated the Effective Date, as to the incumbency and signature of
the officers of the Parent executing any Loan Documents and any related
documents satisfactory in form and substance to the Administrative
Agent, as executed by the President or any Vice President and the
Secretary or an Assistant Secretary of the Parent.
(f) CORPORATE PROCEEDINGS OF HEAT HOLDINGS II. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy
of the resolutions of the Board of Directors of Heat Holdings II
authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party and all closing
documents delivered in connection therewith, certified by the Secretary
or an Assistant Secretary of Heat Holdings II, as of the Effective
Date, which certificate shall state that
<PAGE>
the resolutions thereby certified have not been amended, modified,
revoked or rescinded and shall be in form and substance satisfactory to
the Administrative Agent.
(g) HEAT HOLDINGS II INCUMBENCY CERTIFICATE. The Administrative
Agent shall have received, with a counterpart for each Lender, a
certificate of Heat Holdings II dated the Effective Date, as to the
incumbency and signature of the officers of Heat Holdings II executing
any Loan Documents and any related documents satisfactory in form and
substance to the Administrative Agent, as executed by the President or
any Vice President and the Secretary or an Assistant Secretary of Heat
Holdings II.
(h) CORPORATE PROCEEDINGS OF THE SUBSIDIARIES. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy
of the resolutions of the Board of Directors of each Subsidiary
authorizing (i) the execution, delivery and performance of each Loan
Document to which it is a party and (ii) in the case of Merger Sub, the
execution, delivery and performance of the Merger Documents to which
Merger Sub is a party and all closing documents delivered in connection
therewith, in each case, certified by the Secretary or an Assistant
Secretary of such Subsidiary as of the Effective Date, which
certificate shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded and shall be in form and
substance satisfactory to the Administrative Agent.
(i) SUBSIDIARY INCUMBENCY CERTIFICATE. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate
of each Subsidiary, dated the Effective Date, as to the incumbency and
signature of the officers of each Subsidiary executing any Loan
Document, Merger Document and any related documents satisfactory in
form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or an Assistant
Secretary of such Subsidiary.
(j) CORPORATE DOCUMENTS. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the charter documents of the Parent, Heat Holdings II, the Borrower
and each Subsidiary (together with, in the case of each Foreign
Subsidiary, copies of available English translations thereof),
certified as of the Effective Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the Parent, Heat
Holdings II, the Borrower and such Subsidiary, as the case may be.
(k) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate
of a Responsible Officer of the Borrower (i) attaching copies of all
consents, authorizations and filings referred to in SCHEDULE 3.4, and
(ii) stating that such consents, licenses and filings are in full force
and effect, and each such consent, authorization and filing shall be in
form and substance satisfactory to the Administrative Agent.
<PAGE>
(l) CLOSING FEES AND EXPENSES. The Administrative Agent shall have
received the fees to be received on the Effective Date referred to in
the Fee Letter and the reimbursement of all costs and expenses
(including the fees and expenses of counsel and local counsel to the
Administrative Agent) and the Issuer shall have received the fees to be
received on the Effective Date.
(m) LEGAL OPINIONS. The Administrative Agent shall have received,
with a counterpart for each Lender, the executed legal opinions of (A)
New York counsel to the Loan Parties, substantially in the form of
EXHIBIT U, (B) New Hampshire and Texas counsel to the Loan Parties,
substantially in the form of EXHIBIT V and (C) foreign counsel to the
Loan Parties in the United Kingdom, Germany and Italy, covering such
matters as are set forth on EXHIBIT W, and, in each case, covering such
other matters incident to the transactions contemplated by this
Agreement as the Administrative Agent may reasonably require.
(n) MERGER DOCUMENTS; CERTIFICATE. The Administrative Agent shall
have received, with copies for each Lender, (i) true and correct copies
of each of the Merger Documents including all schedules and exhibits
thereto and side letters affecting the terms thereof or otherwise
delivered in connection therewith together with all closing documents,
opinions and certificates executed in connection therewith, all of
which shall be in full force and effect and (ii) evidence of approval
of the Merger by the stockholders of the Borrower. The Merger Documents
shall not have been amended, supplemented or otherwise modified in any
material respect since the date thereof, except as may have been
consented to in writing by the Lenders. The Merger Documents shall be
accompanied by a certificate, dated the Effective Date, of a
Responsible Officer of the Borrower to such effect. The transactions
described in the Merger Documents shall have been consummated in all
material respects in accordance with the terms and provisions thereof
and the Borrower and each other party to the Merger Documents shall be
in material compliance with all the terms of the Merger Documents to
which it is a party.
(o) CORPORATE STRUCTURE. The Administrative Agent and the Lenders
shall be satisfied with the legal arrangements among the Parent and the
Subsidiaries, including any tax and cost sharing agreements and
arrangements.
(p) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a closing certificate of
each of the Parent, Heat Holdings II, and the Borrower, in each case
substantially in the form of EXHIBIT X, dated the Effective Date.
(q) FINANCIAL INFORMATION; PROJECTIONS. The Administrative Agent
shall have received, with copies for each Lender, (i) each of the
financial statements referred to in SECTION 3.1 and (ii) the business
forecast of the Borrower and its Subsidiaries referred to
<PAGE>
in SECTION 3.1(f) in form and substance satisfactory to the
Administrative Agent and the Lenders.
(r) PLEDGED STOCK; STOCK POWERS. The Administrative Agent shall
have received certificates representing the Pledged Stock pursuant to
the Pledge Agreements, together with an undated stock power executed in
blank for each such certificate, an acknowledgment of and consent to
each such Pledge Agreement by the Borrower or the applicable Subsidiary
and any other items required under the terms of any such Pledge
Agreement.
(s) FILINGS, REGISTRATIONS AND RECORDINGS. All filings,
registrations and recordings listed in SCHEDULE 4.1(s) have been
delivered to the Administrative Agent for filing, registration or
recording in each jurisdiction listed in SCHEDULE 4.1(s). Any documents
(including, without limitation, financing statements) required to be
filed under any of the Security Documents in order to create, in favor
of the Administrative Agent, a perfected security interest in the
collateral thereunder shall have been delivered to the Administrative
Agent for filing, registration or recording in each office in each
jurisdiction listed in the Security Agreement, and such filings are the
only ones required in order to create in favor of the Administrative
Agent, for the benefit of the Lenders, a perfected Lien on the
respective collateral described therein in the jurisdictions listed on
SCHEDULE 4.1(s).
(t) INSURANCE. The Administrative Agent shall have received
evidence satisfactory to it of the existence of the insurance required
hereunder and pursuant to the Security Documents and the Administrative
Agent for the benefit of the Lenders, shall have been named as loss
payee under each insurance policy maintained by the Borrower or any
Subsidiary (other than worker's compensation, public liability,
employee benefits and welfare insurance).
(u) SOURCES AND USES. The Administrative Agent shall have
received, with a copy for each Lender, a schedule of sources and uses
substantially in the form of SCHEDULE 4.1(u), setting forth the
application of the proceeds of the Loans made on the Effective Date and
the other amounts received or paid in connection with the Merger and
the financing thereof, such schedule to be certified by a Responsible
Officer of the Borrower.
(v) LIEN SEARCHES. The Administrative Agent shall have received
(i) lien searches with respect to the assets of the Parent, Merger Sub,
Heat Holdings II, the Borrower and its Subsidiaries under such names
and in such jurisdictions as the Administrative Agent shall have
requested and the results of such lien searches shall be in form and
substance satisfactory to the Administrative Agent and (ii) without
limiting the foregoing, duly executed financing statements on form
UCC-3 (or comparable statements under applicable law), and evidence
satisfactory to the Administrative Agent of any other actions necessary
or, in the opinion of the Administrative Agent, desirable to terminate
<PAGE>
any existing liens created with respect to the assets of any such party
(other than Liens in favor of the Administrative Agent, for the benefit
of the Lenders, and Liens permitted under 6.3(e), (g) and (h)).
(w) INDEBTEDNESS. Immediately after the consummation of the
Merger, the Loan Parties shall have only the Existing Indebtedness.
(x) LIEN WAIVERS. The Administrative Agent shall have received,
with a counterpart for each Lender, Landlord Waivers executed by each
Person listed on SCHEDULE 4.1(x).
(y) NO MATERIAL ADVERSE EFFECT. Except as set forth on SCHEDULE
4.1(y), since December 31, 1998, no Material Adverse Effect shall have
occurred with respect to the Parent, Merger Sub, Heat Holdings II, the
Borrower or the Subsidiaries taken as a whole.
(z) SOLVENCY CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Chief Financial Officer of each of the Parent, Heat Holdings II and the
Borrower certifying as to the Solvency of such Loan Party, both before
and after giving effect to the Loans on the Effective Date.
(aa) LITIGATION. There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or Merger Sub pending
or threatened before any court, governmental agency or arbitrator that
could reasonably be expected to have a Material Adverse Effect or
purports to affect the legality, validity or enforceability of the
Merger, this Agreement or any other Loan Document.
(bb) COMPLIANCE CERTIFICATE: The Administrative Agent shall have
received a Compliance Certificate dated as of the Effective Date,
demonstrating as of the Effective Date (after giving effect to the
Thermalloy Acquisition, the Merger and the related transactions
described in the Offering Memorandum) (i) EBITDA for the four fiscal
quarters ended October 2, 1999 of at least $41,000,000, (ii) a Total
Leverage Ratio (after giving effect to the borrowings hereunder and the
prepayment of Indebtedness of each Loan Party) of 5.00 to 1.00 or less,
and (iii) a Senior Leverage Ratio of 2.00 to 1.00 or less.
(cc) CONTRIBUTION TO THE PARENT AND HEAT HOLDINGS II. Prior to or
in conjunction with the Merger, the Parent and Heat Holdings II shall
have received not less than $151,000,000 in the aggregate in cash
equity from either Willis Stein & Partners II, L.P. or any of its
Affiliates and from the co-investors set forth on Schedule 3.18.
(dd) SUBORDINATED DEBT PROCEEDS. The Borrower shall have received
aggregate gross proceeds of not less than $150,000,000 from the
issuance of the Permitted High Yield Securities and Warrants on terms
and conditions acceptable to the Administrative Agent and the Lenders,
which proceeds shall have been utilized to consummate the Merger, to
<PAGE>
repay certain Indebtedness under the Existing Credit Agreement and
other existing Indebtedness and to pay related transaction fees and
expenses.
(ee) REPAYMENT UNDER EXISTING CREDIT AGREEMENT. The Borrower
shall have repaid $88,182,281.09 of the Loans (as defined in the
Existing Credit Agreement) including accrued interest thereon.
(ff) RESTRUCTURING. The Restructuring shall have been completed in
accordance with the terms set forth on SCHEDULE 1.2, and the
Administrative Agent shall have received evidence satisfactory to it
that the Schedule 1.3 Entities are either inactive or have been
dissolved.
4.2 CONDITIONS TO EACH CREDIT EXTENSION . The agreement of each Lender to
make any Loan requested to be made by it on any date (including, without
limitation, its initial Loan) and of the Issuer to issue any Letter of Credit is
subject to the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by the Parent, Heat Holdings II, the Borrower and
each other Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of such date as if
made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loan or
Letter of Credit requested to be made or issued on such date.
(c) AGGREGATE STATED AMOUNT. Immediately before and immediately
after giving effect to such Loan, or after issuance of such Letter of
Credit, as the case may be, the aggregate outstanding principal amount
of the Revolving Credit Loans made by the Lender, the aggregate Stated
Amount of all Letters of Credit outstanding and the aggregate amount
drawn under all Letters of Credit for which the Issuer has not been
reimbursed shall not exceed the Available Revolving Credit Commitment.
(d) FEES AND EXPENSES. The Borrower shall have paid all accrued
fees and expenses of the Administrative Agent and the Lenders
(including the accrued fees and expenses reasonably incurred by counsel
to the Administrative Agent).
(e) ADDITIONAL MATTERS. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with
the transactions contemplated by this Agreement and the other Loan
Documents shall be satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
such other documents, instruments and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
<PAGE>
Each borrowing by the Borrower hereunder and each request by the Borrower to the
Issuer to issue a Letter of Credit shall constitute a representation and
warranty by the Parent, Heat Holdings II and the Borrower as of the date of such
Loan or the issuance of such Letter of Credit that the conditions contained in
this SECTION 4.2 have been satisfied.
ARTICLE 5. AFFIRMATIVE COVENANTS
Each of the Parent, Heat Holdings II and the Borrower hereby
agrees that, so long as the Commitments remain in effect, any Note remains
outstanding and unpaid or any Obligation is owing to any Lender, the Issuer or
the Administrative Agent hereunder, the Parent, Heat Holdings II, and the
Borrower shall and shall cause each Subsidiary to:
5.1 FINANCIAL STATEMENTS . Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the consolidated and
consolidating balance sheet of the Borrower and the Subsidiaries as at the
end of such year and the related statements of operations, stockholders'
equity and cash flows for such year, setting forth in each case in
comparative form the figures as of the end of and for the previous year,
reported on, in the case of the consolidated financial statement, without
a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit with respect to the consolidated
statements, by Arthur Andersen LLP, or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days after
the end of each quarterly period for each fiscal year of the Borrower, the
unaudited consolidated and consolidating balance sheet of the Borrower and
the Subsidiaries as at the end of such quarter and the related unaudited
statements of operations and cash flows of the Borrower and the
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter and setting forth in each case in comparative form
the figures from the budget for such fiscal year furnished to the Lenders
pursuant to SECTION 5.2(d) and the actual figures for the corresponding
date or period in the previous year, certified by a Responsible Officer as
being fairly stated in all material respects; and
(c) solely to the extent otherwise prepared, as soon as available, but
in any event within 90 days after the end of each fiscal year of Heat
Holdings II, a copy of the consolidated and consolidating balance sheet of
Heat Holdings II as at the end of such year and the related statements of
operations, stockholders' equity and cash flows for such year, setting
forth in each case in comparative form the figures as of the end of and
for the previous year, reported on, in the case of the consolidated
financial statement (to the extent such financial statement is audited),
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit with respect to the
<PAGE>
consolidated statements, by Arthur Andersen LLP, or other independent
certified public accountants of nationally recognized standing;
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with U.S.
GAAP applied consistently throughout the periods reflected therein and with
prior periods.
5.2 CERTIFICATES; OTHER INFORMATION . Furnish to each Lender or, in the case of
clause (h), the requesting Lender and the Administrative Agent:
(a) concurrently with the delivery of the financial statements referred
to in SECTION 5.1(a) THROUGH (c), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements referred
to in SECTION 5.1(a) THROUGH (b), a certificate of a Responsible Officer
of the Borrower, stating that, during the period covered by such financial
statements, the Borrower and each of its Subsidiaries, during such period
has observed or performed all its covenants and other agreements, and
satisfied every condition, contained in this Agreement and in each other
Loan Document to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate;
(c) concurrently with the delivery of the financial statements referred
to in SECTION 5.1(a) THROUGH (c), a certificate of a Responsible Officer
of the Borrower, substantially in the form of EXHIBIT R hereto (the
"COMPLIANCE CERTIFICATE"), showing compliance by the Borrower and its
Subsidiaries with the covenants contained in SECTION 6.1 and SECTION 6.8;
(d) not later than 45 days after the end of each fiscal year of the
Borrower, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower and its Subsidiaries for the
succeeding fiscal year set forth on a monthly basis together with a
narrative description setting forth the assumptions upon which such
projections are based, such projections to be accompanied by a certificate
of a Responsible Officer to the effect that such Responsible Officer has
no reason to believe that such projections are incorrect or misleading in
any material respect or that such assumptions are not reasonable;
(e) within five days after the same are sent, copies of all financial
statements and reports which the Borrower or any Subsidiary generally
sends to all its stockholders, and
<PAGE>
within five days after the same are filed, copies of all financial
statements and reports, if any, which the Borrower or any Subsidiary may
make to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(f) promptly upon receipt thereof, copies of all substantive management
letters and other substantive material reports which are submitted to the
Borrower or any Subsidiary by its independent accountants in connection
with any annual or interim audit of the books of the Borrower or such
Subsidiary made by such accountants;
(g) promptly (and in any event within 30 days), upon any issuance by the
Parent, Heat Holdings II or the Borrower of Capital Stock or any transfer
of shares of the such Loan Party's Capital Stock by any Person who owns at
least 5% of any class of the Capital Stock of such Loan Party of which any
such Loan Party becomes aware, a certificate of a Responsible Officer of
such Loan Party notifying the Administrative Agent of such transfer; and
(h) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS . Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, including all material taxes imposed upon it or
upon its income or profits or in respect of its property, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with U.S. GAAP with respect
thereto have been provided on the books of the Borrower and its Subsidiaries, as
the case may be.
5.4 MAINTENANCE OF EXISTENCE . Renew and keep in full force and effect its
corporate existence, take all reasonable action to maintain all rights,
privileges and franchises necessary in the normal conduct of its business except
to the extent such failure to maintain could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect and comply with all material
Contractual Obligations and Requirements of Law.
5.5 MAINTENANCE OF PROPERTY; INSURANCE . Keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted, maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, business interruption, storm
damage and earthquake) and with such deductibles or self-insurance retentions as
are usually insured against in the same general areas by companies engaged in
the same or a similar business and name the Administrative Agent, for the
benefit of the Lenders, as loss payee under each such policy (other than
worker's compensation, public liability, employee benefits and welfare
insurance); and furnish to each Lender, upon request, full information as to the
insurance carried including certified copies of policies and certificates of
insurance from the Borrower's insurance broker, or such other recognized
insurance broker reasonably acceptable to
<PAGE>
the Required Lenders. If the Parent, the Borrower or any Subsidiary receives any
Net Insurance Proceeds (other than workmen's compensation, public liability,
employee benefits and welfare insurance) the Borrower shall promptly, and, in
any event, within three Business days after receipt thereof, deliver such Net
Insurance Proceeds to the Administrative Agent for application in accordance
with SECTION 2.9(d).
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS . (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with U.S. GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; permit
representatives of any Lender, upon reasonable prior notice unless an Event of
Default shall have occurred and be continuing, to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time during normal business hours and as often as may reasonably
be desired and to discuss the business, operations, properties and financial and
other condition of the Parent, the Borrower or any Subsidiary with officers and
employees of the Parent, the Borrower or any Subsidiary and with their
independent certified public accountants; (b) if any Loan Party that is a party
to a Custody Agreement shall have requested the release of any of the Capital
Stock which is subject to such Custody Agreement, present such Capital Stock to
the Administrative Agent for its inspection; PROVIDED that so long as an Event
of Default shall have occurred which is continuing, such request shall not be
made more frequently than once in any 60-day period.
5.7 NOTICES . Promptly after the Parent, Heat Holdings II or the Borrower
knows or has reason to know thereof, and, in any event, within 5 days thereof
with respect to any notice under clause (a) or 10 days with respect to any other
notice under this Section, give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation
of the Parent, the Borrower or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between the
Parent, the Borrower or any Subsidiary and any Governmental Authority,
which in either case, if not cured or if adversely determined, as the case
may be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Parent, the Borrower or
any Subsidiary in which the amount involved is the Dollar Equivalent of
$2,000,000 or more and is not covered by insurance or in which injunctive
or similar relief is sought;
(d) any material labor dispute to which the Parent, the Borrower or any
Subsidiary may become a party and which involves any group of employees,
any strikes or walkouts relating to any of its plants or facilities and
the expiration or termination of any labor contract to which the Parent,
the Borrower or any Subsidiary is a party or by which the Parent, the
Borrower or any such Subsidiary is bound;
<PAGE>
(e) the purchase of the Capital Stock of Curamik pursuant to the Curamik
Documents;
(f) the release from escrow of either the Capital Stock of Thermalloy
Malaysia or the cash deposited into escrow in connection with the sale of
such Capital Stock; and
(g) any development or event which could reasonably be expected to have
a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Parent or the Borrower proposes to take with respect
thereto.
5.8 ENVIRONMENTAL LAWS . (a) Comply in all material respects, and ensure
compliance in all material respects by all tenants and subtenants, if any,
with all applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants, if
any, obtain and comply in all material respects with and maintain, any and
all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required under Environmental Laws
and promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws except
to the extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.
(c) Jointly and severally, defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
subsidiaries, affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Laws applicable to
the operations of the Parent, the Borrower or any of the Subsidiaries, or the
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full force and effect
regardless of the termination of this Agreement.
<PAGE>
5.9 YEAR 2000 COMPLIANCE . Each of the Parent and the Borrower shall take
all action necessary to assure that its computer-based systems and those of any
Subsidiary, are able to effectively process data, including through dates on and
after January 1, 2000, except where the failure to be able to do so could not
reasonably be expected to have a Material Adverse Effect. At the request of the
Administrative Agent or any Lender, the Parent and the Borrower shall provide
the Administrative Agent and the Lenders with assurances reasonably acceptable
to the Administrative Agent of the Parent's, the Borrower's and each
Subsidiary's year 2000 capability.
5.10 ERISA . (a) Establish, maintain and operate all Plans to comply in
all material respects with the applicable provisions of ERISA, the Code, and
all other applicable laws, and the regulations and interpretations thereunder
and the respective requirements of the governing documents for such Plans;
(b) Within ten days after receipt by Parent, the Borrower or any Subsidiary
of any unfavorable determination letter from the IRS regarding the qualification
of a Plan under Section 401(a) of the Code, and promptly following the request
of the Administrative Agent for any favorable determination letters, provide the
Administrative Agent and the Lenders with copies of each such letter;
(c) Within ten days after the filing thereof, provide the Administrative
Agent and the Lenders with copies of any annual report (IRS Form 5500 series)
with respect to a Single Employer Plan, including Schedule B thereto;
(d) Within ten days after the Parent, the Borrower or any Subsidiary knows
or has reason to know that a non-exempted prohibited transaction (defined in
Sections 406 of ERISA and 4975 of the Code) has occurred which could reasonably
be expected to have a Material Adverse Effect, provide the Administrative Agent
and the Lenders with a statement of the chief financial officer of the Parent,
the Borrower or such Subsidiary describing such transaction and the action which
the Parent, the Borrower or such Subsidiary has taken, is taking or proposes to
take with respect thereto;
(e) Within ten days after the filing thereof, provide the Administrative
Agent and the Lender with copies of each actuarial report for any Single
Employer Plan and each actuarial report and annual report received from any
Multiemployer Plan;
(f) Within ten days after the occurrence thereof, provide the
Administrative Agent and the Lenders with notification of any material increase
in the benefits of any existing Single Employer Plan or the establishment by the
Parent, the Borrower or any Subsidiary of any new Single Employer Plan or the
commencement of contributions by the Parent, the Borrower or any Subsidiary to
any Single Employer Plan to which the Parent, the Borrower or any Subsidiary was
not previously contributing; and
<PAGE>
(g) Within ten days after the Parent, the Borrower or any Subsidiary or any
Commonly Controlled Entity knows or has reason to know thereof provide the
Administrative Agent and the Lenders with: (i) the occurrence of any Reportable
Event with respect to any Benefit Plan or Multiemployer Plan which could
reasonably be expected to have a Material Adverse Effect, a failure to make any
required contribution to a Benefit Plan or Multiemployer Plan, the creation of
any Lien in favor of the PBGC or a Benefit Plan or Multiemployer Plan or any
withdrawal from, or the receipt of notice with respect to the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the receipt of notice from the PBGC or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Benefit Plan or Multiemployer Plan.
5.11 USE OF PROCEEDS . The proceeds of the Loans shall be utilized only for
the respective purposes set forth in SECTION 3.15.
5.12 POST-CLOSING MATTERS. The Borrower shall cause each of the requirements
set forth on SCHEDULE 5.12 to be satisfied on or before the date set forth
therein for each such requirement.
5.13 FURTHER ASSURANCES. From time to time hereafter, execute and deliver,
or cause to be executed and delivered, such additional instruments, certificates
or documents, and take all such actions, as the Administrative Agent or the
Lenders may reasonably request, for the purposes of implementing or effectuating
the Loan Documents, or of more fully perfecting, preserving or renewing the
rights of the Lenders with respect to the Collateral (or with respect to any
additions thereto or replacements or proceeds thereby or with respect to any
other property or assets hereafter acquired by the Parent, Heat Holdings II or
the Borrower which may be deemed to be part of the Collateral) pursuant hereto
or thereto.
ARTICLE 6. NEGATIVE COVENANTS
Each of the Parent, Heat Holdings II and the Borrower hereby agrees
that, so long as the Commitments remain in effect, any Note remains outstanding
and unpaid or any Obligation is owing to any Lender, the Issuer or any Agent
hereunder, the Parent, Heat Holdings II and the Borrower shall not and shall not
permit any Subsidiary to:
6.1 FINANCIAL CONDITION COVENANTS .
(a) INTEREST COVERAGE RATIO. On the last day of any fiscal quarter
commencing with the fiscal quarter ending July 1, 2000, permit the Interest
Coverage Ratio for the twelve-month period ending on the last day of such fiscal
quarter to be less than the ratio set forth opposite such period below:
<PAGE>
<TABLE>
<CAPTION>
Period Interest Coverage Ratio
------ -----------------------
<S> <C>
Last day of the second fiscal quarter of 2000 through the
last day of the fourth fiscal quarter of 2000 1.50 to 1.00
First day of the first fiscal quarter of 2001 through the
last day of the third fiscal quarter of 2001 1.75 to 1.00
First day of the fourth fiscal quarter of 2001 through the
last day of the second fiscal quarter of 2002 2.00 to 1.00
First day of the third fiscal quarter of 2002 through the
last day of the fourth fiscal quarter of 2002 2.25 to 1.00
First day of the fiscal quarter of 2003 and thereafter 2.75 to 1.00
</TABLE>
(b) FIXED CHARGES RATIO. On the last day of any fiscal quarter of the
Borrower, commencing with the fiscal quarter ending March 31, 2001, permit the
Fixed Charges Ratio for the twelve-month period ending on the last day of such
fiscal quarter to be less than the ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Period Fixed Charges Ratio
------ -------------------
<S> <C>
Last day of the first fiscal quarter of 2001
through the last day of the fourth fiscal quarter
of 2002 1.00 to 1.00
First day of the first fiscal quarter of 2003 and
thereafter 1.05 to 1.00
</TABLE>
(c) TOTAL LEVERAGE RATIO. Permit the Total Leverage Ratio during any period
to exceed the ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Period Total Leverage Ratio
------ --------------------
<S> <C>
Effective Date through the last day of the
second fiscal quarter of 2000 5.40 to 1.00
First day of the third fiscal quarter 2000
through the next to last day of the fourth fiscal
quarter of 2000 5.00 to 1.00
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Last day of the fourth fiscal quarter of 2000
through the last day of the second fiscal quarter
of 2001 4.50 to 1.00
First day of the third fiscal quarter of 2001
through the last day of the fourth fiscal quarter
of 2001 4.25 to 1.00
January 1, 2002 and thereafter 3.75 to 1.00
</TABLE>
(d) SENIOR LEVERAGE RATIO. Permit the Senior Leverage Ratio during any
period and at the time of any borrowing hereunder to exceed the ratio set forth
opposite such period below:
<TABLE>
<CAPTION>
Period Senior Leverage Ratio
------ ---------------------
<S> <C>
Effective Date through the last day of the
second fiscal quarter of 2001 2.00 to 1.00
First day of the third fiscal quarter of 2001 and
thereafter 1.50 to 1.00
</TABLE>
6.2 LIMITATION ON INDEBTEDNESS . Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness under this Agreement or under any Hedging Agreement;
(b) Indebtedness of the Parent, the Borrower or any Subsidiary
(including Financing Leases) incurred to finance the purchase price of
equipment, fixtures and other similar property of the Parent, the Borrower
or such Subsidiary in an amount not to exceed the Dollar Equivalent of
$2,000,000 at any one time outstanding;
(c) unsecured Indebtedness of any Approved Subsidiary that is a Domestic
Subsidiary incurred in the ordinary course of business and aggregating not
more than the Dollar Equivalent of $1,000,000 at any time outstanding;
(d) unsecured Indebtedness (i) in respect of lines of credit from
commercial banks advised in writing to the Administrative Agent and
available to the Foreign Subsidiaries that are Approved Subsidiaries and
aggregating not more than the Dollar Equivalent of $3,000,000 at any time
outstanding and (ii) of any Foreign Subsidiary that is not an Approved
Subsidiary and aggregating not more than the Dollar Equivalent of
$5,000,000 at any time outstanding;
<PAGE>
(e) unsecured Indebtedness of (i) any Subsidiary owed to the Borrower or
any other Subsidiary or (ii) the Borrower owed to any Subsidiary; PROVIDED
that the sum of loans, advances and other investments under Section 6.9(g)
(to the extent not duplicative) and the aggregate principal amount of all
such unsecured Indebtedness shall not exceed the Dollar Equivalent of (A)
$5,000,000 in the case of any Subsidiary that is not an Approved
Subsidiary, and (B) $10,000,000 in the aggregate, in the case of all
Subsidiaries that are not Approved Subsidiaries, in each case, at any time
outstanding;
(f) Existing Indebtedness;
(g) Permitted High Yield Securities or Refinancing Securities;
(h) Subordinated Guarantees;
(i) Non-Recourse Indebtedness in an aggregate principal amount not to
exceed the Dollar Equivalent of $10,000,000 at any time outstanding; and.
(j) Indebtedness of Fluent UK Holdings, Ltd. owed to the Borrower in an
aggregate amount not to exceed the Dollar Equivalent of $8,000,000;
PROVIDED that, subject to Section 956 of the Code, any security for such
Indebtedness shall be assigned to the Administrative Agent, for the
benefit of the Lenders.
6.3 LIMITATION ON LIENS . Create, incur, assume or suffer to exist any Lien
upon any of its properties, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) inchoate Liens for taxes, assessments or governmental charges or
levies or Liens for taxes, assessments, governmental charges or levies not
yet due or which are being contested in good faith by appropriate
proceedings; PROVIDED that adequate reserves with respect thereto are
maintained on the books of the Parent, the Borrower or any Subsidiaries,
as the case may be, in conformity with U.S. GAAP;
(b) statutory Liens of carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other similar Liens arising in the ordinary
course of business which are not overdue for a period of more than 90 days
or which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation; deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements; and deposits to secure true leases in the ordinary course;
(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and landlords'
Liens which, in the aggregate, are not
<PAGE>
substantial in amount and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower;
(e) Liens securing Indebtedness permitted under SECTION 6.2(b)
(including financing statements filed in connection with Financing Leases
permitted under SECTION 6.2(b); PROVIDED that such Liens shall extend only
to the equipment, fixtures and other similar property so financed (and
improvements or attachments thereto) and the proceeds thereof);
(f) any attachment or judgment Lien not constituting an Event of Default
under SECTION 7.1(h);
(g) Liens described in SCHEDULE 6.3(g) and securing Existing
Indebtedness;
(h) Liens created pursuant to, or permitted by the terms of, the
Security Documents;
(i) Liens securing Non-Recourse Indebtedness permitted under SECTION
6.2(i); and
(j) any Liens securing Indebtedness permitted under Section 6.2(j).
6.4 LIMITATION ON GUARANTEE OBLIGATIONS . Create, incur, assume or suffer
to exist any Guarantee Obligation other than (a) Guarantees of operating leases
in an aggregate amount not to exceed $2,000,000, (b) the Guarantees and the
Subordinated Guarantees and (c) Guarantee Obligations of Indebtedness expressly
permitted to be incurred pursuant to SECTION 6.2.
6.5 LIMITATION ON FUNDAMENTAL CHANGES . Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all its property, business or
assets, or make any material change in its present method of conducting business
except:
(a) (i) any Subsidiary may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation), (ii) any Domestic Subsidiary of the Borrower may be merged
or consolidated with or into any one or more Domestic Subsidiaries of the
Borrower, and (iii) any Foreign Subsidiary may be merged or consolidated
with or into any Domestic Subsidiary (provided that the Domestic
Subsidiary shall be the continuing or surviving corporation) or a Foreign
Subsidiary that is an Approved Subsidiary (provided that such Foreign
Subsidiary shall be the continuing or surviving corporation);
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of any
or all its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Approved Subsidiary;
<PAGE>
(c) pursuant to a Permitted Disposition;
(d) the contribution or transfer of assets and liabilities in accordance
with the Restructuring;
(e) the conversion or merger of each Domestic Subsidiary of AT from a
corporation into a limited liability company and the consummation of the
other restructuring transactions set forth on SCHEDULES 1.2, in each case,
on terms and conditions satisfactory to the Administrative Agent including
that the Liens in favor of the Administrative Agent, for the benefit of
the Lenders, shall continue in full force and effect and shall be first
priority Liens;
(f) the closing of the Borrower's Hong Kong, Texas and United Kingdom
facilities as set forth on SCHEDULE 6.5 (h); and
(g) the Parent or Heat Holdings II may be merged or consolidated with or
into the Borrower, PROVIDED the Borrower shall be the continuing or
surviving corporation and the Administrative Agent, for the benefit of the
Lenders, shall have a first perfected security interest in all the Capital
Stock of the Borrower pursuant to an agreement reasonably satisfactory to
the Administrative Agent.
6.6 LIMITATION ON SALE OF ASSETS . Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, any Capital Stock, receivables and fee or leasehold interests),
whether now owned or hereafter acquired, in each case, in one transaction or a
series of transactions to any Person, except:
(a) the sale or other disposition of (i) Inventory in the ordinary
course of business, (ii) obsolete or worn out property in the ordinary
course of business and (iii) equipment no longer useful for the business
of the Parent, the Borrower or any of their respective Subsidiaries;
PROVIDED that such determination as to usefulness is made in good faith by
(x) management of such Person if the then aggregate fair market value of
such equipment does not exceed the Dollar Equivalent of $2,500,000 or (y)
the board of directors of such Person if the then aggregate fair market
value of such equipment exceeds the Dollar Equivalent of $2,500,000;
(b) the sale or discount without recourse of accounts receivable arising
in the ordinary course of business in connection with the compromise or
collection thereof;
(c) sales of property, business or assets (other than Capital Stock) to
the Borrower or any wholly-owned Subsidiary;
(d) the issuance of the Management Shares;
<PAGE>
(e) any sale or disposition permitted under SECTION 6.5(b);
(f) the sale of up to 40% of the outstanding Capital Stock of Thermalloy
Malaysia in accordance with Malaysian law;
(g) license agreements entered into, as licensor, in the ordinary course
of business, for the use of any Intellectual Property or other intangible
assets;
(h) Permitted Dispositions (including, but not limited to, Significant
Dispositions); PROVIDED that the Net Disposition Proceeds thereof are
applied in accordance with the terms of SECTION 2.9(c);
(i) the Restructuring transactions set forth on Schedule 1.2; and
(j) the issuance of the Warrants and the issuance of Capital Stock of
the Borrower upon exercise of the Warrants.
6.7 LIMITATION ON DIVIDENDS; PREPAYMENT OF INDEBTEDNESS . (a) Declare or
pay any dividend on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
Capital Stock of the Parent or the Borrower or any warrants or options to
purchase any such Capital Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Parent or
the Borrower, other than (i) dividends paid by a wholly-owned Subsidiary to
the Borrower or an Approved Subsidiary or by AT or Fluent on its preferred
stock, PROVIDED such preferred stock is pledged pursuant to the Pledge
Agreements, (ii) the purchase of shares of the Capital Stock of Curamik
pursuant to the Curamik Documents in the form delivered to the Administrative
Agent on the Original Closing Date and (iii) the Restructuring transactions
set forth in Schedule 1.2.
(b) Prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Indebtedness, other than the prepayment of the
Loans in accordance with the terms of this Agreement.
6.8 LIMITATION ON CAPITAL EXPENDITURES . Make or commit to make (by way of
the acquisition of securities of a Person or otherwise but excluding Permitted
Acquisitions) any Capital Expenditures exceeding, in the aggregate, the Dollar
Equivalent of $16,500,000 from the Effective Date to March 31, 2001.
6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES . Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or
<PAGE>
other securities of or any assets constituting a business unit of, or make any
other investment in, any Person, except:
(a) any extension of trade credit in the ordinary course of business and
investments in customer accounts or notes receivable for inventory
sold or services rendered in the ordinary course of business and
consistent with past practice;
(b) any investment in Cash Equivalents;
(c) Capital Expenditures permitted under SECTION 6.8;
(d) any investment by the Parent or the Borrower in any Approved
Subsidiary or any wholly-owned, direct or indirect Subsidiary of an
Approved Subsidiary and any investment by any Subsidiary in the
Parent, the Borrower or any Approved Subsidiary or any wholly-owned,
direct or indirect Subsidiary of an Approved Subsidiary;
(e) investments received in connection with the bankruptcy of suppliers
and customers or received pursuant to a plan of reorganization of any
supplier or customer, in each case, in settlement of delinquent
obligations or disputes with such suppliers or customers;
(f) deposits permitted under SECTION 6.3(c);
(g) any advance, loan or other investment by the Parent, the Borrower or
any Domestic Subsidiary to any Subsidiary that is not an Approved
Subsidiary, PROVIDED that the sum of (i) the aggregate amount of all
such advances, loans and other investments plus (ii) (to the extent
not duplicative) Indebtedness under Section 6.2(e), shall not exceed
the Dollar Equivalent of (A) $5,000,000 in the case of any Subsidiary
that is not an Approved Subsidiary, and (B) $10,000,000 in the
aggregate, in the case of all Subsidiaries that are not Approved
Subsidiaries, in each case, at any time outstanding;
(h) the purchase by the Borrower or any Subsidiary of the shares of
Capital Stock of Curamik pursuant to the Curamik Documents;
(i) loans and advances to Approved Subsidiaries in connection with the
Merger;
(j) loans and advances to employees of the Borrower and its Subsidiaries
in the ordinary course of business (including without limitation for
travel, entertainment and relocation expenses) in an aggregate amount
for the Parent and its Subsidiaries not to exceed the Dollar
Equivalent of $2,000,000 at any one time outstanding; and
(k) Permitted Acquisitions.
<PAGE>
6.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES . Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is otherwise permitted under this Agreement or (a) in the
ordinary course of the Parent's or a Subsidiary's business and (b) upon fair and
reasonable terms no less favorable to the Parent or such Subsidiary, as the case
may be, than it would obtain in a comparable arm's length transaction with a
Person which is not an Affiliate.
6.11 LIMITATION ON SALES AND LEASEBACKS . Enter into any arrangement with
any Person providing for the leasing by the Parent, Heat Holdings II, the
Borrower or any of their respective Subsidiaries of real or personal property
which has been or is to be sold or transferred by such Loan Party to such Person
or to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of such Loan
Party.
6.12 LIMITATION ON CHANGES IN FISCAL YEAR . Permit the fiscal year of the
Parent, Heat Holdings II, the Borrower or any of their respective Subsidiaries
to end other than on December 31.
6.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES .
(a) Enter into with any Person any agreement and other than (i) this
Agreement or the Indenture or (ii) any Lien permitted under or Financing Leases
permitted by this Agreement (in which case, any prohibition or limitation shall
be effective only against the assets financed thereby) which prohibits or limits
the ability of the Parent, Heat Holdings II, the Borrower or any of their
respective Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired; and
(b) enter into any agreement or arrangement which prohibits, limits or
restricts the rights or ability of any Subsidiary to declare or pay any
dividends in cash or property or to make loans or advances or other payments of
any nature or to make any distributions or transfers of its assets, in each case
to the Borrower or any other Person as to which such Subsidiary is a Subsidiary.
6.14 LIMITATION ON LINES OF BUSINESS . Enter into or engage in any
business, except for those customarily engaged in connection with the Thermal
Management Solutions Business; PROVIDED that the Schedule 1.3 Entities shall
not enter into or engage in any business or have any assets the aggregate
fair market value of which assets exceeds the Dollar Equivalent of $100,000,
other than the ownership of Capital Stock of AT and other Schedule 1.3
Entities.
6.15 NEW SUBSIDIARIES . Create or permit to exist any Subsidiary other than
those listed on SCHEDULE 3.21; PROVIDED that the Borrower may create
wholly-owned Subsidiaries solely to consummate Permitted Acquisitions or that
are Approved Subsidiaries and have entered into a Joinder Agreement and security
arrangements with respect to their assets as are acceptable to the
Administrative Agent.
<PAGE>
6.16 AMENDMENTS TO MATERIAL AGREEMENTS . Amend, modify or waive any of its
rights under (a) any agreement relating to material Indebtedness, (b) its
certificate of incorporation, by-laws or other organizational documents, (c) any
Merger Document, (d) any Thermalloy Acquisition Document, (e) any Subordinated
Debt Document, or (f) the pledge arrangements with respect to the preferred
equity of ATPUK, in the case of clauses (a), (c) and (d) above, in a manner
materially adverse to the interests of the Lenders and, in the case of clauses
(b), (e) and (f) above, in a manner that could be adverse in any material
respect to the interests of the Lenders; PROVIDED that, if requested by the
Borrower, the Administrative Agent will review any contemplated amendment or
waiver relating to any such Indebtedness, organizational documents or other
agreements and promptly advise the Borrower if such amendment or waiver could be
adverse to the interests of the Lenders.
ARTICLE 7. EVENTS OF DEFAULT
7.1 If any of the following events shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of any Note when due
in accordance with the terms thereof or hereof; or (ii) the Borrower shall
fail to pay any Reimbursement Obligation with respect to the Letter of
Credit or deposit cash collateral pursuant to SECTION 2.21, when due in
accordance with the terms thereof or (iii) the Borrower shall fail to pay
any interest on any Note, or any fees or other amount payable hereunder,
within five days after any such interest, fees or other amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower or
any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or written financial or other
statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
(c) The Borrower or any other Loan Party shall default in the observance
or performance of any agreement contained in ARTICLE 6, SECTION 5.1,
SECTION 5.2, SECTION 5.4, SECTION 5.7, or SECTION 5.9 hereof, clauses (b)
and (c) of SECTION 5 of each Pledge Agreement, clauses (h), (i), (j) and
(p) of SECTION 5 of each Security Agreement, SECTION 1.1 and clauses (a),
(b), (c) and (e) of SECTION 3 of the Pledge Agreement governing the pledge
of the Capital Stock of ATPUK, SECTION 7.1(a) of the Pledge Agreement
governing the pledge of the Capital Stock of the Subsidiary organized under
the laws of the Federal Republic of Germany, or SECTION 10.1(B) or (C) of
the Subsidiary Pledge Agreement governing the pledge of the Capital Stock
of the Subsidiary organized under the laws of Italy; or
<PAGE>
(d) The Borrower or any other Loan Party shall default in the observance
or performance of any other agreement contained in this Agreement or any
other Loan Document, and such default shall continue unremedied for a
period of 30 days; or
(e) Any of the Parent, Heat Holdings II, the Borrower or the Subsidiaries
shall (i) default in any payment (regardless of amount) of principal of or
interest on any Indebtedness having an aggregate principal amount in excess
of the Dollar Equivalent of $2,000,000 (other than the Notes) beyond the
period of grace (not to exceed 30 days), if any, provided in the instrument
or agreement under which such Indebtedness was created or (ii) default
beyond the period of grace (not to exceed 30 days), if any, in the
observance or performance of any other agreement or condition relating to
any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness to cause,
with the giving of notice, if required, such Indebtedness to become due
prior to its stated maturity; or
(f) (i) Any of the Parent, Heat Holdings II, the Borrower or the
Subsidiaries shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or any of the
Parent, Heat Holdings II, the Borrower or the Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any of the Parent, Heat Holdings II, the Borrower or the
Subsidiaries, any case, proceeding or other action referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
any of the Parent, Heat Holdings II, the Borrower or the Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any of
the Parent, Heat Holdings II, the Borrower or the Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any of the Parent, Heat Holdings II, the Borrower or the
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
<PAGE>
(g) (i) Any Person shall engage in any non-exempt "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, shall exist with respect to any Plan
or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Parent, Heat Holdings II, the Borrower, any Subsidiary or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to
result in the termination of such Plan pursuant to Section 4041(c) or 4042
of ERISA, (iv) any Single Employer Plan shall terminate pursuant to Section
4041(c) or 4042 of ERISA, (v) the Parent, Heat Holdings II, the Borrower,
any Subsidiary or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against any of the
Parent, Heat Holdings II, the Borrower or the Subsidiaries involving in the
aggregate a liability (to the extent not covered by third-party insurance
as to which the insurer has acknowledged coverage) of the Dollar Equivalent
of $2,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from
the entry thereof; or
(i) (x) Any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party which is a party to any of the
Security Documents shall so assert, (y) the Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby or (z) the Administrative Agent
shall not have, for any reason whatsoever, a valid and perfected first
security interest for the benefit of the Lenders in the Collateral, subject
only to Liens permitted under SECTION 6.3; or
(j) Any Guarantee shall, for any reason other than the satisfaction in
full of all the Obligations and termination of this Agreement, cease to be
in full force and effect or shall be declared to be null and void, or any
Loan Party party thereto shall deny that it has any further liability,
including with respect to future advances by the Lenders, under such
Guarantee or any such Loan Party gives notice to such effect; or
(k) A Change of Control shall occur; or
(l) An event shall exist or occur which has a Material Adverse Effect;
<PAGE>
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to any of the Parent,
Heat Holdings II, the Borrower or the Subsidiaries, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the Notes
shall immediately become due and payable, or (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
ARTICLE 8. GUARANTEE
8.1 PARENT GUARANTEE . In consideration for the Lenders extending the
Commitments and in order to induce the Lenders to make the Loans to the
Borrower, the Parent hereby unconditionally guarantees (the "Parent Guarantee")
the due and punctual payment of all Obligations of the Borrower or any other
Loan Party (including with respect to principal, interest, fees, costs or
expenses) when due and at all times thereafter, in cash, whether by required
prepayment, voluntary prepayment, declaration, acceleration, demand or
otherwise, and whether such Obligation is now existing or hereafter arising,
under or in connection with this Agreement, any Note or any other Loan Document.
In addition, the Parent hereby indemnifies and holds harmless the Administrative
Agent and each Lender for any and all costs and expenses (including reasonable
attorney's fees and expenses) incurred in enforcing any rights under the Parent
Guarantee.
8.2 CONTINUING GUARANTEE . The Parent agrees that the Parent Guarantee is a
continuing guaranty and that the Obligations of the Borrower may be extended,
compromised or renewed, in whole or in part, without notice to or further assent
from the Parent, and that the Parent shall remain bound upon the Parent
Guarantee notwithstanding any extension, compromise, renewal or other alteration
of any Obligation. The Parent waives presentation to, demand of, payment from
and protest of any Obligation to the Borrower, or any other Loan Party and also
waives notice of protest for non-payment. The obligations of the Guarantor under
the Parent Guarantee shall not be affected by
(a) the failure of the Administrative Agent, any Lender, or the holder of
any Note
<PAGE>
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower or any Subsidiary under the provisions of
this Agreement, the Notes, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Obligation;
(b) any extension, compromise or renewal of any Obligation of the
Borrower;
(c) any rescission, waiver, amendment or modification of any of the terms
or provisions of this Agreement, any Note, or any Loan Document; or
(d) the release of any collateral held by the Administrative Agent or any
Lender securing any Obligation.
The Parent further agrees that the Parent Guarantee constitutes a guaranty of
payment when due (upon the earlier of demand by the Administrative Agent or any
Lender, at stated maturity or upon acceleration (in whole or in part) pursuant
to SECTION 7.1) and not of collection and waives any right to require that any
resort be had by the Administrative Agent, any Lender or the holder of any Note
to the Borrower or any other Person, to any collateral held as security for the
payment of any Obligation or to any balance of any deposit account or credit on
its books in favor of the Borrower or any other Person. The obligations of the
Parent under the Parent Guarantee shall not be discharged or impaired or
otherwise affected (in any way whatsoever) by any reduction, limitation,
impairment or termination of the Obligations of the Borrower for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and the Parent hereby waives any right to or claim of)
any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality, nongenuineness, irregularity, compromise,
or unenforceability of the Obligations of the Borrower or otherwise. Without
limiting the generality of the foregoing, unless otherwise agreed in writing
pursuant to SECTION 10.1, the obligations of the Parent under the Parent
Guarantee shall not be discharged or impaired or otherwise affected by the
failure of the Administrative Agent, any Lender or the holder of any Note to
assert any claim or demand or to enforce any remedy under this Agreement or any
other Loan Document, by any waiver or modification, of any thereof, by any
default, failure or delay, wilful or otherwise, in the performance of any
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Parent as a guarantor or would otherwise operate as a discharge of the
Parent as a guarantor as a matter of law or equity.
8.3 REINSTATEMENT. The Parent agrees that the Parent Guarantee shall
continue to be effective or be reinstated, as the case may be, if at any time,
all or any portion of any payment (whether in respect of principal, interest,
fees, costs, expenses or other amounts payable under this Agreement, any Note or
any other Loan Document), is rescinded or must otherwise be restored by the
Administrative Agent, any Lender or the holder of any Note upon the bankruptcy
<PAGE>
or reorganization of the Borrower or otherwise. For so long as any of the
Obligations of the Borrower shall remain outstanding or any Commitments shall
remain in effect:
(a) all rights of the Parent against the Borrower or any other Subsidiary,
whether arising as a result of rights of subrogation or otherwise, shall in
all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full of all the Obligations to the Administrative
Agent, the Lenders and other holders of Notes, and, in the event the Parent
receives any payment prior to such indefeasible payment in full, the Parent
shall receive such payment in trust for, and shall immediately turn over
all amounts to, the Administrative Agent, for application to the payment of
such Obligations;
(b) the Parent shall refrain from taking any action or commencing any
proceeding against the Borrower (or its successors or assigns, whether in
connection with a bankruptcy proceeding or otherwise) to recover any
amounts in respect of payments made under the Parent Guarantee to the
Administrative Agent, any Lender or any holder of any Note; and
(c) the Parent hereby waives any claim, right or remedy which the Parent
may now have or may hereafter acquire against the Borrower or any
Subsidiary that arises hereunder and/or from the performance by the Parent
hereunder including, without limitation, any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification or
participation in any claim, right or remedy of the Lenders or the
Administrative Agent against the Borrower or any Subsidiary or any security
which the Lenders or the Administrative Agent now have or hereafter
acquire, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise.
ARTICLE 9. THE AGENTS
9.1 APPOINTMENT . Each Lender hereby irrevocably designates and appoints
Canadian Imperial Bank of Commerce as Administrative Agent and Bank Boston N.A.,
as Documentation Agent, in each case of such Lender under this Agreement and the
other Loan Documents. Each Lender hereby irrevocably authorizes Canadian
Imperial Bank of Commerce, as the Administrative Agent for such Lender, to serve
as security trustee for each Lender, to take such action on behalf of each
Lender under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agents shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against any Agent.
<PAGE>
9.2 DELEGATION OF DUTIES . The Administrative Agent may execute any of its
duties, rights or remedies under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS . None of the Agents nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates (a)
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or their own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower, any other Loan
Party or any officer or any of them contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by such Agent under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Loan Document or the perfection or priority of any Lien
created or purported to be created thereunder, or for any failure of the
Borrower or any other Loan Party to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
(b) The Lead Arranger, as such, shall have no duties or obligations
whatsoever with respect to this Agreement, the Notes or any other document or
any matter related thereto.
9.4 RELIANCE BY ADMINISTRATIVE AGENT . The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Parent or the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the Notes and the other Loan Documents in accordance with a
request of the Required Lenders, and
<PAGE>
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
9.5 NOTICE OF DEFAULT . The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS . Each Lender expressly
acknowledges that none of the Agents nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
hereafter taken, including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by the Agents to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon the Agents or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Parent, the Borrower and its Subsidiaries
made its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Agents or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Parent, the Borrower
and the Subsidiaries. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agents hereunder or furnished to
the Administrative Agent for the account of, or with a counterpart or copy for,
each Lender, no Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Parent, the Borrower and the Subsidiaries which may come into its possession
or any officer, director, employee, agent, attorney-in-fact or Affiliate.
9.7 INDEMNIFICATION . The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Parent and the Borrower
and without limiting the obligation of the Parent and the Borrower to do so),
ratably according to their respective aggregate Commitment Percentages in effect
on the date on which indemnification is sought
<PAGE>
under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with their Commitment Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against any Agent in any way relating to or arising out of this
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by any Agent under or in connection with any of
the foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Agent's gross negligence or willful misconduct. The agreements in this Section
shall survive the payment of the Obligations hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY . Each Agent and its respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any of the Parent, the Borrower or the Subsidiaries as
though such Agent were not acting in such capacity hereunder and under the other
Loan Documents. With respect to Credit Extensions made or renewed by it and any
Note issued to it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
9.9 SUCCESSOR AGENTS . The Administrative Agent may resign as
Administrative Agent upon 20 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign or be terminated, as the case may be, as
Administrative Agent under this Agreement and the other Loan Documents, then the
Required Lenders shall appoint a successor Administrative Agent who shall be
reasonably acceptable to the Borrower (so long as no Event of Default shall have
occurred which is continuing), whereupon such successor Administrative Agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor Administrative Agent
effective upon such appointment and approval, and the former Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After the Administrative Agent's resignation or termination, as
Administrative Agent, the provisions of this Section shall inure to the benefit
of the Administrative Agent, as to any actions taken or omitted to be taken by
it while it was the Administrative Agent, under this Agreement and the other
Loan Documents.
9.10 RELEASE OF COLLATERAL . Each of the Agents and the Lenders hereby
directs, in accordance with the terms hereof, the Administrative Agent to
release any Lien held by the Administrative Agent for the benefit of the
Lenders:
<PAGE>
(i) against all of the Collateral, upon final payment in full of
the Obligations and termination hereof; and
(ii) against any part of the Collateral sold or disposed of by the
Parent, the Borrower or any Subsidiary, if such sale or disposition is
permitted by SECTION 6.6.
(b) Each of the Lenders hereby directs the Administrative Agent to execute
and deliver or file such termination and partial release statements and do such
other things as are necessary to release Liens to be released pursuant to this
SECTION 9.10 promptly upon the effectiveness of any such release.
(c) Without in any manner limiting the Administrative Agent's authority to
act without any specific or further authorization or consent by any of the
Lenders (as set forth in clause (a) above), each Lender agrees to confirm in
writing, upon request by the Administrative Agent, the authority to release
Collateral conferred upon the Administrative Agent under (i) and (ii) of clause
(a) above. So long as no Event of Default is then continuing, upon receipt by
the Administrative Agent of any such written confirmation from the Lenders of
the Administrative Agent's authority to release any particular items or types of
Collateral, and in any event upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Agreement, the Administrative
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens upon
such Collateral granted to the Administrative Agent for the benefit of the
Lenders; PROVIDED that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in the Administrative Agent's opinion
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of any Parent, the
Borrower or any Subsidiary in respect of) all interests retained by any Parent,
the Borrower or any Subsidiary, including without limitation the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
<PAGE>
ARTICLE 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS . Neither this Agreement, any Note or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Parent,
Heat Holdings II and the Borrower written amendments, supplements or
modifications hereto or any other Loan Document for the purpose of adding any
provisions to or changing in any manner the rights of the Lenders or of the
Parent, Heat Holdings II or the Borrower hereunder or thereunder, (b) enter into
with any Loan Party written amendments, supplements or modifications to the Loan
Documents to which such Loan Party is a party for the purpose of adding
provisions to such other Loan Documents or changing in any manner the rights of
the Lenders or such other Loan Party thereunder or (c) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement,
the Notes or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED that no such waiver and no such amendment, supplement or
modification (i) shall reduce the amount or extend the scheduled date of
maturity of any Note or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or extend the expiration date of any Lender's Commitments, in
each case, without the consent of each Lender, (ii) shall amend, modify or waive
any provision of this Agreement or any other Loan Document which specifically by
its terms requires the approval or consent of all the Lenders or reduce the
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by the Parent, the Borrower or any other Loan Party of
any of its rights and obligations under this Agreement, the Notes and the other
Loan Documents, or terminate any Subsidiary Guarantee or release all or any
substantial portion of the Collateral, in each case, without the written consent
of all the Lenders, (iii) shall increase the Stated Amount of the Letter of
Credit without the consent of the Issuer, (iv) shall increase the aggregate
amount of any Lender's Commitment, without the consent of such Lender, (v) shall
adversely affect the interest, rights or obligations of the Issuer, without the
consent of the Issuer, or (vi) shall amend, modify or waive any provision of
ARTICLE 9 without the written consent of the Administrative Agent and, in the
case of any amendment, modification or waiver of SECTION 9.1, SECTION 9.6, or
SECTION 9.7, the Lead Arranger. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Parent, Heat Holdings II, the Borrower, the Lenders, the
Agents and all future holders of the Notes. In the case of any waiver, the
Parent, Heat Holdings II, the Borrower, the Lenders and the Agents shall be
restored to their former position and rights hereunder and under the outstanding
Notes and any other Loan Documents, and any Default or Event of Default waived
shall be deemed to be cured and not continuing, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
<PAGE>
10.2 NOTICES . All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or, in the case of notice by mail, when
received, or, in the case of telecopy notice, when received, addressed as
follows in the case of the Parent, Heat Holdings II, the Borrower, the
Administrative Agent and the Issuer, and as set forth in SCHEDULE I under the
heading "Domestic Lending Office" in the case of the Lenders, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
<PAGE>
The Parent: Heat Holdings Corp.
c/o Willis Stein & Partners
227 West Monroe Street, Suite 4300
Chicago, Illinois 60606
Attention: Daniel Blumenthal
Telecopy: 212-422-2424
Heat Holdings II: Heat Holdings II Corp.
c/o Willis Stein & Partners
227 West Monroe Street, Suite 4300
Chicago, Illinois 60606
Attention: Daniel Blumenthal
Telecopy: 212-422-2424
The Borrower: Aavid Thermal Technologies, Inc.
One Eagle Square
Suite 500
Concord, New Hampshire 03301
Attention: Chief Executive Officer
Telecopy: (603) 224-6673
The Administrative Agent: Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: David Benyaminy
Telecopy: (212) 856-3761
The Issuer: Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Telecopy: (212) 856-3763
<PAGE>
; PROVIDED that any notice, request or demand to or upon the Administrative
Agent or the Lenders pursuant to SECTION 2.3, SECTION 2.5, SECTION 2.8, SECTION
2.9, SECTION 2.10 or SECTION 2.15, shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES . No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION . The Parent and the
Borrower, jointly and severally, agree (a) to pay or reimburse the
Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement, the Notes and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each of the Lenders, the Administrative Agent for all its costs and expenses
incurred in connection with the negotiation of any restructuring or "work-out,"
whether or not consummated, and the enforcement or preservation of any rights
under this Agreement, the Notes, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to the Administrative Agent and to each Lender, (c) to pay, and indemnify and
hold harmless each Lender and the Agents from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the Notes, the other Loan Documents and any such
other documents, and (d) to pay, and indemnify and hold harmless each Lender and
the Agents (including each of their respective parents, subsidiaries, officers,
directors, employees, agent and affiliates) from and against, any and all other
claims, demands, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, settlements, expenses or disbursements of whatever kind
or nature arising from, in connection with or with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
Notes, the other Loan Documents, the Thermalloy Acquisition Documents,
<PAGE>
the Merger Documents, or any other documents or the use of the proceeds of
the Loans or the purchase of the shares of Capital Stock of Curamik pursuant
to the Curamik Documents or any other purpose (all the foregoing in this
clause (d), collectively, the "indemnified liabilities"); PROVIDED that the
Parent and the Borrower shall not have any obligation hereunder to any Agent
or any Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of such Agent or such Lender. The agreements
in this SECTION 10.5 shall survive repayment of the Obligations hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS . (a) This
Agreement shall be binding upon and inure to the benefit of the Parent, Heat
Holdings II, the Borrower, the Lenders, the Issuer, the Administrative Agent,
all future holders of the Notes and their respective successors and assigns,
except that none of such Loan Parties may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent
of each Lender.
(b) Any Lender may, in the ordinary course of its lending business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents; PROVIDED
that after giving effect to any such sale, such Lender must have either (x)
retained at least $2,500,000 of Commitments not subject to any participating
interests or (y) sold participating interests to Participants in all its Loans
and Commitments. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent, shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. Each of the
Parent, Heat Holdings II, and the Borrower agrees that if amounts outstanding
under this Agreement and the Notes are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement and any Note
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Note; PROVIDED that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in SECTION
10.7(a) as fully as if it were a Lender hereunder. Each of the Parent, Heat
Holdings II, and the Borrower also agrees that each Participant shall be
entitled to the benefits of SECTION 2.17, SECTION 2.18, SECTION 2.19, with
respect to its participation in the Commitments and the Loans outstanding from
time to time as if it were a Lender; PROVIDED that, in the case of SECTION 2.18
or such Participant shall have complied with the requirements of such Section
and PROVIDED, FURTHER, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
<PAGE>
(c) Any Lender may, in the ordinary course of its lending business and in
accordance with applicable law, at any time and from time to time assign to any
Lender or any affiliate thereof or, with the consent of the Borrower (which
consent shall not be unreasonably withheld and shall not be required if an Event
of Default shall have occurred) and with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld), to an additional bank or
financial institution (an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement and the Notes pursuant to a Commitment Transfer
Supplement, substantially in the form of EXHIBIT Y (a "COMMITMENT TRANSFER
SUPPLEMENT") executed by such Assignee, such assigning Lender (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof, by the
Borrower (so long as no Event of Default shall have occurred which is
continuing) and the Administrative Agent) and delivered to the Administrative
Agent for its acceptance and recording in the Register; PROVIDED that (i) any
such assignment must (unless to an institution which was a Lender immediately
prior thereto) be in a minimum amount equal to the lesser of (x) $2,500,000 (or
such lesser amount as may be acceptable to the Administrative Agent and the
Borrower (so long as no Event of Default shall have occurred which is
continuing)) and whole multiples of $1,000,000 in excess thereof, and (y) the
aggregate Commitments and outstanding Loans of such Lender then in effect, and
(ii) after giving effect to any such assignment, such Lender shall have either
(x) sold all its rights and obligations hereunder and under the Notes or (y)
retained at least $2,500,000 of the aggregate Commitments. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Commitment Transfer Supplement, (1) the Assignee thereunder
shall be a party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein and (2) the assigning Lender thereunder, to the
extent provided in such Commitment Transfer Supplement, shall be released from
its obligations under this Agreement (and, in the case of a Commitment Transfer
Supplement covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto; PROVIDED that the provisions of SECTION 2.17, SECTION 2.18,
SECTION 2.19, and SECTION 10.5 shall continue to benefit such assigning Lender
to the extent required by such Sections).
(d) The Administrative Agent shall maintain, at its address referred to in
SECTION 10.2, a copy of each Commitment Transfer Supplement delivered to it and
a register (the "REGISTER") for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Parent, Heat Holdings II, the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for inspection
by the Parent, Heat Holdings II, the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
<PAGE>
(e) Upon its receipt of a Commitment Transfer Supplement executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall promptly accept such
Commitment Transfer Supplement and, on the effective date determined pursuant
thereto, shall record the information contained therein in the Register and give
notice of such acceptance and recordation to the Lenders and the Borrower. On or
prior to such effective date, the Borrower, at its own expense, shall execute
and deliver to the Administrative Agent (in exchange for the Revolving Credit
Note, or Term Note of the assigning Lender) a new Revolving Credit Note, or Term
Note, as the case may be, to the order of such Assignee in an amount equal to
the Revolving Credit Commitment, or Term Loan, as the case may be, assumed by
such Assignee pursuant to such Commitment Transfer Supplement and, if the
assigning Lender has retained a Revolving Credit Commitment, or Term Loan,
hereunder, a new Revolving Credit Note or Term Note, as the case may be, to the
order of the assigning Lender in an amount equal to the Revolving Credit
Commitment or Term Loan, as the case may be, retained by it hereunder. Such new
Notes shall be dated the Effective Date and shall otherwise be in the form of
the Notes replaced thereby.
(f) Each of the Parent, Heat Holdings II and the Borrower authorizes each
Lender to disclose to any Participant or Assignee (each, a "TRANSFEREE") and any
prospective Transferee, any and all financial information in such Lender's
possession concerning the Parent, Heat Holding II, the Borrower and their
respective Affiliates which has been delivered to such Lender by or on behalf of
such Loan Party pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of such Loan Party in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or assigning any
Note to any Federal Reserve Bank in accordance with applicable law.
10.7 ADJUSTMENTS; SETOFF . (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Credit
Extensions, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by setoff, pursuant to events or
proceedings of the nature referred to in SECTION 7.1(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Credit Extensions, or
interest thereon, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Loans, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; PROVIDED that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.
<PAGE>
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, Heat
Holdings II or the Parent, any such notice being expressly waived by each
Borrower, Heat Holdings II and the Parent to the extent permitted by applicable
law, upon any amount becoming due and payable by the Borrower, Heat Holdings II
or the Parent hereunder and under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final) in any currency, and any other credits, indebtedness or claims, in any
currency, in each case, whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower, Heat
Holdings II or the Parent, as the case may be. Each Lender agrees promptly to
notify the Borrower, Heat Holdings II or the Parent, as applicable, and the
Administrative Agent after any such setoff and application made by such Lender;
PROVIDED that the failure to give such notice shall not affect the validity of
such setoff and application.
10.8 CONFIDENTIALITY . Each Lender agrees to exercise all reasonable
efforts (consistent with its customary methods for keeping information
confidential) to keep any information delivered or made available by any Loan
Party confidential from anyone other than persons employed or retained by such
Lender who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; PROVIDED, that nothing herein shall
prevent any Lender from disclosing such information (a) to any Affiliate of such
Lender or to any other Lender, (b) upon the order of any court or administrative
agency, (c) upon the request or demand of any regulatory agency or authority
having jurisdiction over such Lender, (d) that has been publicly disclosed, (e)
in connection with any litigation relating to the Loans, this Agreement or any
transaction contemplated hereby to which any Loan Party, any Lender or the
Administrative Agent may be a party, (f) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (g) to such Lender's legal
counsel and independent auditors and (h) to any actual or proposed participant
or assignee of all or any part of its Loans hereunder, if such other Person,
prior to such disclosure, agrees, in writing, for the benefit of the Borrower to
comply with the provisions of this SECTION 10.8.
10.9 EFFECTIVENESS . On the Effective Date, the Existing Credit Agreement
shall be amended and restated in its entirety by this Agreement and the Existing
Credit Agreement shall thereafter be of no further force and effect.
Notwithstanding any provision of this SECTION 10.9 to the contrary, any
obligations of the Borrower which accrued on or prior to the Effective Date
under the Existing Credit Agreement shall not be released or terminated by the
effectiveness of this Agreement. The terms and conditions of this Agreement and
the Administrative Agent's and the Lenders' rights and remedies under this
Agreement shall apply to all obligations incurred under the Existing Credit
Agreement. It is expressly understood and agreed by the parties hereto that (a)
this Agreement is in no way intended to constitute a novation of the obligations
and liabilities existing under the Existing Credit Agreement and (b) the
obligations and liabilities under the Notes evidence obligations and liabilities
incurred under the Existing Credit Agreement. The Borrower reaffirms the Liens
granted to the Administrative Agent for the
<PAGE>
benefit of the Lenders pursuant to each of the Loan Documents executed by the
Borrower, which Liens shall continue in full force and effect during the term of
this Agreement and any renewals thereof and shall continue to secure the
Obligations identified in such Loan Documents. Unless expressly stated to the
contrary, all references to the Existing Credit Agreement in the Loan Documents
shall be deemed to refer to this Agreement. This Agreement and each of the other
Loan Documents shall be construed to the extent reasonable to be consistent with
the other, but to the extent that the terms and conditions of this Agreement are
actually inconsistent with the terms and conditions of any other Loan Document,
this Agreement shall govern. This Agreement shall become effective on the date
when counterparts hereof executed on behalf of the Parent, Heat Holdings II, the
Borrower and each Lender shall have been received by the Administrative Agent
and notice thereof shall have been given by the Administrative Agent to the
Parent, Heat Holdings II, the Borrower and each Lender.
10.10 COUNTERPARTS . This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.11 SEVERABILITY . Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.12 INTEGRATION . This Agreement and the other Loan Documents represent
the agreement of the Parent, Heat Holdings II, the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to subject
matter hereof or thereof not expressly set forth or referred to herein or in
the other Loan Documents.
10.13 GOVERNING LAW . THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS
THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK.
10.14 SUBMISSION TO JURISDICTION; WAIVERS . Each of the Parent, Heat
Holdings II and the Borrower hereby irrevocably and unconditionally:
<PAGE>
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the applicable Loan Party at its address set forth in
SECTION 10.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing contained herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.15 ACKNOWLEDGMENTS . Each of the Parent, Heat Holdings II and the
Borrower hereby acknowledges that:
(a) none of the Administrative Agent or any Lender has any
fiduciary relationship with or duty to any Loan Party arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Administrative Agent and the Lenders,
on the one hand, and the Parent, Heat Holdings II, and the Borrower, on
the other hand, in connection herewith or therewith is solely that of
creditor and debtor; and
(b) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among any of the Loan Parties
and the Lenders.
10.16 WAIVER OF EXISTING CREDIT AGREEMENT . Each Lender who is an Existing
Lender hereby waives the provisions of SECTIONS 5.4, 6.2, 6.3, 6.4, 6.5, 6.6,
6.12 and 6.13 of the Existing Credit Agreement if and to the extent such
provisions apply to the Merger and the Restructuring, the Subordinated Debt
Documents or any other transaction contemplated hereby.
10.17 WAVIERS OF JURY TRIAL . The Parent, Heat Holdings II, the
Borrower, the Agents and the Lenders hereby irrevocably and unconditionally
waive trial by jury in any legal action or proceeding relating to this
agreement or the notes or any other loan documents and for any counterclaim
therein.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ Bharatan Patel
-----------------------------------------
Name: Bharatan Patel
Title: Chief Executive Officer
HEAT HOLDINGS CORP.
By: /s/ Daniel H. Blumenthal
-----------------------------------------
Name: Daniel H. Blumenthal
Title: Vice President
HEAT HOLDINGS II CORP.
By: /s/ Daniel H. Blumenthal
-----------------------------------------
Name: Daniel H. Blumenthal
Title: Vice President
CIBC WORLD MARKETS CORP.,
as Lead Arranger and Bookrunner
By: /s/ Keith Labbate
-----------------------------------------
Name: Keith Labbate
Title: Executive Director
CANADIAN IMPERIAL BANK OF
COMMERCE,
as issuer and Administrative Agent
By: /s/ Keith Labbate
-----------------------------------------
Name: Keith Labbate
Title: Executive Director
<PAGE>
BANKBOSTON, N.A., as Documentation Agent
By: /s/ David M. Crane
-----------------------------------------
Name: David M. Crane
Title: Director
<PAGE>
LENDERS:
CIBC INC.
By: /s/ Keith Labbate
-----------------------------------------
Name: Keith Labbate
Title: Executive Director
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Mark T. Ostrowsal
-----------------------------------------
Name: Mark T. Ostrowsal
Title: Vice President
BANKBOSTON, N.A.
By: /s/ David M. Crane
-----------------------------------------
Name: David M. Crane
Title: Director
CITIZENS BANK
By: /s/ Vernon T. Studer
-----------------------------------------
Name: Vernon T. Studer
Title: Vice President
<PAGE>
EXHIBIT A
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF AMENDED AND RESTATED REVOLVING CREDIT NOTE
$------------- February 2, 2000
New York, New York
FOR VALUE RECEIVED, the undersigned, AAVID THERMAL
TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER"), hereby
unconditionally promises to pay to the order of _____________ (the "LENDER"), on
the Maturity Date as defined in the Amended and Restated Credit Agreement
hereinafter referred to, at the office of Canadian Imperial Bank of Commerce, as
administrative agent for such Lender and the other financial institutions under
the aforementioned Amended and Restated Credit Agreement (the "ADMINISTRATIVE
AGENT"), located at 425 Lexington Avenue, New York, New York 10017, or such
other address as may be specified from time to time by the Administrative Agent,
in lawful money of the United States of America and in immediately available
funds, the principal amount of the lesser of (a) ______________________
($__________) and (b) the aggregate unpaid principal amount of all Revolving
Credit Loans made by the Lender to the undersigned pursuant to Section 2.1 of
the Amended and Restated Credit Agreement.
The Borrower hereby unconditionally further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding from the date hereof, and on any unpaid interest
payable hereon, from the date such interest is due hereunder, at the applicable
rates per annum and on the dates specified in Section 2.12 of the Amended and
Restated Credit Agreement until such principal amount is paid in full (both
before and after judgment).
The holder of this Amended and Restated Revolving Credit Note
is authorized to record the date, Type and amount of each Revolving Credit Loan
made by the Lender pursuant to Section 2.2 of the Amended and Restated Credit
Agreement, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on the schedules annexed hereto and made a
part hereof, and any such recordation shall constitute PRIMA FACIE evidence of
the accuracy of the information so recorded absent manifest error; PROVIDED that
the failure of the Lender to make such recordation (or any error in such
recordation) shall not affect the obligations of the Borrower hereunder or under
the Amended and Restated Credit Agreement.
This Amended and Restated Revolving Credit Note is one of the
Amended and Restated Revolving Credit Notes referred to in the Amended and
Restated Credit Agreement, dated as of February 2, 2000 (as further amended,
supplemented, waived or otherwise modified from time to time, the "AMENDED AND
RESTATED CREDIT Agreement"; terms defined therein being used herein as defined
therein), among the Borrower, Heat Holdings Corp., Heat Holdings II Corp., the
several banks and other financial institutions parties thereto (including the
Lender),
<PAGE>
Canadian Imperial Bank of Commerce, as Issuer, the Administrative Agent, Bank
Boston, N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC
World Markets Corp., as Lead Arranger, and is entitled to the benefits
thereof, and is subject to optional and mandatory prepayment in whole or in
part as provided therein.
Upon the occurrence of any one or more of the Events of
Default specified in the Amended and Restated Credit Agreement, all amounts
remaining unpaid on this Amended and Restated Revolving Credit Note shall
become, or may be declared to be, immediately due and payable all as provided
therein.
This Amended and Restated Revolving Credit Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
obligations secured, the terms and conditions upon which the security interest
was granted and the rights of the holder of this Amended and Restated Revolving
Credit Note in respect thereof. Payment and performance of this Amended and
Restated Revolving Credit Note is guaranteed as set forth in the Subsidiary
Guarantees. The undersigned hereby unconditionally agrees to pay the costs and
expenses incurred by the Lender in connection with the enforcement of its rights
and remedies under the Amended and Restated Credit Agreement and said Security
Documents as provided therein.
All parties now and hereafter liable with respect to this
Amended and Restated Revolving Credit Note, whether maker, principal, surety,
guarantor, endorser or otherwise, hereby waive presentment, demand, protest and
all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW).
AAVID THERMAL TECHNOLOGIES, INC.
By: __________________________
Name:
Title:
<PAGE>
Schedule A
TO AMENDED AND RESTATED REVOLVING
CREDIT NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
Amount
Amount of of
Alternate Base Interest Eurodollar
Rate Loans Period and Loans Amount
Converted Eurodollar Converted of
Amount of into Rate with into Principal
Eurodollar Eurodollar Respect Alternate Base Repaid or Notation
Date Loans Made Loans Thereto Rate Loans Prepaid Made by
<S> <C> <C> <C> <C> <C> <C>
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</TABLE>
<PAGE>
Schedule B
TO AMENDED AND RESTATED REVOLVING
CREDIT NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF ALTERNATE BASE RATE LOANS
<TABLE>
<CAPTION>
- -------------------- ------------------ -------------------- ---------------- ------------------ ---------------- ------------------
Amount of Amount of
Eurodollar Alternate Base Interest
Loans Rate Loans Period and
Converted Converted Eurodollar Amount
Amount of into into Rate with of
Alternate Base Alternate Base Eurodollar Respect Principal Notation
Date Rate Loans Made Rate Loans Loans Thereto Repaid Made by
<S> <C> <C> <C> <C> <C> <C>
- -------------------- ------------------ -------------------- ---------------- ------------------ ---------------- ------------------
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</TABLE>
<PAGE>
EXHIBIT B
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF AMENDED AND RESTATED TERM NOTE
$____________ New York, New York
February 2, 2000
FOR VALUE RECEIVED, the undersigned, AAVID THERMAL
TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER"), hereby
unconditionally promises to pay to the order of _______________ (the "LENDER")
at the office of Canadian Imperial Bank of Commerce, as administrative agent for
such Lender and the other financial institutions under the Amended and Restated
Credit Agreement hereinafter referred to (the "ADMINISTRATIVE Agent"), located
at 425 Lexington Avenue, New York, New York 10017, or such other address as may
be specified from time to time by the Administrative Agent, in lawful money of
the United States of America and in immediately available funds, the principal
amount of the lesser of (a) ______________________ ($__________) and (b) the
aggregate unpaid principal amount of the Term Loan made by the Lender to the
undersigned pursuant to Section 2.6 of the Amended and Restated Credit Agreement
(as defined hereinafter), which sum shall be payable in installments in
accordance with Section 2.7 of the Amended and Restated Credit Agreement.
The Borrower hereby unconditionally further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding from the date hereof, and on any unpaid interest
payable hereon, from the date such interest is due hereunder, at the applicable
rates per annum and on the dates set forth in Section 2.12 of the Amended and
Restated Credit Agreement until such principal amount is paid in full (both
before and after judgment).
The holder of this Amended and Restated Term Note is
authorized to record the date, Type and amount of the Term Loan made pursuant to
Section 2.6 of the Amended and Restated Credit Agreement, each continuation
thereof, each conversion of all or a portion thereof to another Type, the date
and amount of each payment or prepayment of principal thereof and, in the case
of Eurodollar Loans, the length of each Interest Period with respect thereto, on
the schedules annexed hereto and made a part hereof, which recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information so recorded
absent manifest error; PROVIDED that failure by the Lender to make any such
recordation (or any error in such recordation) on this Amended and Restated Term
Note shall not affect the obligations of the Borrower under this Amended and
Restated Term Note or the Amended and Restated Credit Agreement.
This Amended and Restated Term Note is one of the Amended and
Restated Term Notes referred to in the Amended and Restated Credit Agreement,
dated as of February 2, 2000 (as further amended, supplemented, waived or
otherwise modified from time to time, the
<PAGE>
"AMENDED AND RESTATED CREDIT AGREEMENT"; terms defined therein being used
herein as defined therein), among the Borrower, Heat Holdings Corp., Heat
Holdings II Corp., the several banks and other financial institutions parties
thereto (including the Lender), Canadian Imperial Bank of Commerce, as
Issuer, the Administrative Agent Bank Boston, N.A. as documentation agent
(the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as Lead Arranger,
and is entitled to the benefits thereof, and is subject to optional and
mandatory prepayment in whole or in part as provided therein.
Upon the occurrence of any one or more of the Events of
Default specified in the Amended and Restated Credit Agreement, all amounts then
remaining unpaid on this Amended and Restated Term Note shall become, or may be
declared to be, immediately due and payable, all as provided therein.
This Amended and Restated Term Note is secured as provided in
the Security Documents. Reference is hereby made to the Security Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the obligations secured, the
terms and conditions upon which the security interest was granted and the rights
of the holder of this Amended and Restated Term Note in respect thereof. Payment
and performance of this Amended and Restated Term Note is guaranteed as set
forth in the Subsidiary Guarantees. The undersigned hereby unconditionally
agrees to pay all costs and expenses incurred by the Lender in connection with
the enforcement of its rights and remedies under the Amended and Restated Credit
Agreement and said Security Documents as provided therein.
All parties now and hereafter liable with respect to this
Amended and Restated Term Note, whether maker, principal, surety, guarantor,
endorser or otherwise, hereby waive presentment, demand, protest and all other
notices of any kind.
THIS AMENDED AND RESTATED TERM NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF (OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATION LAW).
AAVID THERMAL TECHNOLOGIES, INC.
By: ___________________________
Name:
Title:
<PAGE>
Schedule A
TO AMENDED AND
RESTATED TERM NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
Amount of Amount of
Alternate Base Interest Eurodollar
Rate Loans Period and Loans Amount
Converted Eurodollar Converted of
Amount of into Rate with into Principal
Eurodollar Eurodollar Respect Alternate Base Repaid or Notation
Date Loans Made Loans Thereto Rate Loans Prepaid Made by
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
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</TABLE>
<PAGE>
Schedule B
TO AMENDED AND
RESTATED TERM NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF ALTERNATE BASE RATE LOANS
<TABLE>
<CAPTION>
- ----------------- ----------------- -------------------- ---------------- ------------------- ----------------- -------------------
Amount of Amount of
Eurodollar Alternate Base Interest
Loans Rate Loans Period and Amount
Converted Converted Eurodollar of
Amount of into into Rate with Principal
Alternate Base Alternate Base Eurodollar Respect Repaid or Notation
Date Rate Loans Made Rate Loans Loans Thereto Prepaid Made by
- ----------------- ----------------- -------------------- ---------------- ------------------- ----------------- -------------------
- ----------------- ----------------- -------------------- ---------------- ------------------- ----------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------- ----------------- -------------------- ---------------- ------------------- ----------------- -----------------
- ------------------- ----------------- -------------------- ---------------- ------------------- ----------------- -----------------
- ------------------- ----------------- -------------------- ---------------- ------------------- ----------------- -----------------
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- ------------------- ----------------- -------------------- ---------------- ------------------- ----------------- -----------------
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- ------------------- ----------------- -------------------- ---------------- ------------------- ----------------- -----------------
- ------------------- ----------------- -------------------- ---------------- ------------------- ----------------- -----------------
</TABLE>
<PAGE>
EXHIBIT C
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
---------
FORM OF NOTICE OF BORROWING
To: Canadian Imperial Bank of Commerce, as Administrative Agent for the
Lenders under the Amended and Restated Credit Agreement dated as of
February 2, 2000 among Aavid Thermal Technologies, Inc., a Delaware
corporation (the "BORROWER"), Heat Holdings Corp., Heat Holdings II
Corp., the Lenders, Canadian Imperial Bank of Commerce, as Issuer, the
Administrative Agent Bank Boston, N.A. as documentation agent (the
"DOCUMENTATION AGENT") and CIBC World Markets Corp., as Lead Arranger
and Bookrunner (as amended, supplemented or otherwise modified from
time to time, the "AMENDED AND RESTATED CREDIT AGREEMENT").
Pursuant to Section [2.3] [2.8] of the Amended and Restated
Credit Agreement, this Notice of Borrowing ("NOTICE") represents the request
of Borrower to borrow on [the date hereof] [________, 20__] (the "BORROWING
DATE")(1) from the Lenders the principal amount of [$___________] in
[Term Loans] [Revolving Credit Loans] as [Alternate Base Rate Loans]
[Eurodollar Loans]. [$_________ of such Loans will be Eurodollar Loans.]
[The initial Interest Period for such Eurodollar Loans is requested to be a
[one, two, three or six] month period.] Proceeds of such Loans are to be
wire-transferred in accordance with the following wire instructions:
---------------------------------------
---------------------------------------
---------------------------------------
[The Revolving Credit Commitment on the Borrowing Date is
$___________.] [The Revolving Credit Commitment has been temporarily reduced by
$_________ attributable to Net Insurance Proceeds received by the Borrower prior
to the Borrowing Date and less than 270 days after the date of loss prior to the
acquisition of replacement assets. The aggregate amount of the Revolving Credit
Commitment (after giving effect to any Revolving Credit Loans outstanding and
any such temporary reductions in the Revolving Credit Commitment) available on
the Borrowing Date is
- ----------------------------
(1) Which notice must be given (i) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Loans are to be
Eurodollar Loans initially, or (ii) one Business Day prior to the requested
Borrowing Date, otherwise.
<PAGE>
$__________.](2) [$_________ of the Revolving Credit Loans requested hereunder
are to be applied [to restore, rebuild or replace any loss for which Net
Insurance Proceeds are available] [in accordance with the last sentence of
Section 2.9(d)] and subject to the conditions set forth in Section 2.9(d), the
Revolving Credit Commitment shall be restored to $______________.]
The undersigned hereby certifies that, as of the Borrowing
Date, all the conditions contained in [Sections 4.1 and 4.2](3) [Section 4.2](4)
of the Amended and Restated Credit Agreement have been satisfied (or waived
pursuant to Section 10.1 of the Amended and Restated Credit Agreement), no
Default or Event of Default has occurred and is continuing, and represents and
warrants that all representations and warranties set forth in Article 3 of the
Amended and Restated Credit Agreement are true and correct in all material
respects on the Borrowing Date.
Unless otherwise defined herein, terms defined in the Amended
and Restated Credit Agreement shall have the same meanings in this Notice.
Dated this ___ day of _______, ____.
AAVID THERMAL TECHNOLOGIES, INC.
By: ______________________________
Name:
Title:
- --------------------------
(2) To be used only when there are Net Insurance Proceeds which have not
been applied pursuant to Section 2.9(d) to prepay the Loans or for use in the
acquisition of replacement assets.
(3) To be used for Loans made on the Effective Date.
(4) To be used for Revolving Credit Loans made after the Effective Date
other than Revolving Credit Loans made in respect of Net Disposition Proceeds
and Net Insurance Proceeds.
<PAGE>
EXHIBIT D
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
---------
FORM OF NOTICE OF CONVERSION/CONTINUATION
Canadian Imperial Bank of Commerce,
as Administrative Agent for the below-referenced Lenders
425 Lexington Avenue
New York, New York 10017
Attention: Syndications, Manager of Administration
AAVID THERMAL TECHNOLOGIES, INC.
Gentlemen and Ladies:
This Notice of Conversion/Continuation (this "NOTICE") is delivered to
you pursuant to SECTION 2.10 of the Amended and Restated Credit Agreement, dated
as of February 2, 2000 (as amended, supplemented, or other modified from time to
time, the "AMENDED AND RESTATED CREDIT AGREEMENT"), among Aavid Thermal
Technologies, Inc., a Delaware corporation (the "BORROWER"), Heat Holdings
Corp., Heat Holdings II Corp., the several banks and other financial
institutions from time to time parties thereto (the "LENDERS"), Canadian
Imperial Bank of Commerce, as issuer of certain letters of credit, Canadian
Imperial Bank of Commerce, as administrative agent for the Lenders (the
"ADMINISTRATIVE AGENT"), Bank Boston, N.A. as documentation agent (the
"DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner. Unless otherwise defined herein or the context otherwise requires,
terms used herein have the meanings provided in the Amended and Restated Credit
Agreement.
The Borrower hereby requests that on __________, ___:*
(1) $_________ of the currently outstanding principal amount
of the [Term Loan] [Revolving Credit Loan]** originally made on
__________, ____ and currently being maintained as [Alternate Base Rate
Loans] [[one] [two] [three] [six] month Eurodollar Loans]**,
(2) be [converted into] [continued as],
- -------------------
*Conversion of Eurodollar Loans may be made only on the last day of an Interest
Period with respect thereto.
**Select appropriate option.
<PAGE>
(3) [Eurodollar Loans having an Interest Period of [one] [two]
[three] [six] months, which Interest Period will expire on __________,
____] [Alternate Base Rate Loans].*
In the event that such Loans are to be converted into, or continued as,
Eurodollar Rate Loans, the Borrower hereby:
(a) certifies, represents and warrants that no Default has
occurred and is continuing or will (after giving effect to the
continuation or conversion requested hereby) occur and be continuing;
(b) certifies, represents and warrants that all
representations and warranties contained in Article 3 of the Amended
and Restated Credit Agreement and in the other Loan Documents are, and
will continue to be (after giving effect to such continuation or
conversion requested hereby), true and correct in all material respects
as if made on the date of continuation or conversion hereunder[, except
in the following respects: [describe] and the Administrative Agent and
the Required Lenders have waived such exception to the representations
and warranties in writing dated __________]; and
(c) agrees that if prior to the time of such conversion or
continuation any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify the
Administrative Agent. Except to the extent, if any, that prior to the
time of the conversion or continuation requested hereby the
Administrative Agent shall receive written notice to the contrary from
the Borrower, each matter certified, represented and warranted to
herein shall be deemed to be certified, represented and warranted at
the date of such [conversion] [continuation] as if then made. [The
Borrower agrees to remit to the Administrative Agent for the benefit of
the Lenders, on the date of such conversion, an interest payment in the
amount of $_________.]**
IN WITNESS WHEREOF, the Borrower has caused this Notice to be executed
and delivered, and the certification, representations and warranties contained
herein to be made, by an authorized officer this ____ day of __________, ____.
AAVID THERMAL TECHNOLOGIES, INC.
By: ______________________________
Name:
Title:
- ------------------
*Insert appropriate interest rate option, and, if applicable, number of months
(for Eurodollar Rate Loans).
**To be inserted upon a conversion of a Eurodollar or Alternate Base Rate Loan
with the amount of accrued interest thereon through the conversion date.
<PAGE>
EXHIBIT E-1
TO CREDIT AGREEMENT
FORM OF SUBSIDIARY CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT (this "AGREEMENT") dated as of February
2, 2000, is entered into between AAVID THERMALLOY LLC, a Delaware limited
liability company, as Depositor (the "DEPOSITOR") and CANADIAN IMPERIAL BANK OF
COMMERCE ("CIBC"), as Custodian (the "CUSTODIAN").
W I T N E S S E T H :
WHEREAS, Aavid Thermal Technologies, Inc. (the "BORROWER") has
entered into an Amended and Restated Credit Agreement dated as of February 2,
2000 (such agreement, as amended, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Borrower, Heat Holdings Corp., Heat
Holdings II Corp., the banks and other financial institutions (the "LENDERS")
from time to time parties thereto, Canadian Imperial Bank of Commerce, as issuer
of certain letters of credit (the "ISSUER"), Canadian Imperial Bank of Commerce,
as administrative agent (the "ADMINISTRATIVE AGENT"), BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (in such capacity, the "Lead Arranger"), pursuant
to which the Lenders have severally agreed to make Loans to, and the Issuer has
agreed to provide letters of credit for the benefit of, the Borrower upon the
terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Administrative Agent
shall have received this Agreement, executed and delivered by the Depositor with
a counterpart for each Lender;
WHEREAS, CIBC is willing to act in the capacity of Custodian,
hereunder;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings specified in the Credit
Agreement and the following terms shall have the following meanings:
"DEPOSIT NOTICE" has the meaning specified in Section 2.03(e).
"DEPOSITED STOCK" shall mean the shares of Capital Stock of
the entities listed on Schedule I, and the related stock certificates, in each
case to be deposited with the Custodian pursuant to SECTION 2.03, and any stock
dividends in respect of such stock.
<PAGE>
"RECEIPT" has the meaning specified in SECTION 2.03(b).
"RELEASE NOTICE" has the meaning specified in SECTION 2.08.
"SUBSIDIARIES" shall mean the entities listed on Schedule I
hereto.
"TERMINATION DATE" shall mean that date on which the
Administrative Agent shall notify the Custodian in writing that the Depositor
has satisfied and discharged in full all its Obligations under the Credit
Agreement.
ARTICLE II
CUSTODIAN
SECTION 2.01. DESIGNATION AND APPOINTMENT OF CIBC AS
CUSTODIAN. CIBC is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Custodian under and as set forth in this Agreement. CIBC
shall serve as Custodian from the date hereof until the Termination Date,
subject to resignation or removal pursuant to SECTION 3.04 hereof.
SECTION 2.02. DUTIES OF THE CUSTODIAN. At all times that CIBC
shall be the Custodian, it shall duly discharge its duties of receiving and
holding the Deposited Stock in accordance with this Agreement. As to any matters
not expressly provided for by this Agreement, the Custodian shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the written instructions of the Administrative
Agent; PROVIDED, HOWEVER, that the Custodian shall not be required to take any
action which is contrary to this Agreement or applicable law, or which is not
reasonably incidental to its duties and responsibilities under this Agreement or
is of a type unrelated to its business.
SECTION 2.03. DEPOSITED STOCK. (a) On the Closing Date, the
Deposited Stock shall be delivered by the Depositor to the Custodian. All such
Deposited Stock shall be held by the Custodian pursuant to the terms hereof.
(b) On the Closing Date, upon the delivery of the Deposited
Stock by the Depositor to the Custodian hereunder, the Custodian shall deliver
to the Depositor (with copies to the Administrative Agent) a receipt (the
"RECEIPT") substantially in the form of EXHIBIT A attached hereto identifying
the Deposited Stock that it has received and confirming that it holds such
Deposited Stock, as Custodian hereunder.
(c) On each date that the Depositor shall receive any stock
dividend in respect of the Deposited Stock the Depositor shall deliver such
stock to the Custodian and the Custodian will issue a revised Receipt.
(d) The Custodian shall hold the Deposited Stock as Custodian
on the terms and conditions hereinafter set forth.
(e) On the Closing Date, concurrent with the delivery of the
Deposited Stock to the Custodian, the Depositor shall deliver to each Subsidiary
a deposit notice (the "DEPOSIT
2
<PAGE>
NOTICE") substantially in the form of EXHIBIT B attached hereto notifying
such Subsidiary of the grant of custody of the Deposited Stock to the
Custodian hereunder.
SECTION 2.04. DEPOSITED STOCK HELD BY THE CUSTODIAN. All
Deposited Stock coming into the possession of the Custodian shall be held by it
as Custodian consistent with its customary practice and procedure as a
custodian.
SECTION 2.05 NO LIENS OR ENCUMBRANCES. (a) Each of the parties
hereto acknowledges and agrees that nothing contained herein is intended to
create or shall be construed as creating any sale, transfer, assignment, pledge,
lien, security interest, encumbrance upon or other disposition of the Deposited
Stock.
(b) The Custodian hereby agrees not to assert any statutory or
possessory liens or encumbrances of any kind with respect to the Deposited Stock
held by it and hereby waives all such liens and encumbrances.
SECTION 2.06. MAINTENANCE OF RECORDS. The Custodian shall
implement and maintain administrative and operating procedures pursuant to which
it shall keep and maintain all records and information necessary to permit the
regular identification of all Deposited Stock held or released by it.
SECTION 2.07. OTHER INFORMATION. (a) From time to time upon
reasonable prior notification, during normal business hours, the Administrative
Agent and any of its respective authorized agents, employees or representatives,
shall have the right (i) to visit the office of the Custodian where the
Deposited Stock is kept, (ii) to examine the facilities for the storage and
safekeeping thereof and (iii) to discuss matters relating to the Deposited Stock
and the Custodian's performance hereunder with any officer of the Custodian
having knowledge of such matters.
(b) The Custodian shall provide to the Administrative Agent
such other information as the Administrative Agent may from time to time
reasonably request, concerning the Deposited Stock which is in the possession of
the Custodian.
SECTION 2.08. REMOVAL OF DEPOSITED STOCK. At any time, the
Depositor may request the Custodian to release the Deposited Stock held by the
Custodian to the Depositor, by delivering a written notice substantially in the
form of EXHIBIT C hereto (a "RELEASE NOTICE") to the Custodian (with
simultaneous delivery thereof by facsimile to the Administrative Agent)
specifying a date for such release that shall be not less than 10 days after the
date of such Release Notice. The Custodian shall also forward a copy of the
Release Notice to the Administrative Agent within 2 days of receipt thereof. On
the date specified in the Release Notice, the Custodian shall release such
Deposited Stock to the Depositor.
SECTION 2.09. CUSTODIAN'S INDEMNIFICATION. The Custodian shall
have no liability whatsoever by reason of any error of judgment for any act done
or step taken or omitted by it, or for any mistake of fact or law for anything
which it may do or refrain from doing in connection herewith, unless caused by
or arising out of its own gross negligence or willful misconduct. Furthermore,
the Depositor agrees to hold the Custodian harmless from any and all losses,
expenses, damages and costs (including, without limitation, attorneys fees)
incurred by
3
<PAGE>
either of them as a result of their execution of, or performance of their
respective obligations under, this Agreement, unless however, such losses,
expenses, damages and costs are caused by or arise out of the Custodian's
gross negligence or willful misconduct. The provisions of this SECTION 2.09
shall be continuing and shall survive the termination of this Agreement.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by each party
hereto, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 3.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including telex
communication and communication by facsimile copy) and mailed, telexed,
transmitted or delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or at such other address as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, upon receipt, or in the case
of delivery by facsimile copy, when verbal communication of receipt is obtained,
in each case addressed as aforesaid.
SECTION 3.03. BINDING EFFECT; ASSIGNABILITY; TERM. This
Agreement shall be binding upon and inure to the benefit of the Depositor and
the Custodian and their respective successors and assigns. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Termination Date, PROVIDED, HOWEVER, that the provisions of SECTION 2.09 shall
be continuing and shall survive the termination of this Agreement.
SECTION 3.04. RESIGNATION AND REMOVAL. The Custodian may
resign at any time by giving written notice thereof to the Depositor and the
Administrative Agent not less than 120 days' prior to the effective date of such
resignation. The Custodian may be removed by the Administrative Agent at any
time, with or without cause, by giving written notice thereof to the Custodian
(with copies to the Depositor) not less than ten (10) days prior to the
effective date of such removal. Upon any such resignation or removal, the
Administrative Agent shall have the right to appoint a successor Custodian. Any
such successor shall, upon its acceptance thereof, succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Custodian,
and the retiring Custodian shall be discharged from its duties and obligations
as Custodian under this Agreement.
SECTION 3.05. NO RIGHT OF SET-OFF. Nothing contained herein
shall grant any right to the Custodian to setoff or otherwise apply any or all
Deposited Stock at any time held hereunder to or for the credit or account of
the Depositor against any or all obligations of the Borrower now or hereafter
existing under the Credit Agreement or any other Loan Document (as defined in
the Credit Agreement).
SECTION 3.06. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws and decisions of the State of New
York.
4
<PAGE>
SECTION 3.07. EXECUTION IN COUNTERPARTS; SEVERABILITY. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
5
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
AAVID THERMALLOY, LLC,
as Depositor
By: _____________________________
Name:
Title:
Notice Address:
Attention:
Telecopy:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Custodian
By: ______________________________
Name:
Title:
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Telecopy: (212) 856-3763
6
<PAGE>
EXHIBIT A to
Custody Agreement
RECEIPT
February __, 2000
Aavid Thermalloy LLC
Attention:
Re: AAVID THERMALLOY LLC
Ladies and Gentlemen:
We are sending this letter to you pursuant to Section 2.03(b)
of that certain Custody Agreement dated as of February 2, 2000 (the "CUSTODY
AGREEMENT") among Aavid Thermalloy LLC, as Depositor, and Canadian Imperial Bank
of Commerce, as Custodian. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed thereto in the Custody
Agreement.
The undersigned hereby confirms to you its receipt of the
following Deposited Stock.
[NAME OF SUBSIDIARY], _____ shares, stock certificate
no._____
The undersigned hereby confirms that it shall hold the above-listed Deposited
Stock as Custodian in accordance with the terms of the Custody Agreement.
Very truly yours,
CANADIAN IMPERIAL BANK OF
COMMERCE, as Custodian
By: _____________________________
Name:
Title
7
<PAGE>
EXHIBIT B to
Custody Agreement
DEPOSIT NOTICE
February __, 2000
[NAME OF SUBSIDIARY]
Attention:
Re: AAVID THERMALLOY LLC
Ladies and Gentlemen:
You are hereby advised that Aavid Thermalloy LLC has granted
custody of 35% of the shares of capital stock of [NAME OF SUBSIDIARY] owned by
Aavid Thermalloy LLC to Canadian Imperial Bank of Commerce (the "Custodian"), as
custodian pursuant to a Custody Agreement dated as of February 2, 2000 between
Aavid Thermalloy LLC and the Custodian, a copy of which is attached hereto.
Please acknowledge your receipt of this letter by signing
where indicated below and returning the same to the undersigned's attention as
soon as possible.
Very truly yours,
AAVID THERMALLOY LLC
By: ______________________
Name:
Title:
Receipt acknowledged this ___ day of ___________.
[NAME OF SUBSIDIARY]
By: ________________________
Name:
Title:
8
<PAGE>
EXHIBIT C to
Custody Agreement
RELEASE NOTICE
February __, 2000
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Re: AAVID THERMALLOY LLC -- RELEASE OF DEPOSITED STOCk
Ladies and Gentlemen:
Pursuant to SECTION 2.08 of that certain Custody Agreement
dated as of February 2, 2000 (the "CUSTODY AGREEMENT"; capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed thereto
in the Custody Agreement) among Aavid Thermalloy LLC as Depositor, and Canadian
Imperial Bank of Commerce, as Custodian, the undersigned hereby requests that
the following Deposited Stock be delivered into our possession:
[Identify Deposited Stock to be released by stock certificate numbers]
In connection with the foregoing, the undersigned hereby
represents and warrants that a copy of this notice has been delivered to the
Administrative Agent simultaneously with delivery to the Custodian.
Very truly yours,
AAVID THERMALLOY LLC
By: ___________________
Name:
Title
9
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
Name of Jurisdiction of Class of Shares Number of Shares Share Certificate Letter
Subsidiary Organization
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
</TABLE>
10
<PAGE>
EXHIBIT E-2
TO CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED FOREIGN SUBSIDIARY
CUSTODY AGREEMENT
THIS AMENDED AND RESTATED CUSTODY AGREEMENT (this
"AGREEMENT") dated as of February 2, 2000, is entered into between AAVID
THERMAL PRODUCTS UK HOLDINGS LIMITED, a company incorporated under the laws
of England, as Depositor (the "DEPOSITOR") and CANADIAN IMPERIAL BANK OF
COMMERCE ("CIBC"), as Custodian (the "CUSTODIAN").
PRELIMINARY STATEMENT
WHEREAS, Aavid Thermal Technologies Inc. (the "BORROWER")
has entered into a Credit Agreement dated as of October 21, 1999, among the
Borrower, the lenders party thereto (the "EXISTING LENDERS"), CIBC World
Markets Corp., as lead arranger and bookrunner (the "EXISTING ARRANGER"),
Canadian Imperial Bank of Commerce, as issuer of certain letters of credit
(the "EXISTING ISSUER"), and Canadian Imperial Bank of Commerce, as
administrative agent (the "EXISTING AGENT"), pursuant to which the Existing
Lenders have severally agreed to make Loans to, and the Existing Issuer has
agreed to provide letters of credit for the benefit of, the Borrower upon the
terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Depositor was required to enter into a Custody Agreement dated as of October
21, 1999 (the "EXISTING CUSTODY AGREEMENT") with the Existing Agent, pursuant
to which , among other things, the Depositor has agreed to deliver to the
Existing Agent share of Capital Stock of certain of its subsidiaries (the
"EXISTING DEPOSITED STOCK");
WHEREAS, the parties to the Existing Credit Agreement have
agreed to amend and restate the Exisiting Credit Agreement as set forth in
the Amended and Restated Credit Agreement, dated as of February 2, 2000 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrower, Heat Holdings Corp., Heat Holdings II Corp.,
the banks and other financial institutions from time to time parties thereto
(the "LENDERS"), Canadian Imperial Bank of Commerce, as issuer of certain
letters of credit (the "ISSUER"), Canadian Imperial Bank of Commerce, as
administrative agent (the "ADMINISTRATIVE AGENT") the Administrative Agent,
BankBoston, N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC
World Markets Corp., as lead arranger and bookrunner (in such capacity, the
"LEAD ARRANGER").
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT") dated as of February 2, 2000, pursuant to which (a) the Existing
Lenders have assigned all their right, title and interest in, to and under
the Existing Credit Agreement, the "Loan Documents" (as defined in the
Existing Credit Agreement) and the
<PAGE>
Collateral (as defined in such Loan Documents) and delegated all their
obligations with respect thereto to the Lenders and the Lenders have accepted
such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their respective Loans to the Borrower and of the Issuer
to issue Letters of Credit under the Credit Agreement that the Administrative
Agent shall have received this Agreement, executed and delivered by the
Depositor with a counterpart for each Lender;
WHEREAS, the Depositor and the Administrative Agent wish to
amend the Existing Custody Agreement as set forth herein in order to, among
other things, (i) reflect the execution of the Credit Agreement and the
Assignment and Assumption Agreement and (ii) make appropriate amendments to
reflecting changes in the Existing Deposited Stock.
WHEREAS, CIBC is willing to act in the capacity of
Custodian, hereunder;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings specified in the Credit
Agreement and the following terms shall have the following meanings:
"DEPOSIT NOTICE" has the meaning specified in Section
2.03(e).
"DEPOSITED STOCK" shall mean the shares of Capital Stock of
the entities listed on Schedule I, and the related stock certificates, in
each case to be deposited with the Custodian pursuant to SECTION 2.03, and
any stock dividends in respect of such stock.
"RECEIPT" has the meaning specified in SECTION 2.03(b).
"RELEASE NOTICE" has the meaning specified in SECTION 2.08.
"SUBSIDIARIES" shall mean the entities listed on Schedule I
hereto.
"TERMINATION DATE" shall mean that date on which the
Administrative Agent shall notify the Custodian in writing that the Depositor
has satisfied and discharged in full all its Obligations under the Credit
Agreement.
ARTICLE II
CUSTODIAN
SECTION 2.01. DESIGNATION AND APPOINTMENT OF CIBC AS
CUSTODIAN. CIBC is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Custodian
2
<PAGE>
under and as set forth in this Agreement. CIBC shall serve as Custodian from
the date hereof until the Termination Date, subject to resignation or removal
pursuant to SECTION 3.04 hereof.
SECTION 2.02. DUTIES OF THE CUSTODIAN. At all times that
CIBC shall be the Custodian, it shall duly discharge its duties of receiving
and holding the Deposited Stock in accordance with this Agreement. As to any
matters not expressly provided for by this Agreement, the Custodian shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the written instructions of the
Administrative Agent; PROVIDED, HOWEVER, that the Custodian shall not be
required to take any action which is contrary to this Agreement or applicable
law, or which is not reasonably incidental to its duties and responsibilities
under this Agreement or is of a type unrelated to its business.
SECTION 2.03. DEPOSITED STOCK. (a) On the Closing Date, the
Deposited Stock shall be delivered by the Depositor to the Custodian. All
such Deposited Stock shall be held by the Custodian pursuant to the terms
hereof.
(b) On the Closing Date, upon the delivery of the Deposited
Stock by the Depositor to the Custodian hereunder, the Custodian shall
deliver to the Depositor (with copies to the Administrative Agent) a receipt
(the "RECEIPT") substantially in the form of EXHIBIT A attached hereto
identifying the Deposited Stock that it has received and confirming that it
holds such Deposited Stock, as Custodian hereunder.
(c) On each date that the Depositor shall receive any stock
dividend in respect of the Deposited Stock the Depositor shall deliver such
stock to the Custodian and the Custodian will issue a revised Receipt.
(d) The Custodian shall hold the Deposited Stock as
Custodian on the terms and conditions hereinafter set forth.
(e) On the Closing Date, concurrent with the delivery of
the Deposited Stock to the Custodian, the Depositor shall deliver to each
Subsidiary a deposit notice (the "DEPOSIT NOTICE") substantially in the form
of EXHIBIT B attached hereto notifying such Subsidiary of the grant of
custody of the Deposited Stock to the Custodian hereunder.
SECTION 2.04. DEPOSITED STOCK HELD BY THE CUSTODIAN. All
Deposited Stock coming into the possession of the Custodian shall be held by
it as Custodian consistent with its customary practice and procedure as a
custodian.
SECTION 2.05 NO LIENS OR ENCUMBRANCES. (a) Each of the
parties hereto acknowledges and agrees that nothing contained herein is
intended to create or shall be construed as creating any sale, transfer,
assignment, pledge, lien, security interest, encumbrance upon or other
disposition of the Deposited Stock.
(b) The Custodian hereby agrees not to assert any statutory
or possessory liens or encumbrances of any kind with respect to the Deposited
Stock held by it and hereby waives all such liens and encumbrances.
3
<PAGE>
SECTION 2.06. MAINTENANCE OF RECORDS. The Custodian shall
implement and maintain administrative and operating procedures pursuant to
which it shall keep and maintain all records and information necessary to
permit the regular identification of all Deposited Stock held or released by
it.
SECTION 2.07. OTHER INFORMATION. (a) From time to time upon
reasonable prior notification, during normal business hours, the
Administrative Agent and any of its respective authorized agents, employees
or representatives, shall have the right (i) to visit the office of the
Custodian where the Deposited Stock is kept, (ii) to examine the facilities
for the storage and safekeeping thereof and (iii) to discuss matters relating
to the Deposited Stock and the Custodian's performance hereunder with any
officer of the Custodian having knowledge of such matters.
(b) The Custodian shall provide to the Administrative Agent
such other information as the Administrative Agent may from time to time
reasonably request, concerning the Deposited Stock which is in the possession
of the Custodian.
SECTION 2.08. REMOVAL OF DEPOSITED STOCK. At any time, the
Depositor may request the Custodian to release the Deposited Stock held by
the Custodian to the Depositor, by delivering a written notice substantially
in the form of EXHIBIT C hereto (a "RELEASE NOTICE") to the Custodian (with
simultaneous delivery thereof by facsimile to the Administrative Agent)
specifying a date for such release that shall be not less than 10 days after
the date of such Release Notice. The Custodian shall also forward a copy of
the Release Notice to the Administrative Agent within 2 days of receipt
thereof. On the date specified in the Release Notice, the Custodian shall
release such Deposited Stock to the Depositor.
SECTION 2.09. CUSTODIAN'S INDEMNIFICATION. The Custodian
shall have no liability whatsoever by reason of any error of judgment for any
act done or step taken or omitted by it, or for any mistake of fact or law
for anything which it may do or refrain from doing in connection herewith,
unless caused by or arising out of its own gross negligence or willful
misconduct. Furthermore, the Depositor agrees to hold the Custodian harmless
from any and all losses, expenses, damages and costs (including, without
limitation, attorneys fees) incurred by either of them as a result of their
execution of, or performance of their respective obligations under, this
Agreement, unless however, such losses, expenses, damages and costs are
caused by or arise out of the Custodian's gross negligence or willful
misconduct. The provisions of this SECTION 2.09 shall be continuing and shall
survive the termination of this Agreement.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. AMENDMENTS, ETC. No amendment or waiver of
any provision of this Agreement nor consent to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by
each party hereto, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 3.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including telex
communication and communication by
4
<PAGE>
facsimile copy) and mailed, telexed, transmitted or delivered, as to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and
communications shall be effective, upon receipt, or in the case of delivery
by facsimile copy, when verbal communication of receipt is obtained, in each
case addressed as aforesaid.
SECTION 3.03. BINDING EFFECT; ASSIGNABILITY; TERM. This
Agreement shall be binding upon and inure to the benefit of the Depositor and
the Custodian and their respective successors and assigns. This Agreement
shall create and constitute the continuing obligations of the parties hereto
in accordance with its terms, and shall remain in full force and effect until
the Termination Date, PROVIDED, HOWEVER, that the provisions of SECTION 2.09
shall be continuing and shall survive the termination of this Agreement.
SECTION 3.04. RESIGNATION AND REMOVAL. The Custodian may
resign at any time by giving written notice thereof to the Depositor and the
Administrative Agent not less than 120 days' prior to the effective date of
such resignation. The Custodian may be removed by the Administrative Agent at
any time, with or without cause, by giving written notice thereof to the
Custodian (with copies to the Depositor) not less than ten (10) days prior to
the effective date of such removal. Upon any such resignation or removal, the
Administrative Agent shall have the right to appoint a successor Custodian.
Any such successor shall, upon its acceptance thereof, succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Custodian, and the retiring Custodian shall be discharged from its duties and
obligations as Custodian under this Agreement.
SECTION 3.05. NO RIGHT OF SET-OFF. Nothing contained herein
shall grant any right to the Custodian to setoff or otherwise apply any or
all Deposited Stock at any time held hereunder to or for the credit or
account of the Depositor against any or all obligations of the Borrower now
or hereafter existing under the Credit Agreement or any other Loan Document
(as defined in the Credit Agreement).
SECTION 3.06. GOVERNING LAW. This Agreement shall be
governed by, and construed in accordance with, the laws and decisions of the
State of New York.
SECTION 3.07. EXECUTION IN COUNTERPARTS; SEVERABILITY. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
5
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the date first above written.
AAVID THERMAL PRODUCTS UK HOLDINGS
LIMITED
as Depositor
By: _____________________________
Name:
Title:
Notice Address:
Attention:
Telecopy:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Custodian
By: ______________________________
Name:
Title:
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Telecopy: (212) 856-3763
6
<PAGE>
EXHIBIT A to
Custody Agreement
RECEIPT
February __, 2000
Aavid Thermal Products UK Holdings Limited
Attention:
Re: AAVID THERMAL PRODUCTS UK HOLDINGS LIMITED
Ladies and Gentlemen:
We are sending this letter to you pursuant to Section
2.03(b) of that certain Custody Agreement dated as of February 2, 2000 (the
"CUSTODY AGREEMENT") among Aavid Thermal Products UK Holdings Limited, as
Depositor, and Canadian Imperial Bank of Commerce, as Custodian. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed thereto in the Custody Agreement.
The undersigned hereby confirms to you its receipt of the
following Deposited Stock.
[NAME OF SUBSIDIARY], _____ shares, stock certificate no.
_____
The undersigned hereby confirms that it shall hold the above-listed Deposited
Stock as Custodian in accordance with the terms of the Custody Agreement.
Very truly yours,
CANADIAN IMPERIAL BANK OF
COMMERCE, as Custodian
By: _________________________
Name:
Title
7
<PAGE>
EXHIBIT B to
Custody Agreement
DEPOSIT NOTICE
February 2, 2000
[NAME OF SUBSIDIARY]
Attention:
Re: AAVID THERMAL PRODUCTS UK HOLDINGS LIMITED
Ladies and Gentlemen:
You are hereby advised that Aavid Thermal Products UK
Holdings Limited, has granted custody of 35% of the shares of capital stock
of [NAME OF SUBSIDIARY] owned by Aavid Thermal Products UK Holdings Limited,
to Canadian Imperial Bank of Commerce (the "Custodian"), as custodian
pursuant to a Custody Agreement dated as of February 2, 2000 between Aavid
Thermal Products UK Holdings Limited, and the Custodian, a copy of which is
attached hereto.
Please acknowledge your receipt of this letter by signing
where indicated below and returning the same to the undersigned's attention
as soon as possible.
Very truly yours,
AAVID THERMAL PRODUCTS UK HOLDINGS
LIMITED
By:_______________________________
Name:
Title:
Receipt acknowledged this ___ day of ___________.
[NAME OF SUBSIDIARY]
By: ________________________
Name:
Title:
8
<PAGE>
EXHIBIT C to
Custody Agreement
RELEASE NOTICE
[DATE]
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Re: AAVID THERMAL PRODUCTS UK HOLDINGS LIMITED -- RELEASE
OF DEPOSITED STOCk
Ladies and Gentlemen:
Pursuant to SECTION 2.08 of that certain Custody Agreement
dated as of February 2, 2000 (the "CUSTODY AGREEMENT"; capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed
thereto in the Custody Agreement) among Aavid Thermal Products UK Holdings
Limited, as Depositor, and Canadian Imperial Bank of Commerce, as Custodian,
the undersigned hereby requests that the following Deposited Stock be
delivered into our possession:
[Identify Deposited Stock to be released by stock certificate
numbers]
In connection with the foregoing, the undersigned hereby
represents and warrants that a copy of this notice has been delivered to the
Administrative Agent simultaneously with delivery to the Custodian.
Very truly yours,
AAVID THERMAL PRODUCTS UK HOLDINGS
LIMITED
By: ________________________________
Name:
Title
9
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
Name of Jurisdiction of Class of Shares Number of Shares Share Certificate Letter
Subsidiary Organization
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
<S> <C> <C> <C> <C>
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
</TABLE>
10
<PAGE>
EXHIBIT F-1
TO CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED CUSTODY AGREEMENT
THIS AMENDED AND RESTATED CUSTODY AGREEMENT (this
"AGREEMENT") dated as of February 2, 2000, is entered into between AAVID
THERMAL TECHNOLOGIES, INC., a New Hampshire corporation, as Depositor (the
"DEPOSITOR") and CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as Custodian
(the "CUSTODIAN").
PRELIMINARY STATEMENT
WHEREAS, Aavid Thermal Technologies, Inc. (the "BORROWER")
has entered into a Credit Agreement dated as of October 21, 1999, among the
Borrower, the lenders party thereto (the "EXISTING LENDERS"), CIBC World
Markets Corp., as lead arranger and bookrunner (the "EXISTING ARRANGER"),
Canadian Imperial Bank of Commerce, as issuer of certain letters of credit
(the "EXISTING ISSUER"), and Canadian Imperial Bank of Commerce, as
administrative agent (the "EXISTING AGENT"), pursuant to which the Existing
Lenders have severally agreed to make Loans to, and the Existing Issuer has
agreed to provide letters of credit for the benefit of, the Borrower upon the
terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Depositor was required to enter into a Custody Agreement dated as of October
21, 1999 (the "EXISTING CUSTODY AGREEMENT") with the Existing Agent, pursuant
to which , among other things, the Depositor has agreed to deliver to the
Existing Agent share of Capital Stock of certain of its subsidiaries (the
"EXISTING DEPOSITED STOCK");
WHEREAS, the parties to the Existing Credit Agreement have
agreed to amend and restate the Exisiting Credit Agreement as set forth in
the Amended and Restated Credit Agreement, dated as of February 2, 2000 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrower, Heat Holdings Corp., Heat Holdings II Corp.,
the banks and other financial institutions from time to time parties thereto
(the "LENDERS"), Canadian Imperial Bank of Commerce, as issuer of certain
letters of credit (the "ISSUER"), Canadian Imperial Bank of Commerce, as
administrative agent (the "ADMINISTRATIVE AGENT") the Administrative Agent,
BankBoston, N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC
World Markets Corp., as lead arranger and bookrunner (in such capacity, the
"LEAD ARRANGER").
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT") dated as of February 2, 2000, pursuant to which (a) the Existing
Lenders have assigned all their right, title and interest in, to and under
the Existing Credit Agreement, the "Loan Documents" (as defined in the
Existing Credit Agreement) and the Collateral (as defined in such Loan
Documents) and delegated all their obligations with respect thereto to the
Lenders and the Lenders have accepted such assignment and assumed such
obligations, and (b) the Borrower has consented to such assignment and
delegations;
<PAGE>
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their respective Loans to the Borrower and of the Issuer
to issue Letters of Credit under the Credit Agreement that the Administrative
Agent shall have received this Agreement, executed and delivered by the
Depositor with a counterpart for each Lender;
WHEREAS, the Depositor and the Administrative Agent wish to
amend the Existing Custody Agreement as set forth herein in order to, among
other things, (i) reflect the execution of the Credit Agreement and the
Assignment and Assumption Agreement and (ii) make appropriate amendments to
reflecting changes in the Existing Deposited Stock.
WHEREAS, CIBC is willing to act in the capacity of
Custodian, hereunder;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings specified in the Credit
Agreement and the following terms shall have the following meanings:
"DEPOSIT NOTICE" has the meaning specified in Section
2.03(e).
"DEPOSITED STOCK" shall mean the shares of Capital Stock of
the entities listed on Schedule I, and the related stock certificates, in
each case to be deposited with the Custodian pursuant to SECTION 2.03, and
any stock dividends in respect of such stock.
"RECEIPT" has the meaning specified in SECTION 2.03(b).
"RELEASE NOTICE" has the meaning specified in SECTION 2.08.
"SUBSIDIARIES" shall mean the entities listed on Schedule I
hereto.
"TERMINATION DATE" shall mean that date on which the
Administrative Agent shall notify the Custodian in writing that the Borrower
has satisfied and discharged in full all its Obligations under the Credit
Agreement.
ARTICLE II
CUSTODIAN
SECTION 2.01. DESIGNATION AND APPOINTMENT OF CIBC AS
CUSTODIAN. CIBC is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Custodian under and as set forth in this
Agreement. CIBC shall serve as Custodian from the date hereof until the
Termination Date, subject to resignation or removal pursuant to SECTION 3.04
hereof.
2
<PAGE>
SECTION 2.02. DUTIES OF THE CUSTODIAN. At all times that
CIBC shall be the Custodian, it shall duly discharge its duties of receiving
and holding the Deposited Stock in accordance with this Agreement. As to any
matters not expressly provided for by this Agreement, the Custodian shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the written instructions of the
Administrative Agent; PROVIDED, HOWEVER, that the Custodian shall not be
required to take any action which is contrary to this Agreement or applicable
law, or which is not reasonably incidental to its duties and responsibilities
under this Agreement or is of a type unrelated to its business.
SECTION 2.03. DEPOSITED STOCK. (a) On the Closing Date, the
Deposited Stock shall be delivered by the Depositor to the Custodian. All
such Deposited Stock shall be held by the Custodian pursuant to the terms
hereof.
(b) On the Closing Date, upon the delivery of the Deposited
Stock by the Depositor to the Custodian hereunder, the Custodian shall
deliver to the Depositor (with copies to the Administrative Agent) a receipt
(the "RECEIPT") substantially in the form of EXHIBIT A attached hereto
identifying the Deposited Stock that it has received and confirming that it
holds such Deposited Stock, as Custodian hereunder.
(c) On each date that the Depositor shall receive any stock
dividend in respect of the Deposited Stock the Depositor shall deliver such
stock to the Custodian and the Custodian will issue a revised Receipt.
(d) The Custodian shall hold the Deposited Stock as
Custodian on the terms and conditions hereinafter set forth.
(e) On the Closing Date, concurrent with the delivery of
the Deposited Stock to the Custodian, the Depositor shall deliver to each
Subsidiary a deposit notice (the "DEPOSIT NOTICE") substantially in the form
of EXHIBIT B attached hereto notifying such Subsidiary of the grant of
custody of the Deposited Stock to the Custodian hereunder.
SECTION 2.04. DEPOSITED STOCK HELD BY THE CUSTODIAN. All
Deposited Stock coming into the possession of the Custodian shall be held by
it as Custodian consistent with its customary practice and procedure as a
custodian.
SECTION 2.05 NO LIENS OR ENCUMBRANCES. (a) Each of the
parties hereto acknowledges and agrees that nothing contained herein is
intended to create or shall be construed as creating any sale, transfer,
assignment, pledge, lien, security interest, encumbrance upon or other
disposition of the Deposited Stock.
(b) The Custodian hereby agrees not to assert any statutory
or possessory liens or encumbrances of any kind with respect to the Deposited
Stock held by it and hereby waives all such liens and encumbrances.
SECTION 2.06. MAINTENANCE OF RECORDS. The Custodian shall
implement and maintain administrative and operating procedures pursuant to
which it shall keep and maintain
3
<PAGE>
all records and information necessary to permit the regular identification of
all Deposited Stock held or released by it.
SECTION 2.07. OTHER INFORMATION. (a) From time to time upon
reasonable prior notification, during normal business hours, the
Administrative Agent and any of its respective authorized agents, employees
or representatives, shall have the right (i) to visit the office of the
Custodian where the Deposited Stock is kept, (ii) to examine the facilities
for the storage and safekeeping thereof and (iii) to discuss matters relating
to the Deposited Stock and the Custodian's performance hereunder with any
officer of the Custodian having knowledge of such matters.
(b) The Custodian shall provide to the Administrative Agent
such other information as the Administrative Agent may from time to time
reasonably request, concerning the Deposited Stock which is in the possession
of the Custodian.
SECTION 2.08. REMOVAL OF DEPOSITED STOCK. At any time, the
Depositor may request the Custodian to release the Deposited Stock held by
the Custodian to the Depositor, by delivering a written notice substantially
in the form of EXHIBIT C hereto (a "RELEASE NOTICE") to the Custodian (with
simultaneous delivery thereof by facsimile to the Administrative Agent)
specifying a date for such release that shall be not less than 10 days after
the date of such Release Notice. The Custodian shall also forward a copy of
the Release Notice to the Administrative Agent within 2 days of receipt
thereof. On the date specified in the Release Notice, the Custodian shall
release such Deposited Stock to the Depositor.
SECTION 2.09. CUSTODIAN'S INDEMNIFICATION. The Custodian
shall have no liability whatsoever by reason of any error of judgment for any
act done or step taken or omitted by it, or for any mistake of fact or law
for anything which it may do or refrain from doing in connection herewith,
unless caused by or arising out of its own gross negligence or willful
misconduct. Furthermore, the Depositor agrees to hold the Custodian harmless
from any and all losses, expenses, damages and costs (including, without
limitation, attorneys fees) incurred by either of them as a result of their
execution of, or performance of their respective obligations under, this
Agreement, unless however, such losses, expenses, damages and costs are
caused by or arise out of the Custodian's gross negligence or willful
misconduct. The provisions of this SECTION 2.09 shall be continuing and shall
survive the termination of this Agreement.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. AMENDMENTS, ETC. No amendment or waiver of
any provision of this Agreement nor consent to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by
each party hereto, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 3.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including telex
communication and communication by facsimile copy) and mailed, telexed,
transmitted or delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or at such other address as
shall be
4
<PAGE>
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, upon receipt, or in the
case of delivery by facsimile copy, when verbal communication of receipt is
obtained, in each case addressed as aforesaid.
SECTION 3.03. BINDING EFFECT; ASSIGNABILITY; TERM. This
Agreement shall be binding upon and inure to the benefit of the Depositor and
the Custodian and their respective successors and assigns. This Agreement
shall create and constitute the continuing obligations of the parties hereto
in accordance with its terms, and shall remain in full force and effect until
the Termination Date, PROVIDED, HOWEVER, that the provisions of SECTION 2.09
shall be continuing and shall survive the termination of this Agreement.
SECTION 3.04. RESIGNATION AND REMOVAL. The Custodian may
resign at any time by giving written notice thereof to the Depositor and the
Administrative Agent not less than 120 days' prior to the effective date of
such resignation. The Custodian may be removed by the Administrative Agent at
any time, with or without cause, by giving written notice thereof to the
Custodian (with copies to the Depositor) not less than ten (10) days prior to
the effective date of such removal. Upon any such resignation or removal, the
Administrative Agent shall have the right to appoint a successor Custodian.
Any such successor shall, upon its acceptance thereof, succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Custodian, and the retiring Custodian shall be discharged from its duties and
obligations as Custodian under this Agreement.
SECTION 3.05. NO RIGHT OF SET-OFF. Nothing contained herein
shall grant any right to the Custodian to setoff or otherwise apply any or
all Deposited Stock at any time held hereunder to or for the credit or
account of the Depositor against any or all obligations of the Depositor now
or hereafter existing under the Credit Agreement or any other Loan Document
(as defined in the Credit Agreement).
SECTION 3.06. GOVERNING LAW. This Agreement shall be
governed by, and construed in accordance with, the laws and decisions of the
State of New York.
SECTION 3.07. EXECUTION IN COUNTERPARTS; SEVERABILITY. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
5
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the date first above written.
AAVID THERMAL TECHNOLOGIES, INC.
as Depositor
By: ________________________
Name:
Title:
Notice Address:
Attention:
Telecopy:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Custodian
By: ______________________________
Name:
Title:
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Telecopy: (212) 856-3763
6
<PAGE>
EXHIBIT A to
Custody Agreement
RECEIPT
February __, 2000
Fluent, Inc.
Attention:
Re: AAVID THERMAL TECHNOLOGIES INC.
Ladies and Gentlemen:
We are sending this letter to you pursuant to Section
2.03(b) of that certain Custody Agreement dated as of February 2, 2000 (the
"CUSTODY AGREEMENT") among Aavid Thermal Technologies Inc., as Depositor, and
Canadian Imperial Bank of Commerce, as Custodian. Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed
thereto in the Custody Agreement.
The undersigned hereby confirms to you its receipt of the
following Deposited Stock.
AAVID THERMAL PRODUCTS UK HOLDINGS LTD., _____ shares,
stock certificate no. _____
The undersigned hereby confirms that it shall hold the above-listed Deposited
Stock as Custodian in accordance with the terms of the Custody Agreement.
Very truly yours,
CANADIAN IMPERIAL BANK OF
COMMERCE, as Custodian
By: _________________________
Name:
Title
7
<PAGE>
EXHIBIT B to
Custody Agreement
DEPOSIT NOTICE
February 2, 2000
Aavid Thermal Products UK Holdings Ltd.
Attention:
Re: AAVID THERMAL TECHNOLOGIES INC.
Ladies and Gentlemen:
You are hereby advised that Aavid Thermal Technologies Inc.,
has granted custody of [35%] of the shares of capital stock of Aavid Thermal
Products UK Holdings Ltd. owned by Aavid Thermal Technologies Inc., to Canadian
Imperial Bank of Commerce (the "Custodian"), as custodian pursuant to a Custody
Agreement dated as of February 2, 2000 between Aavid Thermal Technologies Inc.,
and the Custodian, a copy of which is attached hereto.
Please acknowledge your receipt of this letter by signing
where indicated below and returning the same to the undersigned's attention as
soon as possible.
Very truly yours,
AAVID THERMAL TECHNOLOGIES, INC.
By: _______________________
Name:
Title:
Receipt acknowledged this ___ day of ___________.
AAVID THERMAL PRODUCTS UK HOLDINGS LTD.
By: ________________________
Name:
Title:
8
<PAGE>
EXHIBIT C to
Custody Agreement
RELEASE NOTICE
February__, 2000
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: Mary Beth Ross
Re: AAVID THERMAL TECHNOLOGIES INC. -- RELEASE OF
DEPOSITED STOCK
Ladies and Gentlemen:
Pursuant to SECTION 2.08 of that certain Custody Agreement
dated as of February 2, 2000 (the "CUSTODY AGREEMENT"; capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed thereto
in the Custody Agreement) among Aavid Thermal Technologies Inc. , as Depositor,
and Canadian Imperial Bank of Commerce, as Custodian, the undersigned hereby
requests that the following Deposited Stock be delivered into our possession:
[Identify Deposited Stock to be released by stock certificate
numbers]
In connection with the foregoing, the undersigned hereby
represents and warrants that a copy of this notice has been delivered to the
Administrative Agent simultaneously with delivery to the Custodian.
Very truly yours,
AAVID THERMAL TECHNOLOGIES, INC.
By: _______________________
Name:
Title
9
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
Name of Subsidiary Jurisdiction of Class of Shares Number of Shares Share Certificate Letter
Organization
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
<S> <C> <C> <C> <C>
Aavid Thermal
Products UK Holdings
Ltd.
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
</TABLE>
10
<PAGE>
EXHIBIT F-2
TO CREDIT AGREEMENT
FORM OF BORROWER INTELLECTUAL PROPERTY SECURITY AGREEMENT
AMENDED AND RESTATED BORROWER INTELLECTUAL PROPERTY SECURITY
AGREEMENT, dated as of February 2, 2000, made by AAVID THERMAL TECHNOLOGIES,
INC., a Delaware corporation (the "BORROWER"), in favor of CANADIAN IMPERIAL
BANK OF COMMERCE, as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the several banks and other financial institutions (the "LENDERS")
from time to time parties to the Amended and Restated Credit Agreement, dated as
of February 2, 2000 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Borrower, Heat Holdings Corp., Heat
Holdings II Corp., the Lenders, Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "ISSUER"), the Administrative Agent, BankBoston,
N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets
Corp., as lead arranger and bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Borrower was required to enter into an Intellectual Property Security Agreement
dated as of October 21, 1999 (the "EXISTING IP SECURITY AGREEMENT") with the
Existing Agent, pursuant to which , among other things, the Borrower granted to
the Existing Agent a security interest in certain collateral;
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
<PAGE>
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Borrower shall have
executed and delivered this Amended and Restated Security Agreement to the
Administrative Agent for the ratable benefit of the Lenders; and
WHEREAS, the Borrower and the Administrative Agent wish to
amend and restate the Existing IP Security Agreement as set forth herein in
order to, among other things, reflect the execution of the Credit Agreement and
the Assignment and Assumption Agreement.
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Borrower hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS.
(a) Unless otherwise defined herein, each capitalized term
used herein that is defined in the Credit Agreement shall have the meaning
specified for such term in the Credit Agreement. Unless otherwise defined herein
or in the Credit Agreement, all terms defined in Article 9 of the Uniform
Commercial Code in effect as of the date hereof in the State of New York are
used herein as defined therein as of the date hereof.
(b) The words "hereof", "herein" and "hereunder" and words of
like import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and section references
are to this Agreement unless otherwise specified.
(c) All terms defined in this Agreement in the singular shall
have comparable meanings when used in the plural, and VICE VERSA, unless
otherwise specified.
2. SECURITY INTEREST IN INTELLECTUAL PROPERTY. To secure the
complete and timely payment, performance and satisfaction of all the
Obligations, the Borrower hereby grants to the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, a security interest in, as
and by way of a first mortgage and security interest having priority over all
other security interests, with power of sale to the extent permitted by
applicable law, all the Borrower's now owned or existing and hereafter acquired
or arising:
(i) trademarks, registered trademarks, trademark applications,
service marks, registered service marks and service mark applications,
including, without limitation, the trademarks, registered trademarks,
trademark applications, service marks, registered service marks and
service mark applications listed on SCHEDULE A attached hereto and made
a part hereof, and (a) all renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable under and
with respect thereto,
2
<PAGE>
including, without limitation, payments under all licenses
entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (c) the right to
sue for past, present and future infringements and dilutions thereof,
(d) the goodwill of the Borrower's business symbolized by the foregoing
and connected therewith, and (e) all the Borrower's rights
corresponding thereto throughout the world (all the foregoing
trademarks, registered trademarks and trademark applications, and
service marks, registered service marks and service mark applications,
together with the items described in CLAUSES (a)-(e) in this PARAGRAPH
2(i), are sometimes hereinafter individually and/or collectively
referred to as the "TRADEMARKS");
(ii) rights under or interest in any patent license
agreements, trademark license agreements or service mark license
agreements with any other party, whether the Borrower is a licensee or
licensor under any such license agreement, including, without
limitation, those patent license agreements, trademark license
agreements and service mark license agreements listed on SCHEDULE B
attached hereto and made a part hereof, in each case to the extent
assignable without violation thereof, together with any goodwill
connected with and symbolized by any such trademark license agreements
or service mark license agreements, and the right to prepare for sale
and sell any and all Inventory now or hereafter owned by the Borrower
and now or hereafter covered by such licenses (all the foregoing are
hereinafter referred to collectively as the "LICENSES"); and
(iii) patents and patent applications, and the inventions and
improvements described and claimed therein, including, without
limitation, those patents and patent applications listed on SCHEDULE A
attached hereto and made a part hereof, and (a) the reissues,
divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties, damages and
payments now and hereafter due and/or payable under and with respect
thereto, including, without limitation, payments under all licenses
entered into in connection therewith and damages and payments for past
or future infringements thereof, (c) the right to sue for past, present
and future infringements thereof, (d) all patented technology and
know-how, and (e) all of the Borrower's rights corresponding thereto
throughout the world (all of the foregoing patents and applications,
together with the items described in CLAUSES (a)-(e) in this PARAGRAPH
2(iii) are sometimes hereinafter individually and/or collectively
referred to as the "PATENTS").
3. RESTRICTIONS ON FUTURE AGREEMENTS. The Borrower will not,
without the Administrative Agent's prior written consent, enter into any
agreement, including, without limitation, any license agreement, which is
inconsistent with this Agreement, and the Borrower further agrees that, without
the Administrative Agent's prior written consent, it will not take any action,
and will use its best efforts not to permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would in any respect adversely affect the validity or enforcement of the rights
transferred to the Administrative Agent under this Agreement or the rights
associated with any Patents, Trademarks or Licenses, and in particular, the
Borrower will not permit to lapse or become abandoned any Patent, Trademark or
License; PROVIDED that nothing contained herein shall restrict the Borrower's
ability to license its software in the ordinary course of its business
consistent with prior practice.
3
<PAGE>
4. NEW PATENTS, TRADEMARKS AND LICENSES. The Borrower
represents and warrants that (a) the Patents and Trademarks listed on SCHEDULE A
include all the registered patents, patent applications, trademarks, common law
trademarks, trademark applications, registered service marks and service mark
applications now owned or held by the Borrower, (b) the Licenses listed on
SCHEDULE B include all the patent license agreements, trademark license
agreements and service mark license agreements under which the Borrower is the
licensee or licensor and which are material individually or in the aggregate to
the operation of the business of the Borrower and (c) other than the rights of
any party to the Licenses with respect to the Patents and the Trademarks, no
Liens in such Patents, Trademarks and Licenses have been granted by the Borrower
to any Person other than the Administrative Agent. If, prior to the termination
of this Agreement, the Borrower shall (i) obtain rights to any new patentable
inventions, trademarks, registered trademarks, trademark applications, service
marks, registered service marks or service mark applications, (ii) become
entitled to the benefit of any patent, patent application, license or any
reissue, division, continuation, renewal, extension or continuation-in-part of
any Patent or any improvement on any Patent or License or any trademarks,
registered trademarks, trademark applications, trademark licenses, trademark
license renewals, service marks, registered service marks, service mark
applications, service mark licenses or service mark license renewals whether as
licensee or licensor, or (iii) enter into any new patent license agreement,
trademark license agreement or service mark license agreement, the provisions of
PARAGRAPH 3 above shall automatically apply thereto. The Borrower shall give to
the Administrative Agent written notice of events described in CLAUSES (i), (ii)
and (iii) of the preceding sentence within 30 days of the occurrence of any such
event. The Borrower hereby authorizes the Administrative Agent to modify this
Agreement unilaterally (i) by amending SCHEDULE A to include any future patents,
trademarks, registered trademarks, trademark applications, service marks, patent
applications, registered service marks and service mark applications owned or
held by Borrower or to prepare this Agreement for filing with the Patent and
Trademark Office and by amending SCHEDULE B to include any patent license
agreements, trademark license agreements and service mark license agreements to
which Borrower becomes a party, which are Trademarks or Licenses under PARAGRAPH
2 above or under this PARAGRAPH 4, and (ii) by filing with the Patent and
Trademark Office, in addition to and not in substitution for this Agreement, a
duplicate original of this Agreement containing on SCHEDULE A or B thereto, as
the case may be, such future patents, trademarks, registered trademarks,
trademark applications, service marks, patent applications, registered service
marks and service mark applications, and patent license agreements, trademark
license agreements and service mark license agreements.
5. ROYALTIES. The Borrower hereby agrees that the use by the
Administrative Agent of the Patents, Trademarks and Licenses as authorized
hereunder in connection with the Administrative Agent's exercise of its rights
and remedies under PARAGRAPH 13 or pursuant to the Security Agreements shall be
coextensive with the Borrower's rights thereunder and with respect thereto and
without any liability for royalties or other related charges from the
Administrative Agent and the Lenders to the Borrower.
6. FURTHER ASSIGNMENTS AND SECURITY INTERESTS. The Borrower
agrees not to sell or assign its respective interests in, or grant any license
under, the Patents, the Trademarks or the Licenses without the prior and express
written consent of the Administrative Agent.
4
<PAGE>
7. Nature and Continuation of the Administrative Agent's
Security Interest; Termination of the Administrative Agent's Security Interest;
Release of Collateral. This Agreement is made for collateral security purposes
only. This Agreement shall create a continuing security interest in the Patents,
Trademarks and Licenses and shall terminate only when the Obligations have been
paid in full in cash and the Credit Agreement and the Security Agreements have
been terminated. Upon such termination and at the written request of the
Borrower or its successors or assigns, and at the cost and expense of the
Borrower or its successors or assigns, the Administrative Agent shall execute in
a timely manner such instruments, documents or agreements as are necessary or
desirable to terminate the Administrative Agent's security interest in the
Patents, the Trademarks and the Licenses, subject to any disposition thereof
which may have been made by the Administrative Agent pursuant to this Agreement
or the Security Agreements.
8. DUTIES OF THE BORROWER. Subject to the second sentence of
this Section 8, the Borrower shall have the duty (i) to prosecute diligently any
patent application, trademark application or service mark application that is
part of the Trademarks pending as of the date hereof or hereafter until the
termination of this Agreement and (ii) to make any application for and
diligently prosecute the registration of (x) any trademark or service mark that
the Borrower has not created as of the date hereof which the Administrative
Agent, after consultation with the Borrower, reasonably determines may have
significant value and (y) any unpatented but patentable invention. The Borrower
further agrees (i) not to abandon any Trademark or License without the prior
written consent of the Administrative Agent if such abandonment would have a
Material Adverse Effect, and (ii) to use its reasonable best efforts to obtain
and maintain in full force and effect the Patents, the Trademarks and the
Licenses that are or shall be necessary or economically desirable in the
operation of the Borrower's business. Any expenses incurred in connection with
the foregoing shall be borne by the Borrower. Neither the Administrative Agent
nor any of the Lenders shall have any duty with respect to the Patents,
Trademarks and Licenses. Without limiting the generality of the foregoing,
neither the Administrative Agent nor any of the Lenders shall be under any
obligation to take any steps necessary to preserve rights in the Patents, the
Trademarks or Licenses against any other parties, but the Administrative Agent
may do so at its option from and after the occurrence of an Event of Default,
and all expenses incurred in connection therewith shall be for the sole account
of the Borrower and shall be added to the Obligations secured hereby.
9. THE ADMINISTRATIVE AGENT'S RIGHT TO SUE. Upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right, but shall not be obligated, to bring suit in its own
name to enforce the Patents, the Trademarks and the Licenses and, if the
Administrative Agent shall commence any such suit, the Borrower shall, at the
request of the Administrative Agent, do any and all lawful acts and execute any
and all proper documents required by the Administrative Agent in aid of such
enforcement. The Borrower shall, upon demand, promptly reimburse the
Administrative Agent for all actual costs and expenses incurred by the
Administrative Agent in the exercise of its rights under this PARAGRAPH 9
(including, without limitation, reasonable fees and expenses of counsel for the
Administrative Agent).
10. WAIVERS. The Administrative Agent's failure, at any time
or times hereafter, to require strict performance by the Borrower of any
provision of this Agreement shall
5
<PAGE>
not waive, affect or diminish any right of the Administrative Agent
thereafter to demand strict compliance and performance therewith nor shall
any course of dealing between the Borrower and the Administrative Agent have
such effect. No single or partial exercise of any right hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right. None of the undertakings, agreements, warranties, covenants and
representations of the Borrower contained in this Agreement shall be deemed
to have been suspended or waived by the Administrative Agent unless such
suspension or waiver is in writing signed by an officer of the Administrative
Agent and directed to the Borrower specifying such suspension or waiver.
11. SEVERABILITY. If any provision of this Agreement is held
to be prohibited or unenforceable in any jurisdiction the substantive laws of
which are held to be applicable hereto, such prohibition or unenforceability
shall not affect the validity or enforceability of the remaining provisions
hereof and shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12. MODIFICATION. This Agreement cannot be altered, amended or
modified in any way, except as specifically provided in PARAGRAPH 4 hereof or by
a writing signed by the parties hereto.
13. CUMULATIVE REMEDIES; POWER OF ATTORNEY. The Borrower
agrees, upon the request of the Administrative Agent and promptly following such
request, to take any action and execute any instrument which the Administrative
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement. The Borrower hereby irrevocably designates, constitutes and appoints
the Administrative Agent (and all Persons designated by the Administrative Agent
in its sole and absolute discretion) as the Borrower's true and lawful
attorney-in-fact, and authorizes the Administrative Agent and any of the
Administrative Agent's designees, in the Borrower's or the Administrative
Agent's name, from and after the occurrence and during the continuance of an
Event of Default, to take any action and execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation, (i) to endorse the Borrower's
name on all applications, documents, papers and instruments necessary or
desirable for the Administrative Agent in the use, prosecution or protection of
the Patents, the Trademarks or the Licenses, (ii) to assign, pledge, convey or
otherwise transfer title in or dispose of the Trademarks or the Licenses to
anyone on commercially reasonable terms, (iii) to grant or issue any exclusive
or nonexclusive license under the Patents, the Trademarks or the Licenses, to
anyone on commercially reasonable terms, and (iv) to take any other actions with
respect to the Patents or the Trademarks or, to the extent permitted, the
Licenses as the Administrative Agent deems in its own or the Lenders' best
interest. The Borrower hereby ratifies all that such attorney shall lawfully do
or, to the extent permitted, cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable until all the
Obligations shall have been paid in full in cash and the Credit Agreement shall
have been terminated. The Borrower acknowledges and agrees that this Agreement
is not intended to limit or restrict in any way the rights and remedies of the
Administrative Agent or the other Lenders under the Agreement, but rather is
intended to facilitate the exercise of such rights and remedies.
The Administrative Agent shall have, in addition to all
other rights and remedies given it by the terms of this Agreement, all rights
and remedies allowed by law and the rights
6
<PAGE>
and remedies of a secured party under the Uniform Commercial Code as enacted
in any jurisdiction in which the Trademarks or the Licenses may be located or
deemed located. If an Event of Default has occurred and is continuing and the
Administrative Agent has elected to exercise any of its remedies under
Section 9-504 or Section 9-505 of the Uniform Commercial Code with respect to
the Patents, Trademarks and Licenses, the Borrower agrees to assign, convey
and otherwise transfer all of its title in and to the Patents, the Trademarks
and the Licenses to the Administrative Agent or any transferee of the
Administrative Agent and to execute and deliver to the Administrative Agent
or any such transferee all such agreements, documents and instruments as may
be necessary, in the Administrative Agent's sole discretion, to effect such
assignment, conveyance and transfer; PROVIDED that in the case of any
Patents, Trademarks and Licenses licensed to the Borrower by third parties,
such transfer shall be solely to the extent any of the foregoing are
transferable pursuant to operative agreements between the Borrower and such
third party. All the Administrative Agent's rights and remedies with respect
to the Patents, the Trademarks and the Licenses, whether established hereby,
by the Security Agreements, by any other agreements or by law, shall be
cumulative and may be exercised separately or concurrently. Notwithstanding
anything set forth herein to the contrary, it is hereby expressly agreed that
if an Event of Default has occurred and is continuing, the Administrative
Agent may exercise any of the rights and remedies provided in this Agreement,
the Security Agreements and any of the other Loan Documents. The Borrower
agrees that any notification of intended disposition of any of the Patents,
Trademarks and Licenses required by law shall be deemed reasonably and
properly given if given at least ten (10) days before such disposition;
PROVIDED, that the Administrative Agent may give any shorter notice that is
commercially reasonable under the circumstances.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the benefit
of each of the Lenders and its nominees, successors and assigns. The Borrower's
successors and assigns shall include, without limitation, a receiver, trustee or
debtor-in-possession of or for the Borrower; PROVIDED, that the Borrower shall
not voluntarily assign or transfer its rights or obligations hereunder without
the Administrative Agent's prior written consent.
15. GOVERNING LAW. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the law (without regards to
conflict of law provisions (other than Section 5-1401 of the General Obligations
Law)) of the State of New York, except for perfection and enforcement of
security interests and liens in other jurisdictions to the extent the law of
another jurisdiction is, pursuant to the laws of such jurisdiction, mandatorily
applicable.
16. NOTICES. All notices or other communications hereunder
shall be given in the manner and to the addresses set forth in Section 9.2 of
the Credit Agreement.
17. AUTHORITY OF ADMINISTRATIVE AGENT. The Borrower
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent
7
<PAGE>
and the Borrower, the Administrative Agent shall be conclusively presumed to
be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and the Borrower shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
18. TERMINATION; RELEASE. Upon the repayment of all the
Obligations in full and the termination of the Commitments, this Agreement shall
terminate, and the Administrative Agent, at the request and expense of the
Borrower, will promptly execute and deliver to the Borrower the proper
instruments acknowledging the termination of this Agreement, and will duly
assign, transfer and deliver to Borrower (without recourse and without any
representation or warranty of any kind) such of the Collateral as may be in the
possession of the Administrative Agent and has not theretofore been disposed of
or otherwise applied or released.
19. REINSTATEMENT. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Lenders in respect of the Obligations is rescinded or must
otherwise be restored or returned by such Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or upon
the appointment of any intervenor or conservator of, or trustee or similar
official for, the Borrower or any substantial part of its assets, or upon the
entry of an order by a bankruptcy court avoiding payment of such amount, or
otherwise, all as though such payments had not been made.
20. SECTION TITLES. The section titles herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
21. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
22. SUBMISSION TO JURISDICTION AND SERVICE OF PROCESS. The
Borrower hereby irrevocably and unconditionally agrees that the terms of Section
9.13 of the Credit Agreement with respect to submission to jurisdiction and
service of process shall apply equally to this Agreement.
23. WAIVER OF BOND. The Borrower waives the posting of any
bond otherwise required of the Administrative Agent in connection with any
judicial process or proceeding to realize on any of the Patents, Trademarks or
Licenses or any other security for the Obligations, to enforce any judgment or
other court order entered in favor of the Administrative Agent, or to enforce by
specific performance, temporary restraining order, or preliminary or permanent
injunction, this Agreement or any other agreement or document between the
Administrative Agent and the Borrower.
24. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE
ADMINISTRATIVE AGENT WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE ADMINISTRATIVE AGENT AND
THE BORROWER ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
8
<PAGE>
DELIVERED IN CONNECTION HEREWITH. EITHER THE BORROWER OR THE ADMINISTRATIVE
AGENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By:
------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
as Administrative Agent
By:
------------------------------------
Name:
Title:
10
<PAGE>
STATE OF )
-------------
) SS
COUNTY OF )
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On the _____ day of ___________, 2000, before me personally
came ________________________, to me known, who being by me duly sworn, did
depose and say that he/she resides at______________________________________;
that he/she is a _________________________ of Aavid Thermal Technologies,
Inc., the corporation described in and which accepted and agreed to the
foregoing instrument; and that he/she signed his/her name thereto by
authority of the board of directors of said corporation.
----------------------------
Notary Public
11
<PAGE>
STATE OF )
--------------
) SS
--------------
COUNTY OF ) -------------- On the _____
day of ___________, 2000, before me personally came ________________________,
to me known, who being by me duly sworn, did depose and say that he/she
resides at______________________________________________;_ that he/she is a
_________________________ of Canadian Imperial Bank of Commerce, the entity
described in and which accepted and agreed to the foregoing instrument; and
that he/she signed his/her name thereto by appropriate authority.
-----------------------------
Notary Public
12
<PAGE>
Schedule A
to
Amended and Restated Borrower Intellectual Property Security Agreement
Dated as of February 2, 2000
TRADEMARKS, SERVICE MARKS, ETC., AND APPLICATIONS
TRADEMARK COUNTRY APPLICATION NO. REGISTRATION NO.
--------- ------- -------------- ----------------
PATENTS AND APPLICATIONS
13
<PAGE>
Schedule B
to
Amended and Restated Borrower Intellectual Property Security Agreement
Dated as of February 2, 2000
LICENSE AGREEMENTS
14
<PAGE>
EXHIBIT G-1
TO CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of February
2, 2000, made by AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
"BORROWER"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the several banks and
other financial institutions (the "LENDERS") from time to time parties to the
Amended and Restated Credit Agreement, dated as of February 2, 2000 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the Borrower, Heat Holdings Corp., Heat Holdings II Corp., the Lenders,
Canadian Imperial Bank of Commerce, as issuer of certain letters of credit (the
"ISSUER"), the Administrative Agent, BankBoston, N.A. as documentation agent
(the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Borrower was required to enter into a Security Agreement dated as of October 21,
1999 (the "EXISTING SECURITY AGREEMENT") with the Existing Agent, pursuant to
which , among other things, the Borrower granted to the Existing Agent a
security interest in certain collateral (the "EXISTING COLLATERAL");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
<PAGE>
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Borrower shall have
executed and delivered this Amended and Restated Security Agreement to the
Administrative Agent for the ratable benefit of the Lenders; and
WHEREAS, the Borrower and the Administrative Agent wish to
amend and restate the Existing Security Agreement as set forth herein in order
to, among other things, (i) reflect the execution of the Credit Agreement and
the Assignment and Assumption Agreement and (ii) make appropriate amendments to
reflect changes in the Existing Collateral.
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Borrower hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used herein as defined
therein. The following terms which are defined in the Uniform Commercial Code
in effect in the State of New York on the date hereof are used herein as
defined therein: Accounts, Chattel Paper, Documents, Equipment, Farm
Products, General Intangibles, Instruments, Inventory, Investment Property
and Proceeds. The following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York.
"COLLATERAL" shall have the meaning assigned to it in
Section 2.
"CONTRACTS" shall mean (a) any Merger Document to which the
Borrower is a party, (b) any Hedging Agreement to which the Borrower is
a party and (c) all other contracts executed from time to time by the
Borrower, including, without limitation, with respect to an Account, in
each case, as the same may from time to time be amended, supplemented
or otherwise modified, including, without limitation, (i) all rights of
the Borrower to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of the Borrower to damages
arising out of, or for, breach or default in respect thereof, (iii) all
rights of the Borrower to receive Proceeds of any insurance, indemnity,
warranty or guaranty with respect thereto and (iv) all rights of the
Borrower to perform and to exercise all remedies thereunder.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent,
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<PAGE>
Heat Holdings II, the Borrower or any such Subsidiary, as applicable,
to the Agents and the Lenders or any of their respective Affiliates,
including any Reimbursement Obligations and any obligation of the
Borrower under any Hedging Agreement entered into with any Agent, any
Lender or any of their respective Affiliates, whether direct or
indirect, absolute or contingent, due or to become due, now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, the Notes, the other Loan Documents or any
Hedging Agreement with any Agent, any Lender or any of their respective
Affiliates or any other document made, delivered or given in connection
therewith or herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel
to any Agent or to the Lenders that are required to be paid by the
Parent, Heat Holdings II, the Borrower or any Subsidiary, as
applicable, pursuant to the terms of the Credit Agreement, any other
Loan Document or any Hedging Agreement with any Agent, any Lender or
any of their respective Affiliates) or otherwise.
"SECURITY AGREEMENT" shall mean this Amended and Restated
Security Agreement, as amended, supplemented or otherwise modified from
time to time.
2. GRANT OF SECURITY INTEREST. As collateral security for
the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations, the
Borrower hereby grants to the Administrative Agent for the ratable benefit of
the Lenders a security interest in all the following property now owned or at
any time hereafter acquired by the Borrower or in which the Borrower now has
or at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property; PROVIDED that with respect
to the Capital Stock of any Foreign Subsidiary, such
security interest, together with any security
interest created through a pledge of such Investment
Property pursuant to a Pledge Agreement, shall be in
an amount equal to 65% of such Capital Stock or such
higher percentage as may be allowed under Treas. Reg.
Section 1.956-2(c)(2) under the Code; and
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<PAGE>
(x) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing;
PROVIDED that nothing contained herein shall create a collateral assignment with
respect to any Contract if the grant of such collateral assignment is (or is
determined by non-appealable adjudication of a court or other dispute resolution
tribunal to be) prohibited by the terms of such Contract.
3. RIGHTS OF ADMINISTRATIVE AGENT AND LENDERS; LIMITATIONS ON
ADMINISTRATIVE AGENT'S AND LENDERS' OBLIGATIONS.
(a) BORROWER REMAINS LIABLE UNDER ACCOUNTS AND CONTRACTS.
Anything herein to the contrary notwithstanding, the Borrower shall remain
liable under each of the Accounts and Contracts to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise to each such
Account and in accordance with and pursuant to the terms and provisions of
each such Contract. Neither the Administrative Agent nor any Lender shall
have any obligation or liability under any Account (or any agreement giving
rise thereto) or under any Contract by reason of or arising out of this
Security Agreement or the receipt by the Administrative Agent or any such
Lender of any payment relating to such Account or Contract pursuant hereto,
nor shall the Administrative Agent or any Lender be obligated in any manner
to perform any of the obligations of the Borrower under or pursuant to any
Account (or any agreement giving rise thereto) or under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Account (or any agreement giving rise
thereto) or under any Contract, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
(b) NOTICE TO ACCOUNT DEBTORS AND CONTRACTING PARTIES. At
any time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right at any time, upon
written notice to the Borrower of its intention to do so, to notify account
debtors or obligors on the Accounts and parties to the Contracts that the
Accounts and the Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Lenders and that payments due or to become due to
the Borrower in respect thereof shall be made directly to the Administrative
Agent and, upon such notification, and at the expense of the Borrower, to
enforce collection of any such Accounts. The Administrative Agent may, at any
time, in its own name or in the name of the Lenders or the Borrower
communicate with account debtors on the Accounts and parties to the Contracts
to verify with them to its satisfaction the existence, amount and terms of
any Accounts or Contracts. Unless an Event of Default shall have occurred and
be continuing, the Administrative Agent shall not exercise its right under
this clause (b) more than once in any 12-month period.
(c) COLLECTIONS ON ACCOUNTS. The Administrative Agent
hereby authorizes the Borrower to collect the Accounts; PROVIDED that the
Administrative Agent may curtail or terminate said authority at any time
after the occurrence of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the
continuance of an
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<PAGE>
Event of Default, any payments of Accounts, when collected by the Borrower,
shall be forthwith (and, in any event, within two Business Days) deposited by
the Borrower in the exact form received, duly endorsed by the Borrower to the
Administrative Agent if required, in a special collateral account maintained
by the Administrative Agent, subject to withdrawal by the Administrative
Agent for the account of the Lenders only, as hereinafter provided, and,
until so turned over, shall be held by the Borrower in trust for the
Administrative Agent and the Lenders, segregated from other funds of the
Borrower. Each deposit of any such Proceeds shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments
included in the deposit. All Proceeds constituting collections of Accounts
while held by the Administrative Agent (or by the Borrower in trust for the
Administrative Agent and the Lenders) shall continue to be collateral
security for all the Obligations and shall not constitute payment thereof
until applied as hereinafter provided. At such intervals as may be agreed
upon by the Borrower and the Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent shall apply all or any part of the
funds on deposit in said special collateral account on account of the
Obligations in such order as the Administrative Agent may elect, and any part
of such funds which the Administrative Agent elects not so to apply and deems
not required as collateral security for the obligations shall be paid over
from time to time by the Administrative Agent to the Borrower or to
whomsoever may lawfully be entitled to receive the same (it being understood
that (i) prior to any Event of Default that is continuing, the Borrower shall
be permitted to use such funds in the operation of its business in a manner
consistent with the terms of the Credit Agreement and (ii) within fifteen
days after the occurrence of any Event of Default, the Administrative Agent
shall, in its sole discretion, either apply such funds in payment of the
Obligations in such order as the Administrative Agent may elect or permit the
Borrower to use such funds in the operation of its business). Upon the
occurrence of an Event of Default that is continuing, at the Administrative
Agent's request, the Borrower shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Accounts, including, without limitation,
all original orders, invoices and shipping receipts.
(d) ANALYSIS OF ACCOUNTS. The Administrative Agent shall
have the right to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and the Borrower
shall furnish all such assistance and information as the Administrative Agent
may require in connection therewith; PROVIDED that the Administrative Agent
shall use its reasonable efforts to minimize any disruption of the Borrower's
business resulting from such verifications. At any time and from time to time
if the Administrative Agent concludes in its reasonable judgment, based upon
its evaluation of the general creditworthiness of the Borrower, that such
examination is required, and so requests, the Borrower at its own expense
shall cause independent public accountants or other parties that are not
Affiliates of the Borrower and are reasonably satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts. Unless an Event of Default shall have occurred and be continuing,
the Administrative Agent shall not exercise its right under this clause (d)
more than once in any 12-month period.
4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants that:
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<PAGE>
(a) TITLE; NO OTHER LIENS. Except as permitted under
Section 6.3 of the Credit Agreement, the Borrower owns or has a valid
leasehold interest in each item of the Collateral free and clear of any and
all Liens or claims of others. Except as permitted under Section 6.3(e) of
the Credit Agreement, no security agreement, financing statement or other
public notice with respect to all or any part of the Collateral is on file or
of record in any public office, except (i) such as may have been filed in
favor of the Administrative Agent, for the ratable benefit of the Lenders,
pursuant to this Security Agreement and (ii) financing statements filed by
lessors solely for information purposes in respect of "true" leases.
(b) PERFECTED FIRST PRIORITY LIENS. Except as permitted
under Section 6.3(e) of the Credit Agreement, the Liens granted pursuant to
this Security Agreement will, upon the filing of appropriate financing
statements, constitute valid and perfected first priority Liens on the
Collateral in favor of the Administrative Agent, for the ratable benefit of
the Lenders, and against any owner or purchaser of the real property where
any of the Equipment is located and any present or future creditor obtaining
a Lien on such real property, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditor's rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(c) ACCOUNTS. The amount represented by the Borrower to the
Lenders from time to time as owing by each account debtor or by all account
debtors in respect of the Accounts will at such time be the correct amount
actually owing by such account debtor or debtors thereunder. No amount
payable to the Borrower under or in connection with any Account is evidenced
by any Instrument or Chattel Paper which has not been delivered to the
Administrative Agent. The place where the Borrower keeps its records
concerning the Accounts is One Eagle Square, Concord, New Hampshire 03301(1.)
(d) CONTRACTS. Except as set forth in Schedule 3.4 to the
Credit Agreement, no consent of any party (other than the Borrower) to any
Contract is required in connection with the execution, delivery and
performance by the Borrower of this Security Agreement. Each Contract is in
full force and effect and constitutes a valid and legally enforceable
obligation of the parties thereto, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditor's rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law). No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery or performance by the Borrower of, or the validity or
enforceability of, any of the Contracts by any party thereto other than those
which have been duly obtained, made or performed, are in full force and
effect and do not subject the scope of any such Contract to any material
adverse limitation, either specific or general in nature. Neither the
Borrower nor (to the best of the Borrower's knowledge) any other party to any
Contract is in default in any material respect in the performance or
observance of any of the terms thereof. The Borrower has fully performed in
all material respects all its obligations under each Contract. The right,
title and interest of the Borrower in, to and under each Contract are not
subject to any defense, offset, counterclaim or claim which would
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(1) Aavid to confirm.
-6-
<PAGE>
materially adversely affect the value of such Contract as Collateral, nor
have any of the foregoing been asserted or alleged against the Borrower as to
any Contract. The Borrower has delivered to the Administrative Agent a
complete and correct copy of each material Contract, including all
amendments, supplements and other modifications thereto and will deliver any
other Contract which the Administrative Agent may request. No amount payable
to the Borrower under or in connection with any Contract is evidenced by any
Instrument or Chattel Paper which has not been delivered to the
Administrative Agent.
(e) INVENTORY AND EQUIPMENT. The Inventory and the
Equipment are kept at the locations listed on Schedule I hereto.
(f) CHIEF EXECUTIVE OFFICE. The Borrower's chief executive
office and chief place of business is located at One Eagle Square, Concord,
New Hampshire 03301(2).
(g) FARM PRODUCTS. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
(h) GOVERNMENTAL OBLIGORS. None of the obligors on any
Accounts, and none of the parties to any Contracts, is a Governmental
Authority.
(i) INVESTMENT PROPERTY. The Investment Property consists
of the items set forth on Annex A.
5. COVENANTS. The Borrower covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full and the Commitments
are terminated:
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS AND
CHATTEL PAPER. At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the Borrower, the
Borrower will promptly and duly execute and deliver such further instruments
and documents and take such further action as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full
benefits of this Security Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the Liens created hereby. The Borrower also
hereby authorizes the Administrative Agent to file any such financing or
continuation statement without the signature of the Borrower to the extent
permitted by applicable law. A carbon, photographic or other reproduction of
this Security Agreement shall be sufficient as a financing statement for
filing in any jurisdiction. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument or
Chattel Paper, such Instrument or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly endorsed in a manner satisfactory
to the Administrative Agent, to be held as Collateral pursuant to this
Security Agreement.
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(2) Aavid to confirm.
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<PAGE>
(b) INDEMNIFICATION. The Borrower agrees to pay, and to
save the Administrative Agent and the Lenders harmless from, any and all
liabilities, costs and expenses (including, without limitation, legal fees
and expenses) (i) with respect to, or resulting from, any delay in paying any
and all excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral, (ii) with respect to, or
resulting from, any delay in complying with any Requirement of Law applicable
to any of the Collateral or (iii) in connection with any of the transactions
contemplated by this Security Agreement, except resulting from the
Administrative Agent's or any Lender's gross negligence or willful
misconduct. In any suit, proceeding or action brought by the Administrative
Agent or any Lender under any Account or Contract for any sum owing
thereunder, or to enforce any provisions of any Account or Contract, the
Borrower will save, indemnify and keep the Administrative Agent and such
Lender harmless from and against all expense, loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction or
liability whatsoever of the account debtor or obligor thereunder, arising out
of a breach by the Borrower of any obligation thereunder or arising out of
any other agreement, indebtedness or liability at any time owing to or in
favor of such account debtor or obligor or its successors from the Borrower,
except resulting from the Administrative Agent's or any Lender's gross
negligence or willful misconduct.
(c) MAINTENANCE OF RECORDS. The Borrower will keep and
maintain at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments received
and all credits granted with respect to the Accounts. The Borrower will mark
its books and records pertaining to the Collateral to evidence this Security
Agreement and the security interests granted hereby in such manner as the
Administrative Agent may request. For the Administrative Agent's and the
Lenders' further security, the Administrative Agent, for the ratable benefit
of the Lenders, shall have a security interest in all the Borrower's books
and records pertaining to the Collateral, and the Borrower shall, during the
continuance of a Default under Section 7.1(a) of the Credit Agreement or
Section 7.1(c) of the Credit Agreement as it relates to Section 6.1 of the
Credit Agreement, turn over copies of such books and records and during the
continuation of an Event of Default turn over any such books and records, in
each case, to the Administrative Agent or to its representatives at the
request of the Administrative Agent.
(d) RIGHT OF INSPECTION. The Administrative Agent and the
Lenders shall at all times have full and free access during normal business
hours and, so long as no Event of Default shall have occurred and be
continuing, upon reasonable prior notice, to all books, correspondence and
records of the Borrower, and the Administrative Agent and the Lenders and
their respective representatives may examine the same, take extracts
therefrom and make photocopies thereof, and the Borrower agrees to render to
the Administrative Agent and the Lenders, at the Borrower's cost and expense,
such clerical and other assistance as may be reasonably requested with regard
thereto. The Administrative Agent and the Lenders and their respective
representatives shall at all times and, so long as no Event of Default shall
have occurred and be continuing, upon reasonable prior notice, also have the
right to enter into and upon any premises where any of the Inventory or
Equipment is located for the purpose of inspecting the same, observing its
use or otherwise protecting its interests therein.
(e) COMPLIANCE WITH LAWS. The Borrower will comply in all
material respects with all Requirements of Law applicable to the Collateral
or any part thereof or to the operation
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<PAGE>
of the Borrower's business; PROVIDED that the Borrower may contest any
Requirement of Law in any reasonable manner which shall not, in the sole
opinion of the Administrative Agent, adversely affect the Administrative
Agent's or the Lenders' rights or the priority of their Liens on the
Collateral.
(f) COMPLIANCE WITH TERMS OF CONTRACTS. The Borrower will
perform and comply in all material respects with all its obligations under
the Contracts and all its other Contractual Obligations relating to the
Collateral.
(g) PAYMENT OF OBLIGATIONS. The Borrower will pay promptly
when due all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of its income or profits therefrom, as well
as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except
that no such charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such proceedings do
not involve any material danger of the sale, forfeiture or loss of any of the
Collateral or any interest therein and (iii) such charge is adequately
reserved against on the Borrower's books in accordance with GAAP.
(h) LIMITATION ON LIENS ON COLLATERAL. The Borrower will
not create, incur or permit to exist, will defend the Collateral against, and
will take such other action as is necessary to remove, any Lien or claim on
or to the Collateral, other than the Liens created hereby and other than as
permitted pursuant to Section 6.3 of the Credit Agreement, and will defend
the right, title and interest of the Administrative Agent and the Lenders in
and to any of the Collateral against the claims and demands of all Persons
whomsoever.
(i) LIMITATIONS ON DISPOSITIONS OF COLLATERAL. The Borrower
will not sell, transfer, lease or otherwise dispose of any of the Collateral,
or attempt, offer or contract to do so except as permitted pursuant to
Section 6.6 of the Credit Agreement.
(j) LIMITATIONS ON MODIFICATIONS, WAIVERS, EXTENSIONS OF
CONTRACTS AND AGREEMENTS GIVING RISE TO ACCOUNTS. Subject to subsection (k)
below, the Borrower will not (i) amend, modify, terminate or waive any
provision of any Material Contract or any agreement giving rise to an Account
in any manner which could reasonably be expected to materially adversely
affect the value of such Contract or Account as Collateral, (ii) fail to
exercise promptly and diligently each and every material right which it may
have under each Contract and each agreement giving rise to an Account (other
than any right of termination) or (iii) fail to deliver to the Administrative
Agent a copy of each material demand, notice or document received by it
relating in any way to any Contract or any agreement giving rise to an
Account. As used in this clause (j), a "Material Contract" shall mean (x) any
purchase order or license agreement by Fluent, Inc. with a value of more than
$750,000 in any 12-month period or (y) any other contract with a stated
duration (including any extension periods contained therein) of more than 12
months and with a value of more than $750,000.
(k) LIMITATIONS ON DISCOUNTS, COMPROMISES, EXTENSIONS OF
ACCOUNTS. Other than in the ordinary course of business, the Borrower will
not grant any extension of the time of payment of any of the Accounts,
compromise, compound or settle the same for less than the full
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<PAGE>
amount thereof, release, wholly or partially, any Person liable for the
payment thereof, or allow any credit or discount whatsoever thereon.
(l) MAINTENANCE OF EQUIPMENT. The Borrower will maintain
each item of Equipment not subject to Section 6.6(a) of the Credit Agreement
in good operating condition, ordinary wear and tear and immaterial
impairments of value and damage by the elements excepted, and will provide
all maintenance, service and repairs necessary for such purpose.
(m) MAINTENANCE OF INSURANCE. The Borrower will maintain,
with financially sound and reputable companies, insurance policies as
required under the Credit Agreement. All such policies shall (i) contain a
breach of warranty clause in favor of the Administrative Agent and the
Lenders, (ii) provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at least 30 days
after receipt by the Administrative Agent and the Lenders of written notice
thereof, (iii) name the Administrative Agent as loss payee of each such
policy, (iv) name the Administrative Agent and the Lenders as insured to the
extent of their interests under each such policy and (v) be reasonably
satisfactory in all material respects to the Administrative Agent. The
Borrower shall deliver to the Administrative Agent and each Lender upon
request, full information as to the insurance carried, including certified
copies of policies and certificates of insurance from a recognized insurance
broker reasonably acceptable to the Administrative Agent.
(n) FURTHER IDENTIFICATION OF COLLATERAL. The Borrower will
furnish to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
(o) NOTICES. The Borrower will advise the Administrative
Agent promptly, in reasonable detail, at its address set forth in the Credit
Agreement, (i) of any Lien (other than Liens created hereby or permitted
under the Credit Agreement) on, or claim asserted against, any of the
Collateral and (ii) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder.
(p) CHANGES IN LOCATIONS, NAME, ETC. Unless the Borrower
gives 30 days' prior written notice to the Administrative Agent, the Borrower
will not (i) change the location of its chief executive office/chief place of
business from that specified in Section 4(f) or remove its books and records
from the location specified in Section 4(c), (ii) permit any of the Inventory
or Equipment to be kept at a location other than those listed on Schedule I
hereto or (iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Security Agreement would become seriously misleading.
6. ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) POWERS. The Borrower hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the
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Borrower and in the name of the Borrower or in its own name, from time to
time in the Administrative Agent's discretion, for the purpose of carrying
out the terms of this Security Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Security Agreement,
and, without limiting the generality of the foregoing, the Borrower hereby
gives the Administrative Agent the power and right, on behalf of the
Borrower, without notice to or assent by the Borrower, to do the following:
(i) in the case of any Account, at any time when the
authority of the Borrower to collect the Accounts has
been curtailed or terminated pursuant to the first
sentence of Section 3(c), or in the case of any
other Collateral, at any time when any Event of Default
shall have occurred and is continuing, in the name of
the Borrower or its own name, or otherwise, to take
possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for
the payment of moneys due under any Account, Instrument,
General Intangible or Contract or with respect to any
other Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such
moneys due under any Account, Instrument, General
Intangible or Contract or with respect to any other
Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any
repairs or any insurance called for by the terms of
this Security Agreement and to pay all or any part
of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any
Event of Default, (A) to direct any party liable for
any payment under any of the Collateral to make
payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as
the Administrative Agent shall direct; (B) to ask or
demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due
or to become due at any time in respect of or arising
out of any Collateral; (C) to sign and endorse any
invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents
in connection with any of the Collateral; (D) to
commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof
and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding
brought against the Borrower with respect to any
Collateral; (F) to settle, compromise or adjust any
suit, action or proceeding described in clause (E) above
and, in connection therewith, to give such discharges or
releases as the Administrative Agent may deem
appropriate; and (G) generally, to sell, transfer,
pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent
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were the absolute owner thereof for all purposes, and
to do, at the Administrative Agent's option and the
Borrower's expense, at any time, or from time to time,
all acts and things which the Administrative Agent
deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent's and the
Lenders' Liens thereon and to effect the intent of this
Security Agreement, all as fully and effectively as the
Borrower might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) OTHER POWERS. The Borrower also authorizes the
Administrative Agent and the Lenders, at any time and from time to time, to
execute, in connection with the sale provided for in this SECTION 6 or in
SECTION 9 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) NO DUTY ON ADMINISTRATIVE AGENT OR LENDERS' PART. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in
the Collateral and shall not impose any duty upon the Administrative Agent or
any Lender to exercise any such powers. The Administrative Agent and the
Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to the Borrower
for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
7. PERFORMANCE BY ADMINISTRATIVE AGENT OF BORROWER'S
OBLIGATIONS. If the Borrower fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by
the terms of this Security Agreement, shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the expenses
of the Administrative Agent incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum 2% above the
Alternate Base Rate, shall be payable by the Borrower to the Administrative
Agent on demand and shall constitute Obligations secured hereby.
8. PROCEEDS. In addition to the rights of the
Administrative Agent and the Lenders specified in Section 3(c) with respect
to payments of Accounts, it is agreed that if an Event of Default shall occur
and be continuing (a) upon written notice by the Administrative Agent to the
Borrower, all Proceeds received by the Borrower consisting of cash, checks
and other near-cash items shall be held by the Borrower in trust for the
Administrative Agent and the Lenders, segregated from other funds of the
Borrower, and, forthwith upon receipt by the Borrower, shall be turned over
to the Administrative Agent in the exact form received by the Borrower (duly
endorsed by the Borrower to the Administrative Agent, if required), and (b)
any and all such Proceeds received by the Administrative Agent (whether from
the Borrower or otherwise) may, in the sole discretion of the Administrative
Agent, (i) be held by the Administrative Agent for the ratable benefit of the
Lenders as collateral security for the Obligations, and/or (ii) then or at
any time thereafter either (x) be applied by the Administrative
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Agent for the ratable benefit of the Lenders against the Obligations (whether
matured or unmatured), such application to be in such order as the
Administrative Agent shall elect, or (y) at the sole discretion of the
Administrative Agent, be available for use by the Borrower in the operation
of its business. Any balance of such Proceeds remaining after the Obligations
shall have been paid in full and the Commitments shall have been terminated
shall be paid over to the Borrower or to whomsoever may be lawfully entitled
to receive the same.
9. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise,
in addition to all other rights and remedies granted to them in this Security
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Borrower, any guarantor, or
any other Person (all and each of which demands, defenses, advertisements and
notices being hereby waived to the maximum extent permitted by applicable
law), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of
and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender
or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Administrative Agent or any Lender
shall have the right upon any such public sale or sales, and, to the extent
permitted by applicable law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity
of redemption in the Borrower, which right or equity is hereby waived or
released to the maximum extent permitted by applicable law. The Borrower
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at such places
as the Administrative Agent shall reasonably select, whether at the
Borrower's premises or elsewhere. The Administrative Agent shall apply the
net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred therein or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of
the Administrative Agent and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(i)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Borrower. To the
extent permitted by applicable law, the Borrower waives all claims, damages
and demands it may acquire against the Administrative Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of
a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. The Borrower shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
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<PAGE>
10. LIMITATION ON DUTIES REGARDING PRESERVATION OF
COLLATERAL. The Administrative Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the Code or otherwise, shall be to deal with it in the
same manner as the Administrative Agent deals with similar property for its
own account. Neither the Administrative Agent, any Lender, nor any of their
respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Borrower or
otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. LIMITATION ON LINES OF BUSINESS. Nothing in this
Security Agreement shall be deemed or construed as modifying in any way the
restrictions on the Borrower's activities as set forth in Section 6.14 of the
Credit Agreement.
13. SEVERABILITY. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
14. SECTION HEADINGS. The section headings used in this
Security Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
15. NO WAIVER; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to SECTION 16), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on
the part of the Administrative Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
16. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of
the terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Borrower and the Administrative Agent; PROVIDED that any provision of
this Security Agreement may be waived by the Administrative Agent in a
written letter or agreement executed by the Administrative Agent or by telex
or facsimile transmission from the Administrative Agent. This Security
Agreement
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<PAGE>
shall be binding upon the successors and assigns of the Borrower and shall
inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns.
17. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS
THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK, EXCEPT FOR PERFECTION AND ENFORCEMENT OF SECURITY INTERESTS AND
LIENS IN OTHER JURISDICTIONS TO THE EXTENT THE LAW OF ANOTHER JURISDICTION IS
MANDATORILY APPLICABLE PURSUANT TO THE LAWS OF SUCH JURISDICTION.
18. NOTICES. Notices hereunder may be given by mail, by
telex or by facsimile transmission, addressed or transmitted to the Person to
which it is being given at such Person's address or transmission number set
forth in the Credit Agreement and shall be effective (a) in the case of mail,
three days after deposit in the postal system, first class postage pre-paid
and (b) in the case of telex or facsimile notices, when sent if receipt is
confirmed by telephone. The Borrower may change its address and transmission
number by written notice to the Administrative Agent, and the Administrative
Agent or any Lender may change its address and transmission number by written
notice to the Borrower and, in the case of any Lender, to the Administrative
Agent.
19. AUTHORITY OF ADMINISTRATIVE AGENT. The Borrower
acknowledges that the rights and responsibilities of the Administrative Agent
under this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Security Agreement
shall, as between the Administrative Agent and the Lenders, be governed by
the Credit Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Administrative Agent
and the Borrower, the Administrative Agent shall be conclusively presumed to
be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and the Borrower shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
20. COUNTERPARTS. This Security Agreement may be executed
in counterparts, and all of such counterparts taken together shall be deemed
to constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the Borrower and the Administrative Agent
have caused this Security Agreement to be duly executed and delivered as of the
date first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By:
-----------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By:
-----------------------------------
Name
Title:
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SCHEDULE I
TO BORROWER
SECURITY AGREEMENT
------------------
AAVID THERMAL TECHNOLOGIES, INC.
LOCATION OF INVENTORY
---------------------
LOCATION OF EQUIPMENT
---------------------
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ANNEX A
TO BORROWER
SECURITY AGREEMENT
------------------
AAVID THERMAL TECHNOLOGIES, INC.
LIST OF INVESTMENT PROPERTY
---------------------------
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EXHIBIT G-2
TO CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of February 2, 2000, made by
AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the "PLEDGOR"), in
favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the several banks and other
financial institutions (the "LENDERS") from time to time parties to the
Amended and Restated Credit Agreement, dated as of February 2, 2000 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Pledgor, as Borrower, Heat Holdings Corp., Heat
Holdings II Corp., the Lenders, Canadian Imperial Bank of Commerce, as issuer
of certain letters of credit (the "ISSUER"), the Administrative Agent,
BankBoston, N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC
World Markets Corp., as lead arranger and bookrunner (in such capacity, the
"LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Pledgor has entered into a Credit Agreement
dated as of October 21, 1999, among the Pledgor, the lenders party thereto
(the "EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and
bookrunner (the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as
issuer of certain letters of credit (the "EXISTING ISSUER") and Canadian
Imperial Bank of Commerce, as administrative agent (the "EXISTING AGENT"),
pursuant to which the Existing Lenders have severally agreed to make Loans
to, and the Existing Issuer has agreed to provide letters of credit for the
benefit of, the Pledgor upon the terms and subject to the conditions set
forth therein (the "EXISTING CREDIT AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Pledgor was required to enter into a Pledge Agreement dated as of October 21,
1999 (the "EXISTING PLEDGE AGREEMENT") with the Existing Agent, pursuant to
which , among other things, the Pledgor granted to the Existing Agent a
security interest in certain collateral, including, but not limited to shares
of Capital Stock of certain of its subsidiaries (the "EXISTING PLEDGED
STOCK");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Pledgor have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT") dated as of February 2, 2000, pursuant to which (a) the Existing
Lenders have assigned all their right, title and interest in, to and under
the Existing Credit Agreement, the "Loan Documents" (as defined in the
Existing Credit Agreement) and the Collateral (as defined in such Loan
Documents) and delegated all their obligations with respect thereto to the
Lenders and the Lenders have accepted such assignment and assumed such
obligations, and (b) the Pledgor has consented to such assignment and
delegations;
<PAGE>
WHEREAS, the Pledgor, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their respective Loans to the Pledgor and of the Issuer
to issue Letters of Credit under the Credit Agreement that the Pledgor shall
have executed and delivered this Amended and Restated Pledge Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
WHEREAS, the Pledgor and the Administrative Agent wish to
amend the Existing Pledge Agreement as set forth herein in order to, among
other things, (i) reflect the execution of the Credit Agreement and the
Assignment and Assumption Agreement and (ii) make appropriate amendments to
reflect changes in the Existing Pledged Stock effected by the Pledgor prior
to the date hereof in connection with the Merger.
NOW, THEREFORE, in consideration of the premises and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and the Lenders to make their respective Loans to the Pledgor under
the Credit Agreement, the Pledgor hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used as defined therein,
and the following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code from time to
time in effect in the State of New York.
"COLLATERAL" shall mean the Pledged Securities and all
Proceeds thereof.
"PLEDGE AGREEMENT" shall mean this Amended and Restated
Pledge Agreement, as amended, supplemented or otherwise modified
from time to time.
"PLEDGED DEBT" shall mean shall mean any now existing or
future promissory note or instrument executed by a Person in favor of
the Pledgor, other than the Subordinated Intercompany Notes.
"PLEDGED STOCK" shall mean all of the shares of Capital Stock
of the entities listed on Schedule I and at any time held by the
Pledgor, together with all certificates or instruments evidencing such
shares, all share options, all of the right, title and interest of the
Pledgor in and to all investment property in respect of such shares
(including, without limitation, the profits, losses, income, gains,
deductions, credits or similar items relating to such shares) or rights
of any nature whatsoever that may be issued or granted to the Pledgor
in respect of such shares while this Pledge Agreement is in effect.
"PLEDGED SECURITIES" shall mean the collective reference to
the Pledged Stock and the Pledged Debt.
2
<PAGE>
"PROCEEDS" shall mean all "proceeds" as such term is
defined in Section 9-306(1) of the Code and, in any event, shall
include, without limitation, all dividends, distributions, interest
and principal or other income from, or in respect of, the Pledged
Securities.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the Lenders,
all the Pledged Stock and the Pledged Debt, and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first
priority security interest in all of the Pledgor's right, title and interest
in, to and under the Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
3. POWERS AND INSTRUCTIONS; ENDORSEMENTS. (a) Concurrently
with the delivery to the Administrative Agent of each certificate
representing one or more shares of Pledged Stock to the Administrative Agent,
the Pledgor shall deliver an undated power covering such certificate, duly
executed in blank by the Pledgor, and pledge instructions in form and
substance satisfactory to the Administrative Agent.
(b) Concurrently with the delivery of the Pledged Debt to
the Administrative Agent, the Pledgor shall deliver an undated endorsement
covering such Pledged Debt, duly executed in blank by the Pledgor.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents
and warrants that:
(a) the shares of Pledged Stock listed on Schedule I
represent that percentage as set forth in Schedule I of the issued
and outstanding Capital Stock of the issuer in respect thereof;
(b) all of the shares of Pledged Stock have been duly and
validly issued and are fully paid and nonassessable;
(c) the Pledgor is the sole record and beneficial owner of,
and has good and marketable title to, the Pledged Stock, free of any
and all Liens or options in favor of, or claims of, any other Person,
except the Lien created by this Pledge Agreement; PROVIDED that any
such sale of the Pledged Securities would be subject to compliance with
or an exemption from transfer restrictions under applicable securities
laws;
(d) the Pledgor is the sole record and beneficial owner of,
and has good and marketable title to, the Pledged Debt listed on
Schedule II, free of any and all Liens or options in favor of, or
claims of, any other Person, except the Lien created by this Pledge
Agreement.
(e) the Lien granted pursuant to this Pledge Agreement
constitutes a valid, perfected first priority Lien on the Collateral,
enforceable as such against all creditors of the Pledgor and any
Persons purporting to purchase any Collateral from the Pledgor, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and
3
<PAGE>
by general equitable principles (whether enforcement is sought by
proceedings in equity or at law); and
(f) The chief executive office of the Pledgor and the office
where the Pledgor keeps its records concerning all contracts is located
at One Eagle Square, Concord, New Hampshire 03301. The Pledgor shall
not establish a new location for its chief executive office or change
its name until (i) it has given to the Administrative Agent not less
than 30 days' prior written notice of its intention to do so, clearly
describing such new location or specifying such new name, as the case
may be, and (ii) with respect to such new location or such new name, as
the case may be, it shall have taken all action, satisfactory to the
Administrative Agent, necessary to maintain the security interest of
the Administrative Agent in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect.
5. COVENANTS. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of
this Pledge Agreement until the Obligations are paid in full and the
Commitments are terminated:
(a) If the Pledgor, as a result of its ownership of the
Pledged Stock, shall become entitled to receive or shall receive any
Capital Stock certificates or other securities of any issuer of Pledged
Stock (including, without limitation, any certificate representing a
distribution of Capital Stock in connection with any reclassification,
increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights, whether in
addition to, in substitution of, as a conversion of, or in exchange for
any of the Pledged Stock, or otherwise in respect thereof, the Pledgor
shall accept the same as the agent of the Administrative Agent and the
Lenders, hold the same in trust for the benefit of the Administrative
Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly endorsed by the
Pledgor to the Administrative Agent, if required, together with an
undated power covering such certificate duly executed in blank by the
Pledgor to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums
paid upon or in respect of the Pledged Stock upon the liquidation or
dissolution of any issuer of Pledged Stock and any distribution of
capital in respect of the Pledged Stock or any cash pursuant to the
recapitalization or reclassification of the capital of any issuer of
Pledged Stock or pursuant to the reorganization thereof shall, within
15 days after receipt thereof by the Administrative Agent and in the
sole discretion of the Administrative Agent, either be (i) applied in
payment of the Obligations in such order as the Administrative Agent
may elect or (ii) paid over to the Pledgor for its use in the operation
of its business, and in case any distribution of capital shall be made
on or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of any issuer of
Pledged Stock or pursuant to the reorganization thereof, the property
so distributed shall be delivered to the Administrative Agent to be
held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in
respect of the Pledged Stock shall be received by the Pledgor, the
Pledgor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in
4
<PAGE>
trust for the benefit of the Lenders, segregated from other funds of
the Pledgor, as additional collateral security for the Obligations.
(b) If the Pledgor shall become entitled to receive or shall
have received any Pledged Debt, the Pledgor shall accept the same as
the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received,
together with an undated endorsement covering such Pledged Debt duly
executed in blank by the Pledgor, to be held by the Administrative
Agent, subject to the terms hereof, as additional collateral security
for the Guarantee Obligations. Any sums paid upon or in respect of any
Pledged Debt upon the bankruptcy, liquidation or dissolution of any of
the makers of any such Pledged Debt shall be paid over to the
Administrative Agent to be held by it hereunder as additional
collateral security for the Guarantee Obligations and shall within 15
days after receipt thereof by the Administrative Agent and in the sole
discretion of the Administrative Agent, either be (i) applied in
payment of the Obligations in such order as the Administrative Agent
may elect or (ii) paid over to the Pledgor for its use in the operation
of its business. If any sums of money or property so paid in respect of
any such Pledged Debt shall be received by the Pledgor, the Pledgor
shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the
Administrative Agent and Lenders, segregated from other funds of the
Pledgor, as additional collateral security for the Guarantee
Obligations.
(c) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, any issuer of Pledged Stock to issue Capital Stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
Capital Stock or other equity securities of any nature of any issuer of
Pledged Stock (other than any Capital Stock or other equity securities
constituting Management Shares), (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Collateral, or (iii) create, incur or permit to exist any other Lien or
option in favor of, or any claim of any Person with respect to, any of
the Collateral, or any interest therein, except for the Lien provided
for by this Pledge Agreement. The Pledgor will defend and will
indemnify and hold harmless the Administrative Agent and the Lenders
against the claims and demands of all Persons whomsoever with respect
to any claim arising from or in connection with the right, title and
interest of the Administrative Agent and the Lenders in and to the
Collateral.
(d) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
5
<PAGE>
(e) The Pledgor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamps,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Pledge Agreement.
(f) The Pledgor agrees that, within 30 days of any
corporation, limited liability company or similar entity becoming a
Subsidiary (as defined in the Credit Agreement), in the case of shares
of Capital Stock of such Subsidiary represented by one or more
certificates, it shall (i) upon the request of the Administrative
Agent, deliver to the Administrative Agent all such shares (or, in the
case of any Foreign Subsidiary, 65% of such shares) owned by the
Pledgor, together with, in each case, appropriate undated powers duly
executed in blank and (ii) execute and deliver a new pledge agreement
(or a supplement to this Pledge Agreement) covering such shares. Upon
such delivery, such shares shall constitute a representation and
warranty as of the date of such delivery that the representations and
warranties contained in SECTION 4 above are true and correct on such
date after giving effect to such delivery. The Pledgor shall also
furnish to the Lenders such legal opinions confirming such
representations and warranties as the Administrative Agent or any
Lender may reasonably request.
6. CASH DIVIDENDS; VOTING RIGHTS. Unless a Default or Event
of Default shall have occurred and be continuing, the Pledgor shall be
permitted to receive all cash dividends, distributions, interest and
principal paid on the Pledged Securities to the extent that such cash
dividends, distributions, interest and principal are permitted in the Credit
Agreement and applicable laws; PROVIDED that any such cash dividends,
distributions, interest or principal received by the Pledgor during the
pendency of any Default (but prior to the occurrence of an Event of Default)
shall be returned promptly to the issuer of such cash dividends,
distributions, interest or principal, and any such cash dividends,
distributions, interest or principal received during the pendency of any
Default but not returned prior to such Default becoming an Event of Default
or during the pendency of any Event of Default shall be delivered promptly to
the Administrative Agent. Unless an Event of Default shall have occurred and
be continuing, the Pledgor shall be permitted to exercise all voting and
corporate rights with respect to the Pledged Stock; PROVIDED that no vote
shall be cast or corporate right exercised or other action taken which, in
the Administrative Agent's reasonable judgment, would impair the Collateral
or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, the Notes, the other Loan Documents or
this Pledge Agreement.
7. RIGHTS OF THE LENDERS AND THE ADMINISTRATIVE AGENT. (a)
If an Event of Default shall occur and be continuing, (i) the Administrative
Agent shall have the right to receive any and all dividends, distributions,
interest and principal paid in respect of the Pledged Securities, and to make
application thereof to the Obligations in such order as the Administrative
Agent may determine and (ii) all of the Pledged Stock shall be registered in
the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (A) all voting, corporate and
other rights pertaining to the Pledged Stock, and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or
options, pertaining to any of the Pledged Stock as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all the Pledged
6
<PAGE>
Stock upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any issuer of Pledged
Stock, or upon the exercise by the Pledgor or the Administrative Agent of any
right, privilege or option pertaining to any of the Pledged Stock, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine),
all without liability to the Administrative Agent except to account for
property actually received by it, but the Administrative Agent shall have no
duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the
Pledgor, any issuer of Pledged Stock, any guarantor or against any other
Person which may be or become liable in respect of all or any part of the
Obligations or against any collateral security therefor, guarantee therefor
or right of offset with respect thereto. Neither the Administrative Agent nor
any Lender shall be liable for any failure to demand, collect or realize upon
all or any part of the Collateral or for any delay in doing so, nor shall the
Administrative Agent be under any obligation to sell or otherwise dispose of
any Collateral upon the request of the Pledgor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part thereof.
8. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise,
in addition to all other rights and remedies granted in this Pledge Agreement
and in any other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law
referred to below) to or upon the Pledgor, any issuer of Pledged Stock, any
guarantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived to the maximum extent permitted
by law), may in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith
sell, assign, give option or options to purchase or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any Lender shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold free of any right or equity of redemption in the Pledgor, which right or
equity is hereby waived or released to the maximum extent permitted by law.
The Administrative Agent shall apply any Proceeds from time to time held by
it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental to the care
or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, attorneys' fees and disbursements
of counsel to the Administrative Agent, to the payment in whole or in part of
7
<PAGE>
the Obligations, in such order as the Administrative Agent may elect, and
only after such application and after the payment by the Administrative Agent
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to the Pledgor. To the extent permitted by
applicable law, the Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of Collateral are insufficient to
pay the Obligations and the fees and disbursements of any attorneys employed
by the Administrative Agent or any Lender to collect such deficiency.
9. PRIVATE SALES. (a) The Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Securities, by reason of certain prohibitions contained in the
Securities Act of 1933 (the "SECURITIES ACT") and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in
prices and other terms less favorable than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of
the Pledged Securities for the period of time necessary to permit any issuer
of Pledged Stock or the Pledgor to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if
such issuer or the Pledgor would agree to do so.
(b) The Pledgor further agrees to use its best efforts to
do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Securities pursuant to
this SECTION 9 valid and binding and in compliance with any and all other
applicable Requirements of Law. The Pledgor further agrees that a breach of
any of the covenants contained in this SECTION 9 will cause irreparable
injury to the Administrative Agent and the Lenders, that the Administrative
Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
SECTION 9 shall be specifically enforceable against the Pledgor, and the
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event
of Default has occurred under the Credit Agreement.
10. LIMITATION ON DUTIES REGARDING COLLATERAL. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section
9-207 of the Code or otherwise, shall be to deal with it in the same manner
as the Administrative Agent deals with similar securities and property for
its own account. None of the Administrative Agent, the Lenders or any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of
8
<PAGE>
the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral upon the request of the
Pledgor or otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. SEVERABILITY. Any provision of this Pledge Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
13. SECTION HEADINGS. The section headings used in this
Pledge Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to SECTION 15) be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or
in any breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Administrative
Agent or any Lender, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
15. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS;
GOVERNING LAW. None of the terms or provisions of this Pledge Agreement may
be amended, supplemented or otherwise modified except by a written instrument
executed by the Pledgor and the Administrative Agent; PROVIDED that any
provision of this Pledge Agreement may be waived by the Administrative Agent
in a letter or agreement executed by the Administrative Agent or by telex or
facsimile transmission from the Administrative Agent. This Pledge Agreement
shall inure to the benefit of the Administrative Agent and the Lenders and
their respective successors and assigns. THIS PLEDGE AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF
OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK.
16. NOTICES. Notices may be given by mail, by telex or by
facsimile transmission, addressed or transmitted to the Person to which it is
being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid, and (b) in
9
<PAGE>
the case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Pledgor and any issuer of Pledged Stock may change their
respective addresses and transmission numbers by written notice to the
Administrative Agent.
17. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS.
The Pledgor hereby authorizes and instructs each issuer of Pledged Stock to
comply with any instruction received by it from the Administrative Agent in
writing that (a) states that an Event of Default has occurred and (b) is
otherwise in accordance with the terms of this Pledge Agreement, without any
other or further instructions from the Pledgor, and the Pledgor agrees that
such issuer shall be fully protected in so complying.
18. AUTHORITY OF AGENT. The Pledgor acknowledges that the
rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting,
and neither the Pledgor nor any issuer of Pledged Stock shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
19. TERMINATION; RELEASE. Upon the repayment of all the
Obligations in full and the termination of the Commitments, this Pledge
Agreement shall terminate, and the Administrative Agent, at the request of
and sole expense of the Pledgor, will execute and deliver to the Pledgor the
proper instruments (including Uniform Commercial Code termination statements
on form UCC-2 or UCC-3, as applicable) acknowledging the termination of this
Pledge Agreement, and will duly assign, transfer and deliver to the Pledgor
(without recourse and without any representation or warranty of any kind)
such of the Collateral as may be in the possession of the Administrative
Agent and has not theretofore been disposed of or otherwise applied or
released.
20. COUNTERPARTS. This Pledge Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
10
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By:
-------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By:
-------------------------------
Name:
Title:
11
<PAGE>
ACKNOWLEDGMENT AND CONSENT
FLUENT HOLDINGS, INC., a Delaware corporation ("Fluent"),
one of the issuers of Pledged Stock referred to in the foregoing Pledge
Agreement, hereby acknowledges receipt of a copy thereof, agrees to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. Fluent agrees to notify the Administrative Agent promptly
in writing of the occurrence of any of the events described in SECTION 5(a)
of the Pledge Agreement. Fluent further agrees that the terms of SECTION 9(b)
of the Pledge Agreement shall apply to it, MUTATIS MUTANDIS, with respect to
all actions that may be required of it under or pursuant to or arising out of
SECTION 9 of the Pledge Agreement.
FLUENT HOLDINGS, INC.
By:
-------------------------------
Name:
Title:
Address for Notices:
With copies to:
12
<PAGE>
ACKNOWLEDGMENT AND CONSENT
AAVID THERMAL PRODUCTS, INC., a Delaware corporation
("ATP"), one of the issuers of Pledged Stock referred to in the foregoing
Pledge Agreement, hereby acknowledges receipt of a copy thereof, agrees to be
bound thereby and to comply with the terms thereof insofar as such terms are
applicable to it. ATP agrees to notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in SECTION 5(a) of
the Pledge Agreement. ATP further agrees that the terms of SECTION 9(b) of
the Pledge Agreement shall apply to it, MUTATIS MUTANDIS, with respect to all
actions that may be required of it under or pursuant to or arising out of
SECTION 9 of the Pledge Agreement.
AAVID THERMAL PRODUCTS, INC.
By:
-------------------------------
Name:
Title:
Address for Notices:
With copies to:
13
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
TO BORROWER
PLEDGE AGREEMENT
----------------
DESCRIPTION OF PLEDGED STOCK
Issuer of Pledged Stock Class of Certificate No. of Percentage of
- ----------------------- Stock No. Shares Shares
----- --- ------ ------
<S> <C> <C> <C> <C>
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
TO BORROWER
PLEDGE AGREEMENT
----------------
DESCRIPTION OF PLEDGED DEBT
Issuer Date of Debt Amount of Debt
------ ------------ --------------
<S> <C> <C>
</TABLE>
15
<PAGE>
EXHIBIT H TO
AMENDED AND RESTATED
CREDIT AGREEMENTS
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT"),
entered into as of February 2, 2000, among (i) the several banks and
financial institutions set forth on SCHEDULE I hereto as existing lenders
(the "EXISTING LENDERS"),(ii) the several banks and financial institutions
set forth on SCHEDULE II hereto as lenders ("LENDERS"), (iii) Canadian
Imperial Bank of Commerce, as agent for the Existing Lenders under the
Existing Credit Agreement described below (in such capacity, the "EXISTING
AGENT"), (iv) Canadian Imperial Bank of Commerce, as agent for the Lenders
under the Credit Agreement described below (in such capacity, the
"ADMINISTRATIVE AGENT"), (v) Bank Boston, N.A. as documentation agent (the
"DOCUMENTATION AGENT"), (vi) CIBC World Markets Corp., as lead arranger and
bookrunner under the Existing Credit Agreement (the "EXISTING ARRANGER"),
(vii) CIBC World Markets Corp., as lead arranger and bookrunner under the
Credit Agreement (the "ARRANGER"), (viii) Canadian Imperial Bank of Commerce,
as issuer of certain letters of credit under the Existing Credit Agreement
(the "EXISTING ISSUER") and (ix) Canadian Imperial Bank of Commerce, as
issuer of certain letters of credit under the Credit Agreement (the "ISSUER").
W I T N E S S E T H:
WHEREAS, the Existing Lenders, the Existing Agent, the
Existing Issuer, the Existing Arranger, Aavid Thermal Technologies, Inc., a
Delaware corporation (the "BORROWER"), are parties to the Credit Agreement
dated as of October 21, 1999 (the "EXISTING CREDIT AGREEMENT");
WHEREAS, the Lenders, the Agent, the Issuer, the Arranger,
Aavid Thermal Technologies, Inc., a Delaware corporation (the "BORROWER"),
Heat Holdings Corp., a Delaware corporation and Heat Holdings II, Corp., a
Delaware corporation, are parties to the Amended and Restated Credit
Agreement dated as of February 2, 2000 (the "CREDIT AGREEMENT");
WHEREAS, the Existing Agent and the Existing Lenders desire
to assign all their right, title and interest in, to and under the Existing
Credit Agreement, the Loan Documents (as defined in the Existing Credit
Agreement) and the Collateral (as defined in the Existing Credit Agreement)
and delegate all their obligations with respect thereto to the Lenders, and
the Lenders desire to accept such assignment and delegation;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Unless otherwise defined herein, terms defined in the Existing
Credit Agreement and used herein are used herein as defined therein.
2. On the date hereof, the Existing Lenders hereby irrevocably sell,
assign and transfer to the Lenders, without recourse, representation or
warranty, and each Lender hereby irrevocably purchases, takes and assumes
from the Existing Lenders, (a) on a pro rata basis, as
<PAGE>
set forth opposite such Lender's name on Schedule II, the presently
outstanding Loans and other amounts owing to the Existing Lenders under the
Existing Credit Agreement and the Notes and (b) all the Existing Lenders'
right, title and interest in, to and under the Existing Credit Agreement, the
Loan Documents and the Collateral.
3. Each of the parties to this Agreement agrees that at any time and
from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Agreement.
4. By executing and delivering this Agreement, the Existing Lenders
and the Lenders confirm to and agree with each other and the Existing Agent
and the Administrative Agent as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, the Existing Lenders
make no representation or warranty and assume no responsibility with respect
to any statements, warranties or representations made in or in connection
with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement,
the Notes (as defined in the Credit Agreement) or any other instrument or
document furnished pursuant thereto; (ii) the Existing Lenders make no
representation or warranty and assume no responsibility with respect to the
financial condition of the Borrowr or any other Loan Party, or the
performance or observance by any such Person of any of its obligations under
the Credit Agreement, the Notes (as defined in the Credit Agreement) or any
other instrument or document furnished pursuant hereto and (iii) each Lender
will, independently and without reliance upon the Existing Agent, the
Administrative Agent or the Existing Lenders and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit
Agreement.
5. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK.
6. This Agreement may be executed in counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their respective duly
authorized officers as of the day and year first above written.
CANADIAN IMPERIAL BANK OF COMMERCE,
as Existing Agent
By:_______________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent
By:_______________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Existing Issuer
By:_______________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Existing Issuer
By:_______________________________
Name:
Title:
3
<PAGE>
CIBC WORLD MARKETS CORP.,
as Existing Arranger
By:_______________________________
Name:
Title:
CIBC WORLD MARKETS CORP.,
as Arranger
By:_______________________________
Name:
Title:
EXISTING LENDERS:
[_____________________________]
By:___________________________
Name:
Title:
4
<PAGE>
LENDERS:
[_____________________________]
By:___________________________
Name:
Title:
5
<PAGE>
Acknowledged and Consented to
this 31st day of January, 2000
AAVID THERMAL TECHNOLOGIES, INC.
By:___________________________
Name:
Title:
6
<PAGE>
EXHIBIT I
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (this "AGREEMENT") is entered
into as of October 21, 1999 among (i) Aavid Thermal Technologies of Texas LLC,
a Delaware limited liability company (successor by merger to Aavid Thermal
Technologies of Texas, Inc., a New Hampshire corporation), (ii) Thermalloy
Investment Co., Inc., a Delaware corporation (successor by merger to Thermalloy
Investment Company, a Texas corporation), (iii) Thermalloy, Inc., a Delaware
corporation (successor by merger to Thermalloy, Inc., a Nevada corporation),
(iv) Fluent Holdings, Inc., a Delaware corporation (successor by merger to
Fluent, Inc., a New Hampshire corporation), (v) Applied Thermal Technologies
LLC, a Delaware limited liability company (successor by merger to Applied
Thermal Technologies, Inc., a New Hampshire corporation), (vi) Aavid
Thermalloy, LLC, a Delaware limited liability company, (vii) Aavid Thermalloy
SW, LLC, a Delaware limited liability company, (viii) Aavid Thermal Products,
Inc., a Delaware corporation (successor by merger to Aavid Thermal Products,
Inc., a New Hampshire corporation) (each a "SUBSIDIARY" and, collectively,
the "SUBSIDIARIES").
W I T N E S S E T H :
WHEREAS, Aavid Thermal Technologies, Inc., a Delaware
corporation (the "BORROWER"), has entered into the Amended and Restated
Credit Agreement dated as of February 2, 2000, among the Borrower, Heat
Holdings Corp., Heat Holdings II Corp., the several banks and other financial
institutions (the "LENDERS") from time to time party thereto, Canadian
Imperial Bank of Commerce, as issuer of certain letters of credit, Canadian
Imperial Bank of Commerce, as administrative agent for the Lenders (the
"ADMINISTRATIVE AGENT"), BankBoston, N.A. as documentation agent (the
"DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner (as the same may hereafter be amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"; terms used therein being
used as therein defined);
WHEREAS, in connection therewith, each Subsidiary has
entered into a Guarantee dated as of the date hereof in favor of the
Administrative Agent for the benefit of the Lenders, pursuant to which such
Subsidiary has guaranteed all the Obligations of the Borrower (such
Guarantees, as the same may be amended, supplemented or modified from time to
time, are collectively referred to as the "SUBSIDIARY GUARANTEES"); and
WHEREAS, the Borrower, the Parent and Holding II,
collectively own, directly or indirectly, all the Capital Stock of each of
the Subsidiaries, and each of the Subsidiaries derives substantial benefit
from the Borrower entering into the Credit Agreement and obtaining Loans
thereunder;
<PAGE>
NOW, THEREFORE, in consideration of the premises and the
covenants hereafter contained, and to induce each of the Subsidiaries to
enter into its respective Subsidiary Guarantee, it is agreed as follows:
The parties agree as among themselves that, to the extent
any payment of the Obligations of the Borrower is required to be made under a
Subsidiary Guarantee, each Subsidiary shall be responsible for a portion of
such payment equal to the product of (a) a fraction, the numerator of which
is the net worth (determined in accordance with U.S. GAAP) of such Subsidiary
on the date the Indebtedness which is the subject of such payment was
incurred and the denominator of which is the aggregate net worth (computed as
aforesaid) of the Subsidiaries (such fraction is referred to in the case of
any Subsidiary as its "NET WORTH FRACTION"), MULTIPLIED BY (b) the amount of
such payment (such product being such Subsidiary's "CONTRIBUTION AMOUNT"). To
the extent that any Subsidiary (the "PAYING SUBSIDIARY") shall make a payment
in respect of the Obligations of the Borrower under its Subsidiary Guarantee
in excess of its Contribution Amount, each of the other Subsidiaries shall
reimburse the Paying Subsidiary in an amount equal to the product of (x) such
other Subsidiary's Net Worth Fraction multiplied by (y) such excess.
This Agreement is only intended to define the relative
rights of the Subsidiaries, and nothing set forth in this Agreement is
intended to or shall impair the obligations of the Subsidiaries, jointly and
severally, to pay to the Agents and the Lenders the Obligations as and when
the same shall become due and payable in accordance with the terms of their
respective Subsidiary Guarantees.
The parties hereto acknowledge that the right to
contribution hereunder shall constitute an asset in favor of the Subsidiaries
to which such contribution is owing.
The parties hereto acknowledge and agree that the
Administrative Agent, for the benefit of the Lenders and the Issuer, is an
intended third-party beneficiary of this Agreement and that until the
indefeasible payment of all the Obligations and the termination of the
Commitments, this Agreement may not be terminated, amended or modified in a
manner that would adversely affect either Agent or the Lenders without the
prior written consent of the Administrative Agent.
The parties hereto acknowledge and agree that this
Agreement has been entered into so as to support the arrangement set forth in
the Credit Agreement which is governed by the laws of the State of New York.
The parties hereto desire that this Agreement be interpreted in a manner
consistent with the interpretation of the Credit Agreement and to that end
have agreed that this Agreement will be governed by and construed in
accordance with the laws of the State of New York and in such selection have
relied, among other items, upon Section 5-1401 of the General Obligations Law
of the State of New York.
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<PAGE>
IN WITNESS WHEREOF, each of the Subsidiaries has executed
and delivered this Agreement as of the date first above written.
Aavid Thermal Technologies of Texas LLC
By: ___________________________
Name:
Title:
Thermalloy Investment Co., Inc.,
By: ___________________________
Name:
Title:
Thermalloy, Inc.
By: ___________________________
Name:
Title:
Fluent Holdings, Inc.
By: ___________________________
Name:
Title:
Applied Thermal Technologies LLC
By: ___________________________
Name:
Title:
Aavid Thermalloy, LLC
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<PAGE>
By: ___________________________
Name:
Title:
Aavid Thermalloy SW, LLC
By: ___________________________
Name:
Title:
Aavid Thermal Products, Inc.
By: ___________________________
Name:
Title:
4
<PAGE>
EXHIBIT J
TO CREDIT AGREEMENT
FORM OF HEAT HOLDINGS II GUARANTEE
GUARANTEE (this "GUARANTEE"), dated as of February 2, 2000 made by HEAT HOLDINGS
II CORP., a Delaware corporation (the "GUARANTOR"), in favor of CANADIAN
IMPERIAL BANK OF COMMERCE, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the several banks and other financial institutions
(the "LENDERS") from time to time parties to the Amended and Restated Credit
Agreement, dated as of February 2, 2000 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among Aavid Thermal
Technologies, Inc., a Delaware corporation (the "BORROWER"), the Grantor, Heat
Holdings Corp., the Lenders, Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "ISSUER"), the Administrative Agent, BankBoston,
N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets
Corp., as lead arranger and bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER"), and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, the Guarantor will derive direct and indirect benefit
from the making of the Loan and the issuance of the letters of credit to the
Borrower;
<PAGE>
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and the Issuer to issue
Letters of Credit under the Credit Agreement that the Guarantor shall have
executed and delivered this Guarantee to the Administrative Agent for the
ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to enter into the Credit Agreement and to make the Loans to the
Borrower under the Credit Agreement, the Guarantor hereby agrees with and for
the benefit of the Administrative Agent and the Lenders as follows:
1. DEFINED TERMS. As used in this Guarantee, terms defined in
the Credit Agreement are used herein as therein defined, and the following term
shall have the following meanings:
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Parent, the Guarantor, the Borrower or any of their respective
Subsidiaries, as applicable, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding and whether the
Administrative Agent, for the benefit of the Lenders, is oversecured or
undersecured with respect to such Loans) the Notes and all other obligations and
liabilities of the Parent, Guarantor, the Borrower or any such Subsidiary, as
applicable, to the Agents and the Lenders or any of their respective Affiliates,
including any Reimbursement Obligations and any obligation of the Borrower under
any Hedging Agreement entered into with any Agent, any Lender or any of their
respective Affiliates, whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, the Notes, the other Loan
Documents or any Hedging Agreement with any Agent, any Lender or any of their
respective Affiliates or any other document made, delivered or given in
connection therewith or herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to any Agent or to the
Lenders that are required to be paid by the Parent, Guarantor, the Borrower or
any Subsidiary, as applicable, pursuant to the terms of the Credit Agreement,
any other Loan Document or any Hedging Agreement with any Agent, any Lender or
any of their respective Affiliates) or otherwise.
2. GUARANTEE. (a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Administrative Agent and the Lenders and their
respective successors, endorsees, transferees and assigns, the prompt and
complete payment by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and the Guarantor further agrees
to pay any and all expenses (including, without limitation, all fees and
disbursements of counsel) which may be paid or incurred by the Administrative
Agent or any Lender in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all the Obligations and/or
enforcing any rights with respect to, or collecting against, the Guarantor under
this Guarantee.
2
<PAGE>
(b) No payment or payments made by the Borrower,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any other guarantor or any
other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which shall,
notwithstanding any such payment or payments other than payments made by the
Guarantor in respect of the Obligations or payments received or collected from
the Guarantor in respect of the Obligations, remain liable for the Obligations
until the Obligations are paid in full and the Commitments are terminated.
(c) The Guarantor agrees that whenever, at any
time, or from time to time, it shall make any payment to the Administrative
Agent or any Lender on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Guarantee
for such purpose.
3. RIGHT OF SETOFF. Upon the occurrence of any Event of
Default specified in the Credit Agreement, the Guarantor hereby irrevocably
authorizes the Administrative Agent and each Lender at any time and from time to
time without notice to the Guarantor or any other guarantor, any such notice
being expressly waived by the Guarantor, to setoff and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent and/or such
Lender to or for the credit or the account of the Guarantor, or any part thereof
in such amounts as the Administrative Agent or such may elect, against and on
account of the obligations and liabilities of the Guarantor to the
Administrative Agent or such Lender hereunder and claims of every nature and
description of the Administrative Agent or such Lender against the Guarantor, in
any currency, whether arising hereunder, under the Credit Agreement, the Notes,
the Security Documents, any other Loan Document, any Hedging Agreement with
either Agent, any Lender or any of their respective Affiliates or otherwise, as
the Administrative Agent or such Lender may elect, whether or not the
Administrative Agent or any Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
Administrative Agent and each Lender agrees to notify the Guarantor promptly of
any such setoff and the application made by the Administrative Agent or such
Lender; PROVIDED that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Administrative Agent
and each Lender under this paragraph are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Administrative Agent or such Lender may have.
4. NO SUBROGATION. Notwithstanding any payment or payments
made by the Guarantor hereunder or any setoff or application of funds of the
Guarantor by the Administrative Agent or any Lender, until all Obligations have
been irrevocably and indefeasibly paid in full in cash (and therefore the
payment thereof is no longer subject to being set aside or returned under
applicable law), the Guarantor hereby waives any claim, right or remedy which
the Guarantor may now have or may hereafter acquire against the Borrower that
arises hereunder and/or from the performance by the Guarantor hereunder
including, without limitation, any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification or participation in
any claim, right or remedy of the Lenders and the Administrative Agent against
the Borrower
3
<PAGE>
or any security which the Lenders and the Administrative Agent now have or
hereafter acquire, whether or not such claim, right or remedy arises in
equity, under contract, by statute, under common law or otherwise; PROVIDED
that if the foregoing standstill is not sufficient to permit indefeasible
payment in full of all the Obligations, then the Guarantor shall be deemed to
have waived any such claim, right or remedy to the maximum extent permitted
by law. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all the Obligations shall not have been
paid in full, such amount shall be held by the Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of the
Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over
to the Administrative Agent in the exact form received by the Guarantor (duly
endorsed by the Guarantor to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order
as the Administrative Agent may determine.
5. AMENDMENTS, ETC, WITH RESPECT TO THE OBLIGATIONS: WAIVER
OF RIGHTS. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without
notice to or further assent by the Guarantor, any demand for payment of any
of the Obligations made by the Administrative Agent or any Lender may be
rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released, in accordance with the terms of such agreement, by
the Administrative Agent or any Lender and the Credit Agreement, the Notes,
the Security Documents, the other Loan Documents, any Hedging Agreement with
either Agent or Lender and any other collateral security document or other
guarantee or document in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, in accordance with the terms
of such agreement, as the Administrative Agent and/or any Lender may deem
advisable from time to time, and any collateral security, guarantee or right
of offset at any time held by the Administrative Agent or any Lender for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held as
security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against the Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other guarantor, and any failure
by the Administrative Agent or any Lender to make any such demand or to
collect any payments from the Borrower or any such other guarantor or any
release of the Borrower or such other guarantor shall not relieve the
Guarantor of its obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of law,
of the Administrative Agent against the Guarantor. For the purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings.
6. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee, the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower or the Guarantor and the
Administrative
4
<PAGE>
Agent or any Lender shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, the Notes, any of the Security Documents, any other Loan Document,
any of the obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, setoff or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower against Administrative Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Administrative Agent and any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee for
the obligations or any right of offset with respect thereto, and any failure by
the Administrative Agent or any Lender to pursue such other rights or remedies
or to collect any payments from the Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower or any such other Person or any
such collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against the Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon the Guarantor and the successors and assigns thereof,
and shall inure to the benefit of the Administrative Agent and the Lenders, and
its respective successors, endorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Guarantee shall have
been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Obligations.
7. REINSTATEMENT. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or the Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
8. PAYMENTS. The Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent for the benefit or the
Lenders without setoff or counterclaim in U.S. Dollars at the office of the
Administrative Agent located at 425 Lexington Avenue, New York, New York 10017
or such other location as the Administrative Agent may from time to time direct
the Guarantor.
5
<PAGE>
9. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants that:
(a) the Guarantor has the corporate power
and authority, and the legal right, to execute, deliver and perform its
obligations under, this Guarantee and the other Loan Documents to which the
Guarantor is a party, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Guarantee and the other Loan
Documents to which the Guarantor is a party;
(b) this Guarantee and the other Loan
Documents to which the Guarantor is a party each constitute a legal, valid and
binding obligation of the Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors, rights generally or by general principles of equity (whether
enforcement is sought by proceedings in equity or at law);
(c) the execution, delivery and performance
by the Guarantor of this Guarantee or any other Loan Document to which the
Guarantor is a party will not violate any Requirement of Law or Contractual
Obligation of the Guarantor, and will not result in, or require, the creation or
imposition of any Lien on any of the properties or revenues of the Guarantor
pursuant to any such Requirement of Law or Contractual Obligation except Liens
created pursuant to the Loan Documents; and
(d) no consent or authorization of, filing
with or other act by or in respect of, any Governmental Authority or any other
Person (including, without limitation, any stockholder or creditor of the
Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guarantee or any other Loan Document to which
the Guarantor is a party.
The Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Guarantor on the date of
each borrowing by the Borrower under the Credit Agreement on and as of such date
of borrowing as though made hereunder on and as of such date.
10. SEVERABILITY. (a) Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(b) The parties hereto have agreed as
provided in SECTION 13 of this Guarantee and in the Credit Agreement, that New
York law is to govern, among other matters, the amount of interest that may
lawfully be charged, received or contracted for in connection with the
Obligations. If, notwithstanding such agreement, a court of competent
jurisdiction applies the law of any other jurisdiction to such interest, then
the following shall apply:
It is expressly stipulated and agreed to be the intent of the
Guarantor and the Administrative Agent at all times to comply with applicable
state law governing the maximum
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<PAGE>
rate or amount of interest payable with respect to the Obligations (or
applicable United States federal law to the extent that it permits the
Administrative Agent to contract for, charge, take, reserve or receive a
greater amount of interest than under state law, including, without
limitation, 12 U.S.C. Section 85 (1994)). If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under
the Obligations or under this Guarantee, or contracted for, charged, taken,
reserved or received with respect to the Obligations, then it is the
Guarantor's and the Administrative Agent's express intent that all excess
amounts theretofore collected by the Administrative Agent be credited on the
principal balance of the Obligations (or, if the Obligations have been or
would thereby be paid in full, refunded to the Guarantor), and the provisions
of this Guarantee and all other documents immediately be deemed reformed and
the amounts thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder or thereunder.
11. SECTION HEADINGS. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
12. NO WAIVER: CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 13), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
13. INTEGRATION; WAIVERS AND AMENDMENTS; SUCCESSORS AND
ASSIGNS; GOVERNING LAW. This Guarantee represents the agreement of the Guarantor
with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein. None of the terms or provisions of
this Guarantee may be waived, amended or supplemented or otherwise modified
except by a written instrument executed by the Guarantor and the Administrative
Agent; provided that any provision of this Guarantee may be waived by the
Administrative Agent and the Lenders in a letter or agreement executed by the
Administrative Agent or by telex or facsimile transmission from the
Administrative Agent. This Guarantee shall be binding upon the successors and
assigns of the Guarantor and shall inure to the benefit of the Administrative
Agent and their and their respective successors and assigns. THIS GUARANTEE AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF
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CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK.
14. NOTICES. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent or any Lender to be effective shall be in
writing or by telegraph or telex and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or, in the case of mail, three days after deposit in the postal system, first
class postage prepaid, or, in the case of telegraphic notice, when sent,
answerback received, addressed to a party at the address provided for such party
in the Credit Agreement or set forth under its signature below, as the case may
be.
15. SUBMISSION TO JURISDICTION: WAIVERS. (A) The Guarantor
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee or any other Loan Document to which it is
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in any inconvenient court and agrees not
to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address set forth below or at such other address of which the
Administrative Agent shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
(B) THE GUARANTOR AND THE ADMINISTRATIVE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
HEAT HOLDINGS II CORP.
By: ___________________________
Name:
Title:
Address for Notices:
c/o Willis Stein & Partners
227 West Monroe Street, Suite 4300
Chicago, IL 60606
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EXHIBIT K
TO CREDIT AGREEMENT
FORM OF HEAT HOLDINGS II PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of February 2, 2000 made by HEAT HOLDINGS II CORP., a
Delaware corporation (the "PLEDGOR"), in favor of CANADIAN IMPERIAL BANK OF
COMMERCE, as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT")
for the several banks and other financial institutions (the "LENDERS") from time
to time parties to the Amended and Restated Credit Agreement, dated as of
February 2, 2000 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among Aavid Thermal Technologies, Inc., a
Delaware corporation (the "BORROWER"), the Pledgor, Heat Holdings Corp., the
Lenders, Canadian Imperial Bank of Commerce, as issuer of certain letters of
credit (the "ISSUER"), the Administrative Agent, BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H :
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the
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Credit Agreement that the Pledgor shall have executed and delivered this
Pledge Agreement to the Administrative Agent for the ratable benefit of the
Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Pledgor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used as defined therein, and
the following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code from time to
time in effect in the State of New York.
"COLLATERAL" shall mean the Pledged Stock and all Proceeds
thereof.
"GUARANTEE" shall mean the Guarantee dated as of the date
hereof by the Pledgor in favor of the Administrative Agent for the
benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTEE OBLIGATIONS" shall mean all obligations of the
Pledgor under the Guarantee including, without limitation, in respect
of the Obligations to the extent set forth in the Guarantee.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or any of their respective Affiliates, including
any Reimbursement Obligations and any obligation of the Borrower under
any Hedging Agreement entered into with any Agent, any Lender or any of
their respective Affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, the other Loan Documents or any Hedging Agreement
with any Agent, any Lender or any of their respective Affiliates or any
other document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to any Agent or to
the Lenders that are required to be paid by the Parent, Heat Holdings
II, the Borrower or any Subsidiary, as applicable, pursuant to the
terms of the Credit Agreement, any other Loan Document or
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any Hedging Agreement with any Agent, any Lender or any of their
respective Affiliates) or otherwise.
"PLEDGE AGREEMENT" shall mean this Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
"PLEDGED STOCK" shall mean all of the units of Capital Stock
of the entities listed on Schedule I and at any time held by the
Pledgor, together with all certificates or instruments evidencing such
units, all unit options, all of the right, title and interest of the
Pledgor in and to all investment property in respect of such units
(including, without limitation, the profits, losses, income, gains,
deductions, credits or similar items relating to such units) or rights
of any nature whatsoever that may be issued or granted to the Pledgor
in respect of such units while this Pledge Agreement is in effect.
"PROCEEDS" shall mean all "proceeds" as such term is defined
in Section 9-306(1) of the Code and, in any event, shall include,
without limitation, all dividends, distributions, interest and
principal or other income from, or in respect of, the Pledged Stock.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the Lenders,
all the Pledged Stock represented by certificates, and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first priority
security interest in all of the Pledgor's right, title and interest in, to and
under the Collateral, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Guarantee Obligations.
3. POWERS AND INSTRUCTIONS. Concurrently with the delivery to
the Administrative Agent of each certificate representing one or more units of
Pledged Stock to the Administrative Agent, the Pledgor shall deliver an undated
power covering such certificate, duly executed in blank by the Pledgor, and
pledge instructions and a transaction statement in form and substance
satisfactory to the Administrative Agent.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
(a) the units of Pledged Stock listed on Schedule I represent
that percentage as set forth in Schedule I of the issued and
outstanding Capital Stock of the issuer in respect thereof;
(b) all the units of Pledged Stock have been duly and validly
issued and are fully paid and nonassessable;
(c) the Pledgor is the sole record and beneficial owner of,
and has good and marketable title to, the Pledged Stock listed on
Schedule I, free of any and all Liens or options in favor of, or claims
of, any other Person, except the Lien created by this Pledge Agreement;
PROVIDED that any such sale of the Pledged Stock would be subject to
compliance with or an exemption from transfer restrictions under
applicable securities laws;
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(d) upon delivering to the Administrative Agent of
certificates evidencing the Pledged Stock, the Lien granted pursuant to
this Pledge Agreement constitutes a valid, perfected first priority
Lien on the Collateral, enforceable as such against all creditors of
the Pledgor and any Persons purporting to purchase any Collateral from
the Pledgor, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law); and
(e) The chief executive office of the Pledgor and the office
where the Pledgor keeps its records concerning all contracts is located
at c/o Willis Stein & Partners, 227 West Monroe Street, Suite 4300,
Chicago, IL 60606. The Pledgor shall not establish a new location for
its chief executive office or change its name until (i) it has given to
the Administrative Agent not less than 30 days' prior written notice of
its intention to do so, clearly describing such new location or
specifying such new name, as the case may be, and (ii) with respect to
such new location or such new name, as the case may be, it shall have
taken all action, satisfactory to the Administrative Agent, necessary
to maintain the security interest of the Administrative Agent in the
Collateral intended to be granted hereby at all times fully perfected
and in full force and effect.
5. COVENANTS. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Commitments are
terminated:
(a) If the Pledgor, as a result of its ownership of the
Pledged Stock, shall become entitled to receive or shall receive any
Capital Stock certificates of any issuer of Pledged Stock (including,
without limitation, any certificate representing a distribution of
Capital Stock in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in
substitution of, as a conversion of, or in exchange for any of the
Pledged Stock, or otherwise in respect thereof, the Pledgor shall
accept the same as the agent of the Administrative Agent and the
Lenders, hold the same in trust for the benefit of the Administrative
Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly endorsed by the
Pledgor to the Administrative Agent, if required, together with an
undated power covering such certificate duly executed in blank by the
Pledgor to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Guarantee
Obligations. Any sums paid upon or in respect of the Pledged Stock upon
the liquidation or dissolution of any issuer of Pledged Stock and any
distribution of capital in respect of the Pledged Stock or any cash
pursuant to the recapitalization or reclassification of the capital of
any
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issuer of Pledged Stock or pursuant to the reorganization thereof
shall, within 15 days after receipt thereof by the Administrative Agent
and in the sole discretion of the Administrative Agent, either be (i)
applied in payment of the Obligations in such order as the
Administrative Agent may elect or (ii) paid over to the Pledgor for its
use in the operation of its business, and in case any distribution of
capital shall be made on or in respect of the Pledged Stock or any
property shall be distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the capital of
any issuer of Pledged Stock or pursuant to the reorganization thereof,
the property so distributed shall be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security for
the Guarantee Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Stock shall be received by the
Pledgor, the Pledgor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in
trust for the benefit of the Lenders, segregated from other funds of
the Pledgor, as additional collateral security for the Guarantee
Obligations.
(b) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, any issuer of Pledged Stock to issue Capital Stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
Capital Stock or other equity securities of any nature of any issuer of
Pledged Stock (other than any Capital Stock or other equity securities
constituting Management Shares), (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Collateral, or (iii) create, incur or permit to exist any other Lien or
option in favor of, or any claim of any Person with respect to, any of
the Collateral, or any interest therein, except for the Lien provided
for by this Pledge Agreement. The Pledgor will defend and will
indemnify and hold harmless the Administrative Agent and the Lenders
against the claims and demands of all Persons whomsoever with respect
to any claim arising from or in connection with the right, title and
interest of the Administrative Agent and the Lenders in and to the
Collateral.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
(d) The Pledgor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamps,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Pledge Agreement.
(e) The Pledgor agrees that, within 30 days of any
corporation, limited liability company or similar entity becoming a
Subsidiary (as defined in the Credit Agreement), in the case of units
of Capital Stock of such Subsidiary represented by one or more
certificates, it shall (i) upon the request of the Administrative
Agent, deliver to the Administrative Agent all such units (or, in the
case of any Foreign Subsidiary, 65% of such units) owned by the
Pledgor, together with, in each case, appropriate undated
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powers duly executed in blank and (ii) execute and deliver a new pledge
agreement (or a supplement to this Pledge Agreement) covering such
units. Upon such delivery, such units shall constitute a representation
and warranty as of the date of such delivery that the representations
and warranties contained in SECTION 4 above are true and correct on
such date after giving effect to such delivery. The Pledgor shall also
furnish to the Lenders such legal opinions confirming such
representations and warranties as the Administrative Agent or any
Lender may reasonably request.
6. CASH DISTRIBUTIONS; VOTING RIGHTS.
Unless a Default or Event of Default shall have occurred and
be continuing, the Pledgor shall be permitted to receive all cash dividends,
distributions, interest and principal paid on the Pledged Stock to the extent
that such cash dividends, distributions, interest and principal are permitted in
the Credit Agreement and applicable laws; PROVIDED that any such cash dividends,
distributions, interest or principal received by the Pledgor during the pendency
of any Default (but prior to the occurrence of an Event of Default) shall be
returned promptly to the issuer of such cash dividends, distributions, interest
or principal, and any such cash dividends, distributions, interest or principal
received during the pendency of any Default but not returned prior to such
Default becoming an Event of Default or during the pendency of any Event of
Default shall be delivered promptly to the Administrative Agent. Unless an Event
of Default shall have occurred and be continuing, the Pledgor shall be permitted
to exercise all voting and limited liability company rights with respect to the
Pledged Stock; PROVIDED that no vote shall be cast or limited liability company
right exercised or other action taken which, in the Administrative Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, the
Notes, the other Loan Documents or this Pledge Agreement.
7. RIGHTS OF THE LENDERS AND THE ADMINISTRATIVE AGENT. (a) If
an Event of Default shall occur and be continuing, (i) the Administrative Agent
shall have the right to receive any and all dividends, distributions, interest
and principal paid in respect of the Pledged Stock, and to make application
thereof to the Obligations in such order as the Administrative Agent may
determine and (ii) all of the Pledged Stock shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (A) all voting, limited liability company and
other rights pertaining to the Pledged Stock, and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options,
pertaining to any of the Pledged Stock as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
issuer of Pledged Stock, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to any of the
Pledged Stock, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine), all without liability to the Administrative Agent except to account
for property actually received by it, but the Administrative Agent shall have no
duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
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(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the Pledgor,
any issuer of Pledged Stock, any guarantor or against any other Person which may
be or become liable in respect of all or any part of the Obligations or against
any collateral security therefor, guarantee therefor or right of offset with
respect thereto. Neither the Administrative Agent nor any Lender shall be liable
for any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative Agent be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
8. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted in this Pledge Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Pledgor, any issuer of Pledged Stock, any guarantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the maximum extent permitted by law), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold free of any right or equity of redemption in the Pledgor, which right or
equity is hereby waived or released to the maximum extent permitted by law. The
Administrative Agent shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
attorneys' fees and disbursements of counsel to the Administrative Agent, to the
payment in whole or in part of the Obligations, in such order as the
Administrative Agent may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Pledgor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of Collateral
are insufficient to pay the Obligations and the fees and
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disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
9. PRIVATE SALES. (a) The Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities Act
of 1933 (the "SECURITIES ACT") and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit any issuer of Pledged Stock or the Pledgor to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such issuer or the Pledgor would agree
to do so.
(b) The Pledgor further agrees to use its best efforts to do
or cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this SECTION 9
valid and binding and in compliance with any and all other applicable
Requirements of Law. The Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 9 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this SECTION 9 shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Credit Agreement.
10. LIMITATION ON DUTIES REGARDING COLLATERAL. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. None of the Administrative Agent, the Lenders or any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. SEVERABILITY. Any provision of this Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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13. SECTION HEADINGS. The section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 15) be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
15. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS; GOVERNING
LAW. None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent; PROVIDED that any provision of this
Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Pledge Agreement shall inure to
the benefit of the Administrative Agent and the Lenders and their respective
successors and assigns. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
16. NOTICES. Notices may be given by mail, by telex or by
facsimile transmission, addressed or transmitted to the Person to which it is
being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid, and (b) in the
case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Pledgor and any issuer of Pledged Stock may change their
respective addresses and transmission numbers by written notice to the
Administrative Agent.
17. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS. The
Pledgor hereby authorizes and instructs each issuer of Pledged Stock to comply
with any instruction received by it from the Administrative Agent in writing
that (a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that such issuer shall be
fully protected in so complying.
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18. AUTHORITY OF AGENT. The Pledgor acknowledges that the
rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
neither the Pledgor nor any issuer of Pledged Stock shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
19. TERMINATION; RELEASE. Upon the repayment of all the
Obligations in full and the termination of the Commitments, this Pledge
Agreement shall terminate, and the Administrative Agent, at the request of and
sole expense of the Pledgor, will execute and deliver to the Pledgor the proper
instruments (including Uniform Commercial Code termination statements on form
UCC-2 or UCC-3, as applicable) acknowledging the termination of this Pledge
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty of any kind) such of the
Collateral as may be in the possession of the Administrative Agent and has not
theretofore been disposed of or otherwise applied or released.
20. COUNTERPARTS. This Pledge Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
HEAT HOLDINGS II CORP.
By: ____________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: ____________________________
Name:
Title:
11
<PAGE>
ACKNOWLEDGMENT AND CONSENT
Aavid Thermalloy LLC, a Delaware limited liability company
("ATLLC"), hereby acknowledges receipt of a copy thereof, agrees to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. ATLLC agrees to notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in SECTION 5(a) of the
Pledge Agreement. ATLLC further agrees that the terms of SECTION 9(b) of the
Pledge Agreement shall apply to it, MUTATIS MUTANDIS, with respect to all
actions that may be required of it under or pursuant to or arising out of
SECTION 9 of the Pledge Agreement.
AAVID THERMALLOY LLC
By: ____________________________
Name:
Title:
Address for Notices:
With copies to:
12
<PAGE>
SCHEDULE I
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Class of Certificate Number Percentage
Issuer Units Number of Units of Units
------- ----- ------- -------- --------
<S> <C> <C> <C> <C>
Aavid Thermalloy LLC, a Delaware limited
liability company.
</TABLE>
13
<PAGE>
EXHIBIT L
TO CREDIT AGREEMENT
FORM OF HEAT HOLDINGS II SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of February 2, 2000, made by HEAT
HOLDINGS II CORP., a Delaware corporation (the "GRANTOR"), in favor of CANADIAN
IMPERIAL BANK OF COMMERCE, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the several banks and other financial institutions
(the "LENDERS") from time to time parties to the Amended and Restated Credit
Agreement, dated as of February 2, 2000 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among the Aavid Thermal
Technologies, Inc., a Delaware corporation (the "BORROWER"), the Grantor, Heat
Holdings Corp., the Lenders, Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "ISSUER"), the Administrative Agent, BankBoston,
N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets
Corp., as lead arranger and bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H :
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER"), and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the
<PAGE>
Credit Agreement that the Grantor shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of the
Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used herein as defined
therein. The following terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as defined
therein: Accounts, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Investment Property and Proceeds. The
following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York.
"COLLATERAL" shall have the meaning assigned to it in Section
2.
"CONTRACTS" shall mean all contracts executed from time to
time by the Grantor, including, without limitation, with respect to an
Account, in each case, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i)
all rights of the Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of the Grantor
to damages arising out of, or for, breach or default in respect thereof
and (iii) all rights of the Grantor to perform and to exercise all
remedies thereunder.
"GUARANTEE" shall mean the Guarantee dated as of the date
hereof by the Pledgor in favor of the Administrative Agent for the
benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTEE OBLIGATIONS" shall mean all obligations of the
Grantor under the Guarantee including, without limitation, in respect
of the Obligations to the extent set forth in the Guarantee.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or any of their respective Affiliates, including
any Reimbursement Obligations and any obligation of the Borrower under
any Hedging Agreement entered
2
<PAGE>
into with any Agent, any Lender or any of their respective Affiliates,
whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter incurred, which may arise under, out of,
or in connection with, the Credit Agreement, the Notes, the other Loan
Documents or any Hedging Agreement with any Agent, any Lender or any of
their respective Affiliates or any other document made, delivered or
given in connection therewith or herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and
disbursements of counsel to any Agent or to the Lenders that are
required to be paid by the Parent, Heat Holdings II, the Borrower or
any Subsidiary, as applicable, pursuant to the terms of the Credit
Agreement, any other Loan Document or any Hedging Agreement with any
Agent, any Lender or any of their respective Affiliates) or otherwise.
"SECURITY AGREEMENT" shall mean this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
2. GRANT OF SECURITY INTEREST. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Guarantee Obligations, the
Grantor hereby grants to the Administrative Agent for the ratable benefit of the
Lenders a security interest in all the following property now owned or at any
time hereafter acquired by the Grantor or in which the Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
"COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property; PROVIDED that with respect
to the Capital Stock of any Foreign Subsidiary, such
security interest, together with any security
interest created through a pledge of such Investment
Property pursuant to a Pledge Agreement, shall be in
an amount equal to 65% of such Capital Stock or such
higher percentage as may be allowed under Treas. Reg.
Section 1.956-2(c)(2) under the Code; and
(x) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing;
3
<PAGE>
PROVIDED that nothing contained herein shall create a collateral assignment with
respect to any Contract if the grant of such collateral assignment is (or is
determined by non-appealable adjudication of a court or other dispute resolution
tribunal to be) prohibited by the terms of such Contract.
3. RIGHTS OF ADMINISTRATIVE AGENT AND LENDERS; LIMITATIONS ON
ADMINISTRATIVE AGENT'S AND LENDERS' OBLIGATIONS.
(a) GRANTOR REMAINS LIABLE UNDER ACCOUNTS AND CONTRACTS.
Anything herein to the contrary notwithstanding, the Grantor shall remain liable
under each of the Accounts and Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such Account and
in accordance with and pursuant to the terms and provisions of each such
Contract. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
or under any Contract by reason of or arising out of this Security Agreement or
the receipt by the Administrative Agent or any such Lender of any payment
relating to such Account or Contract pursuant hereto, nor shall the
Administrative Agent or any Lender be obligated in any manner to perform any of
the obligations of the Grantor under or pursuant to any Account (or any
agreement giving rise thereto) or under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account (or any agreement giving rise thereto) or under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(b) NOTICE TO ACCOUNT DEBTORS AND CONTRACTING PARTIES. At any
time after the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right at any time, upon written notice to
the Grantor of its intention to do so, to notify account debtors or obligors on
the Accounts and parties to the Contracts that the Accounts and the Contracts
have been assigned to the Administrative Agent for the ratable benefit of the
Lenders and that payments due or to become due to the Grantor in respect thereof
shall be made directly to the Administrative Agent and, upon such notification,
and at the expense of the Grantor, to enforce collection of any such Accounts.
The Administrative Agent may, at any time, in its own name or in the name of the
Lenders or the Grantor communicate with account debtors on the Accounts and
parties to the Contracts to verify with them to its satisfaction the existence,
amount and terms of any Accounts or Contracts. Unless an Event of Default shall
have occurred and be continuing, the Administrative Agent shall not exercise its
right under this clause (b) more than once in any 12-month period.
(c) COLLECTIONS ON ACCOUNTS. The Administrative Agent hereby
authorizes the Grantor to collect the Accounts; PROVIDED that the Administrative
Agent may curtail or terminate said authority at any time after the occurrence
of an Event of Default. If required by the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, any
payments of Accounts, when collected by the Grantor, shall be forthwith (and, in
any event, within two Business Days) deposited by the Grantor in the exact form
received, duly endorsed by the Grantor to the Administrative Agent if required,
in a special collateral account
4
<PAGE>
maintained by the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Lenders only, as hereinafter
provided, and, until so turned over, shall be held by the Grantor in trust for
the Administrative Agent and the Lenders, segregated from other funds of the
Grantor. Each deposit of any such Proceeds shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit. All Proceeds constituting collections of Accounts while held by
the Administrative Agent (or by the Grantor in trust for the Administrative
Agent and the Lenders) shall continue to be collateral security for all the
Guarantee Obligations and shall not constitute payment thereof until applied as
hereinafter provided. At such intervals as may be agreed upon by the Grantor and
the Administrative Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent's election, the
Administrative Agent shall apply all or any part of the funds on deposit in said
special collateral account on account of the Guarantee Obligations in such order
as the Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the obligations shall be paid over from time to time by the
Administrative Agent to the Grantor or to whomsoever may lawfully be entitled to
receive the same (it being understood that (i) prior to any Event of Default
that is continuing, the Grantor shall be permitted to use such funds in the
operation of its business in a manner consistent with the terms of the Credit
Agreement and (ii) within fifteen days after the occurrence of any Event of
Default, the Administrative Agent shall, in its sole discretion, either apply
such funds in payment of the Guarantee Obligations in such order as the
Administrative Agent may elect or permit the Grantor to use such funds in the
operation of its business). Upon the occurrence of an Event of Default that is
continuing, at the Administrative Agent's request, the Grantor shall deliver to
the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.
(d) ANALYSIS OF ACCOUNTS. The Administrative Agent shall have
the right to make test verifications of the Accounts in any manner and through
any medium that it reasonably considers advisable, and the Grantor shall furnish
all such assistance and information as the Administrative Agent may require in
connection therewith; PROVIDED that the Administrative Agent shall use its
reasonable efforts to minimize any disruption of the Grantor's business
resulting from such verifications. At any time and from time to time if the
Administrative Agent concludes in its reasonable judgment, based upon its
evaluation of the general creditworthiness of the Grantor, that such examination
is required, and so requests, the Grantor at its own expense shall cause
independent public accountants or other parties that are not Affiliates of the
Grantor and are reasonably satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. Unless an Event of
Default shall have occurred and be continuing, the Administrative Agent shall
not exercise its right under this clause (d) more than once in any 12-month
period.
4. REPRESENTATIONS AND WARRANTIES. The Grantor hereby
represents and warrants that:
(a) TITLE; NO OTHER LIENS. Except as permitted under Section
6.3 of the Credit Agreement, the Grantor owns or has a valid leasehold interest
in each item of the Collateral free
5
<PAGE>
and clear of any and all Liens or claims of others. Except as permitted under
Section 6.3(e) of the Credit Agreement, no security agreement, financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except (i) such as may
have been filed in favor of the Administrative Agent, for the ratable benefit of
the Lenders, pursuant to this Security Agreement and (ii) financing statements
filed by lessors solely for information purposes in respect of "true" leases.
(b) PERFECTED FIRST PRIORITY LIENS. Except as permitted under
Section 6.3(e) of the Credit Agreement, the Liens granted pursuant to this
Security Agreement will, upon the filing of appropriate financing statements,
constitute valid and perfected first priority Liens on the Collateral in favor
of the Administrative Agent, for the ratable benefit of the Lenders, and against
any owner or purchaser of the real property where any of the Equipment is
located and any present or future creditor obtaining a Lien on such real
property, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) ACCOUNTS. The amount represented by the Grantor to the
Lenders from time to time as owing by each account debtor or by all account
debtors in respect of the Accounts will at such time be the correct amount
actually owing by such account debtor or debtors thereunder. No amount payable
to the Grantor under or in connection with any Account is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Administrative
Agent. The place where the Grantor keeps its records concerning the Accounts is
c/o Willis Stein & Partners, 227 West Monroe Street, Suite 4300, Chicago, IL
60606.
(d) CONTRACTS. Except as set forth in Schedule 3.4 to the
Credit Agreement, no consent of any party (other than the Grantor) to any
Contract is required in connection with the execution, delivery and performance
by the Grantor of this Security Agreement. Each Contract is in full force and
effect and constitutes a valid and legally enforceable obligation of the parties
thereto, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). No consent or
authorization of, filing with or other act by or in respect of any Governmental
Authority is required in connection with the execution, delivery or performance
by the Grantor of, or the validity or enforceability of, any of the Contracts by
any party thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the scope of any such
Contract to any material adverse limitation, either specific or general in
nature. Neither the Grantor nor (to the best of the Grantor's knowledge) any
other party to any Contract is in default in any material respect in the
performance or observance of any of the terms thereof. The Grantor has fully
performed in all material respects all its obligations under each Contract. The
right, title and interest of the Grantor in, to and under each Contract are not
subject to any defense, offset, counterclaim or claim which would materially
adversely affect the value of such Contract as Collateral, nor have any of the
foregoing been asserted or alleged against the Grantor as to any Contract. The
Grantor has delivered to the Administrative Agent a complete and correct copy of
each material Contract, including all amendments, supplements and other
modifications thereto and will deliver any other Contract which the
Administrative Agent may request. No amount payable to the Grantor under or in
6
<PAGE>
connection with any Contract is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
(e) INVENTORY AND EQUIPMENT. The Inventory and the Equipment
are kept at the locations listed on Schedule I hereto.
(f) CHIEF EXECUTIVE OFFICE. The Grantor's chief executive
office and chief place of business is located at c/o Willis Stein & Partners,
227 West Monroe Street, Suite 4300, Chicago, IL 60606.
(g) FARM PRODUCTS. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
(h) GOVERNMENTAL OBLIGORS. None of the obligors on any
Accounts, and none of the parties to any Contracts, is a Governmental Authority.
(i) INVESTMENT PROPERTY. The Investment Property consists of
the items set forth on Annex A.
5. COVENANTS. The Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full and the Commitments
are terminated:
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS AND CHATTEL
PAPER. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Grantor, the Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the Liens
created hereby. The Grantor also hereby authorizes the Administrative Agent to
file any such financing or continuation statement without the signature of the
Grantor to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Security Agreement shall be sufficient as a financing
statement for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Security Agreement.
(b) INDEMNIFICATION. The Grantor agrees to pay, and to save
the Administrative Agent and the Lenders harmless from, any and all liabilities,
costs and expenses (including, without limitation, legal fees and expenses) (i)
with respect to, or resulting from, any delay in paying any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting from, any
delay in complying with any Requirement of Law applicable to any of the
Collateral or (iii) in connection with any of the transactions contemplated by
this Security Agreement, except resulting from the Administrative Agent's or any
Lender's gross negligence or willful misconduct. In any suit,
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<PAGE>
proceeding or action brought by the Administrative Agent or any Lender under any
Account or Contract for any sum owing thereunder, or to enforce any provisions
of any Account or Contract, the Grantor will save, indemnify and keep the
Administrative Agent and such Lender harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a breach by the Grantor of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such account debtor or obligor or its successors from the Grantor,
except resulting from the Administrative Agent's or any Lender's gross
negligence or willful misconduct.
(c) MAINTENANCE OF RECORDS. The Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Accounts. The Grantor will mark its books and
records pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby in such manner as the Administrative Agent may
request. For the Administrative Agent's and the Lenders' further security, the
Administrative Agent, for the ratable benefit of the Lenders, shall have a
security interest in all the Grantor's books and records pertaining to the
Collateral, and the Grantor shall, during the continuance of a Default under
Section 7.1(a) of the Credit Agreement or Section 7.1(c) of the Credit Agreement
as it relates to Section 6.1 of the Credit Agreement, turn over copies of such
books and records and during the continuation of an Event of Default turn over
any such books and records, in each case, to the Administrative Agent or to its
representatives at the request of the Administrative Agent.
(d) RIGHT OF INSPECTION. The Administrative Agent and the
Lenders shall at all times have full and free access during normal business
hours and, so long as no Event of Default shall have occurred and be continuing,
upon reasonable prior notice, to all books, correspondence and records of the
Grantor, and the Administrative Agent and the Lenders and their respective
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and the Grantor agrees to render to the Administrative
Agent and the Lenders, at the Grantor's cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto. The
Administrative Agent and the Lenders and their respective representatives shall
at all times and, so long as no Event of Default shall have occurred and be
continuing, upon reasonable prior notice, also have the right to enter into and
upon any premises where any of the Inventory or Equipment is located for the
purpose of inspecting the same, observing its use or otherwise protecting its
interests therein.
(e) COMPLIANCE WITH LAWS. The Grantor will comply in all
material respects with all Requirements of Law applicable to the Collateral or
any part thereof or to the operation of the Grantor's business; PROVIDED that
the Grantor may contest any Requirement of Law in any reasonable manner which
shall not, in the sole opinion of the Administrative Agent, adversely affect the
Administrative Agent's or the Lenders' rights or the priority of their Liens on
the Collateral.
(f) COMPLIANCE WITH TERMS OF CONTRACTS. The Grantor will
perform and comply in all material respects with all its obligations under the
Contracts and all its other Contractual Obligations relating to the Collateral.
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<PAGE>
(g) PAYMENT OF OBLIGATIONS. The Grantor will pay promptly when
due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if (i) the validity thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any of the Collateral or any interest
therein and (iii) such charge is adequately reserved against on the Grantor's
books in accordance with GAAP.
(h) LIMITATION ON LIENS ON COLLATERAL. The Grantor will not
create, incur or permit to exist, will defend the Collateral against, and will
take such other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than as permitted
pursuant to Section 6.3 of the Credit Agreement, and will defend the right,
title and interest of the Administrative Agent and the Lenders in and to any of
the Collateral against the claims and demands of all Persons whomsoever.
(i) LIMITATIONS ON DISPOSITIONS OF COLLATERAL. The Grantor
will not sell, transfer, lease or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so except as permitted pursuant to Section 6.6
of the Credit Agreement.
(j) LIMITATIONS ON MODIFICATIONS, WAIVERS, EXTENSIONS OF
CONTRACTS AND AGREEMENTS GIVING RISE TO ACCOUNTS. Subject to subsection (k)
below, the Grantor will not (i) amend, modify, terminate or waive any provision
of any Material Contract or any agreement giving rise to an Account in any
manner which could reasonably be expected to materially adversely affect the
value of such Contract or Account as Collateral, (ii) fail to exercise promptly
and diligently each and every material right which it may have under each
Contract and each agreement giving rise to an Account (other than any right of
termination) or (iii) fail to deliver to the Administrative Agent a copy of each
material demand, notice or document received by it relating in any way to any
Contract or any agreement giving rise to an Account. As used in this clause (j),
a "Material Contract" shall mean any contract with a stated duration (including
any extension periods contained therein) of more than 12 months and with a value
of more than $750,000.
(k) LIMITATIONS ON DISCOUNTS, COMPROMISES, EXTENSIONS OF
ACCOUNTS. Other than in the ordinary course of business, the Grantor will not
grant any extension of the time of payment of any of the Accounts, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partially, any Person liable for the payment thereof, or allow any
credit or discount whatsoever thereon.
(l) MAINTENANCE OF EQUIPMENT. The Grantor will maintain each
item of Equipment not subject to Section 6.6(a) of the Credit Agreement in good
operating condition, ordinary wear and tear and immaterial impairments of value
and damage by the elements excepted, and will provide all maintenance, service
and repairs necessary for such purpose.
(m) MAINTENANCE OF INSURANCE. The Grantor will maintain, with
financially sound and reputable companies, insurance policies as required under
the Credit Agreement. All such policies shall (i) contain a breach of warranty
clause in favor of the Administrative Agent
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and the Lenders, (ii) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30 days
after receipt by the Administrative Agent and the Lenders of written notice
thereof, (iii) name the Administrative Agent as loss payee of each such policy,
(iv) name the Administrative Agent and the Lenders as insured to the extent of
their interests under each such policy and (v) be reasonably satisfactory in all
material respects to the Administrative Agent. The Grantor shall deliver to the
Administrative Agent and each Lender upon request, full information as to the
insurance carried, including certified copies of policies and certificates of
insurance from a recognized insurance broker reasonably acceptable to the
Administrative Agent.
(n) FURTHER IDENTIFICATION OF COLLATERAL. The Grantor will
furnish to the Administrative Agent and the Lenders from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
(o) NOTICES. The Grantor will advise the Administrative Agent
promptly, in reasonable detail, at its address set forth in the Credit
Agreement, (i) of any Lien (other than Liens created hereby or permitted under
the Credit Agreement) on, or claim asserted against, any of the Collateral and
(ii) of the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the Liens created hereunder.
(p) CHANGES IN LOCATIONS, NAME, ETC. Unless the Grantor gives
30 days' prior written notice to the Administrative Agent, the Grantor will not
(i) change the location of its chief executive office/chief place of business
from that specified in Section 4(f) or remove its books and records from the
location specified in Section 4(c), (ii) permit any of the Inventory or
Equipment to be kept at a location other than those listed on Schedule I hereto
or (iii) change its name, identity or corporate structure to such an extent that
any financing statement filed by the Administrative Agent in connection with
this Security Agreement would become seriously misleading.
6. ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) POWERS. The Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Grantor and in the
name of the Grantor or in its own name, from time to time in the Administrative
Agent's discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, the Grantor hereby gives the Administrative Agent the power and
right, on behalf of the Grantor, without notice to or assent by the Grantor, to
do the following:
(i) in the case of any Account, at any time when the authority
of the Grantor to collect the Accounts has been curtailed or terminated
pursuant to the first sentence of Section 3(c), or in the case of any
other Collateral, at any time when any Event of Default
10
<PAGE>
shall have occurred and is continuing, in the name of the Grantor or
its own name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under any Account, Instrument, General
Intangible or Contract or with respect to any other Collateral and to
file any claim or to take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under
any Account, Instrument, General Intangible or Contract or with respect
to any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to pay
all or any part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any
Event of Default, (A) to direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any Collateral;
(E) to defend any suit, action or proceeding brought against the
Grantor with respect to any Collateral; (F) to settle, compromise or
adjust any suit, action or proceeding described in clause (E) above
and, in connection therewith, to give such discharges or releases as
the Administrative Agent may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option and the
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's
and the Lenders' Liens thereon and to effect the intent of this
Security Agreement, all as fully and effectively as the Grantor might
do.
The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) OTHER POWERS. The Grantor also authorizes the
Administrative Agent and the Lenders, at any time and from time to time, to
execute, in connection with the sale provided for in this SECTION 6 or in
SECTION 9 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) NO DUTY ON ADMINISTRATIVE AGENT'S OR LENDERS' PART. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the
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Administrative Agent's and the Lenders' interests in the Collateral and shall
not impose any duty upon the Administrative Agent or any Lender to exercise any
such powers. The Administrative Agent and the Lenders shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
7. PERFORMANCE BY ADMINISTRATIVE AGENT OF GRANTOR'S
OBLIGATIONS. If the Grantor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum 2% above the Alternate Base
Rate, shall be payable by the Grantor to the Administrative Agent on demand and
shall constitute Guarantee Obligations secured hereby.
8. PROCEEDS. In addition to the rights of the Administrative
Agent and the Lenders specified in Section 3(c) with respect to payments of
Accounts, it is agreed that if an Event of Default shall occur and be continuing
(a) upon written notice by the Administrative Agent to the Grantor, all Proceeds
received by the Grantor consisting of cash, checks and other near-cash items
shall be held by the Grantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of the Grantor, and, forthwith upon receipt
by the Grantor, shall be turned over to the Administrative Agent in the exact
form received by the Grantor (duly endorsed by the Grantor to the Administrative
Agent, if required), and (b) any and all such Proceeds received by the
Administrative Agent (whether from the Grantor or otherwise) may, in the sole
discretion of the Administrative Agent, (i) be held by the Administrative Agent
for the ratable benefit of the Lenders as collateral security for the Guaranteed
Obligations, and/or (ii) then or at any time thereafter either (x) be applied by
the Administrative Agent for the ratable benefit of the Lenders against the
Guarantee Obligations (whether matured or unmatured), such application to be in
such order as the Administrative Agent shall elect, or (y) at the sole
discretion of the Administrative Agent, be available for use by the Grantor in
the operation of its business. Any balance of such Proceeds remaining after the
Guarantee Obligations shall have been paid in full and the Commitments shall
have been terminated shall be paid over to the Grantor or to whomsoever may be
lawfully entitled to receive the same.
9. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Security
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Guarantee Obligations, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Grantor, any guarantor, or any
other Person (all and each of which demands, defenses, advertisements and
notices being hereby waived to the maximum extent permitted by applicable law),
may in such circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do
12
<PAGE>
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Administrative Agent or
any Lender or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by applicable law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Grantor, which right or equity is hereby waived or
released to the maximum extent permitted by applicable law. The Grantor further
agrees, at the Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at such places as the
Administrative Agent shall reasonably select, whether at the Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Guarantee Obligations,
in such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(i)(c) of the Code, need the Administrative Agent account for the surplus,
if any, to the Grantor. To the extent permitted by applicable law, the Grantor
waives all claims, damages and demands it may acquire against the Administrative
Agent or any Lender arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. The Grantor shall remain
liable for any deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the Guarantee Obligations and the fees
and disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
10. LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL.
The Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under Section
9-207 of the Code or otherwise, shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any Lender, nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Grantor or otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. LIMITATION ON LINES OF BUSINESS. Nothing in this Security
Agreement shall be deemed or construed as modifying in any way the restrictions
on the Grantor's activities as set forth in Section 6.14 of the Credit
Agreement.
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13. SEVERABILITY. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
14. SECTION HEADINGS. The section headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
15. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 16), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
16. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of
the terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Grantor and the Administrative Agent; PROVIDED that any provision of this
Security Agreement may be waived by the Administrative Agent in a written letter
or agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Security Agreement shall be
binding upon the successors and assigns of the Grantor and shall inure to the
benefit of the Administrative Agent and the Lenders and their respective
successors and assigns.
17. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, EXCEPT
FOR PERFECTION AND ENFORCEMENT OF SECURITY INTERESTS AND LIENS IN OTHER
JURISDICTIONS TO THE EXTENT THE LAW OF ANOTHER JURISDICTION IS MANDATORILY
APPLICABLE PURSUANT TO THE LAWS OF SUCH JURISDICTION.
18. NOTICES. Notices hereunder may be given by mail, by telex
or by facsimile transmission, addressed or transmitted to the Person to which it
is being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid and (b) in
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<PAGE>
the case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Grantor may change its address and transmission number by written
notice to the Administrative Agent, and the Administrative Agent or any Lender
may change its address and transmission number by written notice to the Grantor
and, in the case of any Lender, to the Administrative Agent.
19. AUTHORITY OF ADMINISTRATIVE AGENT. The Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Security Agreement shall, as between
the Administrative Agent and the Lenders, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
the Grantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
20. COUNTERPARTS. This Security Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the Grantor and the Administrative Agent
have caused this Security Agreement to be duly executed and delivered as of the
date first above written.
HEAT HOLDINGS II CORP.
By: _________________________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: _________________________________________
Name:
Title:
16
<PAGE>
SCHEDULE I
TO SECURITY AGREEMENT
HEAT HOLDINGS II CORP.
[ADDRESS]
LOCATION OF INVENTORY
LOCATION OF EQUIPMENT
17
<PAGE>
ANNEX A
TO SECURITY AGREEMENT
HEAT HOLDINGS II CORP.
[ADDRESS]
LIST OF INVESTMENT PROPERTY
18
<PAGE>
EXHIBIT M
TO CREDIT AGREEMENT
FORM OF PARENT PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of February 2, 2000 made by HEAT HOLDINGS CORP., a
Delaware corporation (the "PLEDGOR"), in favor of CANADIAN IMPERIAL BANK OF
COMMERCE, as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT")
for the several banks and other financial institutions (the "LENDERS") from time
to time parties to the Amended and Restated Credit Agreement, dated as of
February 2, 2000 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among Aavid Thermal Technologies, Inc., a
Delaware corporation (the "BORROWER"), the Pledgor, Heat Holdings II Corp., the
Lenders, Canadian Imperial Bank of Commerce, as issuer of certain letters of
credit (the "ISSUER"), the Administrative Agent, BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H :
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the
<PAGE>
Credit Agreement that the Pledgor shall have
executed and delivered this Pledge Agreement to the Administrative Agent for the
ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Pledgor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used as defined therein, and
the following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code from time to
time in effect in the State of New York.
"COLLATERAL" shall mean the Pledged Stock and all Proceeds
thereof.
"GUARANTEE OBLIGATIONS" shall mean all obligations of the
Pledgor under the Parent Guarantee including, without limitation, in
respect of the Obligations to the extent set forth in the Parent
Guarantee.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or any of their respective Affiliates, including
any Reimbursement Obligations and any obligation of the Borrower under
any Hedging Agreement entered into with any Agent, any Lender or any of
their respective Affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, the other Loan Documents or any Hedging Agreement
with any Agent, any Lender or any of their respective Affiliates or any
other document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to any Agent or to
the Lenders that are required to be paid by the Parent, Heat Holdings
II, the Borrower or any Subsidiary, as applicable, pursuant to the
terms of the Credit Agreement, any other Loan Document or any Hedging
Agreement with any Agent, any Lender or any of their respective
Affiliates) or otherwise.
"PLEDGE AGREEMENT" shall mean this Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
2
<PAGE>
"PLEDGED STOCK" shall mean all of the units of Capital Stock
of the entities listed on Schedule I and at any time held by the
Pledgor, together with all certificates or instruments evidencing such
units, all unit options, all of the right, title and interest of the
Pledgor in and to all investment property in respect of such units
(including, without limitation, the profits, losses, income, gains,
deductions, credits or similar items relating to such units) or rights
of any nature whatsoever that may be issued or granted to the Pledgor
in respect of such units while this Pledge Agreement is in effect.
"PROCEEDS" shall mean all "proceeds" as such term is defined
in Section 9-306(1) of the Code and, in any event, shall include,
without limitation, all dividends, distributions, interest and
principal or other income from, or in respect of, the Pledged Stock.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the Lenders,
all the Pledged Stock represented by certificates, and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first priority
security interest in all of the Pledgor's right, title and interest in, to and
under the Collateral, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Guarantee Obligations.
3. POWERS AND INSTRUCTIONS. Concurrently with the delivery to
the Administrative Agent of each certificate representing one or more shares of
Pledged Stock to the Administrative Agent, the Pledgor shall deliver an undated
power covering such certificate, duly executed in blank by the Pledgor and
pledge instructions in form and substance satisfactory to the Administrative
Agent.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
(a) the shares of Pledged Stock listed on Schedule I represent
that percentage as set forth in Schedule I of the issued and
outstanding Capital Stock of the issuer in respect thereof;
(b) all the shares of Pledged Stock have been duly and validly
issued and are fully paid and nonassessable;
(c) the Pledgor is the sole record and beneficial owner of,
and has good and marketable title to, the Pledged Stock listed on
Schedule I, free of any and all Liens or options in favor of, or claims
of, any other Person, except the Lien created by this Pledge Agreement;
PROVIDED that any such sale of the Pledged Stock would be subject to
compliance with or an exemption from transfer restrictions under
applicable securities laws;
(d) upon delivering to the Administrative Agent of
certificates evidencing the Pledged Stock, the Lien granted pursuant to
this Pledge Agreement constitutes a valid, perfected first priority
Lien on the Collateral, enforceable as such against all creditors of
the Pledgor and any Persons purporting to purchase any Collateral from
the Pledgor,
3
<PAGE>
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or
at law); and
(e) The chief executive office of the Pledgor and the office
where the Pledgor keeps its records concerning all contracts is located
at c/o Willis Stein & Partners, 227 West Monroe Street, Suite 4300,
Chicago, IL 60606. The Pledgor shall not establish a new location for
its chief executive office or change its name until (i) it has given to
the Administrative Agent not less than 30 days' prior written notice of
its intention to do so, clearly describing such new location or
specifying such new name, as the case may be, and (ii) with respect to
such new location or such new name, as the case may be, it shall have
taken all action, satisfactory to the Administrative Agent, necessary
to maintain the security interest of the Administrative Agent in the
Collateral intended to be granted hereby at all times fully perfected
and in full force and effect.
5. COVENANTS. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Commitments are
terminated:
(a) If the Pledgor, as a result of its ownership of the
Pledged Stock, shall become entitled to receive or shall receive any
Capital Stock certificates of any issuer of Pledged Stock (including,
without limitation, any certificate representing a distribution of
Capital Stock in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in
substitution of, as a conversion of, or in exchange for any of the
Pledged Stock, or otherwise in respect thereof, the Pledgor shall
accept the same as the agent of the Administrative Agent and the
Lenders, hold the same in trust for the benefit of the Administrative
Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly endorsed by the
Pledgor to the Administrative Agent, if required, together with an
undated power covering such certificate duly executed in blank by the
Pledgor to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Guarantee
Obligations. Any sums paid upon or in respect of the Pledged Stock upon
the liquidation or dissolution of any issuer of Pledged Stock and any
distribution of capital in respect of the Pledged Stock or any cash
pursuant to the recapitalization or reclassification of the capital of
any issuer of Pledged Stock or pursuant to the reorganization thereof
shall, within 15 days after receipt thereof by the Administrative Agent
and in the sole discretion of the Administrative Agent, either be (i)
applied in payment of the Obligations in such order as the
Administrative Agent may elect or (ii) paid over to the Pledgor for its
use in the operation of its business, and in case any distribution of
capital shall be made on or in respect of the Pledged Stock or any
property shall be distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the capital of
any issuer of Pledged Stock or pursuant to the reorganization thereof,
the property so distributed shall be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security for
the Guarantee Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Stock shall be received by the
4
<PAGE>
Pledgor, the Pledgor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in
trust for the benefit of the Lenders, segregated from other funds of
the Pledgor, as additional collateral security for the Guarantee
Obligations.
(b) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, any issuer of Pledged Stock to issue Capital Stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
Capital Stock or other equity securities of any nature of any issuer of
Pledged Stock (other than any Capital Stock or other equity securities
constituting Management Shares), (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Collateral, or (iii) create, incur or permit to exist any other Lien or
option in favor of, or any claim of any Person with respect to, any of
the Collateral, or any interest therein, except for the Lien provided
for by this Pledge Agreement. The Pledgor will defend and will
indemnify and hold harmless the Administrative Agent and the Lenders
against the claims and demands of all Persons whomsoever with respect
to any claim arising from or in connection with the right, title and
interest of the Administrative Agent and the Lenders in and to the
Collateral.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
(d) The Pledgor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamps,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Pledge Agreement.
(e) The Pledgor agrees that, within 30 days of any
corporation, limited liability company or similar entity becoming a
Subsidiary (as defined in the Credit Agreement), in the case of shares
of Capital Stock of such Subsidiary represented by one or more
certificates, it shall (i) upon the request of the Administrative
Agent, deliver to the Administrative Agent all such shares (or, in the
case of any Foreign Subsidiary, 65% of such shares) owned by the
Pledgor, together with, in each case, appropriate undated powers duly
executed in blank and (ii) execute and deliver a new pledge agreement
(or a supplement to this Pledge Agreement) covering such shares. Upon
such delivery, such shares shall constitute a representation and
warranty as of the date of such delivery that the representations and
warranties contained in SECTION 4 above are true and correct on such
5
<PAGE>
date after giving effect to such delivery. The Pledgor shall also
furnish to the Lenders such legal opinions confirming such
representations and warranties as the Administrative Agent or any
Lender may reasonably request.
6. CASH DISTRIBUTIONS; VOTING RIGHTS.
Unless a Default or Event of Default shall have occurred and
be continuing, the Pledgor shall be permitted to receive all cash dividends,
distributions, interest and principal paid on the Pledged Stock to the extent
that such cash dividends, distributions, interest and principal are permitted in
the Credit Agreement and applicable laws; PROVIDED that any such cash dividends,
distributions, interest or principal received by the Pledgor during the pendency
of any Default (but prior to the occurrence of an Event of Default) shall be
returned promptly to the issuer of such cash dividends, distributions, interest
or principal, and any such cash dividends, distributions, interest or principal
received during the pendency of any Default but not returned prior to such
Default becoming an Event of Default or during the pendency of any Event of
Default shall be delivered promptly to the Administrative Agent. Unless an Event
of Default shall have occurred and be continuing, the Pledgor shall be permitted
to exercise all voting and limited liability company rights with respect to the
Pledged Stock; PROVIDED that no vote shall be cast or limited liability company
right exercised or other action taken which, in the Administrative Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, the
Notes, the other Loan Documents or this Pledge Agreement.
7. RIGHTS OF THE LENDERS AND THE ADMINISTRATIVE AGENT. (a) If
an Event of Default shall occur and be continuing, (i) the Administrative Agent
shall have the right to receive any and all dividends, distributions, interest
and principal paid in respect of the Pledged Stock, and to make application
thereof to the Obligations in such order as the Administrative Agent may
determine and (ii) all of the Pledged Stock shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (A) all voting, limited liability company and
other rights pertaining to the Pledged Stock, and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options,
pertaining to any of the Pledged Stock as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
issuer of Pledged Stock, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to any of the
Pledged Stock, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine), all without liability to the Administrative Agent except to account
for property actually received by it, but the Administrative Agent shall have no
duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the Pledgor,
any issuer of Pledged Stock, any guarantor or against any other Person which may
be or become liable in respect of all or any part of the Obligations or against
6
<PAGE>
any collateral security therefor, guarantee therefor or right of offset with
respect thereto. Neither the Administrative Agent nor any Lender shall be liable
for any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative Agent be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
8. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted in this Pledge Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Pledgor, any issuer of Pledged Stock, any guarantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the maximum extent permitted by law), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold free of any right or equity of redemption in the Pledgor, which right or
equity is hereby waived or released to the maximum extent permitted by law. The
Administrative Agent shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
attorneys' fees and disbursements of counsel to the Administrative Agent, to the
payment in whole or in part of the Obligations, in such order as the
Administrative Agent may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Pledgor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of Collateral
are insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to collect such
deficiency.
7
<PAGE>
9. PRIVATE SALES. (a) The Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities Act
of 1933 (the "SECURITIES ACT") and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit any issuer of Pledged Stock or the Pledgor to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such issuer or the Pledgor would agree
to do so.
(b) The Pledgor further agrees to use its best efforts to do
or cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this SECTION 9
valid and binding and in compliance with any and all other applicable
Requirements of Law. The Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 9 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this SECTION 9 shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Credit Agreement.
10. LIMITATION ON DUTIES REGARDING COLLATERAL. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. None of the Administrative Agent, the Lenders or any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. SEVERABILITY. Any provision of this Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13. SECTION HEADINGS. The section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8
<PAGE>
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 15) be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
15. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS; GOVERNING
LAW. None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent; PROVIDED that any provision of this
Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Pledge Agreement shall inure to
the benefit of the Administrative Agent and the Lenders and their respective
successors and assigns. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
16. NOTICES. Notices may be given by mail, by telex or by
facsimile transmission, addressed or transmitted to the Person to which it is
being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid, and (b) in the
case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Pledgor and any issuer of Pledged Stock may change their
respective addresses and transmission numbers by written notice to the
Administrative Agent.
17. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS. The
Pledgor hereby authorizes and instructs each issuer of Pledged Stock to comply
with any instruction received by it from the Administrative Agent in writing
that (a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that such issuer shall be
fully protected in so complying.
18. AUTHORITY OF AGENT. The Pledgor acknowledges that the
rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent
9
<PAGE>
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Pledgor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders
with full and valid authority so to act or refrain from acting, and neither
the Pledgor nor any issuer of Pledged Stock shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
19. TERMINATION; RELEASE. Upon the repayment of all the
Obligations in full and the termination of the Commitments, this Pledge
Agreement shall terminate, and the Administrative Agent, at the request of and
sole expense of the Pledgor, will execute and deliver to the Pledgor the proper
instruments (including Uniform Commercial Code termination statements on form
UCC-2 or UCC-3, as applicable) acknowledging the termination of this Pledge
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty of any kind) such of the
Collateral as may be in the possession of the Administrative Agent and has not
theretofore been disposed of or otherwise applied or released.
20. COUNTERPARTS. This Pledge Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
10
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
HEAT HOLDINGS CORP.
By: ____________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: ____________________________
Name:
Title:
11
<PAGE>
ACKNOWLEDGMENT AND CONSENT
Aavid Thermal Technologies, Inc., a Delaware corporation,
("ATT") the Borrower referred to in the foregoing Pledge Agreement, hereby
acknowledges receipt of a copy thereof, agrees to be bound thereby and to comply
with the terms thereof insofar as such terms are applicable to it. ATT agrees to
notify the Administrative Agent promptly in writing of the occurrence of any of
the events described in SECTION 5(a) of the Pledge Agreement. ATT further agrees
that the terms of SECTION 9(b) of the Pledge Agreement shall apply to it,
MUTATIS MUTANDIS, with respect to all actions that may be required of it under
or pursuant to or arising out of SECTION 9 of the Pledge Agreement.
HEAT HOLDINGS CORP.
By: ____________________________
Name:
Title:
Address for Notices:
With copies to:
12
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
TO SUBSIDIARY
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Class of Certificate Number Percentage
Issuer Units Number of Units of Units
------ ----- ------ -------- --------
<S> <C> <C> <C> <C>
Aavid Thermal Technologies, Inc., a
Delaware corporation
</TABLE>
13
<PAGE>
EXHIBIT N
TO CREDIT AGREEMENT
FORM OF PARENT SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of February 2, 2000, made by HEAT
HOLDINGS CORP., a Delaware corporation (the "GRANTOR"), in favor of CANADIAN
IMPERIAL BANK OF COMMERCE, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the several banks and other financial institutions
(the "LENDERS") from time to time parties to the Amended and Restated Credit
Agreement, dated as of February 2, 2000 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among Aavid Thermal
Technologies, Inc., a Delaware corporation (the "BORROWER"), the Grantor, Heat
Holdings II Corp., the Lenders, Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "ISSUER"), the Administrative Agent, BankBoston,
N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets
Corp., as lead arranger and bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H :
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER"), and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the
<PAGE>
Credit Agreement that the Grantor shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of the
Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make Loans to the Borrower under the Credit Agreement, the
Grantor hereby agrees with the Administrative Agent, for the ratable benefit of
the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used herein as defined
therein. The following terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as defined
therein: Accounts, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Investment Property and Proceeds. The
following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York.
"COLLATERAL" shall have the meaning assigned to it in
Section
2.
"CONTRACTS" shall mean all contracts executed from time to
time by the Grantor, including, without limitation, with respect to an
Account, in each case, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i)
all rights of the Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of the Grantor
to damages arising out of, or for, breach or default in respect thereof
and (iii) all rights of the Grantor to perform and to exercise all
remedies thereunder.
"GUARANTEE OBLIGATIONS" shall mean all obligations of the
Grantor under the Parent Guarantee including, without limitation, in
respect of the Obligations to the extent set forth in the Parent
Guarantee.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or
2
<PAGE>
any of their respective Affiliates, including any Reimbursement
Obligations and any obligation of the Borrower under any Hedging
Agreement entered into with any Agent, any Lender or any of
their respective Affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, the other Loan Documents or any Hedging Agreement
with any Agent, any Lender or any of their respective Affiliates or any
other document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to any Agent or to
the Lenders that are required to be paid by the Parent, Heat Holdings
II, the Borrower or any Subsidiary, as applicable, pursuant to the
terms of the Credit Agreement, any other Loan Document or any Hedging
Agreement with any Agent, any Lender or any of their respective
Affiliates) or otherwise.
"SECURITY AGREEMENT" shall mean this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
2. GRANT OF SECURITY INTEREST. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Guarantee Obligations, the
Grantor hereby grants to the Administrative Agent for the ratable benefit of the
Lenders a security interest in all the following property now owned or at any
time hereafter acquired by the Grantor or in which the Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
"COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property; PROVIDED that with respect
to the capital stock of any Subsidiary of the Grantor
which is a "controlled foreign corporation" within
the meaning of Section 957(a) of the Code, such
security interest, together with any security
interest created through a pledge of such Investment
Property pursuant to a Pledge Agreement, shall be in
an amount equal to 65% of such Capital Stock or such
higher percentage as may be allowed under Treas. Reg.
ss. 1.956-2(c)(2) under the Code; and
(x) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing;
PROVIDED that nothing contained herein shall create a collateral assignment with
respect to any Contract if the grant of such collateral assignment is (or is
determined by non-appealable
3
<PAGE>
adjudication of a court or other dispute resolution tribunal to be)
prohibited by the terms of such Contract.
3. RIGHTS OF ADMINISTRATIVE AGENT AND LENDERS; LIMITATIONS ON
ADMINISTRATIVE AGENT'S AND LENDERS' OBLIGATIONS.
(a) GRANTOR REMAINS LIABLE UNDER ACCOUNTS AND CONTRACTS.
Anything herein to the contrary notwithstanding, the Grantor shall remain liable
under each of the Accounts and Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such Account and
in accordance with and pursuant to the terms and provisions of each such
Contract. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
or under any Contract by reason of or arising out of this Security Agreement or
the receipt by the Administrative Agent or any such Lender of any payment
relating to such Account or Contract pursuant hereto, nor shall the
Administrative Agent or any Lender be obligated in any manner to perform any of
the obligations of the Grantor under or pursuant to any Account (or any
agreement giving rise thereto) or under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account (or any agreement giving rise thereto) or under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(b) NOTICE TO ACCOUNT DEBTORS AND CONTRACTING PARTIES. At any
time after the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right at any time, upon written notice to
the Grantor of its intention to do so, to notify account debtors or obligors on
the Accounts and parties to the Contracts that the Accounts and the Contracts
have been assigned to the Administrative Agent for the ratable benefit of the
Lenders and that payments due or to become due to the Grantor in respect thereof
shall be made directly to the Administrative Agent and, upon such notification,
and at the expense of the Grantor, to enforce collection of any such Accounts.
The Administrative Agent may, at any time, in its own name or in the name of the
Lenders or the Grantor communicate with account debtors on the Accounts and
parties to the Contracts to verify with them to its satisfaction the existence,
amount and terms of any Accounts or Contracts. Unless an Event of Default shall
have occurred and be continuing, the Administrative Agent shall not exercise its
right under this clause (b) more than once in any 12-month period.
(c) COLLECTIONS ON ACCOUNTS. The Administrative Agent hereby
authorizes the Grantor to collect the Accounts; PROVIDED that the Administrative
Agent may curtail or terminate said authority at any time after the occurrence
of an Event of Default. If required by the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, any
payments of Accounts, when collected by the Grantor, shall be forthwith (and, in
any event, within two Business Days) deposited by the Grantor in the exact form
received, duly endorsed by the Grantor to the Administrative Agent if required,
in a special collateral account maintained by the Administrative Agent, subject
to withdrawal by the Administrative Agent for the account of the Lenders only,
as hereinafter provided, and, until so turned over, shall be held
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by the Grantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of the Grantor. Each deposit of any such Proceeds
shall be accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit. All Proceeds constituting
collections of Accounts while held by the Administrative Agent (or by the
Grantor in trust for the Administrative Agent and the Lenders) shall continue
to be collateral security for all the Guarantee Obligations and shall not
constitute payment thereof until applied as hereinafter provided. At such
intervals as may be agreed upon by the Grantor and the Administrative Agent,
or, if an Event of Default shall have occurred and be continuing, at any time
at the Administrative Agent's election, the Administrative Agent shall apply
all or any part of the funds on deposit in said special collateral account on
account of the Guarantee Obligations in such order as the Administrative
Agent may elect, and any part of such funds which the Administrative Agent
elects not so to apply and deems not required as collateral security for the
obligations shall be paid over from time to time by the Administrative Agent
to the Grantor or to whomsoever may lawfully be entitled to receive the same
(it being understood that (i) prior to any Event of Default that is
continuing, the Grantor shall be permitted to use such funds in the operation
of its business in a manner consistent with the terms of the Credit Agreement
and (ii) within fifteen days after the occurrence of any Event of Default,
the Administrative Agent shall, in its sole discretion, either apply such
funds in payment of the Obligations in such order as the Administrative Agent
may elect or permit the Grantor to use such funds in the operation of its
business). Upon the occurrence of an Event of Default that is continuing, at
the Administrative Agent's request, the Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.
(d) ANALYSIS OF ACCOUNTS. The Administrative Agent shall have
the right to make test verifications of the Accounts in any manner and through
any medium that it reasonably considers advisable, and the Grantor shall furnish
all such assistance and information as the Administrative Agent may require in
connection therewith; PROVIDED that the Administrative Agent shall use its
reasonable efforts to minimize any disruption of the Grantor's business
resulting from such verifications. At any time and from time to time if the
Administrative Agent concludes in its reasonable judgment, based upon its
evaluation of the general creditworthiness of the Grantor, that such examination
is required, and so requests, the Grantor at its own expense shall cause
independent public accountants or other parties that are not Affiliates of the
Grantor and are reasonably satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. Unless an Event of
Default shall have occurred and be continuing, the Administrative Agent shall
not exercise its right under this clause (d) more than once in any 12-month
period.
4. REPRESENTATIONS AND WARRANTIES. The Grantor hereby
represents and warrants that:
(a) TITLE; NO OTHER LIENS. Except as permitted under Section
6.3 of the Credit Agreement, the Grantor owns or has a valid leasehold interest
in each item of the Collateral free and clear of any and all Liens or claims of
others. Except as permitted under Section 6.3(e) of the Credit Agreement, no
security agreement, financing statement or other public notice with
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respect to all or any part of the Collateral is on file or of record in any
public office, except (i) such as may have been filed in favor of the
Administrative Agent, for the ratable benefit of the Lenders, pursuant to
this Security Agreement and (ii) financing statements filed by lessors solely
for information purposes in respect of "true" leases.
(b) PERFECTED FIRST PRIORITY LIENS. Except as permitted under
Section 6.3(e) of the Credit Agreement, the Liens granted pursuant to this
Security Agreement will, upon the filing of appropriate financing statements,
constitute valid and perfected first priority Liens on the Collateral in favor
of the Administrative Agent, for the ratable benefit of the Lenders, and against
any owner or purchaser of the real property where any of the Equipment is
located and any present or future creditor obtaining a Lien on such real
property, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) ACCOUNTS. The amount represented by the Grantor to the
Lenders from time to time as owing by each account debtor or by all account
debtors in respect of the Accounts will at such time be the correct amount
actually owing by such account debtor or debtors thereunder. No amount payable
to the Grantor under or in connection with any Account is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Administrative
Agent. The place where the Grantor keeps its records concerning the Accounts is
c/o Willis Stein & Partners, 227 West Monroe Street, Suite 4300, Chicago, IL
60606.
(d) CONTRACTS. Except as set forth in Schedule 3.4 to the
Credit Agreement, no consent of any party (other than the Grantor) to any
Contract is required in connection with the execution, delivery and performance
by the Grantor of this Security Agreement. Each Contract is in full force and
effect and constitutes a valid and legally enforceable obligation of the parties
thereto, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). No consent or
authorization of, filing with or other act by or in respect of any Governmental
Authority is required in connection with the execution, delivery or performance
by the Grantor of, or the validity or enforceability of, any of the Contracts by
any party thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the scope of any such
Contract to any material adverse limitation, either specific or general in
nature. Neither the Grantor nor (to the best of the Grantor's knowledge) any
other party to any Contract is in default in any material respect in the
performance or observance of any of the terms thereof. The Grantor has fully
performed in all material respects all its obligations under each Contract. The
right, title and interest of the Grantor in, to and under each Contract are not
subject to any defense, offset, counterclaim or claim which would materially
adversely affect the value of such Contract as Collateral, nor have any of the
foregoing been asserted or alleged against the Grantor as to any Contract. The
Grantor has delivered to the Administrative Agent a complete and correct copy of
each material Contract, including all amendments, supplements and other
modifications thereto and will deliver any other Contract which the
Administrative Agent may request. No amount payable to the Grantor under or in
connection with any Contract is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
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(e) INVENTORY AND EQUIPMENT. The Inventory and the Equipment
are kept at the locations listed on Schedule I hereto.
(f) CHIEF EXECUTIVE OFFICE. The Grantor's chief executive
office and chief place of business is located at c/o Willis Stein & Partners,
227 West Monroe Street, Suite 4300, Chicago, IL 60606.
(g) FARM PRODUCTS. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
(h) GOVERNMENTAL OBLIGORS. None of the obligors on any
Accounts, and none of the parties to any Contracts, is a Governmental Authority.
(i) INVESTMENT PROPERTY. The Investment Property consists of
the items set forth on Annex A.
5. COVENANTS. The Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full and the Commitments
are terminated:
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS AND CHATTEL
PAPER. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Grantor, the Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the Liens
created hereby. The Grantor also hereby authorizes the Administrative Agent to
file any such financing or continuation statement without the signature of the
Grantor to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Security Agreement shall be sufficient as a financing
statement for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Security Agreement.
(b) INDEMNIFICATION. The Grantor agrees to pay, and to save
the Administrative Agent and the Lenders harmless from, any and all liabilities,
costs and expenses (including, without limitation, legal fees and expenses) (i)
with respect to, or resulting from, any delay in paying any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting from, any
delay in complying with any Requirement of Law applicable to any of the
Collateral or (iii) in connection with any of the transactions contemplated by
this Security Agreement, except resulting from the Administrative Agent's or any
Lender's gross negligence or willful misconduct. In any suit, proceeding or
action brought by the Administrative Agent or any Lender under any Account or
Contract for any sum owing thereunder, or to enforce any provisions of any
Account or Contract,
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the Grantor will save, indemnify and keep the Administrative Agent and such
Lender harmless from and against all expense, loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction or
liability whatsoever of the account debtor or obligor thereunder, arising out
of a breach by the Grantor of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to or in favor
of such account debtor or obligor or its successors from the Grantor, except
resulting from the Administrative Agent's or any Lender's gross negligence or
willful misconduct.
(c) MAINTENANCE OF RECORDS. The Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Accounts. The Grantor will mark its books and
records pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby in such manner as the Administrative Agent may
request. For the Administrative Agent's and the Lenders' further security, the
Administrative Agent, for the ratable benefit of the Lenders, shall have a
security interest in all the Grantor's books and records pertaining to the
Collateral, and the Grantor shall, during the continuance of a Default under
Section 7.1(a) of the Credit Agreement or Section 7.1(c) of the Credit Agreement
as it relates to Section 6.1 of the Credit Agreement, turn over copies of such
books and records and during the continuation of an Event of Default turn over
any such books and records, in each case, to the Administrative Agent or to its
representatives at the request of the Administrative Agent.
(d) RIGHT OF INSPECTION. The Administrative Agent and the
Lenders shall at all times have full and free access during normal business
hours and, so long as no Event of Default shall have occurred and be continuing,
upon reasonable prior notice, to all books, correspondence and records of the
Grantor, and the Administrative Agent and the Lenders and their respective
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and the Grantor agrees to render to the Administrative
Agent and the Lenders, at the Grantor's cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto. The
Administrative Agent and the Lenders and their respective representatives shall
at all times and, so long as no Event of Default shall have occurred and be
continuing, upon reasonable prior notice, also have the right to enter into and
upon any premises where any of the Inventory or Equipment is located for the
purpose of inspecting the same, observing its use or otherwise protecting its
interests therein.
(e) COMPLIANCE WITH LAWS. The Grantor will comply in all
material respects with all Requirements of Law applicable to the Collateral or
any part thereof or to the operation of the Grantor's business; PROVIDED that
the Grantor may contest any Requirement of Law in any reasonable manner which
shall not, in the sole opinion of the Administrative Agent, adversely affect the
Administrative Agent's or the Lenders' rights or the priority of their Liens on
the Collateral.
(f) COMPLIANCE WITH TERMS OF CONTRACTS. The Grantor will
perform and comply in all material respects with all its obligations under the
Contracts and all its other Contractual Obligations relating to the Collateral.
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(g) PAYMENT OF OBLIGATIONS. The Grantor will pay promptly when
due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if (i) the validity thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any of the Collateral or any interest
therein and (iii) such charge is adequately reserved against on the Grantor's
books in accordance with GAAP.
(h) LIMITATION ON LIENS ON COLLATERAL. The Grantor will not
create, incur or permit to exist, will defend the Collateral against, and will
take such other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than as permitted
pursuant to Section 6.3 of the Credit Agreement, and will defend the right,
title and interest of the Administrative Agent and the Lenders in and to any of
the Collateral against the claims and demands of all Persons whomsoever.
(i) LIMITATIONS ON DISPOSITIONS OF COLLATERAL. The Grantor
will not sell, transfer, lease or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so except as permitted pursuant to Section 6.6
of the Credit Agreement.
(j) LIMITATIONS ON MODIFICATIONS, WAIVERS, EXTENSIONS OF
CONTRACTS AND AGREEMENTS GIVING RISE TO ACCOUNTS. Subject to subsection (k)
below, the Grantor will not (i) amend, modify, terminate or waive any provision
of any Material Contract or any agreement giving rise to an Account in any
manner which could reasonably be expected to materially adversely affect the
value of such Contract or Account as Collateral, (ii) fail to exercise promptly
and diligently each and every material right which it may have under each
Contract and each agreement giving rise to an Account (other than any right of
termination) or (iii) fail to deliver to the Administrative Agent a copy of each
material demand, notice or document received by it relating in any way to any
Contract or any agreement giving rise to an Account. As used in this clause (j),
a "Material Contract" shall mean any contract with a stated duration (including
any extension periods contained therein) of more than 12 months and with a value
of more than $750,000.
(k) LIMITATIONS ON DISCOUNTS, COMPROMISES, EXTENSIONS OF
ACCOUNTS. Other than in the ordinary course of business, the Grantor will not
grant any extension of the time of payment of any of the Accounts, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partially, any Person liable for the payment thereof, or allow any
credit or discount whatsoever thereon.
(l) MAINTENANCE OF EQUIPMENT. The Grantor will maintain each
item of Equipment not subject to Section 6.6(a) of the Credit Agreement in good
operating condition, ordinary wear and tear and immaterial impairments of value
and damage by the elements excepted, and will provide all maintenance, service
and repairs necessary for such purpose.
(m) MAINTENANCE OF INSURANCE. The Grantor will maintain, with
financially sound and reputable companies, insurance policies as required under
the Credit Agreement. All such policies shall (i) contain a breach of warranty
clause in favor of the Administrative Agent
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and the Lenders, (ii) provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until at
least 30 days after receipt by the Administrative Agent and the Lenders of
written notice thereof, (iii) name the Administrative Agent as loss payee of
each such policy, (iv) name the Administrative Agent and the Lenders as
insured to the extent of their interests under each such policy and (v) be
reasonably satisfactory in all material respects to the Administrative Agent.
The Grantor shall deliver to the Administrative Agent and each Lender upon
request, full information as to the insurance carried, including certified
copies of policies and certificates of insurance from a recognized insurance
broker reasonably acceptable to the Administrative Agent.
(n) FURTHER IDENTIFICATION OF COLLATERAL. The Grantor will
furnish to the Administrative Agent and the Lenders from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
(o) NOTICES. The Grantor will advise the Administrative Agent
promptly, in reasonable detail, at its address set forth in the Credit
Agreement, (i) of any Lien (other than Liens created hereby or permitted under
the Credit Agreement) on, or claim asserted against, any of the Collateral and
(ii) of the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the Liens created hereunder.
(p) CHANGES IN LOCATIONS, NAME, ETC. Unless the Grantor gives
30 days' prior written notice to the Administrative Agent, the Grantor will not
(i) change the location of its chief executive office/chief place of business
from that specified in Section 4(f) or remove its books and records from the
location specified in Section 4(c), (ii) permit any of the Inventory or
Equipment to be kept at a location other than those listed on Schedule I hereto
or (iii) change its name, identity or corporate structure to such an extent that
any financing statement filed by the Administrative Agent in connection with
this Security Agreement would become seriously misleading.
6. ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) POWERS. The Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Grantor and in the
name of the Grantor or in its own name, from time to time in the Administrative
Agent's discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, the Grantor hereby gives the Administrative Agent the power and
right, on behalf of the Grantor, without notice to or assent by the Grantor, to
do the following:
(i) in the case of any Account, at any time when the authority
of the Grantor to collect the Accounts has been curtailed or terminated
pursuant to the first sentence of Section 3(c), or in the case of any
other Collateral, at any time when any Event of Default
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shall have occurred and is continuing, in the name of the Grantor or
its own name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Account, Instrument, General
Intangible or Contract or with respect to any other Collateral and
to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such
moneys due under any Account, Instrument, General Intangible or
Contract or with respect to any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to pay
all or any part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any
Event of Default, (A) to direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any Collateral;
(E) to defend any suit, action or proceeding brought against the
Grantor with respect to any Collateral; (F) to settle, compromise or
adjust any suit, action or proceeding described in clause (E) above
and, in connection therewith, to give such discharges or releases as
the Administrative Agent may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option and the
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's
and the Lenders' Liens thereon and to effect the intent of this
Security Agreement, all as fully and effectively as the Grantor might
do.
The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) OTHER POWERS. The Grantor also authorizes the
Administrative Agent and the Lenders, at any time and from time to time, to
execute, in connection with the sale provided for in this SECTION 6 or in
SECTION 9 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) NO DUTY ON ADMINISTRATIVE AGENT'S OR LENDERS' PART. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the
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Administrative Agent's and the Lenders' interests in the Collateral and shall
not impose any duty upon the Administrative Agent or any Lender to exercise
any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Grantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7. PERFORMANCE BY ADMINISTRATIVE AGENT OF GRANTOR'S
OBLIGATIONS. If the Grantor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum 2% above the Alternate Base
Rate, shall be payable by the Grantor to the Administrative Agent on demand and
shall constitute Guarantee Obligations secured hereby.
8. PROCEEDS. In addition to the rights of the Administrative
Agent and the Lenders specified in Section 3(c) with respect to payments of
Accounts, it is agreed that if an Event of Default shall occur and be continuing
(a) upon written notice by the Administrative Agent to the Grantor, all Proceeds
received by the Grantor consisting of cash, checks and other near-cash items
shall be held by the Grantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of the Grantor, and, forthwith upon receipt
by the Grantor, shall be turned over to the Administrative Agent in the exact
form received by the Grantor (duly endorsed by the Grantor to the Administrative
Agent, if required), and (b) any and all such Proceeds received by the
Administrative Agent (whether from the Grantor or otherwise) may, in the sole
discretion of the Administrative Agent, (i) be held by the Administrative Agent
for the ratable benefit of the Lenders as collateral security for the Guaranteed
Obligations, and/or (ii) then or at any time thereafter either (x) be applied by
the Administrative Agent for the ratable benefit of the Lenders against the
Guarantee Obligations (whether matured or unmatured), such application to be in
such order as the Administrative Agent shall elect, or (y) at the sole
discretion of the Administrative Agent, be available for use by the Grantor in
the operation of its business. Any balance of such Proceeds remaining after the
Guarantee Obligations shall have been paid in full and the Commitments shall
have been terminated shall be paid over to the Grantor or to whomsoever may be
lawfully entitled to receive the same.
9. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Security
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Guarantee Obligations, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Grantor, any guarantor, or any
other Person (all and each of which demands, defenses, advertisements and
notices being hereby waived to the maximum extent permitted by applicable law),
may in such circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do
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any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Administrative Agent
or any Lender or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Administrative
Agent or any Lender shall have the right upon any such public sale or sales,
and, to the extent permitted by applicable law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Grantor, which right or equity is
hereby waived or released to the maximum extent permitted by applicable law.
The Grantor further agrees, at the Administrative Agent's request, to
assemble the Collateral and make it available to the Administrative Agent at
such places as the Administrative Agent shall reasonably select, whether at
the Grantor's premises or elsewhere. The Administrative Agent shall apply the
net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred therein or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of
the Administrative Agent and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Guarantee Obligations, in such order as the
Administrative Agent may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(i)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Grantor. To the extent permitted by applicable law, the Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent
or any Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given
at least 10 days before such sale or other disposition. The Grantor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Guarantee
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
10. LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL.
The Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under Section
9-207 of the Code or otherwise, shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any Lender, nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Grantor or otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. LIMITATION ON LINES OF BUSINESS. Nothing in this Security
Agreement shall be deemed or construed as modifying in any way the restrictions
on the Grantor's activities as set forth in Section 6.14 of the Credit
Agreement.
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13. SEVERABILITY. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
14. SECTION HEADINGS. The section headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
15. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 16), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
16. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of
the terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Grantor and the Administrative Agent; PROVIDED that any provision of this
Security Agreement may be waived by the Administrative Agent in a written letter
or agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Security Agreement shall be
binding upon the successors and assigns of the Grantor and shall inure to the
benefit of the Administrative Agent and the Lenders and their respective
successors and assigns.
17. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, EXCEPT
FOR PERFECTION AND ENFORCEMENT OF SECURITY INTERESTS AND LIENS IN OTHER
JURISDICTIONS TO THE EXTENT THE LAW OF ANOTHER JURISDICTION IS MANDATORILY
APPLICABLE PURSUANT TO THE LAWS OF SUCH JURISDICTION.
18. NOTICES. Notices hereunder may be given by mail, by telex
or by facsimile transmission, addressed or transmitted to the Person to which it
is being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid and (b) in
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the case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Grantor may change its address and transmission number by
written notice to the Administrative Agent, and the Administrative Agent or
any Lender may change its address and transmission number by written notice
to the Grantor and, in the case of any Lender, to the Administrative Agent.
19. AUTHORITY OF ADMINISTRATIVE AGENT. The Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Security Agreement shall, as between
the Administrative Agent and the Lenders, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
the Grantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
20. COUNTERPARTS. This Security Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Grantor and the Administrative Agent
have caused this Security Agreement to be duly executed and delivered as of the
date first above written.
HEAT HOLDINGS CORP.
By: _______________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: _______________________________
Name:
Title:
16
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SCHEDULE I
TO SECURITY AGREEMENT
HEAT HOLDINGS CORP.
[ADDRESS]
LOCATION OF INVENTORY
LOCATION OF EQUIPMENT
17
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ANNEX A
TO SECURITY AGREEMENT
HEAT HOLDINGS CORP.
[ADDRESS]
LIST OF INVESTMENT PROPERTY
18
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EXHIBIT O
TO CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED SUBSIDIARY GUARANTEE
AMENDED AND RESTATED GUARANTEE, dated as of February 2, 2000
made by AAVID THERMAL PRODUCTS, INC., a Delaware corporation (successor by
merger to Aavid Thermal Products, Inc., a New Hampshire corporation (the
GUARANTOR"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the several banks and
other financial institutions (the "LENDERS") from time to time parties to the
Amended and Restated Credit Agreement, dated as of February 2, 2000 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Aavid Thermal Technologies, Inc. (the "BORROWER"), Heat Holdings Corp.
(the "PARENT"), Heat Holdings II Corp., the Lenders, Canadian Imperial Bank of
Commerce, as issuer of certain letters of credit (the "ISSUER"), the
Administrative Agent, BankBoston, N.A. as documentation agent (the
"DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Guarantor was required to enter into a Guaranty dated as of October 21, 1999
(the "EXISTING GUARANTY") with the Existing Agent, pursuant to which , among
other things, the Guarantor guaranteed the payment of the Obligations of the
Borrower under the Existing Credit Agreement;
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
<PAGE>
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, the Borrower owns directly or indirectly all the
issued and outstanding Capital Stock of the Guarantor;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Guarantor shall have
executed and delivered this Amended and Restated Guarantee to the Administrative
Agent for the ratable benefit of the Lenders;
WHEREAS, the Guarantor and the Administrative Agent wish to
amend the Existing Guarantee as set forth herein in order to, among other
things, reflect the execution of the Credit Agreement and the Assignment and
Assumption Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Guarantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. As used in this Guarantee, terms defined in
the Credit Agreement are used herein as therein defined, and the following term
shall have the following meanings:
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or any of their respective Affiliates, including
any Reimbursement Obligations and any obligation of the Borrower under
any Hedging Agreement entered into with any Agent, any Lender or any of
their respective Affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, the other Loan Documents or any Hedging Agreement
with any Agent, any Lender or any of their respective Affiliates or any
other document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to any Agent or to
the Lenders that are required to be paid by the Parent, Heat Holdings
II, the Borrower or any Subsidiary, as
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<PAGE>
applicable, pursuant to the terms of the Credit Agreement, any other
Loan Document or any Hedging Agreement with any Agent, any Lender or
any of their respective Affiliates) or otherwise.
2. GUARANTEE. (a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Administrative Agent and the Lenders and their
respective successors, endorsees, transferees and assigns, the prompt and
complete payment by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and the Guarantor further agrees
to pay any and all expenses (including, without limitation, all fees and
disbursements of counsel) which may be paid or incurred by the Administrative
Agent or any Lender in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all the Obligations and/or
enforcing any rights with respect to, or collecting against, the Guarantor under
this Guarantee; PROVIDED, that the obligations of the Guarantor hereunder shall
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provisions of any applicable
state law.
(b) No payment or payments made by the Borrower, any
other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any other guarantor or any
other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which shall,
notwithstanding any such payment or payments other than payments made by the
Guarantor in respect of the Obligations or payments received or collected from
the Guarantor in respect of the Obligations, remain liable for the Obligations
until the Obligations are paid in full and the Commitments are terminated.
(c) The Guarantor agrees that whenever, at any time,
or from time to time, it shall make any payment to the Administrative Agent or
any Lender on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Guarantee
for such purpose.
3. RIGHT OF SETOFF. Upon the occurrence of any Event
of Default specified in the Credit Agreement, the Guarantor hereby irrevocably
authorizes the Administrative Agent at each Lender at any time and from time to
time without notice to the Guarantor or any other guarantor, any such notice
being expressly waived by the Guarantor, to setoff and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent and/or such
Lender to or for the credit or the account of the Guarantor, or any part thereof
in such amounts as the Administrative Agent or such may elect, against and on
account of the obligations and liabilities of the Guarantor to the
Administrative Agent or such Lender hereunder and claims of every nature and
description of the Administrative Agent or such Lender against the Guarantor, in
any currency, whether arising hereunder, under the Credit Agreement, the Notes,
the Security Documents, any other Loan Document, any Hedging Agreement with
either Agent, any Lender or any of their respective Affiliates or otherwise, as
the Administrative Agent or such Lender may elect, whether or not the
Administrative Agent or
3
<PAGE>
any Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Administrative
Agent and each Lender agrees to notify the Guarantor promptly of any such
setoff and the application made by the Administrative Agent or such Lender;
PROVIDED that the failure to give such notice shall not affect the validity
of such setoff and application. The rights of the Administrative Agent and
each Lender under this paragraph are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which the
Administrative Agent or such Lender may have.
4. NO SUBROGATION. Notwithstanding any payment or
payments made by the Guarantor hereunder or any setoff or application of funds
of the Guarantor by the Administrative Agent or any Lender, until all
Obligations have been irrevocably and indefeasibly paid in full in cash (and
therefore the payment thereof is no longer subject to being set aside or
returned under applicable law), the Guarantor hereby waives any claim, right or
remedy which the Guarantor may now have or may hereafter acquire against the
Borrower that arises hereunder and/or from the performance by the Guarantor
hereunder including, without limitation, any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification or
participation in any claim, right or remedy of the Lenders and the
Administrative Agent against the Borrower or any security which the Lenders and
the Administrative Agent now have or hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise; PROVIDED that if the foregoing standstill is not
sufficient to permit indefeasible payment in full of all the Obligations, then
the Guarantor shall be deemed to have waived any such claim, right or remedy to
the maximum extent permitted by law. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all the
Obligations shall not have been paid in full, such amount shall be held by the
Guarantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Guarantor (duly endorsed by the Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine.
5. AMENDMENTS, ETC, WITH RESPECT TO THE OBLIGATIONS:
WAIVER OF RIGHTS. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released, in accordance with
the terms of such agreement, by the Administrative Agent or any Lender and the
Credit Agreement, the Notes, the Security Documents, the other Loan Documents,
any Hedging Agreement with either Agent or Lender and any other collateral
security document or other guarantee or document in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, in
accordance with the terms of such agreement, as the Administrative Agent and/or
any Lender may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Lender shall
have
4
<PAGE>
any obligation to protect, secure, perfect or insure any Lien at any time
held as security for the Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against the Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other guarantor, and any failure by
the Administrative Agent or any Lender to make any such demand or to collect any
payments from the Borrower or any such other guarantor or any release of the
Borrower or such other guarantor shall not relieve the Guarantor of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Administrative
Agent against the Guarantor. For the purposes hereof, "demand" shall include the
commencement and continuance of any legal proceedings.
6. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon this Guarantee or acceptance of this
Guarantee, the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the Borrower
or the Guarantor and the Administrative Agent or any Lender shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. The Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or the
Guarantor with respect to the Obligations. The Guarantor understands and agrees
that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the Credit Agreement, the Notes, any of the
Security Documents, any other Loan Document, any of the obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, setoff or counterclaim (other than a defense of payment
or performance) which may at any time be available to or be asserted by the
Borrower against Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against the Guarantor. This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the Guarantor and the successors and assigns thereof, and shall inure
to the benefit of the Administrative Agent and the Lenders, and its respective
successors, endorsees, transferees and assigns, until all the Obligations and
the obligations of the Guarantor under this Guarantee shall have been satisfied
by payment in full
5
<PAGE>
and the Commitments shall be terminated, notwithstanding that from time to
time during the term of the Credit Agreement the Borrower may be free from
any Obligations.
7. REINSTATEMENT. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or the Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
8. PAYMENTS. The Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent for the benefit or the
Lenders without setoff or counterclaim in U.S. Dollars at the office of the
Administrative Agent located at 425 Lexington Avenue, New York, New York 10017
or such other location as the Administrative Agent may from time to time direct
the Guarantor.
9. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants that:
(a) the Guarantor has the corporate power and
authority, and the legal right, to execute, deliver and perform its obligations
under, this Guarantee and the other Loan Documents to which the Guarantor is a
party, and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Guarantee and the other Loan Documents to which
the Guarantor is a party;
(b) this Guarantee and the other Loan Documents to
which the Guarantor is a party each constitute a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors, rights
generally or by general principles of equity (whether enforcement is sought by
proceedings in equity or at law);
(c) the execution, delivery and performance by the
Guarantor of this Guarantee or any other Loan Document to which the Guarantor is
a party will not violate any Requirement of Law or Contractual Obligation of the
Guarantor, except for such violations which could not reasonably be expected to
result in liability in excess of $500,000 in the aggregate, and will not result
in, or require, the creation or imposition of any Lien on any of the properties
or revenues of the Guarantor pursuant to any such Requirement of Law or
Contractual Obligation except Liens created pursuant to the Loan Documents; and
(d) except as set forth in SCHEDULE 9(d), no consent
or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person (including, without limitation, any
stockholder or creditor of the Guarantor) is required in connection with the
execution, delivery, performance, validity or enforceability of this Guarantee
or any other Loan Document to which the Guarantor is a party.
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<PAGE>
The Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Guarantor on the date of
each borrowing by the Borrower under the Credit Agreement on and as of such date
of borrowing as though made hereunder on and as of such date.
10. SEVERABILITY. (a) Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(b) The parties hereto have agreed as provided in
SECTION 13 of this Guarantee and in the Credit Agreement, that New York law is
to govern, among other matters, the amount of interest that may lawfully be
charged, received or contracted for in connection with the Obligations. If,
notwithstanding such agreement, a court of competent jurisdiction applies the
law of any other jurisdiction to such interest, then the following shall apply:
It is expressly stipulated and agreed to be the intent of the
Guarantor and the Administrative Agent at all times to comply with applicable
state law governing the maximum rate or amount of interest payable with respect
to the Obligations (or applicable United States federal law to the extent that
it permits the Administrative Agent to contract for, charge, take, reserve or
receive a greater amount of interest than under state law, including, without
limitation, 12 U.S.C. ss. 85 (1994)). If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Obligations
or under this Guarantee, or contracted for, charged, taken, reserved or received
with respect to the Obligations, then it is the Guarantor's and the
Administrative Agent's express intent that all excess amounts theretofore
collected by the Administrative Agent be credited on the principal balance of
the Obligations (or, if the Obligations have been or would thereby be paid in
full, refunded to the Guarantor), and the provisions of this Guarantee and all
other documents immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new documents, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
or thereunder.
11. SECTION HEADINGS. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
12. NO WAIVER: CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 13), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
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Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
13. INTEGRATION; WAIVERS AND AMENDMENTS; SUCCESSORS AND
ASSIGNS; GOVERNING LAW. This Guarantee represents the agreement of the Guarantor
with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein. None of the terms or provisions of
this Guarantee may be waived, amended or supplemented or otherwise modified
except by a written instrument executed by the Guarantor and the Administrative
Agent; provided that any provision of this Guarantee may be waived by the
Administrative Agent and the Lenders in a letter or agreement executed by the
Administrative Agent or by telex or facsimile transmission from the
Administrative Agent. This Guarantee shall be binding upon the successors and
assigns of the Guarantor and shall inure to the benefit of the Administrative
Agent and their and their respective successors and assigns. THIS GUARANTEE AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
14. NOTICES. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent or any Lender to be effective shall be in
writing or by telegraph or telex and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or, in the case of mail, three days after deposit in the postal system, first
class postage prepaid, or, in the case of telegraphic notice, when sent,
answerback received, addressed to a party at the address provided for such party
in the Credit Agreement or set forth under its signature below, as the case may
be.
15. SUBMISSION TO JURISDICTION: WAIVERS. (A) The Guarantor
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee or any other Loan Document to which it is
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in any inconvenient court and agrees not
to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address set forth below or at such other address of which the
Administrative Agent shall have been notified pursuant thereto; and
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(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
(B) THE GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
AAVID THERMAL PRODUCTS, INC.
By: ___________________________
Name:
Title:
Address for Notices:
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EXHIBIT P
TO CREDIT AGREEMENT
FORM OF SUBSIDIARY PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of February 2,
2000 made by Aavid Thermal Products, Inc., a Delaware corporation (successor by
merger to Aavid Thermal Products, Inc., a New Hampshire corporation) (the
"PLEDGOR"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the several banks and
other financial institutions (the "LENDERS") from time to time parties to the
Amended and Restated Credit Agreement, dated as of February 2, 2000 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Aavid Thermal Technologies, Inc. (the "BORROWER"), Heat Holdings Corp.
(the "PARENT"), Heat Holdings II Corp., the Lenders, Canadian Imperial Bank of
Commerce, as issuer of certain letters of credit (the "ISSUER"), the
Administrative Agent, BankBoston, N.A. as documentation agent (the
"DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Pledgor was required to enter into a Pledge Agreement dated as of October 21,
1999 (the "EXISTING PLEDGE AGREEMENT") with the Existing Agent, pursuant to
which , among other things, the Pledgor granted to the Existing Agent a security
interest in certain collateral, including, but not limited to shares of common
stock of certain of its subsidiaries (the "Existing Pledged Stock");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
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WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Pledgor shall have
executed and delivered this Amended and Restated Pledge Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
WHEREAS, the Pledgor and the Administrative Agent wish to
amend the Existing Pledge Agreement as set forth herein in order to, among other
things, (i) reflect the execution of the Credit Agreement and the Assignment and
Assumption Agreement, and (ii) make appropriate amendments to reflect certain
changes in the Collateral;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Pledgor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used as defined therein, and
the following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code from time to
time in effect in the State of New York.
"COLLATERAL" shall mean the Pledged Stock and all Proceeds
thereof.
"GUARANTEE" shall mean the Guarantee dated as of the date
hereof by the Pledgor in favor of the Administrative Agent for the
benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTEE OBLIGATIONS" shall mean all obligations of the
Pledgor under the Guarantee including, without limitation, in respect
of the Obligations to the extent set forth in the Guarantee.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or any of their respective Affiliates, including
any Reimbursement
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Obligations and any obligation of the Borrower under any Hedging
Agreement entered into with any Agent, any Lender or any of their
respective Affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the Notes, the other Loan Documents or any Hedging
Agreement with any Agent, any Lender or any of their respective
Affiliates or any other document made, delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements
of counsel to any Agent or to the Lenders that are required to be
paid by the Parent, Heat Holdings II, the Borrower or any
Subsidiary, as applicable, pursuant to the terms of the Credit
Agreement, any other Loan Document or any Hedging Agreement with any
Agent, any Lender or any of their respective Affiliates) or
otherwise.
"PLEDGE AGREEMENT" shall mean this Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
"PLEDGED STOCK" shall mean all of the shares of Capital Stock
of the entities listed on Schedule I hereto and at any time held by the
Pledgor, together with all certificates or instruments evidencing such
shares, all share options, all of the right, title and interest of the
Pledgor in and to all investment property in respect of such shares
(including, without limitation, the profits, losses, income, gains,
deductions, credits or similar items relating to such shares) or rights
of any nature whatsoever that may be issued or granted to the Pledgor
in respect of such shares or while this Pledge Agreement is in effect.
"PROCEEDS" shall mean all "proceeds" as such term is defined
in Section 9-306(1) of the Code and, in any event, shall include,
without limitation, all dividends, distributions, interest and
principal or other income from, or in respect of, the Pledged Stock.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the Lenders,
all the Pledged Stock represented by certificates, and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first priority
security interest in all of the Pledgor's right, title and interest in, to and
under the Collateral, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Guarantee Obligations.
3. POWERS AND INSTRUCTIONS. Concurrently with the delivery to
the Administrative Agent of each certificate representing one or more shares of
Pledged Stock to the Administrative Agent, the Pledgor shall deliver an undated
power covering such certificate, duly executed in blank by the Pledgor and
pledge instructions and a transaction statement in form and substance
satisfactory to the Administrative Agent.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
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(a) the shares of Pledged Stock listed on Schedule I represent
that percentage as set forth in Schedule I of the issued and
outstanding Capital Stock of the issuer in respect thereof;
(b) all the shares of Pledged Stock have been duly and validly
issued and are fully paid and nonassessable;
(c) the Pledgor is the sole record and beneficial owner of,
and has good and marketable title to, the Pledged Stock listed on
Schedule I, free of any and all Liens or options in favor of, or claims
of, any other Person, except the Lien created by this Pledge Agreement;
PROVIDED that any such sale of the Pledged Stock would be subject to
compliance with or an exemption from transfer restrictions under
applicable securities laws;
(d) the Lien granted pursuant to this Pledge Agreement
constitutes a valid, perfected first priority Lien on the Collateral,
enforceable as such against all creditors of the Pledgor and any
Persons purporting to purchase any Collateral from the Pledgor, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law); and
(e) The chief executive office of the Pledgor and the office
where the Pledgor keeps its records concerning all contracts is located
at One Eagle Square, Concord, New Hampshire 03301. [NOTE: AAVID TO
CONFIRM ADDRESS.] The Pledgor shall not establish a new location for
its chief executive office or change its name until (i) it has given to
the Administrative Agent not less than 30 days' prior written notice of
its intention to do so, clearly describing such new location or
specifying such new name, as the case may be, and (ii) with respect to
such new location or such new name, as the case may be, it shall have
taken all action, satisfactory to the Administrative Agent, necessary
to maintain the security interest of the Administrative Agent in the
Collateral intended to be granted hereby at all times fully perfected
and in full force and effect.
5. COVENANTS. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Commitments are
terminated:
(a) If the Pledgor, as a result of its ownership of the
Pledged Stock, shall become entitled to receive or shall receive any
Capital Stock certificates of any issuer of Pledged Stock (including,
without limitation, any certificate representing a distribution of
Capital Stock in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in
substitution of, as a conversion of, or in exchange for any of the
Pledged Stock, or otherwise in respect thereof, the Pledgor shall
accept the same as the agent of the Administrative Agent and the
Lenders, hold the same in trust for the benefit of the Administrative
Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly endorsed by the
Pledgor to the
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Administrative Agent, if required, together with an undated power
covering such certificate duly executed in blank by the Pledgor to
be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Guarantee Obligations. Any
sums paid upon or in respect of the Pledged Stock upon the
liquidation or dissolution of any issuer of Pledged Stock and any
distribution of capital in respect of the Pledged Stock or any cash
pursuant to the recapitalization or reclassification of the capital
of any issuer of Pledged Stock or pursuant to the reorganization
thereof shall, within 15 days after receipt thereof by the
Administrative Agent and in the sole discretion of the
Administrative Agent, either be (i) applied in payment of the
Obligations in such order as the Administrative Agent may elect or
(ii) paid over to the Pledgor for its use in the operation of its
business, and in case any distribution of capital shall be made on
or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to
the recapitalization or reclassification of the capital of any
issuer of Pledged Stock or pursuant to the reorganization thereof,
the property so distributed shall be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security
for the Guarantee Obligations. If any sums of money or property so
paid or distributed in respect of the Pledged Stock shall be
received by the Pledgor, the Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the benefit of the Lenders,
segregated from other funds of the Pledgor, as additional collateral
security for the Guarantee Obligations.
(b) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, any issuer of Pledged Stock to issue Capital Stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
Capital Stock or other equity securities of any nature of any issuer of
Pledged Stock (other than any Capital Stock or other equity securities
constituting Management Shares), (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Collateral, or (iii) create, incur or permit to exist any other Lien or
option in favor of, or any claim of any Person with respect to, any of
the Collateral, or any interest therein, except for the Lien provided
for by this Pledge Agreement. The Pledgor will defend and will
indemnify and hold harmless the Administrative Agent and the Lenders
against the claims and demands of all Persons whomsoever with respect
to any claim arising from or in connection with the right, title and
interest of the Administrative Agent and the Lenders in and to the
Collateral.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
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(d) The Pledgor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamps,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Pledge Agreement.
(e) The Pledgor agrees that, within 30 days of any
corporation, limited liability company or similar entity becoming a
Subsidiary (as defined in the Credit Agreement), in the case of shares
of Capital Stock of such Subsidiary represented by one or more
certificates, it shall (i) upon the request of the Administrative
Agent, deliver to the Administrative Agent all such shares (or, in the
case of any Foreign Subsidiary, 65% of such shares) owned by the
Pledgor, together with, in each case, appropriate undated powers duly
executed in blank and (ii) execute and deliver a new pledge agreement
(or a supplement to this Pledge Agreement) covering such shares. Upon
such delivery, such shares shall constitute a representation and
warranty as of the date of such delivery that the representations and
warranties contained in SECTION 4 above are true and correct on such
date after giving effect to such delivery. The Pledgor shall also
furnish to the Lenders such legal opinions confirming such
representations and warranties as the Administrative Agent or any
Lender may reasonably request.
6. CASH DISTRIBUTIONS; VOTING RIGHTS. Unless a Default or
Event of Default shall have occurred and be continuing, the Pledgor shall be
permitted to receive all cash dividends, distributions, interest and principal
paid on the Pledged Stock to the extent that such cash dividends, distributions,
interest and principal are permitted in the Credit Agreement and applicable
laws; PROVIDED that any such cash dividends, distributions, interest or
principal received by the Pledgor during the pendency of any Default (but prior
to the occurrence of an Event of Default) shall be returned promptly to the
issuer of such cash dividends, distributions, interest or principal, and any
such cash dividends, distributions, interest or principal received during the
pendency of any Default but not returned prior to such Default becoming an Event
of Default or during the pendency of any Event of Default shall be delivered
promptly to the Administrative Agent. Unless an Event of Default shall have
occurred and be continuing, the Pledgor shall be permitted to exercise all
voting and corporate rights with respect to the Pledged Stock; PROVIDED that no
vote shall be cast or corporate right exercised or other action taken which, in
the Administrative Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, the Notes, the other Loan Documents or this Pledge
Agreement.
7. RIGHTS OF THE LENDERS AND THE ADMINISTRATIVE AGENT. (a) If
an Event of Default shall occur and be continuing, (i) the Administrative Agent
shall have the right to receive any and all dividends, distributions, interest
and principal paid in respect of the Pledged Stock, and to make application
thereof to the Obligations in such order as the Administrative Agent may
determine and (ii) all of the Pledged Stock shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to the Pledged Stock, and (B) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options, pertaining
to any of the Pledged Stock as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all the
Pledged
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Stock upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any issuer of Pledged
Stock, or upon the exercise by the Pledgor or the Administrative Agent of any
right, privilege or option pertaining to any of the Pledged Stock, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine),
all without liability to the Administrative Agent except to account for
property actually received by it, but the Administrative Agent shall have no
duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the Pledgor,
any issuer of Pledged Stock, any guarantor or against any other Person which may
be or become liable in respect of all or any part of the Obligations or against
any collateral security therefor, guarantee therefor or right of offset with
respect thereto. Neither the Administrative Agent nor any Lender shall be liable
for any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative Agent be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
8. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted in this Pledge Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Pledgor, any issuer of Pledged Stock, any guarantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the maximum extent permitted by law), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold free of any right or equity of redemption in the Pledgor, which right or
equity is hereby waived or released to the maximum extent permitted by law. The
Administrative Agent shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
attorneys' fees and disbursements of counsel to the Administrative Agent, to the
payment in whole or in part of
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the Obligations, in such order as the Administrative Agent may elect, and
only after such application and after the payment by the Administrative Agent
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to the Pledgor. To the extent permitted by
applicable law, the Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of Collateral are insufficient to
pay the Obligations and the fees and disbursements of any attorneys employed
by the Administrative Agent or any Lender to collect such deficiency.
9. PRIVATE SALES. (a) The Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities Act
of 1933 (the "SECURITIES ACT") and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit any issuer of Pledged Stock or the Pledgor to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such issuer or the Pledgor would agree
to do so.
(b) The Pledgor further agrees to use its best efforts to do
or cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this SECTION 9
valid and binding and in compliance with any and all other applicable
Requirements of Law. The Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 9 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this SECTION 9 shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Credit Agreement.
10. LIMITATION ON DUTIES REGARDING COLLATERAL. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. None of the Administrative Agent, the Lenders or any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
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11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. SEVERABILITY. Any provision of this Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13. SECTION HEADINGS. The section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 15) be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
15. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS; GOVERNING
LAW. None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent; PROVIDED that any provision of this
Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Pledge Agreement shall inure to
the benefit of the Administrative Agent and the Lenders and their respective
successors and assigns. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
16. NOTICES. Notices may be given by mail, by telex or by
facsimile transmission, addressed or transmitted to the Person to which it is
being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid, and (b) in the
case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Pledgor and any issuer of Pledged Stock may change their
respective addresses and transmission numbers by written notice to the
Administrative Agent.
9
<PAGE>
17. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS. The
Pledgor hereby authorizes and instructs each issuer of Pledged Stock to comply
with any instruction received by it from the Administrative Agent in writing
that (a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that such issuer of
Pledged Stock shall be fully protected in so complying.
18. AUTHORITY OF AGENT. The Pledgor acknowledges that the
rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
neither the Pledgor nor any issuer of Pledged Stock shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
19. TERMINATION; RELEASE. Upon the repayment of all the
Obligations in full and the termination of the Commitments, this Pledge
Agreement shall terminate, and the Administrative Agent, at the request of and
sole expense of the Pledgor, will execute and deliver to the Pledgor the proper
instruments (including Uniform Commercial Code termination statements on form
UCC-2 or UCC-3, as applicable) acknowledging the termination of this Pledge
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty of any kind) such of the
Collateral as may be in the possession of the Administrative Agent and has not
theretofore been disposed of or otherwise applied or released.
20. COUNTERPARTS. This Pledge Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
AAVID THERMAL TECHNOLOGIES, INC.
By: ____________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: ____________________________
Name:
Title:
11
<PAGE>
ACKNOWLEDGMENT AND CONSENT
[__________] ("_______"), one of the issuers of Pledged Stock
referred to in the foregoing Pledge Agreement, hereby acknowledges receipt of a
copy thereof, agrees to be bound thereby and to comply with the terms thereof
insofar as such terms are applicable to it. [__________] agrees to notify the
Administrative Agent promptly in writing of the occurrence of any of the events
described in SECTION 5(a) of the Pledge Agreement. [__________]further agrees
that the terms of SECTION 9(b) of the Pledge Agreement shall apply to it,
MUTATIS MUTANDIS, with respect to all actions that may be required of it under
or pursuant to or arising out of SECTION 9 of the Pledge Agreement.
[----------]
By: ____________________________
Name:
Title:
Address for Notices:
With copies to:
12
<PAGE>
SCHEDULE I
TO [______]
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Class of Certificate Number Percentage
Issuer Shares Number of Shares of Shares
------ ------ ------ --------- --------
<S> <C> <C> <C> <C>
</TABLE>
* Common unless otherwise indicated.
13
<PAGE>
EXHIBIT Q
TO CREDIT AGREEMENT
FORM OF AMENDED AND RESTATED SUBSIDIARY
INTELLECTUAL PROPERTY SECURITY AGREEMENT
AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of
February 2, 2000 made by AAVID THERMAL PRODUCTS, INC., a Delaware corporation
(successor by merger to Aavid Thermal Products, Inc., a New Hampshire
corporation), (the "GRANTOR"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE,
as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") for the
several banks and other financial institutions (the "LENDERS") from time to time
parties to the Amended and Restated Credit Agreement, dated as of February 2,
2000 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among Aavid Thermal Technologies, Inc. (the "BORROWER"),
Heat Holdings Corp. (the "PARENT"), Heat Holdings II Corp., the Lenders,
Canadian Imperial Bank of Commerce, as issuer of certain letters of credit (the
"Issuer"), the Administrative Agent, BankBoston, N.A. as documentation agent
(the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Grantor was required to enter into a Security Agreement dated as of October 21,
1999 (the "EXISTING IP SECURITY AGREEMENT") with the Existing Agent, pursuant to
which , among other things, the Grantor granted to the Existing Agent a security
interest in certain collateral;
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect
<PAGE>
thereto to the Lenders and the Lenders have accepted such assignment and
assumed such obligations, and (b) the Borrower has consented to such
assignment and delegations;
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Grantor shall have
executed and delivered this Amended and Restated Security Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
WHEREAS, the Grantor and the Administrative Agent wish to
amend the Existing IP Security Agreement as set forth herein in order to, among
other things, reflect the execution of the Credit Agreement and the Assignment
and Assumption Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS.
(a) Unless otherwise defined herein, each capitalized term
used herein that is defined in the Credit Agreement shall have the meaning
specified for such term in the Credit Agreement. Unless otherwise defined herein
or in the Credit Agreement, all terms defined in Article 9 of the Uniform
Commercial Code in effect as of the date hereof in the State of New York are
used herein as defined therein as of the date hereof.
(b) The words "hereof", "herein" and "hereunder" and words of
like import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and section references
are to this Agreement unless otherwise specified.
(c) All terms defined in this Agreement in the singular shall
have comparable meanings when used in the plural, and VICE VERSA, unless
otherwise specified.
2. SECURITY INTEREST IN INTELLECTUAL PROPERTY. To secure the
complete and timely payment, performance and satisfaction of all the
Obligations, the Grantor hereby grants to the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, a security interest in, as
and by way of a first mortgage and security interest having priority over all
other security interests, with power of sale to the extent permitted by
applicable law, all the Grantor's now owned or existing and hereafter acquired
or arising:
(i) trademarks, registered trademarks, trademark applications,
service marks, registered service marks and service mark applications,
including, without limitation, the trademarks, registered trademarks,
trademark applications, service marks, registered
2
<PAGE>
service marks and service mark applications listed on SCHEDULE A
attached hereto and made a part hereof, and (a) all renewals thereof,
(b) all income, royalties, damages and payments now and hereafter due
and/or payable under and with respect thereto, including, without
limitation, payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements
or dilutions thereof, (c) the right to sue for past, present and future
infringements and dilutions thereof, (d) the goodwill of the Grantor's
business symbolized by the foregoing and connected therewith, and (e)
all the Grantor's rights corresponding thereto throughout the world
(all the foregoing trademarks, registered trademarks and trademark
applications, and service marks, registered service marks and service
mark applications, together with the items described in CLAUSES (a)-(e)
in this PARAGRAPH 2(i), are sometimes hereinafter individually and/or
collectively referred to as the "TRADEMARKS");
(ii) rights under or interest in any patent license
agreements, trademark license agreements or service mark license
agreements with any other party, whether the Grantor is a licensee or
licensor under any such license agreement, including, without
limitation, those patent license agreements, trademark license
agreements and service mark license agreements listed on SCHEDULE B
attached hereto and made a part hereof, in each case to the extent
assignable without violation thereof, together with any goodwill
connected with and symbolized by any such trademark license agreements
or service mark license agreements, and the right to prepare for sale
and sell any and all Inventory now or hereafter owned by the Grantor
and now or hereafter covered by such licenses (all the foregoing are
hereinafter referred to collectively as the "LICENSES"); and
(iii) patents and patent applications, and the inventions and
improvements described and claimed therein, including, without
limitation, those patents and patent applications listed on SCHEDULE A
attached hereto and made a part hereof, and (a) the reissues,
divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties, damages and
payments now and hereafter due and/or payable under and with respect
thereto, including, without limitation, payments under all licenses
entered into in connection therewith and damages and payments for past
or future infringements thereof, (c) the right to sue for past, present
and future infringements thereof, (d) all patented technology and
know-how, and (e) all of the Grantor's rights corresponding thereto
throughout the world (all of the foregoing patents and applications,
together with the items described in CLAUSES (a)-(e) in this PARAGRAPH
2(iii) are sometimes hereinafter individually and/or collectively
referred to as the "PATENTS").
3. RESTRICTIONS ON FUTURE AGREEMENTS. The Grantor will not,
without the Administrative Agent's prior written consent, enter into any
agreement, including, without limitation, any license agreement, which is
inconsistent with this Agreement, and the Grantor further agrees that, without
the Administrative Agent's prior written consent, it will not take any action,
and will use its best efforts not to permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would in any respect adversely affect the validity or enforcement of the rights
transferred to the Administrative Agent under this Agreement or the rights
associated with any Patents, Trademarks or Licenses, and in particular, the
Grantor will not permit to lapse or become abandoned any Patent, Trademark or
License;
3
<PAGE>
PROVIDED that nothing contained herein shall restrict the Grantor's
ability to license its software in the ordinary course of its business
consistent with prior practice.
4. NEW PATENTS, TRADEMARKS AND LICENSES. The Grantor
represents and warrants that (a) the Patents and Trademarks listed on SCHEDULE A
include all the registered patents, patent applications, trademarks, common law
trademarks, trademark applications, registered service marks and service mark
applications now owned or held by the Grantor, (b) the Licenses listed on
SCHEDULE B include all the patent license agreements, trademark license
agreements and service mark license agreements under which the Grantor is the
licensee or licensor and which are material individually or in the aggregate to
the operation of the business of the Grantor and (c) other than the rights of
any party to the Licenses with respect to the Patents and the Trademarks, no
Liens in such Patents, Trademarks and Licenses have been granted by the Grantor
to any Person other than the Administrative Agent. If, prior to the termination
of this Agreement, the Grantor shall (i) obtain rights to any new patentable
inventions, trademarks, registered trademarks, trademark applications, service
marks, registered service marks or service mark applications, (ii) become
entitled to the benefit of any patent, patent application, license or any
reissue, division, continuation, renewal, extension or continuation-in-part of
any Patent or any improvement on any Patent or License or any trademarks,
registered trademarks, trademark applications, trademark licenses, trademark
license renewals, service marks, registered service marks, service mark
applications, service mark licenses or service mark license renewals whether as
licensee or licensor, or (iii) enter into any new patent license agreement,
trademark license agreement or service mark license agreement, the provisions of
PARAGRAPH 3 above shall automatically apply thereto. The Grantor shall give to
the Administrative Agent written notice of events described in CLAUSES (i), (ii)
and (iii) of the preceding sentence within 30 days of the occurrence of any such
event. The Grantor hereby authorizes the Administrative Agent to modify this
Agreement unilaterally (i) by amending SCHEDULE A to include any future patents,
trademarks, registered trademarks, trademark applications, service marks, patent
applications, registered service marks and service mark applications owned or
held by Grantor or to prepare this Agreement for filing with the Patent and
Trademark Office and by amending SCHEDULE B to include any patent license
agreements, trademark license agreements and service mark license agreements to
which Grantor becomes a party, which are Trademarks or Licenses under PARAGRAPH
2 above or under this PARAGRAPH 4, and (ii) by filing with the Patent and
Trademark Office, in addition to and not in substitution for this Agreement, a
duplicate original of this Agreement containing on SCHEDULE A or B thereto, as
the case may be, such future patents, trademarks, registered trademarks,
trademark applications, service marks, patent applications, registered service
marks and service mark applications, and patent license agreements, trademark
license agreements and service mark license agreements.
5. ROYALTIES. The Grantor hereby agrees that the use by the
Administrative Agent of the Patents, Trademarks and Licenses as authorized
hereunder in connection with the Administrative Agent's exercise of its rights
and remedies under PARAGRAPH 13 or pursuant to the Security Agreements shall be
coextensive with the Grantor's rights thereunder and with respect thereto and
without any liability for royalties or other related charges from the
Administrative Agent and the Lenders to the Grantor.
4
<PAGE>
6. FURTHER ASSIGNMENTS AND SECURITY INTERESTS. The Grantor
agrees not to sell or assign its respective interests in, or grant any license
under, the Patents, the Trademarks or the Licenses without the prior and express
written consent of the Administrative Agent.
7. Nature and Continuation of the Administrative Agent's
Security Interest; Termination of the Administrative Agent's Security Interest;
Release of Collateral. This Agreement is made for collateral security purposes
only. This Agreement shall create a continuing security interest in the Patents,
Trademarks and Licenses and shall terminate only when the Obligations have been
paid in full in cash and the Credit Agreement and the Security Agreements have
been terminated. Upon such termination and at the written request of the Grantor
or its successors or assigns, and at the cost and expense of the Grantor or its
successors or assigns, the Administrative Agent shall execute in a timely manner
such instruments, documents or agreements as are necessary or desirable to
terminate the Administrative Agent's security interest in the Patents, the
Trademarks and the Licenses, subject to any disposition thereof which may have
been made by the Administrative Agent pursuant to this Agreement or the Security
Agreements.
8. DUTIES OF THE GRANTOR. Subject to the second sentence of
this Section 8, the Grantor shall have the duty (i) to prosecute diligently any
patent application, trademark application or service mark application that is
part of the Trademarks pending as of the date hereof or hereafter until the
termination of this Agreement and (ii) to make any application for and
diligently prosecute the registration of (x) any trademark or service mark that
the Grantor has not created as of the date hereof which the Administrative
Agent, after consultation with the Grantor, reasonably determines may have
significant value and (y) any unpatented but patentable invention. The Grantor
further agrees (i) not to abandon any Trademark or License without the prior
written consent of the Administrative Agent if such abandonment would have a
Material Adverse Effect, and (ii) to use its reasonable best efforts to obtain
and maintain in full force and effect the Patents, the Trademarks and the
Licenses that are or shall be necessary or economically desirable in the
operation of the Grantor's business. Any expenses incurred in connection with
the foregoing shall be borne by the Grantor. Neither the Administrative Agent
nor any of the Lenders shall have any duty with respect to the Patents,
Trademarks and Licenses. Without limiting the generality of the foregoing,
neither the Administrative Agent nor any of the Lenders shall be under any
obligation to take any steps necessary to preserve rights in the Patents, the
Trademarks or Licenses against any other parties, but the Administrative Agent
may do so at its option from and after the occurrence of an Event of Default,
and all expenses incurred in connection therewith shall be for the sole account
of the Grantor and shall be added to the Obligations secured hereby.
9. THE ADMINISTRATIVE AGENT'S RIGHT TO SUE. Upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right, but shall not be obligated, to bring suit in its own
name to enforce the Patents, the Trademarks and the Licenses and, if the
Administrative Agent shall commence any such suit, the Grantor shall, at the
request of the Administrative Agent, do any and all lawful acts and execute any
and all proper documents required by the Administrative Agent in aid of such
enforcement. The Grantor shall, upon demand, promptly reimburse the
Administrative Agent for all actual costs and expenses incurred by the
Administrative Agent in the exercise of its rights under this
5
<PAGE>
PARAGRAPH 9 (including, without limitation, reasonable fees and expenses of
counsel for the Administrative Agent).
10. WAIVERS. The Administrative Agent's failure, at any time
or times hereafter, to require strict performance by the Grantor of any
provision of this Agreement shall not waive, affect or diminish any right of the
Administrative Agent thereafter to demand strict compliance and performance
therewith nor shall any course of dealing between the Grantor and the
Administrative Agent have such effect. No single or partial exercise of any
right hereunder shall preclude any other or further exercise thereof or the
exercise of any other right. None of the undertakings, agreements, warranties,
covenants and representations of the Grantor contained in this Agreement shall
be deemed to have been suspended or waived by the Administrative Agent unless
such suspension or waiver is in writing signed by an officer of the
Administrative Agent and directed to the Grantor specifying such suspension or
waiver.
11. SEVERABILITY. If any provision of this Agreement is held
to be prohibited or unenforceable in any jurisdiction the substantive laws of
which are held to be applicable hereto, such prohibition or unenforceability
shall not affect the validity or enforceability of the remaining provisions
hereof and shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12. MODIFICATION. This Agreement cannot be altered, amended or
modified in any way, except as specifically provided in PARAGRAPH 4 hereof or by
a writing signed by the parties hereto.
13. CUMULATIVE REMEDIES; POWER OF ATTORNEY. The Grantor
agrees, upon the request of the Administrative Agent and promptly following such
request, to take any action and execute any instrument which the Administrative
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement. The Grantor hereby irrevocably designates, constitutes and appoints
the Administrative Agent (and all Persons designated by the Administrative Agent
in its sole and absolute discretion) as the Grantor's true and lawful
attorney-in-fact, and authorizes the Administrative Agent and any of the
Administrative Agent's designees, in the Grantor's or the Administrative Agent's
name, from and after the occurrence and during the continuance of an Event of
Default, to take any action and execute any instrument which the Administrative
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, (i) to endorse the Grantor's name on
all applications, documents, papers and instruments necessary or desirable for
the Administrative Agent in the use, prosecution or protection of the Patents,
the Trademarks or the Licenses, (ii) to assign, pledge, convey or otherwise
transfer title in or dispose of the Trademarks or the Licenses to anyone on
commercially reasonable terms, (iii) to grant or issue any exclusive or
nonexclusive license under the Patents, the Trademarks or the Licenses, to
anyone on commercially reasonable terms, and (iv) to take any other actions with
respect to the Patents or the Trademarks or, to the extent permitted, the
Licenses as the Administrative Agent deems in its own or the Lenders' best
interest. The Grantor hereby ratifies all that such attorney shall lawfully do
or, to the extent permitted, cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable until all the
Obligations shall have been paid in full in cash and the Credit Agreement shall
have been terminated. The Grantor acknowledges and agrees that this Agreement is
not intended to limit or restrict in any way the rights and remedies of the
6
<PAGE>
Administrative Agent or the other Lenders under the Agreement, but rather is
intended to facilitate the exercise of such rights and remedies.
The Administrative Agent shall have, in addition to all other
rights and remedies given it by the terms of this Agreement, all rights and
remedies allowed by law and the rights and remedies of a secured party under the
Uniform Commercial Code as enacted in any jurisdiction in which the Trademarks
or the Licenses may be located or deemed located. If an Event of Default has
occurred and is continuing and the Administrative Agent has elected to exercise
any of its remedies under Section 9-504 or Section 9-505 of the Uniform
Commercial Code with respect to the Patents, Trademarks and Licenses, the
Grantor agrees to assign, convey and otherwise transfer all of its title in and
to the Patents, the Trademarks and the Licenses to the Administrative Agent or
any transferee of the Administrative Agent and to execute and deliver to the
Administrative Agent or any such transferee all such agreements, documents and
instruments as may be necessary, in the Administrative Agent's sole discretion,
to effect such assignment, conveyance and transfer; PROVIDED that in the case of
any Patents, Trademarks and Licenses licensed to the Borrower by third parties,
such transfer shall be solely to the extent any of the foregoing are
transferable pursuant to operative agreements between the Borrower and such
third party. All the Administrative Agent's rights and remedies with respect to
the Patents, the Trademarks and the Licenses, whether established hereby, by the
Security Agreements, by any other agreements or by law, shall be cumulative and
may be exercised separately or concurrently. Notwithstanding anything set forth
herein to the contrary, it is hereby expressly agreed that if an Event of
Default has occurred and is continuing, the Administrative Agent may exercise
any of the rights and remedies provided in this Agreement, the Security
Agreements and any of the other Loan Documents. The Grantor agrees that any
notification of intended disposition of any of the Patents, Trademarks and
Licenses required by law shall be deemed reasonably and properly given if given
at least ten (10) days before such disposition; PROVIDED, that the
Administrative Agent may give any shorter notice that is commercially reasonable
under the circumstances.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Grantor and its successors and assigns, and shall inure to the benefit
of each of the Lenders and its nominees, successors and assigns. The Grantor's
successors and assigns shall include, without limitation, a receiver, trustee or
debtor-in-possession of or for the Grantor; PROVIDED, that the Grantor shall not
voluntarily assign or transfer its rights or obligations hereunder without the
Administrative Agent's prior written consent.
15. GOVERNING LAW. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the law (without regards to
conflict of law provisions (other than Section 5-1401 of the General Obligations
Law)) of the State of New York, except for perfection and enforcement of
security interests and liens in other jurisdictions to the extent the law of
another jurisdiction is, pursuant to the laws of such jurisdiction, mandatorily
applicable.
16. NOTICES. All notices or other communications hereunder
shall be given in the manner and to the addresses set forth in Section 9.2 of
the Credit Agreement.
17. AUTHORITY OF ADMINISTRATIVE AGENT. The Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any
7
<PAGE>
action taken by the Administrative Agent or the exercise or non-exercise by
the Administrative Agent of any option, right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and
valid authority so to act or refrain from acting, and the Grantor shall not
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
18. TERMINATION; RELEASE. Upon the repayment of all the
Obligations in full and the termination of the Commitments, this Agreement shall
terminate, and the Administrative Agent, at the request and expense of the
Grantor, will promptly execute and deliver to the Grantor the proper instruments
acknowledging the termination of this Agreement, and will duly assign, transfer
and deliver to Grantor (without recourse and without any representation or
warranty of any kind) such of the Collateral as may be in the possession of the
Administrative Agent and has not theretofore been disposed of or otherwise
applied or released.
19. REINSTATEMENT. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Lenders in respect of the Obligations is rescinded or must
otherwise be restored or returned by such Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Grantor or upon
the appointment of any intervenor or conservator of, or trustee or similar
official for, the Grantor or any substantial part of its assets, or upon the
entry of an order by a bankruptcy court avoiding payment of such amount, or
otherwise, all as though such payments had not been made.
20. SECTION TITLES. The section titles herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
21. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
22. SUBMISSION TO JURISDICTION AND SERVICE OF PROCESS. The
Grantor hereby irrevocably and unconditionally agrees that the terms of Section
9.13 of the Credit Agreement with respect to submission to jurisdiction and
service of process shall apply equally to this Agreement.
23. WAIVER OF BOND. The Grantor waives the posting of any bond
otherwise required of the Administrative Agent in connection with any judicial
process or proceeding to realize on any of the Patents, Trademarks or Licenses
or any other security for the Obligations, to enforce any judgment or other
court order entered in favor of the Administrative Agent, or to enforce by
specific performance, temporary restraining order, or preliminary or permanent
8
<PAGE>
injunction, this Agreement or any other agreement or document between the
Administrative Agent and the Grantor.
24. WAIVER OF JURY TRIAL. EACH OF THE GRANTOR AND THE
ADMINISTRATIVE AGENT WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE ADMINISTRATIVE AGENT AND
THE GRANTOR ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EITHER THE GRANTOR OR THE ADMINISTRATIVE AGENT MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AAVID THERMAL PRODUCTS, INC.
By: ______________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: ______________________________
Name:
Title:
10
<PAGE>
STATE OF _____________)
) SS
COUNTY OF ___________)
On the _____ day of ___________, 2000, before me personally
came ________________________, to me known, who being by me duly sworn, did
depose and say that he/she resides at _______________________________________
____________________________________________; that he/she is a )_____________
_________________________ of AAVID THERMAL PRODUCTS, INC., the corporation
described in and which accepted and agreed to the foregoing instrument; and that
he/she signed his/her name thereto by authority of the board of directors of
said corporation.
----------------------------
Notary Public
11
<PAGE>
STATE OF _____________)
) SS
COUNTY OF ___________)
On the _____ day of ___________, 2000, before me personally
came ________________________, to me known, who being by me duly sworn, did
depose and say that he/she resides at _______________________________________
____________________________________________; that he/she is a ______________
_________________________ of Canadian Imperial Bank of Commerce, the entity
described in and which accepted and agreed to the foregoing instrument; and that
he/she signed his/her name thereto by appropriate authority.
-----------------------------
Notary Public
12
<PAGE>
Schedule A
to
Aavid Thermal Products, Inc. Amended and
Restated Intellectual Property Security Agreement
Dated as of February 2, 2000
TRADEMARKS, SERVICE MARKS, ETC., AND APPLICATIONS
TRADEMARK COUNTRY APPLICATION NO. REGISTRATION NO.
--------- ------- --------------- ----------------
PATENTS AND APPLICATIONS
13
<PAGE>
Schedule B
to
Aavid Thermal Products, Inc. Amended and Restated
Intellectual Property Security Agreement
Dated as of February 2, 2000
LICENSE AGREEMENTS
14
<PAGE>
EXHIBIT R
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
AAVID THERMAL TECHNOLOGIES, INC.
FORM OF COMPLIANCE CERTIFICATE
Pursuant to Section 5.2(c) of the Amended and Restated Credit
Agreement dated as of February 2, 2000 among Aavid Thermal Technologies, Inc., a
Delaware corporation (the "Borrower"), Heat Holdings Corp., Heat Holdings II
Corp., the several banks and other financial institutions from time to time
party thereto (the "Lenders"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit, Canadian Imperial Bank of Commerce, as administrative
agent for the Lenders (the "Administrative Agent"), BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (as amended, supplemented or otherwise modified
from time to time, the "Amended and Restated Credit Agreement"; certain defined
terms are used herein as defined therein), the undersigned hereby certifies that
he is the Chief Financial Officer of the Borrower and further certifies as
follows:
1. No Default or Event of Default has occurred and is
continuing as of the date hereof, except as set forth
in this Certificate.
[2. As of ___________________ (the "Computation Date"),
EBITDA for the previous twelve months was
$__________, as shown on Attachment 1.](5)
3. As the Computation Date:
a. The Total Leverage Ratio was ____:1.00, as
computed on Attachment 1 hereto.
b. The Fixed Charges Ratio for the previous
four fiscal quarters was _____ :1.00, as
computed on Attachment 2 hereto.
c. The Interest Coverage Ratio for the previous
four fiscal quarters was _____ :1.00, as
computed on Attachment 4 hereto.
4. Capital Expenditures:
a. For the current fiscal year (up to the
Computation Date) the Capital Expenditures
by the Borrower and its Subsidiaries were
$_____________ in the aggregate.
____________________
(5) To be included on the Effective Date only.
<PAGE>
b. Capital Expenditures for the current fiscal
year less the Carryover Amount were
$_________.
c. The amount set forth in paragraph 5(b) above
does not exceed $___________(6) of Capital
Expenditures that the Borrower may expend
for the applicable fiscal year.
5. As of the date hereof, the aggregate Net Disposition
Proceeds received by the Borrower since the Effective
Date is $_____________.
IN WITNESS WHEREOF, the undersigned has hereunto set his name
on this __ day of ________, ____.
AAVID THERMAL TECHNOLOGIES, INC.
By:_________________________
Name:
Title: Chief Financial Officer
- -------------------
(6) [$16,500,000 from the Effective Date to March 31, 2000.]
2
<PAGE>
ATTACHMENT 1
EBITDA
<TABLE>
<S> <C> <C>
1. Net Income for Borrower and its Subsidiaries (excluding (i) all items
classified as extraordinary, all determined in accordance with U.S.
GAAP, (ii) all insurance proceeds (other than proceeds of business
interruption insurance) received during such period to the extent, if
any, included in Net Income and (iii) tax gains and losses upon the
disposition of capital assets $_________
2. Sum of all amounts deducted in computing Net Income for such period in
respect of:
(a) Interest Expense (after giving effect to all Hedging Agreements and
payments and receipts thereunder) (item 4 of Attachment 8) $_________
(b) non-cash amortization expense (including amortization of financing
costs, non-current assets and non-cash charges) $_________
(c) depreciation $_________
(d) income taxes $_________
(e) all other non-cash expenses (other than for minority interests) less
extraordinary gains $_________
(f) non-recurring transaction expenses and underwriting fees $_________
(g) Thermalloy Management Fees(7) $_________
(h) one-time, non-recurring expenses accrued on or prior to December 31,
2000 and related to the Merger associated with facility
closings and headcount reductions related to the Acquisition
and agreed to by Borrower's independent accounting firm $_________
(i) the excess of (A) the value of the inventory sold during such
period as would be set forth on the balance sheet of the
Thermalloy Companies on the date the Thermalloy Acquisition is
consummated (after giving effect to the Thermalloy
Acquisition) over (B) the value of such inventory as would be
set forth on the balance sheet of the Thermalloy Companies on
such date (immediately prior to giving effect to the Thermalloy
Acquisition)(8) $_________
</TABLE>
- -------------------
(7) Amount not to exceed (i) $2,191,000 for the third fiscal quarter of 1999,
(ii) $1,336,000 for the fourth fiscal quarter of 1999, (iii) $1,090,000 for
the first quarter of 2000, (iv) $358,000 for the second fiscal quarter of
2000 and (v) $0 thereafter.
(8) Solely for purposes of calculating EBITDA for any period including
December 1, 2000.
3
<PAGE>
<TABLE>
<S> <C> <C>
(j) the excess of (A) the value of the inventory sold during such period
as would be set forth on the balance sheet of the Borrower on
the date the Merger was consummated over (B) the value of such
inventory as would be set forth on the balance sheet of the
Borrower on such date (immediately prior to giving effect to
the Merger)(9)
(k) the corporate overhead costs and expenses allocated to the
Thermalloy Companies by the Sellers and paid to the Sellers during
such period(10) $_________
(l) the amount attributable to the minority interests owned by
Heat Holdings II in AT as reflected on the books and records
of Heat Holdings II as such(11) $_________
Total of (a) through (l) $_________
3. the amounts of the items listed in 1 and 2 above attributable to the
assets or Capital Stock acquired in a Thermalloy Acquisition or a
Permitted Acquisition determined assuming that all references to the
Borrower in such items or in any other defined term contained therein
shall be deemed to be references to the Person or attributable to the
Capital Stock or assets so acquired(12)
4. the amounts of the items listed in 1 and 2 above attributable to the
assets or Capital Stock disposed of in any Permitted Disposition(13)
</TABLE>
- -------------------
(9) Solely for purposes of calculating EBITDA for any period including
September 30, 2001.
(10) Solely for purposes of calculating EBITDA for any period including
July 3, 1999.
(11) To the extent not duplicative with items (a) through (k).
(12) Applicable for any period of determination which occurs after the
Thermalloy Acquisition or a Permitted Acquisition but incorporates fiscal
quarters prior thereto. Determination of such amounts to be made assuming
that such acquisition shall be deemed to have occurred as of the first day of
the period being measured.
(13) Applicable for any period which occurs after a Permitted Disposition but
incorporates fiscal quarters prior thereto. Determination of such amount to
be made assuming such disposition has occurred as of the first day of the
period being measured.
4
<PAGE>
<TABLE>
<S> <C> <C>
5. the amount by which aggregate amount of items 1, item 2 and item 3
during such period is increased as a result of such lease being deemed
a financing lease for financial accounting purposes(14)
6. EBITDA (sum of item 1, item 2 and item 3, minus item 4 and item 5) $_________
6. [Covenant minimum EBITDA (as set forth in Section 4.1(bb) of the
Amended and Restated Credit Agreement): $41,000,000](15)
</TABLE>
- -------------------
(14) Solely for purposes of calculating EBITDA for any period prior to the
date that the German Lease is deemed to be an operating lease for financial
accounting purposes and not a financing lease.
(15) To be included on the Effective Date only.
5
<PAGE>
ATTACHMENT 2
TOTAL LEVERAGE RATIO
<TABLE>
<S> <C> <C>
1. Funded Debt of Borrower (on the Computation Date) (item 6 of
Attachment 6) $_________
2. EBITDA (item 6 of Attachment 1) $_________
3. Total Leverage Ratio (item 1 divided by item 2) ______:1.0
4. Covenant Total Leverage Ratio (as set forth in Section 6.1(c) or
Section 4.1(bb), as applicable, of the Amended and Restated Credit
Agreement):
</TABLE>
<TABLE>
PERIOD TOTAL LEVERAGE RATIO
<S> <C>
Effective Date through June 30, 2000 5.40 to 1.0
July 1, 2000 through December 31, 2000 5.00 to 1.0
January 1, 2001 through June 30, 2001 4.75 to 1.0
July 1, 2001 through December 31, 2001 4.25 to 1.0
January 1, 2002 and thereafter 3.75 to 1.0
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT 3
FIXED CHARGES RATIO
<S> <C> <C>
1. EBITDA (item 6 of Attachment 1) $_________
2. Interest Expense of Borrower (item 4 of Attachment 8) $_________
3. Capital Expenditures of Borrower (item 5(a) of the Compliance Certificate) $_________
4. Income or other taxes paid or payable in cash during the relevant period $_________
5. Regularly scheduled payments on the Term Loans during the relevant period $_________
6. Regularly scheduled payments of all other Funded Debt of Borrower and its
Subsidiaries during the relevant period $_________
7. Fixed Charges (sum of item 2, item 3, item 4, item 5 and item 6) $_________
8. Fixed Charges Ratio (item 1 divided by item 7) _____:1.00
9. Covenant Fixed Charges Ratio (as set forth in Section 6.1(b) of the
Amended and Restated Credit Agreement):
</TABLE>
<TABLE>
<CAPTION>
PERIOD FIXED CHARGES RATIO
<S> <C> <C>
March 31, 2001 through December 31, 2001 1.00 to 1.0
January 1, 2002 and thereafter 1.10 to 1.0
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT 4
INTEREST COVERAGE RATIO
<S> <C> <C>
1. EBITDA (item 6 of Attachment 1) $_________
2. Interest Expense (item 4 of Attachment 8)(16) $_________
3. Interest Coverage Ratio (item 1 divided by item 2) _____:1.0
4. Covenant Interest Coverage Ratio (as set forth in Section 6.1(a)
of the Amended and Restated Credit Agreement):
</TABLE>
<TABLE>
<CAPTION>
PERIOD INTEREST COVERAGE RATIO
<S> <C> <C>
July 1, 2000 through September 30, 2000 1.50 to 1.00
October 1, 2000 through December 31, 2000 1.75 to 1.00
January 1, 2001 through December 31, 2001 2.00 to 1.00
January 1, 2002 through December 31, 2002 2.25 to 1.00
January 1, 2003 and thereafter 2.75 to 1.00
</TABLE>
- ------------------------------
(16) (x) for the fiscal quarter ending March 31, 2000, Interest Expense for
such fiscal quarter multiplied by four; (y) for the fiscal quarter ending
June 30, 2000, Interest Expense for such fiscal quarter multiplied by two;
and (z) for the fiscal quarter ending September 30, 2000, Interest Expense
for such fiscal quarter multiplied by four-thirds.
8
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT 5
EXCESS CASH FLOW
<S> <C> <C>
1. EBITDA (item 6 of Attachment 1) $_________
2. Optional prepayments of principal of Term Loans $_________
3. Fixed Charges (item 7 of Attachment 3) $_________
4. Optional prepayments of principal of Revolving Credit Loans $_________
5. Excess Cash Flow (item 1 minus the sum of item 2, item 3 and item 4) $_________
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT 6
FUNDED DEBT
<S> <C> <C>
Indebtedness of Borrower and its Subsidiaries (item 9
1. of Attachment 7) $__________
Liabilities arising under Hedging Agreements (other
2. than interest rate caps) (item 6 of Attachment 7) $__________
Withdrawal liabilities of Borrower or any Commonly
3. Controlled Entity to a Plan (item 7 of Attachment 7) $__________
Guarantee Obligations, if the primary obligations would constitute
Indebtedness of another Person under item 1 through item 7 of
Attachment 7 (to the extent arising under the Guarantee Obligations of
a liability arising
4. under item 6 or item 7 of Attachment 7) $__________
Funded Debt (item 1 minus the sum of item 2, item 3 and
5. item 4) $__________
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT 7
INDEBTEDNESS
<S> <C> <C>
1. Indebtedness for borrowed money or for the deferred purchase price of $__________
property or services (other than current trade liabilities and
accrued expenses incurred in the ordinary course of business and
payable in accordance with customary practices and payable within 90 days)
2. To the extent not included above, indebtedness evidenced by a $__________
note, bond, debenture or similar instrument
3. Obligations under Financing Leases $__________
4. Obligations under outstanding letters of credit, acceptances and $__________
similar obligations
5. To the extent not included above, liabilities secured by any Lien on $__________
owned property even if not assumed or otherwise liable for payment
6. To the extent not included above, liabilities arising under $__________
Hedging Agreements (other than interest rate caps)
7. To the extent not included above, withdrawal liabilities of $__________
Borrower or any Commonly Controlled Entity to a Plan
8. To the extent not included above, Guarantee Obligations, if the $__________
primary obligations would constitute Indebtedness of another
Person under item 1 through item 7
9. Indebtedness (sum of item 1, item 2, item 3, item 4, item 5, item $__________
6, item 7 and item 8)
</TABLE>
11
<PAGE>
<TABLE>
ATTACHMENT 8
INTEREST EXPENSE
<S> <C> <C>
1. All interest in respect of Indebtedness of the Parent, Borrower $__________
and their respective Subsidiaries accrued or capitalized during
the relevant period
2. Net amounts payable (or minus the net amounts receivable) under $__________
Hedging Agreements accrued during the relevant period (excluding
transaction or "up front" fees incurred in establishing or
entering into any Hedging Agreement)
3. Financing or commitment fees in respect of Indebtedness of $__________
Borrower or any Subsidiary and management fees accrued or
capitalized during the relevant period (excluding arrangement or
underwriting or similar fees or costs (including attorneys' fees)
paid in respect of Indebtedness or Permitted High Yield
Securities)
4. Interest Expense (sum of item 1, item 2 and item 3) $__________
</TABLE>
12
<PAGE>
EXHIBIT S
TO CREDIT
AGREEMENT
FORM OF SUBSIDIARY SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of February
2, 2000 made by AAVID THERMAL PRODUCTS, INC., a Delaware corporation (successor
by merger to Aavid Thermal Products, Inc., a New Hampshire corporation), (the
"GRANTOR"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the several banks and
other financial institutions (the "LENDERS") from time to time parties to the
Amended and Restated Credit Agreement, dated as of February 2, 2000 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Aavid Thermal Technologies, Inc. (the "BORROWER"), Heat Holdings Corp.,
Heat Holdings II Corp., the Lenders, CIBC World Markets Corp., as lead arranger
and bookrunner (in such capacity, the "LEAD ARRANGER"), Canadian Imperial Bank
of Commerce, as issuer of certain letters of credit (the "ISSUER"), BankBoston,
N.A., as documentation agent, and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Credit Agreement
dated as of October 21, 1999, among the Borrower, the lenders party thereto (the
"EXISTING LENDERS"), CIBC World Markets Corp., as lead arranger and bookrunner
(the "EXISTING ARRANGER"), Canadian Imperial Bank of Commerce, as issuer of
certain letters of credit (the "EXISTING ISSUER") and Canadian Imperial Bank of
Commerce, as administrative agent (the "EXISTING AGENT"), pursuant to which the
Existing Lenders have severally agreed to make Loans to, and the Existing Issuer
has agreed to provide letters of credit for the benefit of, the Borrower upon
the terms and subject to the conditions set forth therein (the "EXISTING CREDIT
AGREEMENT");
WHEREAS, pursuant to the Existing Credit Agreement, the
Grantor was required to enter into a Security Agreement dated as of October 21,
1999 (the "EXISTING SECURITY AGREEMENT") with the Existing Agent, pursuant to
which , among other things, the Grantor granted to the Existing Agent a security
interest in certain collateral (the "EXISTING COLLATERAL");
WHEREAS, the Existing Agent, the Existing Arranger, the
Existing Lenders, the Existing Issuer, the Administrative Agent, the Lead
Arranger, the Issuer, the Lenders, and the Borrower have entered into an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
dated as of February 2, 2000, pursuant to which (a) the Existing Lenders have
assigned all their right, title and interest in, to and under the Existing
Credit Agreement, the "Loan Documents" (as defined in the Existing Credit
Agreement) and the Collateral (as defined in such Loan Documents) and delegated
all their obligations with respect thereto to the Lenders and the Lenders have
accepted such assignment and assumed such obligations, and (b) the Borrower has
consented to such assignment and delegations;
<PAGE>
WHEREAS, the Borrower, the Lenders, the Lead Arranger, the
Issuer and the Administrative Agent have agreed to amend and restate the
Existing Credit Agreement as set forth in the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and of the Issuer to
issue Letters of Credit under the Credit Agreement that the Grantor shall have
executed and delivered this Amended and Restated Security Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
WHEREAS, the Grantor and the Administrative Agent wish to
amend the Existing Security Agreement as set forth herein in order to, among
other things, (i) reflect the execution of the Credit Agreement and the
Assignment and Assumption Agreement, and (ii) make appropriate amendments to
reflect certain changes in the Existing Collateral;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the Lenders to make their respective Loans to the Borrower under the Credit
Agreement, the Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are used herein as defined
therein. The following terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as defined
therein: Accounts, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Investment Property and Proceeds. The
following terms shall have the following meanings:
"CODE" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York.
"COLLATERAL" shall have the meaning assigned to it in Section
2.
"CONTRACTS" shall mean all contracts executed from time to
time by the Grantor, including, without limitation, with respect to an
Account, in each case, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i)
all rights of the Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of the Grantor
to damages arising out of, or for, breach or default in respect thereof
and (iii) all rights of the Grantor to perform and to exercise all
remedies thereunder.
"GUARANTEE OBLIGATIONS" shall mean all obligations of the
Grantor under the Guarantee including, without limitation, in respect
of the Obligations to the extent set forth in the Guarantee.
"OBLIGATIONS" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the maturity
of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Parent, Heat Holdings II, the Borrower
2
<PAGE>
or any of their respective Subsidiaries, as applicable, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding and whether the Administrative Agent, for the benefit of the
Lenders, is oversecured or undersecured with respect to such Loans) the
Notes and all other obligations and liabilities of the Parent, Heat
Holdings II, the Borrower or any such Subsidiary, as applicable, to the
Agents and the Lenders or any of their respective Affiliates, including
any Reimbursement Obligations and any obligation of the Borrower under
any Hedging Agreement entered into with any Agent, any Lender or any of
their respective Affiliates, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, the other Loan Documents or any Hedging Agreement
with any Agent, any Lender or any of their respective Affiliates or any
other document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees and disbursements of counsel to any Agent or to
the Lenders that are required to be paid by the Parent, Heat Holdings
II, the Borrower or any Subsidiary, as applicable, pursuant to the
terms of the Credit Agreement, any other Loan Document or any Hedging
Agreement with any Agent, any Lender or any of their respective
Affiliates) or otherwise.
"SECURITY AGREEMENT" shall mean this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
2. GRANT OF SECURITY INTEREST. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Grantor hereby
grants to the Administrative Agent for the ratable benefit of the Lenders a
security interest in all the following property now owned or at any time
hereafter acquired by the Grantor or in which the Grantor now has or at any time
in the future may acquire any right, title or interest (collectively, the
"COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property; PROVIDED that with respect
to the Capital Stock of any Foreign Subsidiary, such
security interest, together with any security
3
<PAGE>
interest created through a pledge of such Investment
Property pursuant to a Pledge Agreement, shall be in
an amount equal to 65% of such Capital Stock or such
higher percentage as may be allowed under Treas. Reg.
Section 1.956-2(c)(2) under the Code; and
(x) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing;
PROVIDED that nothing contained herein shall create a collateral assignment with
respect to any Contract if the grant of such collateral assignment is (or is
determined by non-appealable adjudication of a court or other dispute resolution
tribunal to be) prohibited by the terms of such Contract.
3. RIGHTS OF ADMINISTRATIVE AGENT AND LENDERS; LIMITATIONS ON
ADMINISTRATIVE AGENT'S AND LENDERS' OBLIGATIONS.
(a) GRANTOR REMAINS LIABLE UNDER ACCOUNTS AND CONTRACTS.
Anything herein to the contrary notwithstanding, the Grantor shall remain liable
under each of the Accounts and Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such Account and
in accordance with and pursuant to the terms and provisions of each such
Contract. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
or under any Contract by reason of or arising out of this Security Agreement or
the receipt by the Administrative Agent or any such Lender of any payment
relating to such Account or Contract pursuant hereto, nor shall the
Administrative Agent or any Lender be obligated in any manner to perform any of
the obligations of the Grantor under or pursuant to any Account (or any
agreement giving rise thereto) or under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account (or any agreement giving rise thereto) or under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(b) NOTICE TO ACCOUNT DEBTORS AND CONTRACTING PARTIES. At any
time after the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right at any time, upon written notice to
the Grantor of its intention to do so, to notify account debtors or obligors on
the Accounts and parties to the Contracts that the Accounts and the Contracts
have been assigned to the Administrative Agent for the ratable benefit of the
Lenders and that payments due or to become due to the Grantor in respect thereof
shall be made directly to the Administrative Agent and, upon such notification,
and at the expense of the Grantor, to enforce collection of any such Accounts.
The Administrative Agent may, at any time, in its own name or in the name of the
Lenders or the Grantor communicate with account debtors on the Accounts and
parties to the Contracts to verify with them to its satisfaction the existence,
amount and terms of any Accounts or Contracts. Unless an Event of Default shall
have occurred and be continuing, the Administrative Agent shall not exercise its
right under this clause (b) more than once in any 12-month period.
4
<PAGE>
(c) COLLECTIONS ON ACCOUNTS. The Administrative Agent hereby
authorizes the Grantor to collect the Accounts; PROVIDED that the Administrative
Agent may curtail or terminate said authority at any time after the occurrence
of an Event of Default. If required by the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, any
payments of Accounts, when collected by the Grantor, shall be forthwith (and, in
any event, within two Business Days) deposited by the Grantor in the exact form
received, duly endorsed by the Grantor to the Administrative Agent if required,
in a special collateral account maintained by the Administrative Agent, subject
to withdrawal by the Administrative Agent for the account of the Lenders only,
as hereinafter provided, and, until so turned over, shall be held by the Grantor
in trust for the Administrative Agent and the Lenders, segregated from other
funds of the Grantor. Each deposit of any such Proceeds shall be accompanied by
a report identifying in reasonable detail the nature and source of the payments
included in the deposit. All Proceeds constituting collections of Accounts while
held by the Administrative Agent (or by the Grantor in trust for the
Administrative Agent and the Lenders) shall continue to be collateral security
for all the Obligations and shall not constitute payment thereof until applied
as hereinafter provided. At such intervals as may be agreed upon by the Grantor
and the Administrative Agent, or, if an Event of Default shall have occurred and
be continuing, at any time at the Administrative Agent's election, the
Administrative Agent shall apply all or any part of the funds on deposit in said
special collateral account on account of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the obligations shall be paid over from time to time by the
Administrative Agent to the Grantor or to whomsoever may lawfully be entitled to
receive the same (it being understood that (i) prior to any Event of Default
that is continuing, the Grantor shall be permitted to use such funds in the
operation of its business in a manner consistent with the terms of the Credit
Agreement and (ii) within fifteen days after the occurrence of any Event of
Default, the Administrative Agent shall, in its sole discretion, either apply
such funds in payment of the Obligations in such order as the Administrative
Agent may elect or permit the Grantor to use such funds in the operation of its
business). Upon the occurrence of an Event of Default that is continuing, at the
Administrative Agent's request, the Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Accounts, including, without
limitation, all original orders, invoices and shipping receipts.
(d) ANALYSIS OF ACCOUNTS. The Administrative Agent shall have
the right to make test verifications of the Accounts in any manner and through
any medium that it reasonably considers advisable, and the Grantor shall furnish
all such assistance and information as the Administrative Agent may require in
connection therewith; PROVIDED that the Administrative Agent shall use its
reasonable efforts to minimize any disruption of the Grantor's business
resulting from such verifications. At any time and from time to time if the
Administrative Agent concludes in its reasonable judgment, based upon its
evaluation of the general creditworthiness of the Grantor, that such examination
is required, and so requests, the Grantor at its own expense shall cause
independent public accountants or other parties that are not Affiliates of the
Grantor and are reasonably satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. Unless an Event of
Default shall have occurred and be
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continuing, the Administrative Agent shall not exercise its right under this
clause (d) more than once in any 12-month period.
4. REPRESENTATIONS AND WARRANTIES. The Grantor hereby
represents and warrants that:
(a) TITLE; NO OTHER LIENS. Except as permitted under Section
6.3 of the Credit Agreement, the Grantor owns or has a valid leasehold interest
in each item of the Collateral free and clear of any and all Liens or claims of
others. Except as permitted under Section 6.3(e) of the Credit Agreement, no
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except (i) such as may have been filed in favor of the Administrative Agent, for
the ratable benefit of the Lenders, pursuant to this Security Agreement and (ii)
financing statements filed by lessors solely for information purposes in respect
of "true" leases.
(b) PERFECTED FIRST PRIORITY LIENS. Except as permitted under
Section 6.3(e) of the Credit Agreement, the Liens granted pursuant to this
Security Agreement will, upon the filing of appropriate financing statements,
constitute valid and perfected first priority Liens on the Collateral in favor
of the Administrative Agent, for the ratable benefit of the Lenders, and against
any owner or purchaser of the real property where any of the Equipment is
located and any present or future creditor obtaining a Lien on such real
property, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) ACCOUNTS. The amount represented by the Grantor to the
Lenders from time to time as owing by each account debtor or by all account
debtors in respect of the Accounts will at such time be the correct amount
actually owing by such account debtor or debtors thereunder. No amount payable
to the Grantor under or in connection with any Account is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Administrative
Agent. The place where the Grantor keeps its records concerning the Accounts is
143 North Main Street, Suite 206, Concord, NH 03301.
(d) CONTRACTS. Except as set forth in Schedule 3.4 to the
Credit Agreement, no consent of any party (other than the Grantor) to any
Contract is required in connection with the execution, delivery and performance
by the Grantor of this Security Agreement. Each Contract is in full force and
effect and constitutes a valid and legally enforceable obligation of the parties
thereto, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). No consent or
authorization of, filing with or other act by or in respect of any Governmental
Authority is required in connection with the execution, delivery or performance
by the Grantor of, or the validity or enforceability of, any of the Contracts by
any party thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the scope of any such
Contract to any material adverse limitation, either specific or general in
nature. Neither the Grantor nor (to the best of the Grantor's knowledge) any
other party to any Contract is in default in any material respect in the
performance or observance of
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any of the terms thereof. The Grantor has fully performed in all material
respects all its obligations under each Contract. The right, title and
interest of the Grantor in, to and under each Contract are not subject to any
defense, offset, counterclaim or claim which would materially adversely
affect the value of such Contract as Collateral, nor have any of the
foregoing been asserted or alleged against the Grantor as to any Contract.
The Grantor has delivered to the Administrative Agent a complete and correct
copy of each material Contract, including all amendments, supplements and
other modifications thereto and will deliver any other Contract which the
Administrative Agent may request. No amount payable to the Grantor under or
in connection with any Contract is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.
(e) INVENTORY AND EQUIPMENT. The Inventory and the Equipment
are kept at the locations listed on Schedule I hereto.
(f) CHIEF EXECUTIVE OFFICE. The Grantor's chief executive
office and chief place of business is located at 143 North Main Street, Suite
206, Concord, NH 03301.
(g) FARM PRODUCTS. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
(h) GOVERNMENTAL OBLIGORS. None of the obligors on any
Accounts, and none of the parties to any Contracts, is a Governmental Authority.
(i) INVESTMENT PROPERTY. The Investment Property
consists of the items set forth on Annex A.
5. COVENANTS. The Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full and the Commitments
are terminated:
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS AND CHATTEL
PAPER. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Grantor, the Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the Liens
created hereby. The Grantor also hereby authorizes the Administrative Agent to
file any such financing or continuation statement without the signature of the
Grantor to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Security Agreement shall be sufficient as a financing
statement for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Security Agreement.
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(b) INDEMNIFICATION. The Grantor agrees to pay, and to save
the Administrative Agent and the Lenders harmless from, any and all liabilities,
costs and expenses (including, without limitation, legal fees and expenses) (i)
with respect to, or resulting from, any delay in paying any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting from, any
delay in complying with any Requirement of Law applicable to any of the
Collateral or (iii) in connection with any of the transactions contemplated by
this Security Agreement, except resulting from the Administrative Agent's or any
Lender's gross negligence or willful misconduct. In any suit, proceeding or
action brought by the Administrative Agent or any Lender under any Account or
Contract for any sum owing thereunder, or to enforce any provisions of any
Account or Contract, the Grantor will save, indemnify and keep the
Administrative Agent and such Lender harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a breach by the Grantor of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor of such account debtor or obligor or its successors from the Grantor,
except resulting from the Administrative Agent's or any Lender's gross
negligence or willful misconduct.
(c) MAINTENANCE OF RECORDS. The Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Accounts. The Grantor will mark its books and
records pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby in such manner as the Administrative Agent may
request. For the Administrative Agent's and the Lenders' further security, the
Administrative Agent, for the ratable benefit of the Lenders, shall have a
security interest in all the Grantor's books and records pertaining to the
Collateral, and the Grantor shall, during the continuance of a Default under
Section 7.1(a) of the Credit Agreement or Section 7.1(c) of the Credit Agreement
as it relates to Section 6.1 of the Credit Agreement, turn over copies of such
books and records and during the continuation of an Event of Default turn over
any such books and records, in each case, to the Administrative Agent or to its
representatives at the request of the Administrative Agent.
(d) RIGHT OF INSPECTION. The Administrative Agent and the
Lenders shall at all times have full and free access during normal business
hours and, so long as no Event of Default shall have occurred and be continuing,
upon reasonable prior notice, to all books, correspondence and records of the
Grantor, and the Administrative Agent and the Lenders and their respective
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and the Grantor agrees to render to the Administrative
Agent and the Lenders, at the Grantor's cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto. The
Administrative Agent and the Lenders and their respective representatives shall
at all times and, so long as no Event of Default shall have occurred and be
continuing, upon reasonable prior notice, also have the right to enter into and
upon any premises where any of the Inventory or Equipment is located for the
purpose of inspecting the same, observing its use or otherwise protecting its
interests therein.
(e) COMPLIANCE WITH LAWS. The Grantor will comply in all
material respects with all Requirements of Law applicable to the Collateral or
any part thereof or to the operation
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of the Grantor's business; PROVIDED that the Grantor may contest any
Requirement of Law in any reasonable manner which shall not, in the sole
opinion of the Administrative Agent, adversely affect the Administrative
Agent's or the Lenders' rights or the priority of their Liens on the
Collateral.
(f) COMPLIANCE WITH TERMS OF CONTRACTS. The Grantor will
perform and comply in all material respects with all its obligations under the
Contracts and all its other Contractual Obligations relating to the Collateral.
(g) PAYMENT OF OBLIGATIONS. The Grantor will pay promptly when
due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if (i) the validity thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any of the Collateral or any interest
therein and (iii) such charge is adequately reserved against on the Grantor's
books in accordance with GAAP.
(h) LIMITATION ON LIENS ON COLLATERAL. The Grantor will not
create, incur or permit to exist, will defend the Collateral against, and will
take such other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than as permitted
pursuant to Section 6.3 of the Credit Agreement, and will defend the right,
title and interest of the Administrative Agent and the Lenders in and to any of
the Collateral against the claims and demands of all Persons whomsoever.
(i) LIMITATIONS ON DISPOSITIONS OF COLLATERAL. The Grantor
will not sell, transfer, lease or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so except as permitted pursuant to Section 6.6
of the Credit Agreement.
(j) LIMITATIONS ON MODIFICATIONS, WAIVERS, EXTENSIONS OF
CONTRACTS AND AGREEMENTS GIVING RISE TO ACCOUNTS. Subject to subsection (k)
below, the Grantor will not (i) amend, modify, terminate or waive any provision
of any Material Contract or any agreement giving rise to an Account in any
manner which could reasonably be expected to materially adversely affect the
value of such Contract or Account as Collateral, (ii) fail to exercise promptly
and diligently each and every material right which it may have under each
Contract and each agreement giving rise to an Account (other than any right of
termination) or (iii) fail to deliver to the Administrative Agent a copy of each
material demand, notice or document received by it relating in any way to any
Contract or any agreement giving rise to an Account. As used in this clause (j),
a "Material Contract" shall mean (x) any purchase order or license agreement by
Fluent Holdings, Inc., a Delaware corporation (successor to Fluent, Inc., a New
Hampshire corporation) with a value of more than $750,000 in any 12-month period
or (y) any other contract with a stated duration (including any extension
periods contained therein) of more than 12 months and with a value of more than
$750,000.
(k) LIMITATIONS ON DISCOUNTS, COMPROMISES, EXTENSIONS OF
ACCOUNTS. Other than in the ordinary course of business, the Grantor will not
grant any extension of the time of payment of any of the Accounts, compromise,
compound or settle the same for less than the full
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amount thereof, release, wholly or partially, any Person liable for the
payment thereof, or allow any credit or discount whatsoever thereon.
(l) MAINTENANCE OF EQUIPMENT. The Grantor will maintain each
item of Equipment not subject to Section 6.6(a) of the Credit Agreement in good
operating condition, ordinary wear and tear and immaterial impairments of value
and damage by the elements excepted, and will provide all maintenance, service
and repairs necessary for such purpose.
(m) MAINTENANCE OF INSURANCE. The Grantor will maintain, with
financially sound and reputable companies, insurance policies as required under
the Credit Agreement. All such policies shall (i) contain a breach of warranty
clause in favor of the Administrative Agent and the Lenders, (ii) provide that
no cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent and the Lenders of written notice thereof, (iii) name the
Administrative Agent as loss payee of each such policy, (iv) name the
Administrative Agent and the Lenders as insured to the extent of their interests
under each such policy and (v) be reasonably satisfactory in all material
respects to the Administrative Agent. The Grantor shall deliver to the
Administrative Agent and each Lender upon request, full information as to the
insurance carried, including certified copies of policies and certificates of
insurance from a recognized insurance broker reasonably acceptable to the
Administrative Agent.
(n) FURTHER IDENTIFICATION OF COLLATERAL. The Grantor will
furnish to the Administrative Agent and the Lenders from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
(o) NOTICES. The Grantor will advise the Administrative Agent
promptly, in reasonable detail, at its address set forth in the Credit
Agreement, (i) of any Lien (other than Liens created hereby or permitted under
the Credit Agreement) on, or claim asserted against, any of the Collateral and
(ii) of the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the Liens created hereunder.
(p) CHANGES IN LOCATIONS, NAME, ETC. Unless the Grantor gives
30 days' prior written notice to the Administrative Agent, the Grantor will not
(i) change the location of its chief executive office/chief place of business
from that specified in Section 4(f) or remove its books and records from the
location specified in Section 4(c), (ii) permit any of the Inventory or
Equipment to be kept at a location other than those listed on Schedule I hereto
or (iii) change its name, identity or corporate structure to such an extent that
any financing statement filed by the Administrative Agent in connection with
this Security Agreement would become seriously misleading.
6. ADMINISTRATIVE AGENT'S APPOINTMENT AS
ATTORNEY-IN-FACT.
(a) POWERS. The Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the
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Grantor and in the name of the Grantor or in its own name, from time to time
in the Administrative Agent's discretion, for the purpose of carrying out the
terms of this Security Agreement, to take any and all appropriate action and
to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement, and, without
limiting the generality of the foregoing, the Grantor hereby gives the
Administrative Agent the power and right, on behalf of the Grantor, without
notice to or assent by the Grantor, to do the following:
(i) in the case of any Account, at any time when the authority
of the Grantor to collect the Accounts has been curtailed or terminated
pursuant to the first sentence of Section 3(c), or in the case of any
other Collateral, at any time when any Event of Default shall have
occurred and is continuing, in the name of the Grantor or its own name,
or otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Account, Instrument, General Intangible or
Contract or with respect to any other Collateral and to file any claim
or to take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any Account,
Instrument, General Intangible or Contract or with respect to any other
Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to pay
all or any part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any
Event of Default, (A) to direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any Collateral;
(E) to defend any suit, action or proceeding brought against the
Grantor with respect to any Collateral; (F) to settle, compromise or
adjust any suit, action or proceeding described in clause (E) above
and, in connection therewith, to give such discharges or releases as
the Administrative Agent may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option and the
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's
and the Lenders' Liens thereon and to effect the intent of this
Security Agreement, all as fully and effectively as the Grantor might
do.
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The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) OTHER POWERS. The Grantor also authorizes the
Administrative Agent and the Lenders, at any time and from time to time, to
execute, in connection with the sale provided for in this SECTION 6 or in
SECTION 9 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) NO DUTY ON ADMINISTRATIVE AGENT OR LENDERS' PART. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon the Administrative Agent or any
Lender to exercise any such powers. The Administrative Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
7. PERFORMANCE BY ADMINISTRATIVE AGENT OF GRANTOR'S
OBLIGATIONS. If the Grantor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum 2% above the Alternate Base
Rate, shall be payable by the Grantor to the Administrative Agent on demand and
shall constitute Obligations secured hereby.
8. PROCEEDS. In addition to the rights of the Administrative
Agent and the Lenders specified in Section 3(c) with respect to payments of
Accounts, it is agreed that if an Event of Default shall occur and be continuing
(a) upon written notice by the Administrative Agent to the Grantor, all Proceeds
received by the Grantor consisting of cash, checks and other near-cash items
shall be held by the Grantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of the Grantor, and, forthwith upon receipt
by the Grantor, shall be turned over to the Administrative Agent in the exact
form received by the Grantor (duly endorsed by the Grantor to the Administrative
Agent, if required), and (b) any and all such Proceeds received by the
Administrative Agent (whether from the Grantor or otherwise) may, in the sole
discretion of the Administrative Agent, (i) be held by the Administrative Agent
for the ratable benefit of the Lenders as collateral security for the Guaranteed
Obligations, and/or (ii) then or at any time thereafter either (x) be applied by
the Administrative Agent for the ratable benefit of the Lenders against the
Guarantee Obligations (whether matured or unmatured), such application to be in
such order as the Administrative Agent shall elect, or (y) at the sole
discretion of the Administrative Agent, be available for use by the Grantor in
the operation of its business. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full and the Commitments shall have been
terminated shall be paid over to the Grantor or to whomsoever may be lawfully
entitled to receive the same.
9. REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and
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remedies granted to them in this Security Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations,
all rights and remedies of a secured party under the Code. Without limiting
the generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Grantor, any guarantor, or any other Person (all and each of which demands,
defenses, advertisements and notices being hereby waived to the maximum
extent permitted by applicable law), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any Lender shall have the right upon any
such public sale or sales, and, to the extent permitted by applicable law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Grantor,
which right or equity is hereby waived or released to the maximum extent
permitted by applicable law. The Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it
available to the Administrative Agent at such places as the Administrative
Agent shall reasonably select, whether at the Grantor's premises or
elsewhere. The Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Obligations, in
such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation,
Section 9-504(i)(c) of the Code, need the Administrative Agent account for
the surplus, if any, to the Grantor. To the extent permitted by applicable
law, the Grantor waives all claims, damages and demands it may acquire
against the Administrative Agent or any Lender arising out of the exercise by
them of any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or
other disposition. The Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Obligations and the fees and disbursements of any attorneys
employed by the Administrative Agent or any Lender to collect such deficiency.
10. LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL.
The Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under Section
9-207 of the Code or otherwise, shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any Lender, nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Grantor or otherwise.
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11. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
12. LIMITATION ON LINES OF BUSINESS. Nothing in this Security
Agreement shall be deemed or construed as modifying in any way the restrictions
on the Grantor's activities as set forth in Section 6.14 of the Credit
Agreement.
13. SEVERABILITY. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
14. SECTION HEADINGS. The section headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
15. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to SECTION 16), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
16. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of
the terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Grantor and the Administrative Agent; PROVIDED that any provision of this
Security Agreement may be waived by the Administrative Agent in a written letter
or agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Security Agreement shall be
binding upon the successors and assigns of the Grantor and shall inure to the
benefit of the Administrative Agent and the Lenders and their respective
successors and assigns.
17. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, EXCEPT
FOR PERFECTION AND ENFORCEMENT OF SECURITY INTERESTS AND LIENS IN OTHER
JURISDICTIONS
14
<PAGE>
TO THE EXTENT THE LAW OF ANOTHER JURISDICTION IS MANDATORILY APPLICABLE
PURSUANT TO THE LAWS OF SUCH JURISDICTION.
18. NOTICES. Notices hereunder may be given by mail, by telex
or by facsimile transmission, addressed or transmitted to the Person to which it
is being given at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) in the case of mail, three days
after deposit in the postal system, first class postage pre-paid and (b) in the
case of telex or facsimile notices, when sent if receipt is confirmed by
telephone. The Grantor may change its address and transmission number by written
notice to the Administrative Agent, and the Administrative Agent or any Lender
may change its address and transmission number by written notice to the Grantor
and, in the case of any Lender, to the Administrative Agent.
19. AUTHORITY OF ADMINISTRATIVE AGENT. The Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Security Agreement shall, as between
the Administrative Agent and the Lenders, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
the Grantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
20. COUNTERPARTS. This Security Agreement may be executed in
counterparts, and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
15
<PAGE>
IN WITNESS WHEREOF, the Grantor and the Administrative Agent
have caused this Security Agreement to be duly executed and delivered as of the
date first above written.
AAVID THERMAL PRODUCTS, INC.
By: _______________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: _______________________________
Name:
Title:
16
<PAGE>
SCHEDULE I
TO SUBSIDIARY
SECURITY AGREEMENT
AAVID THERMAL PRODUCTS, INC.
LOCATION OF INVENTORY
LOCATION OF EQUIPMENT
17
<PAGE>
ANNEX A
TO SUBSIDIARY
SECURITY AGREEMENT
AAVID THERMAL PRODUCTS, INC.
LIST OF INVESTMENT PROPERTY
18
<PAGE>
EXHIBIT T
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF JOINDER AGREEMENT
This Agreement is entered into as of _______________ among
[INITIAL SUBSIDIARY GUARANTORS and SUPPLEMENTAL GUARANTOR] (each a "Subsidiary"
and, collectively, the "Subsidiaries").
W I T N E S S E T H :
WHEREAS, Aavid Thermal Technologies, Inc., a Delaware
corporation (the "BORROWER") has entered into the Amended and Restated Credit
Agreement dated as of February 2, 2000 among the Borrower, Heat Holdings Corp.,
Heat Holdings II Corp., the financial institutions from time to time party
thereto as lenders (the "Lenders"), Canadian Imperial Bank of Commerce, as
issuer of certain letters of credit, Canadian Imperial Bank of Commerce, as
administrative agent for the Lenders (the "ADMINISTRATIVE AGENT"), BankBoston,
N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets
Corp., as lead arranger and bookrunner (as the same may hereafter be amended or
modified from time to time, the "AMENDED AND RESTATED CREDIT AGREEMENT"; terms
defined in the Amended and Restated Credit Agreement and not otherwise defined
herein being used as therein defined);
WHEREAS, in connection therewith, each of [INITIAL SUBSIDIARY
GUARANTORS] has entered into a Guarantee dated as of October 21, 1999 in favor
of the Administrative Agent for the benefit of the Lenders, pursuant to which
each such Subsidiary has guaranteed all the Obligations of the Borrower (such
Guarantees, as the same may be amended, supplemented or modified from time to
time, are collectively referred to as the "SUBSIDIARY GUARANTEES");
WHEREAS, [INITIAL SUBSIDIARY GUARANTORS] (the "Initial
Guarantors") have entered into a Contribution Agreement dated as of October 21,
1999 (the "Contribution Agreement") pursuant to which each such Subsidiary has
agreed that, to the extent any payment of the Obligations of the Borrower is
required to be made under a Subsidiary Guarantee, each Subsidiary shall be
responsible for a portion of such payment equal to its Contribution Amount (as
such term is defined in the Contribution Agreement);
WHEREAS, [insert description of acquisition and/or formation
of the Supplemental Guarantor];
WHEREAS, the [acquisition] [formation] by the Borrower of
[NAME OF SUPPLEMENTAL GUARANTOR] (the "Supplemental Guarantor") is conditioned
upon, among other things, the execution and delivery by the Supplemental
Guarantor of a Subsidiary Guarantee to the Administrative Agent for the ratable
benefit of the Lenders; and
<PAGE>
WHEREAS, each of the Initial Guarantors and the Supplemental
Guarantor desires that the Supplemental Guarantor become a party to the
Contribution Agreement;
NOW, THEREFORE, in consideration of the premises and the
covenants hereafter contained, the parties hereto agree as follows:
[SUPPLEMENTAL GUARANTOR] is joined as a party to the
Contribution Agreement as if an original signatory thereto.
This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the Subsidiaries has executed and
delivered this Agreement as of the date first above written.
[----------------------]
By:_______________________________
Name:
Title:
[----------------------]
By:_______________________________
Name:
Title:
2
<PAGE>
EXHIBIT X-1
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF CLOSING CERTIFICATE
AAVID THERMAL TECHNOLOGIES, INC.
Pursuant to Section 4.1(p) of the Amended and Restated Credit
Agreement dated as of February 2, 2000 among Aavid Thermal Technologies, Inc., a
Delaware corporation (the "BORROWER"), Heat Holdings Corp., a Delaware
corporation (the "PARENT"), Heat Holdings II Corp., a Delaware corporation
("HEAT HOLDINGS II"), the several banks and other financial institutions from
time to time parties thereto (the "LENDERS"), Canadian Imperial Bank of
Commerce, as issuer of certain letters of credit, Canadian Imperial Bank of
Commerce, as administrative agent for the Lenders, BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (the "AMENDED AND RESTATED CREDIT AGREEMENT"; terms
defined therein shall have their defined meanings when used herein), the
undersigned hereby certifies that he/she is the ___________________ of the
Borrower and in such capacity further certifies as follows:
1. The representations and warranties of the Borrower set
forth in the Amended and Restated Credit Agreement and each of the other Loan
Documents to which the Borrower is a party, or which are contained in any
certificate, document or financial or other statement furnished pursuant to or
in connection therewith or any such other document are true and correct in all
material respects on and as of the date hereof with the same effect as if made
on and as of the date hereof.
2. The Borrower has received all documents and instruments,
including all consents, authorizations and filings, required under any
Requirement of Law or Contractual Obligation of the Borrower in connection with
the execution, delivery, performance, validity and enforceability of the Amended
and Restated Credit Agreement, the Notes, the Loan Documents and the Merger
Documents except as expressly set forth in each document. I have examined
SCHEDULE 3.4 to the Amended and Restated Credit Agreement, and attached hereto
as EXHIBIT A are copies of all consents, authorizations and filings referred to
in SCHEDULE 3.4 of the Amended and Restated Credit Agreement, which consents,
authorizations and filings are in full force and effect as of the date hereof.
3. Attached hereto as EXHIBIT B are (i) true and correct
copies of each of the Merger Documents, together with all schedules and exhibits
attached thereto and side letters affecting the terms thereof or otherwise
delivered in connection therewith, together with all closing documents, opinions
and certificates executed in connection therewith, including a copy
<PAGE>
of the Notification and Report Form in respect of Merger furnished to the
Department of Justice and the Federal Trade Commission pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, all of which are in
full force and effect and (ii) evidence of approval of the Merger by the
stockholders of the Borrower. The attached Merger Documents have not been
amended, supplemented or otherwise modified since the respective dates
thereof, except as may have been consented to in writing by the Lenders.
4. The only condition to consummation of the Merger remaining
to be satisfied under the Merger Documents is the delivery of funds sufficient
to pay the consideration under the Merger Documents.
5. Attached hereto as EXHIBIT C is a true, complete and
correct copy of the schedule of sources and uses substantially in the form of
SCHEDULE 4.1(r) to the Amended and Restated Credit Agreement, setting forth the
application of the proceeds of the Loans made under the Amended and Restated
Credit Agreement on the Effective Date and the other amounts received or paid in
connection with the Merger and the financing thereof.
6. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the making of the
Loans on the date hereof.
7. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against the Borrower, nor has any other event
occurred affecting or threatening the existence of the Borrower.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her
name.
AAVID THERMAL TECHNOLOGIES, INC.
By:______________________________
Name:
Title:
Date: , 2000
2
<PAGE>
EXHIBIT X-2
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF CLOSING CERTIFICATE
HEAT HOLDINGS II CORP.
Pursuant to Section 4.1(p) of the Amended and Restated Credit
Agreement dated as of February 2, 2000 among Aavid Thermal Technologies, Inc., a
Delaware corporation (the "BORROWER"), Heat Holdings Corp., a Delaware
corporation (the "PARENT"), Heat Holdings II Corp., a Delaware corporation
("HEAT HOLDINGS II"), the several banks and other financial institutions from
time to time parties thereto (the "LENDERS"), Canadian Imperial Bank of
Commerce, as issuer of certain letters of credit, Canadian Imperial Bank of
Commerce, as administrative agent for the Lenders, BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (the "AMENDED AND RESTATED CREDIT AGREEMENT"; terms
defined therein shall have their defined meanings when used herein), the
undersigned hereby certifies that he/she is the ___________________ of Heat
Holdings II and in such capacity further certifies as follows:
1. The representations and warranties of Heat Holdings II set
forth in the Amended and Restated Credit Agreement and each of the other Loan
Documents to which Heat Holdings II is a party, or which are contained in any
certificate, document or financial or other statement furnished pursuant to or
in connection therewith or any such other document are true and correct in all
material respects on and as of the date hereof with the same effect as if made
on and as of the date hereof.
2. Heat Holdings II has received all documents and
instruments, including all consents, authorizations and filings, required under
any Requirement of Law or Contractual Obligation of Heat Holdings II in
connection with the execution, delivery, performance, validity and
enforceability of the Amended and Restated Credit Agreement, the Notes, the Loan
Documents and the Merger Documents except as expressly set forth in each
document.
3. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the making of the
Loans on the date hereof.
4. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against Heat Holdings II, nor has any other event
occurred affecting or threatening the existence of Heat Holdings II.
<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto set his/her
name.
HEAT HOLDINGS II CORP.
By:______________________________
Name:
Title:
Date: , 2000
2
<PAGE>
EXHIBIT X-3
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF CLOSING CERTIFICATE
HEAT HOLDINGS CORP.
Pursuant to Section 4.1(p) of the Amended and Restated Credit
Agreement dated as of February 2, 2000 among Aavid Thermal Technologies, Inc., a
Delaware corporation (the "BORROWER"), Heat Holdings Corp., a Delaware
corporation (the "PARENT"), Heat Holdings II Corp., a Delaware corporation
("HEAT HOLDINGS II"), the several banks and other financial institutions from
time to time parties thereto (the "LENDERS"), Canadian Imperial Bank of
Commerce, as issuer of certain letters of credit, Canadian Imperial Bank of
Commerce, as administrative agent for the Lenders, BankBoston, N.A. as
documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets Corp., as
lead arranger and bookrunner (the "AMENDED AND RESTATED CREDIT AGREEMENT"; terms
defined therein shall have their defined meanings when used herein), the
undersigned hereby certifies that he/she is the ___________________ of the
Parent and in such capacity further certifies as follows:
1. The representations and warranties of the Parent set forth
in the Amended and Restated Credit Agreement and each of the other Loan
Documents to which the Parent is a party, or which are contained in any
certificate, document or financial or other statement furnished pursuant to or
in connection therewith or any such other document are true and correct in all
material respects on and as of the date hereof with the same effect as if made
on and as of the date hereof.
2. The Parent has received all documents and instruments,
including all consents, authorizations and filings, required under any
Requirement of Law or Contractual Obligation of the Parent in connection with
the execution, delivery, performance, validity and enforceability of the Amended
and Restated Credit Agreement, the Notes, the Loan Documents and the Merger
Documents except as expressly set forth in each document. I have examined
SCHEDULE 3.4 to the Amended and Restated Credit Agreement, and attached as
EXHIBIT A to the Borrower's Closing Certificate are copies of all consents,
authorizations and filings referred to in SCHEDULE 3.4 of the Amended and
Restated Credit Agreement, which consents, authorizations and filings are in
full force and effect as of the date hereof.
3. Attached as EXHIBIT B to the Borrower's Closing Certificate
are (i) true and correct copies of each of the Merger Documents, together with
all schedules and exhibits attached thereto and side letters affecting the terms
thereof or otherwise delivered in connection therewith, together with all
closing documents, opinions and certificates executed in connection therewith,
including a copy of the Notification and Report Form in respect of Merger
furnished to the Department of Justice and the Federal Trade Commission pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, all of which are in
full force and effect and (ii)
<PAGE>
evidence of approval of the Merger by the stockholders of the Borrower. The
Merger Documents attached to the Borrower's Closing Certificate have not been
amended, supplemented or otherwise modified since the respective dates
thereof, except as may have been consented to in writing by the Lenders.
4. The only condition to consummation of the Merger remaining
to be satisfied under the Merger Documents is the delivery of funds sufficient
to pay the consideration under the Merger Documents.
5. Attached as EXHIBIT C to the Borrower's Closing Certificate
is a true, complete and correct copy of the schedule of sources and uses
substantially in the form of SCHEDULE 4.1(R) to the Amended and Restated Credit
Agreement, setting forth the application of the proceeds of the Loans made under
the Amended and Restated Credit Agreement on the Effective Date and the other
amounts received or paid in connection with the Merger and the financing
thereof.
6. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the making of the
Loans on the date hereof.
7. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against the Parent, nor has any other event
occurred affecting or threatening the existence of the Parent.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her
name.
HEAT HOLDINGS CORP.
By:______________________________
Name:
Title:
Date: , 2000
2
<PAGE>
EXHIBIT Y
TO AMENDED
AND RESTATED
CREDIT
AGREEMENT
FORM OF COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of the date set forth
in Item 1 of Schedule I hereto, among the Transferor Bank set forth in Item 2 of
Schedule I hereto (the "TRANSFEROR BANK"), each Purchasing Bank set forth in
Item 3 of Schedule I hereto (each, a "PURCHASING BANK"), and CANADIAN IMPERIAL
BANK OF COMMERCE, as administrative agent for the Lenders under the Amended and
Restated Credit Agreement described below (in such capacity, the "ADMINISTRATIVE
AGENT").
W I T N E S S E T H:
WHEREAS, this Commitment Transfer Supplement is being executed
and delivered in accordance with Section 10.6(c) of the Amended and Restated
Credit Agreement, dated as of February 2, 2000, among Aavid Thermal
Technologies, Inc., a Delaware corporation (the "BORROWER"), Heat Holdings
Corp., Heat Holdings II Corp., the Transferor Bank and the other Lenders party
thereto, Canadian Imperial Bank of Commerce, as issuer of certain letters of
credit, the Administrative Agent BankBoston, N.A. as documentation agent (the
"DOCUMENTATION AGENT") and CIBC World Markets Corp., as lead arranger and
bookrunner (as from time to time amended, supplemented or otherwise modified in
accordance with the terms thereof, the "AMENDED AND RESTATED CREDIT AGREEMENT";
terms defined therein being used herein as therein defined);
WHEREAS, each Purchasing Bank (if it is not already a Lender
party to the Amended and Restated Credit Agreement) wishes to become a Lender
party to the Amended and Restated Credit Agreement; and
WHEREAS, the Transferor Bank is selling and assigning to each
Purchasing Bank, rights, obligations and commitments under the Amended and
Restated Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Upon receipt by the Administrative Agent of (i) a
counterpart of this Commitment Transfer Supplement, to which is attached a fully
completed Schedule I and Schedule II, and which has been executed by the
Transferor Bank, each Purchasing Bank and any other person required by the
Amended and Restated Credit Agreement to consent to the transfer evidenced by
this Commitment Transfer Supplement, and (ii) the processing fee referred to in
Section 10.6(e) of the Amended and Restated Credit Agreement, the Administrative
Agent will transmit to the Borrower, the Transferor Bank and each Purchasing
Bank, a Transfer Effective Notice, substantially in the form of Schedule III to
this Commitment Transfer Supplement (a "TRANSFER EFFECTIVE Notice"). Such
Transfer Effective Notice shall set forth, INTER
<PAGE>
ALIA, the date on which the transfer effected by this Commitment Transfer
Supplement shall become effective (the "TRANSFER EFFECTIVE DATE"), which date
shall be the fifth Business Day following the date of such Transfer Effective
Notice. From and after the Transfer Effective Date, each Purchasing Bank
shall be a Lender party to the Amended and Restated Credit Agreement for all
purposes thereof.
2. At or before 12:00 noon, local time of the Transferor Bank
on the Transfer Effective Date, each Purchasing Bank shall pay to the Transferor
Bank, in immediately available funds, an amount equal to the purchase price, as
agreed between the Transferor Bank and such Purchasing Bank (the "PURCHASE
PRICE"), of the portion being purchased by such Purchasing Bank (such Purchasing
Bank's "PURCHASED PERCENTAGE") of the outstanding Loans and other amounts owing
to the Transferor Bank under the Amended and Restated Credit Agreement and its
Note(s). Effective upon receipt by the Transferor Bank of the Purchase Price
from a Purchasing Bank, the Transferor Bank hereby irrevocably sells, assigns
and transfers to such Purchasing Bank, without recourse, representation or
warranty, and each Purchasing Bank hereby irrevocably purchases, takes and
assumes from the Transferor Bank, such Purchasing Bank's Purchased Percentage of
the Commitments and the presently outstanding Loans and other amounts owing to
the Transferor Bank under the Amended and Restated Credit Agreement and its
Note(s) together with all instruments, documents and collateral security
pertaining thereto.
3. The Transferor Bank has made arrangements with each
Purchasing Bank with respect to (i) the portion, if any, to be paid, and the
date or dates for payment, by the Transferor Bank to such Purchasing Bank of any
fees heretofore received by the Transferor Bank pursuant to the Amended and
Restated Credit Agreement prior to the Transfer Effective Date and (ii) the
portion, if any, to be paid, and the date or dates for payment, by such
Purchasing Bank to the Transferor Bank of fees or interest received by such
Purchasing Bank pursuant to the Amended and Restated Credit Agreement from and
after the Transfer Effective Date.
4. (a) All principal payments that would otherwise be payable
from and after the Transfer Effective Date to or for the account of the
Transferor Bank pursuant to the Amended and Restated Credit Agreement and its
Note(s) shall, instead, be payable to or for the account of the Transferor Bank
and the Purchasing Banks, as the case may be, in accordance with their
respective interests as reflected in this Commitment Transfer Supplement.
(b) All interest, fees and other amounts that would otherwise
accrue for the account of the Transferor Bank from and after the Transfer
Effective Date pursuant to the Amended and Restated Credit Agreement and its
Note(s) shall, instead, accrue for the account of, and be payable to, the
Transferor Bank and the Purchasing Banks, as the case may be, in accordance with
their respective interests as reflected in this Commitment Transfer Supplement.
In the event that any amount of interest, fees or other amounts accruing prior
to the Transfer Effective Date was included in the Purchase Price paid by any
Purchasing Bank, the Transferor Bank and each Purchasing Bank will make
appropriate arrangements for payment by the Transferor Bank to such Purchasing
Bank of such amount upon receipt thereof from the Borrower.
5. On or prior to the Transfer Effective Date, the Transferor
Bank will deliver to the Administrative Agent its Note(s). On or prior to the
Transfer Effective Date,
2
<PAGE>
the Borrower will deliver to the Administrative Agent a new Note or Notes of
the Borrower for each Purchasing Bank, and (if the Transferor Bank shall,
after giving effect to the transfer effected by this Commitment Transfer
Supplement, remain a Lender party to the Amended and Restated Credit
Agreement) the Transferor Bank, in each case in principal amounts reflecting,
in accordance with the Amended and Restated Credit Agreement, their
Commitments as adjusted pursuant to this Commitment Transfer Supplement. Each
new Note shall be dated the Effective Date. Promptly after the Transfer
Effective Date, the Administrative Agent will send to each of the Transferor
Bank and the Purchasing Banks its new Note(s) and will send to the Borrower
the superseded Note(s) of the Transferor Bank, marked "cancelled".
6. Concurrently with the execution and delivery hereof, the
Transferor Bank will provide to each Purchasing Bank (if it is not already a
Lender party to the Amended and Restated Credit Agreement) conformed copies of
all documents delivered to such Transferor Bank on the Original Closing Date and
the Effective Date in satisfaction of the conditions precedent set forth in the
Amended and Restated Credit Agreement.
7. Each of the parties to this Commitment Transfer Supplement
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer
Supplement, the Transferor Bank and each Purchasing Bank confirm to and agree
with each other and the Administrative Agent and the Lenders as follows: (i)
other than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned hereby free and clear of any adverse claim,
the Transferor Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Amended and Restated Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Amended and Restated Credit Agreement, the Note(s) or any other
instrument or document furnished pursuant thereto; (ii) the Transferor Bank
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under the Amended and Restated Credit
Agreement, the Note(s) or any other instrument or document furnished pursuant
hereto; (iii) each Purchasing Bank confirms that it has received a copy of the
Amended and Restated Credit Agreement, together with copies of the financial
statements referred to in Section 3.1 of the Amended and Restated Credit
Agreement, the financial statements delivered pursuant to Section 5.1 of the
Amended and Restated Credit Agreement, if any, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Commitment Transfer Supplement; (iv) each Purchasing
Bank will, independently and without reliance upon the Administrative Agent, the
Transferor Bank or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking of not taking action under the Amended and Restated Credit
Agreement; (v) each Purchasing Bank appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Amended and Restated Credit Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms thereof, together with
such powers as are reasonably incidental thereto, all in accordance
3
<PAGE>
with Article 10 of the Amended and Restated Credit Agreement; and (vi) each
Purchasing Bank agrees that it will perform in accordance with their terms
all the obligations which, by the terms of the Amended and Restated Credit
Agreement, are required to be performed by it as a Lender.
9. Each Purchasing Bank agrees to comply with Section 2.18(b)
of the Amended and Restated Credit Agreement to the same extent as if it were
one of the original Lenders signatory to the Amended and Restated Credit
Agreement.
10. Schedule II hereto sets forth the revised Commitment and
Commitment Percentage of the Transferor Bank and each Purchasing Bank as well as
administrative information with respect to each Purchasing Bank.
11. THIS COMMITMENT TRANSFER SUPPLEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Commitment Transfer Supplement to be executed by their respective duly
authorized officers on Schedule I hereto as of the date set forth in Item 1 of
Schedule I hereto.
SCHEDULE I
TO COMMITMENT
TRANSFER
SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
Item 1 (Date of Commitment
Transfer Supplement):
Item 2 (Transferor Bank):
Item 3 (Purchasing Bank):
Item 4 (Signatures of Parties
to Commitment Transfer
Supplement):
____________________, as
Transferor Bank
By:______________________
Name:
Title:
____________________, as
Purchasing Bank
By:______________________
Name:
Title:
5
<PAGE>
The undersigned consents to
the transfer hereunder in
favor of the Purchasing
Bank(s) specified herein:
AAVID THERMAL TECHNOLOGIES, INC.,
as Borrower
By:____________________________
Name:
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent
By:_______________________
Name:
Title:
6
<PAGE>
SCHEDULE II
TO COMMITMENT
TRANSFER
SUPPLEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
[Name of Transferor
Bank]
REVISED COMMITMENT AMOUNT: $
REVISED COMMITMENT PERCENTAGE:
[Name of Purchasing
Bank]
NEW COMMITMENT AMOUNT: $
NEW COMMITMENT PERCENTAGE:
ADDRESS FOR NOTICES:
[Address]
Attention: ________________
Telephone: _______________
Telecopy:__________________
Telephone:_________________
Confirmation: ______________
EURODOLLAR LENDING OFFICE:
- ----------------------
- ----------------------
- ----------------------
DOMESTIC LENDING OFFICE:
- ----------------------
- ----------------------
- ----------------------
7
<PAGE>
SCHEDULE III
TO COMMITMENT
TRANSFER
SUPPLEMENT
Form of Transfer Effective Notice
To: Aavid Thermal Technologies, Inc., [Transferor Bank and each Purchasing
Bank]
The undersigned, as Administrative Agent under the Amended and
Restated Credit Agreement, dated as of February 2, 2000, among Aavid Thermal
Technologies, Inc., a Delaware corporation (the "BORROWER"), Heat Holdings
Corp., Heat Holdings II Corp., the Transferor Bank and the other Lenders party
thereto, Canadian Imperial Bank of Commerce, as issuer of certain letters of
credit, Canadian Imperial Bank of Commerce, as administrative agent, BankBoston,
N.A. as documentation agent (the "DOCUMENTATION AGENT") and CIBC World Markets
Corp., as lead arranger and bookrunner, acknowledges receipt of an executed
counterpart of a completed Commitment Transfer Supplement. Terms defined in such
Commitment Transfer Supplement are used herein as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you are
advised that the Transfer Effective Date will be ____________ [insert fifth
Business Day following date of Transfer Effective Notice].
2. Pursuant to such Commitment Transfer Supplement, the
Transferor Bank is required to deliver to the Administrative Agent on or before
the Transfer Effective Date its Notes.
3. Pursuant to such Commitment Transfer Supplement, the
Borrower is required to deliver to the Administrative Agent on or before the
Transfer Effective Date the following Notes, each dated the Effective Date.
[Describe each new Note for Transferor Bank and Purchasing
Bank as to principal amount and payee.]
4. Pursuant to such Commitment Transfer Supplement each
Purchasing Bank is required to pay its Purchase Price to the Transferor Bank at
or before 12:00 noon on the Transfer Effective Date in immediately available
funds.
Very truly yours,
CANADIAN IMPERIAL BANK OF
COMMERCE, as
Administrative Agent
By: __________________________
Name:
Title:
8
<PAGE>
Exhibit Z
PROVISIONS RELATING TO
SALE OF THE COMPANY
(a) NOTICE AND CONSENT. If the Company elects to consummate a
transaction constituting a Sale of the Company, the Company shall notify the
Security Holders in writing of that election, each of the Security Holders will
consent to and raise no objections to the proposed transaction, and each of the
Security Holders and the Company will take all other actions reasonably
necessary or desirable to cause the consummation of such Sale of the Company on
the terms proposed by the Company; provided that:
(i) if the proposed Sale of the Company is structured
as or involves a sale or redemption of securities, the
Security Holders will agree to sell their pro-rata share of
the securities being sold in such Sale of the Company on the
terms and conditions approved by Company, and each of the
Security Holders will execute any merger or sale agreement
approved by Company in connection with such Sale of the
Company, and
(ii) each Security Holder shall be severally
obligated to join (on a pro rata basis) in any indemnification
or other obligations that Company agrees to in connection with
such Sale of the Company (other than any such obligations that
relate specifically to a particular Security Holder such as
indemnification with respect to representations and warranties
given by a Security Holder regarding such Security Holder's
title to and ownership of a Security, as to which obligations
each such Security Holder shall be solely liable); provided
that no Security Holder shall be obligated in connection with
a Sale of the Company to agree to indemnify or hold harmless
the prospective transferee(s) with respect to an amount in
excess of the net cash proceeds to be paid to such Security
Holder in connection with such Sale of the Company.
(b) CONDITION. The obligations of the Security Holders with
respect to a Sale of the Company are subject to a satisfaction of the condition
that, upon the consummation of the Sale of the Company, including any related
redemptions, all of the holders of a particular class or series of securities
shall receive the same form and amount of consideration per share, unit or
amount of securities or if any holders of a particular type, class or series of
securities are given an option as to the form and amount of consideration to be
received, all holders of such type, class or series will be given the same
option.
(c) PURCHASER REPRESENTATIVE. If the Company enters into any
negotiation or transaction for which Rule 506 under the Securities Act (or any
similar rule then in effect) may be available with respect to such negotiation
or transaction (including a merger, consolidation or other reorganization), each
Security Holder that is not an "accredited investor" (within the meaning of Rule
501(a) of the Securities Act) will, at the request of Company, appoint a
purchaser representative (as such term is defined in Rule 501 under the
Securities Act) approved by Company and Company will pay the fees of such
purchaser representative. If any such Security
<PAGE>
Holder declines to appoint the purchaser representative approved by Company
such Security Holder will appoint another purchaser representative, and such
Security Holder will be responsible for the fees of the purchaser
representative so appointed.
(d) COSTS. Each Security Holder will bear its or his pro-rata
share (based upon the relative amount of proceeds received with respect to
securities sold) of the reasonable costs of any sale of securities pursuant to a
Sale of the Company to the extent such costs are incurred for the benefit of all
Security Holders and are not otherwise paid by Company or the acquiring party.
Costs incurred by or on behalf of a Security Holder for its or his sole benefit
will not be considered costs of the transaction hereunder.
(e) TERMINATION OF RESTRICTIONS. The restrictions set forth
above shall continue with respect to each security until the earlier of (i) the
date on which such security has been transferred in a Public Sale, or (ii) the
consummation of a Qualified IPO by the Company. Notwithstanding any other
provision of this Agreement, except as set forth in the preceding sentence, the
restrictions set forth above shall continue to be applicable to all securities
after any transfer and no transfer shall be consummated, or be deemed
consummated, for any purpose unless each transferee of such securities shall
have agreed in a writing, in form and substance satisfactory to the Company
delivered to the Company prior to such transfer, to be bound by the provisions
of this Agreement affecting the securities so transferred.
(f) DEFINITIONS. The following terms shall have the
meanings set forth or as referenced below:
"Independent Third Party" means any Person who, immediately
prior to any contemplated transaction with the Company or any of their
subsidiaries (or immediately prior to the first transaction in a series of
related transactions that are consummated contemporaneously or consummated
pursuant to contemporaneous agreements), does not beneficially own five percent
(5%) or more of the fully-diluted equity, who is not an affiliate of any such
five percent (5%) beneficial owner and is not a member of the family group of
any such five percent (5%) beneficial owner.
"Public Offering" means a sale of common equity securities to
the public in an offering pursuant to an effective registration statement filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as then in effect, provided that a Public Offering shall not include an
offering made in connection with a business acquisition or combination or an
employee benefit plan.
"Public Sale" means a sale of securities pursuant to a Public
Offering or a Rule 144 sale.
"Qualified IPO" means receipt by the Company of at least
$75,000,000 gross cash proceeds upon consummation of an underwritten sale of its
common stock pursuant to a registration statement filed under the Securities Act
of 1933.
"Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously
2
<PAGE>
(or consummated pursuant to contemporaneous agreements), with any Independent
Third Party other Person or Persons pursuant to which such Person or Persons
(a) acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) a
majority of the fully-diluted equity of the Company or (b) acquire assets
constituting all or substantially all of the assets of Company or its
subsidiaries on a consolidated basis.
"Person" means any individual, general partnership, limited
partnership, corporation, association, cooperative, joint stock company, trust,
limited liability company, business trust, joint venture, unincorporated
organization and governmental entity (or any department, agency or political
subdivision thereof).
3
<PAGE>
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
Dated as of February 2, 2000
by and among
AAVID THERMAL TECHNOLOGIES, INC.,
as Issuer,
the Guarantors named herein
and
CIBC WORLD MARKETS CORP.
and
FLEETBOSTON ROBERTSON STEPHENS INC.,
as Initial Purchasers
--------------------------
$150,000,000
12-3/4% SENIOR SUBORDINATED NOTES DUE 2007
<PAGE>
TABLE OF CONTENTS
PAGE
1. Definitions...............................................................1
2. Exchange Offer............................................................5
3. Shelf Registration........................................................8
4. Additional Interest......................................................10
5. Registration Procedures..................................................12
6. Registration Expenses....................................................20
7. Indemnification..........................................................21
8. Rules 144 and 144A.......................................................24
9. Underwritten Registrations...............................................25
10. Miscellaneous...........................................................25
(a) Remedies.......................................................25
(b) No Inconsistent Agreements.....................................25
(c) Adjustments Affecting Registrable Notes........................26
(d) Amendments and Waivers.........................................26
(e) Notices........................................................26
(f) Successors and Assigns.........................................28
(g) Counterparts...................................................28
(h) Headings.......................................................28
(i) Governing Law..................................................28
(j) Severability...................................................28
(k) Notes Held by Any Issuer or Its Affiliates.....................28
(l) Third Party Beneficiaries......................................29
(m) Entire Agreement...............................................29
-i-
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made
and entered into as of February 2, 2000, by and among Aavid Thermal
Technologies, Inc., a Delaware corporation (the "COMPANY"), the Guarantors (as
defined) and CIBC World Markets Corp. and FleetBoston Robertson Stephens Inc.
(together, the "INITIAL PURCHASERS").
This Agreement is entered into in connection with the Unit
Purchase Agreement, dated January 31, 2000, by and among the Company, the
Guarantors and the Initial Purchasers (the "PURCHASE AGREEMENT") relating to the
sale by the Company to the Initial Purchasers of 150,000 units consisting of (i)
$150.0 million aggregate principal amount of the Company's 12-3/4% Senior
Subordinated Notes due 2007 (the "NOTES") and the unconditional senior
subordinated guarantee thereof by the Guarantors on a joint and several basis
(the "GUARANTEE") and (ii) 150,000 warrants, each warrant entitling the holder
to purchase .0004 shares of Class A common stock and .0004 shares of Class H
common stock of the Company (collectively "COMMON STOCK"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, and in addition to
the registration rights provided to the holders of Common Stock pursuant to a
separate common stock registration rights agreement, the Issuers (as defined)
have agreed to provide the registration rights set forth in this Agreement for
the benefit of the holders of Registrable Notes (as defined), including, without
limitation, the Initial Purchasers. The execution and delivery of this Agreement
is a condition to the Initial Purchasers' obligation to purchase the Units under
the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
ADDITIONAL INTEREST: See Section 4(a).
ADVICE: See the last paragraph of Section 5.
AGREEMENT: See the first introductory paragraph to this
Agreement.
APPLICABLE PERIOD: See Section 2(b).
<PAGE>
-2-
BUSINESS DAY: A day that is not a Saturday, a Sunday or a day
on which banking institutions in New York, New York are authorized or required
by law or executive order to be closed.
CLOSING DATE: The Closing Date as defined in the Purchase
Agreement.
COMMISSION: The Securities and Exchange Commission.
COMPANY: See the first introductory paragraph to this
Agreement.
EFFECTIVENESS DATE: The 150th day after the Issue Date, in the
case of the Exchange Registration Statement, and the 90th day after the delivery
of the Shelf Notice, in the case of the Initial Shelf Registration.
EFFECTIVENESS PERIOD: See Section 3(a).
EVENT DATE: See Section 4(b).
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
EXCHANGE NOTES: See Section 2(a).
EXCHANGE OFFER: See Section 2(a).
EXCHANGE REGISTRATION STATEMENT: See Section 2(a).
FILING DATE: The 60th day after the Issue Date (regardless of
whether the actual filing precedes such date).
GUARANTEE: See the second introductory paragraph to this
Agreement.
GUARANTORS: The Guarantors as defined in the Unit Purchase
Agreement.
HOLDER: Any registered holder of Registrable Notes.
INDEMNIFIED PERSON: See Section 7(c).
INDEMNIFYING PERSON: See Section 7(c).
<PAGE>
-3-
INDENTURE: The Indenture, dated as of February 2, 2000, by and
among the Company, the Guarantors named therein and Bankers Trust Company, as
trustee, pursuant to which the Notes are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
INITIAL PURCHASERS: See the first introductory paragraph to
this Agreement.
INITIAL SHELF REGISTRATION: See Section 3(a).
INSPECTORS: See Section 5(o).
ISSUE DATE: The date on which the Notes were sold to the
Initial Purchasers pursuant to the Purchase Agreement.
ISSUERS: The Company and the Guarantors, collectively.
NASD: National Association of Securities Dealers, Inc.
NOTES: See the second introductory paragraph to this
Agreement.
PARTICIPANT: See Section 7(a).
PARTICIPATING BROKER-DEALER: Any broker or dealer registered
under the Exchange Act that is the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer in exchange for Registrable Notes acquired for its own account as
a result of market making activities or other trading activities (other than
Registrable Notes acquired directly from the Company or any of its affiliates).
PERSON: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
PRIVATE EXCHANGE: See Section 2(b).
PRIVATE EXCHANGE NOTES: See Section 2(b).
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or
<PAGE>
-4-
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Notes covered by such Registration
Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
RECORDS: See Section 5(o).
REGISTRABLE NOTES: Each Note upon original issuance thereof
and at all times subsequent thereto, each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance thereof and at all times
subsequent thereto and each Private Exchange Note upon original issuance thereof
and at all times subsequent thereto, until, in the case of any such Note,
Exchange Note or Private Exchange Note, as the case may be, the earliest to
occur of (i) a Registration Statement (other than with respect to any Exchange
Note as to which Section 2(c)(iv) hereof is applicable) covering such Note,
Exchange Note or Private Exchange Note, as the case may be, has been declared
effective by the Commission and such Note, Exchange Note or Private Exchange
Note, as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note, Exchange Note or Private Exchange Note,
as the case may be, is sold in compliance with Rule 144 (or any similar
provision then in force), (iii) in the case of any Note, such Note has been
exchanged pursuant to the Exchange Offer for an Exchange Note or Exchange Notes
that may be resold without restriction under federal securities laws and (iv)
such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to
be outstanding for purposes of the Indenture.
REGISTRATION STATEMENT: Any registration statement of the
Company, including, but not limited to, the Exchange Registration Statement,
that covers any of the Registrable Notes pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
RULE 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
<PAGE>
-5-
RULE 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.
RULE 415: Rule 415 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
SHELF NOTICE: See Section 2(c).
SHELF REGISTRATION: See Section 3(b).
SUBSEQUENT SHELF REGISTRATION: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A
registration in which securities of the Issuers are sold to an underwriter for
reoffering to the public.
UNIT PURCHASE AGREEMENT: See the second introductory paragraph
to this Agreement.
2. EXCHANGE OFFER
(a) To the extent not prohibited by any applicable law, each
of the Issuers agrees to use its reasonable best efforts to file or cause to be
filed with the Commission no later than the Filing Date, an offer to exchange
(the "EXCHANGE OFFER") any and all of the Registrable Notes (other than Private
Exchange Notes, if any) for a like aggregate principal amount of debt securities
of the Company that are identical in all material respects to the Notes (the
"EXCHANGE NOTES") (and that are entitled to the benefits of the Indenture or a
trust indenture that is identical in all material respects to the Indenture
(other than such changes to the Indenture or any such identical trust indenture
as are necessary to comply with any requirements of the Commission to effect or
maintain the qualification thereof under the TIA) and that, in either case, has
been qualified under the TIA), except that the Exchange Notes shall have been
registered pursuant to an effective Registration Statement under the Securities
<PAGE>
-6-
Act and shall contain no restrictive legend thereon. The Exchange Offer shall be
registered under the Securities Act on the appropriate form (the "EXCHANGE
REGISTRATION STATEMENT") and shall comply with all applicable tender offer rules
and regulations under the Exchange Act. Each of the Issuers agrees to use its
reasonable best efforts to (x) cause the Exchange Registration Statement to be
declared effective under the Securities Act on or before the Effectiveness Date;
(y) keep the Exchange Offer open for at least 20 Business Days (or longer if
required by applicable law) after the date that notice of the Exchange Offer is
first mailed to Holders; and (z) consummate the Exchange Offer on or prior to
the 30th day following the date on which the Exchange Registration Statement is
declared effective. If after such Exchange Registration Statement is initially
declared effective by the Commission, the Exchange Offer or the issuance of the
Exchange Notes thereunder is interfered with by any stop order, injunction or
other order or requirement of the Commission or any other governmental agency or
court, such Exchange Registration Statement shall be deemed not to have become
effective for purposes of this Agreement. Each Holder who participates in the
Exchange Offer will be required to represent that any Exchange Notes received by
it will be acquired in the ordinary course of its business, that at the time of
the consummation of the Exchange Offer such Holder will have no arrangement or
understanding with any Person to participate in the distribution of the Exchange
Notes, that such Holder is not an affiliate of any Issuer within the meaning of
the Securities Act, and any additional representations that in the written
opinion of counsel to the Issuers are necessary under then-existing
interpretations of the Commission in order for the Exchange Registration
Statement to be declared effective. Upon consummation of the Exchange Offer in
accordance with this Section 2, the provisions of this Agreement shall continue
to apply, MUTATIS MUTANDIS, solely with respect to Registrable Notes that are
Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers,
and the Issuers shall have no further obligation to register Registrable Notes
(other than Private Exchange Notes and other than in respect of any Exchange
Notes as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 of this
Agreement.
(b) The Issuers shall indicate in a "Plan of Distribution"
section contained in the Prospectus contained in the Exchange Registration
Statement that any Participating Broker-Dealer may exchange such Notes pursuant
to the Exchange Offer; however, such Participating Broker-Dealer may be deemed
to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a prospectus meeting the requirements of the Securities Act
in connection with any resales of the Exchange Securities received by such
Participating Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Participating Broker-Dealer
of the Prospectus contained in the Exchange Registration Statement. Such "Plan
of Distribution" section shall also contain all other information with respect
to such resales by Participating Broker-Dealers that the Commission may require
in order to permit such resales pursuant thereto, but such
<PAGE>
-7-
"Plan of Distribution" section shall not name any such Participating
Broker-Dealer or disclose the amount of Exchange Notes held by any such
Participating Broker-Dealer except to the extent required by the Commission as a
result of a change in policy announced after the date of this Agreement.
Each of the Issuers shall use its reasonable best efforts to
keep the Exchange Registration Statement effective and to amend and supplement
the Prospectus contained therein, in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time beginning when the
Exchange Notes are first issued in the Exchange Offer and ending upon the
earlier of the expiration of the 180th day after the Exchange Offer has been
completed and such Persons are no longer required to comply with the prospectus
delivery requirements in connection with offers and sales of the Exchange Notes
(the "APPLICABLE PERIOD").
If, upon consummation of the Exchange Offer, any Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Issuers, upon the written request of
any Initial Purchaser and an opinion of outside counsel for such Initial
Purchaser, reasonably satisfactory in form and substance to outside counsel of
the Company, to the effect that such exchange does not require compliance with
the registration requirements of the Securities Act, shall, simultaneously with
the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to
such Initial Purchaser, in exchange (the "PRIVATE EXCHANGE") for the Notes held
by such Initial Purchaser, a like principal amount of debt securities of the
Company that are identical in all material respects to the Exchange Notes except
for the existence of restrictions on transfer thereof under the Securities Act
and securities laws of the several states of the U.S. (the "PRIVATE EXCHANGE
NOTES") (and which are issued pursuant to the same indenture as the Exchange
Notes). The Company will use its reasonable best efforts to seek to cause the
CUSIP Service Bureau to issue the same CUSIP number for the Private Exchange
Notes as for the Exchange Notes. Interest on the Exchange Notes and Private
Exchange Notes will accrue from the last interest payment date on which interest
was paid on the Notes surrendered in exchange therefor or, if no interest has
been paid on the Notes, from the Issue Date.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming
part of the Exchange Registration Statement, together with an
appropriate letter of transmittal and related documents;
<PAGE>
-8-
(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New
York, which may be the Trustee or an affiliate thereof;
(3) permit Holders to withdraw tendered Registrable Notes at
any time prior to the close of business, New York time, on the last
Business Day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all
applicable laws.
As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the Issuers shall:
(1) accept for exchange all Registrable Notes validly
tendered and not validly withdrawn pursuant to the Exchange Offer
or the Private Exchange;
(2) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly
to each Holder tendering such Registrable Notes, Exchange Notes or
Private Exchange Notes, as the case may be, equal in principal amount
to the Notes of such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which in either event will provide that the Exchange
Notes will not be subject to the transfer restrictions set forth in the
Indenture and that the Exchange Notes, the Private Exchange Notes and the Notes,
if any, will vote and consent together on all matters as one class and that none
of the Exchange Notes, the Private Exchange Notes or the Notes, if any, will
have the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the staff of the Commission, the Company is not
permitted to effect an Exchange Offer, (ii) the Exchange Offer is not
consummated within 180 days of the Issue Date, (iii) any holder of Private
Exchange Notes so requests in writing to the Company or (iv) in the case of any
Holder that participates in the Exchange Offer (and tenders its Registrable
Notes prior to the expiration thereof), such Holder does not receive Exchange
Notes on the date of the exchange that may be sold without restriction under
federal securities laws (other than due solely to the status of such Holder as
an affiliate of any Issuer within the
<PAGE>
-9-
meaning of the Securities Act) and so notifies the Company within 30 days
following the consummation of the Exchange Offer (and providing a reasonable
basis for its conclusions), in the case of each of clauses (i)-(iv), then the
Issuers shall promptly deliver to the Holders and the Trustee written notice
thereof (the "SHELF NOTICE") and shall use its reasonable best efforts to file,
or cause to be filed, a Shelf Registration pursuant to Section 3.
3. SHELF REGISTRATION
If a Shelf Notice is delivered as contemplated by Section
2(c), then:
(a) SHELF REGISTRATION. Each of the Issuers shall use its
reasonable best efforts to file with the Commission as promptly as reasonably
practicable a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Notes (the "INITIAL
SHELF REGISTRATION"). If the Issuers shall not have yet filed the Exchange
Registration Statement, each of the Issuers shall use its reasonable best
efforts to file with the Commission the Initial Shelf Registration on or prior
to the Filing Date and shall use its best efforts to cause such Initial Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date, which shall be determined as if the Issuers received a
Shelf Notice relating to such Initial Shelf Registration on the Filing Date.
Otherwise, each of the Issuers shall use its reasonable best efforts to file
with the Commission the Initial Shelf Registration within 45 days of the
delivery of the Shelf Notice and shall use its best efforts to cause such Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date. The Initial Shelf Registration shall be on Form S-1 or
another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings). The Issuers shall not
permit any securities other than the Registrable Notes to be included in any
Shelf Registration. Each of the Issuers shall use its best efforts to keep the
Initial Shelf Registration continuously effective under the Securities Act until
the date that is 24 months from the Issue Date (or, if Rule 144(k) under the
Securities Act is amended to permit unlimited resales by non-affiliates within a
lesser period, such lesser period) (the "EFFECTIVENESS PERIOD") or such shorter
period ending when (i) all Registrable Notes covered by the Initial Shelf
Registration have been sold in the manner set forth and as contemplated in the
Initial Shelf Registration or (ii) a Subsequent Shelf Registration covering all
of the Registrable Notes has been declared effective under the Securities Act.
(b) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered
<PAGE>
-10-
thereunder), each of the Issuers shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within 30 days of such cessation of effectiveness amend the Shelf
Registration in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes (a "SUBSEQUENT SHELF
REGISTRATION"). If a Subsequent Shelf Registration is filed, each of the Issuers
shall use its best efforts to cause the Subsequent Shelf Registration to be
declared effective as soon as practicable after such filing and to keep such
Subsequent Shelf Registration continuously effective for the remainder of the
Effectiveness Period. As used herein the term "SHELF REGISTRATION" means the
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) SUPPLEMENTS AND AMENDMENTS. Each of the Issuers shall
promptly supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Shelf Registration or by any underwriter of
such Registrable Notes, in each case, with the Issuers' consent, which consent
shall not be unreasonably withheld or delayed.
4. ADDITIONAL INTEREST
(a) The Issuers and the Initial Purchasers agree that the
Holders of Registrable Notes will suffer damages if the Issuers fail to fulfill
their respective obligations under Section 2 or Section 3 hereof and that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Issuers jointly and severally agree to pay, as liquidated
damages, additional interest on the Registrable Notes ("ADDITIONAL INTEREST")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Registration Statement nor
the Initial Shelf Registration has been filed on or prior to the Filing
Date or (B) notwithstanding that the Issuers have filed the Exchange
Offer Registration Statement and have consummated or will consummate an
Exchange Offer, the Issuers are required to file a Shelf Registration
and such Shelf Registration is not filed on or prior to the 45th day
after delivery of the Shelf Notice, then, in the case of subclause (A),
commencing on the day after the Filing Date or, in the case of
subclause (B), commencing on the 46th day following delivery of the
Shelf Notice, Additional Interest shall accrue on the Registrable Notes
over and above the stated interest at a rate of 0.50% per annum for the
first 90 days immediately following the Filing Date or such 45th day,
as the case may
<PAGE>
-11-
be, such Additional Interest rate increasing by an additional 0.25%
per annum at the beginning of each subsequent 90-day period;
(ii) if (A) neither the Exchange Registration Statement nor
the Initial Shelf Registration is declared effective on or prior to the
Effectiveness Date applicable thereto or (B) notwithstanding that the
Issuers have filed the Exchange Offer Registration Statement and have
consummated or will consummate an Exchange Offer, the Issuers are
required to file a Shelf Registration and such Shelf Registration is
not declared effective by the Commission on or prior to the applicable
Effectiveness Date, then, commencing on the day after such applicable
Effectiveness Date, Additional Interest shall accrue on the Registrable
Notes over and above the stated interest at a rate of 0.50% per annum
for the first 90 days immediately following the day after the
applicable Effectiveness Date, such Additional Interest rate increasing
by an additional 0.25% per annum at the beginning of each subsequent
90-day period; and
(iii) if (A) the Issuers have not exchanged Exchange Notes for
all Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to the 180th day after the Issue Date, (B) the
Exchange Registration Statement ceases to be effective prior to
consummation of the Exchange Offer or (C) if applicable, a Shelf
Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period,
then Additional Interest shall accrue on the Registrable Notes over and
above the stated interest at a rate of 0.50% per annum for the first 90
days commencing on the (x) 181st day after the Issue Date in the case
of (A) above or (y) the day such Exchange Registration Statement or
Shelf Registration ceases to be effective in the case of (B) and (C)
above, such Additional Interest rate increasing by an additional 0.25%
per annum at the beginning of each such subsequent 90-day period;
PROVIDED, HOWEVER, that the Additional Interest rate on the Registrable Notes
may not exceed in the aggregate 2.0% per annum; PROVIDED FURTHER that (1) upon
the filing of the Exchange Registration Statement or each Shelf Registration (in
the case of (i) above), (2) upon the effectiveness of the Exchange Registration
Statement or each Shelf Registration, as the case may be (in the case of (ii)
above), or (3) upon the exchange of Exchange Notes for all Registrable Notes
tendered (in the case of (iii)(A) above) or upon the effectiveness of an
Exchange Registration Statement or Shelf Registration which had ceased to remain
effective (in the case of (iii)(B) and (C) above), Additional Interest on any
Registrable Notes then accruing Additional Interest as a result of such clause
(or the relevant subclause thereof), as the case may be, shall cease to accrue.
<PAGE>
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(b) The Issuers shall notify the Trustee within three Business
Day after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash semi-annually on each regular interest payment date
specified in the Indenture (to the Holders of Registrable Notes of record on the
regular record date therefor (as specified in the Indenture) immediately
preceding such dates), commencing with the first such regular interest payment
date occurring after any such Additional Interest commences to accrue. The
amount of Additional Interest will be determined by multiplying the applicable
Additional Interest rate by the principal amount of the Notes subject thereto,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months), and the denominator
of which is 360.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, each of the Issuers shall use its reasonable
best efforts to effect such registrations to permit the sale of such securities
covered thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto and in connection with any Registration Statement
filed by each of the Issuers hereunder, each of the Issuers shall use its
reasonable best efforts to:
(a) Prepare and file with the Commission prior to the Filing
Date, the Exchange Registration Statement or if the Exchange Registration
Statement is not filed or is unavailable, a Shelf Registration as prescribed by
Section 2 or 3, and use its best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein; PROVIDED
that, if (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period and has advised the Issuers that it is a Participating
Broker-Dealer, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Issuers shall, if requested, furnish to
and afford the Holders of the Registrable Notes to be registered pursuant to
such Shelf Registration or each such Participating Broker-Dealer, as the case
may be, covered by such Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case at least
five Business Days prior to such filing). The Issuers shall not file any such
Registration Statement or Prospectus or any amendments or supplements thereto if
the Holders of a majority in aggregate principal
<PAGE>
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amount of the Registrable Notes covered by such Registration Statement, or any
such Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the Commission such amendments and
post-effective amendments to each Shelf Registration or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented, if
requested by the Commission, by any Prospectus supplement required by applicable
law, and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented and with
respect to the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus.
(c) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period from whom the Issuers have received written notice that it
will be a Participating Broker-Dealer, notify the selling Holders of Registrable
Notes, and each such Participating Broker-Dealer, their counsel and the managing
underwriters, if any, promptly (but in any event within two Business Days), and
confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective (including in such notice a written statement that any Holder may,
upon request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and
schedules, documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose, (iii) if at any time when a prospectus is required
by the Securities Act to be delivered in connection with sales of the
Registrable Notes the representations and warranties of any Issuer contained in
any agreement (including any underwriting agreement contemplated by Section 5(n)
hereof) cease to be true and correct in any material respect, (iv) of the
receipt by any Issuer of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or any
of the Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening
<PAGE>
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of any proceeding for such purpose, (v) of the happening of any event, the
existence of any condition or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in, or
amendments or supplements to, such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (vi) of the
Issuers' reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Notes or the
Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any
jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible date.
(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriters, if any, or the Holders of a majority
in aggregate principal amount of the Registrable Notes being sold in connection
with an underwritten offering, (i) as promptly as practicable incorporate in a
prospectus supplement or post-effective amendment such information or revisions
to information therein relating to such underwriters or selling Holders as the
managing underwriters, if any, or such Holders or their counsel reasonably
request to be included or made therein, (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as practicable
after the Issuers have received notification of the matters to be incorporated
in such prospectus supplement or post-effective amendment and (iii) supplement
or make amendments to such Registration Statement to the extent required by law.
(f) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is
<PAGE>
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required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
furnish to each selling Holder of Registrable Notes and to each such
Participating Broker-Dealer who so requests and to counsel and each managing
underwriter, if any, without charge, one conformed copy of the Registration
Statement or Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer, deliver to each selling Holder of Registrable
Notes or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and, if requested, any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Issuers
hereby consent to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Notes and each
Participating Broker-Dealer, and the underwriters or agents, if any, and dealers
(if any), in connection with the offering and sale of the Registrable Notes
covered by, or the sale by Participating Broker-Dealers of the Exchange Notes
pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify, and cooperate
with the selling Holders of Registrable Notes and each such Participating
Broker-Dealer, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Notes or Exchange Notes, as
the case may be, for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters, if any, reasonably
request in writing; PROVIDED that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered pursuant to an underwritten
offering, counsel to the underwriters shall, at the cost and expense of the
Issuers in an amount not to exceed $20,000, perform the Blue Sky investigations
and file registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things reasonably
necessary or advisable to
<PAGE>
-16-
enable the disposition in such jurisdictions of the Exchange Notes by
Participating Broker-Dealers or the Registrable Notes covered by the applicable
Registration Statement; PROVIDED that no Issuer shall be required to (A) qualify
generally to do business or as a dealer in securities in any jurisdiction where
it is not then so qualified, (B) take any action that would subject it to
general service of process in any such jurisdiction where it is not then so
subject or (C) subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Notes, any Participating
Broker-Dealer and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Notes to be sold, which certificates shall not bear any restrictive
legends and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any, or
Holders may reasonably request.
(j) Use its best efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such Registrable Notes, in which case the Issuers will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to
Section 5(a) hereof) file with the Commission, at the Issuers' sole expense, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes being
sold thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
<PAGE>
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(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee with
printed certificates for the Registrable Notes or the Exchange Notes, as the
case may be, in a form eligible for deposit with the Depository Trust Company
and (ii) provide a CUSIP number for the Registrable Notes or the Exchange Notes,
as the case may be.
(m) In connection with an underwritten offering of Registrable
Notes pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of debt securities similar to the Notes
and take all such other actions as are reasonably requested by the managing
underwriter or underwriters in order to expedite or facilitate the registration
or the disposition of such Registrable Notes and, in such connection, (i) make
such representations and warranties to the underwriters, with respect to the
business of the Issuers and their subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of debt securities similar to the Notes,
and confirm the same in writing if and when requested; (ii) obtain the opinion
of counsel to the Issuers and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters, addressed to the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings of debt securities similar to the Notes and such other
matters as may be reasonably requested by managing underwriters; (iii) obtain
"cold comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters from the independent
certified public accountants of the Issuers (and, if necessary, any other
independent certified public accountants of any subsidiary of any Issuer or of
any business acquired by any Issuer for which financial statements and financial
data are, or are required to be, included in the Registration Statement),
addressed to each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of debt securities similar to the Notes
and such other matters as reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of Registrable
Notes covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified pursuant
to said Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is
<PAGE>
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required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
make available for inspection by any selling Holder of such Registrable Notes
being sold, and each Participating Broker-Dealer, any underwriter participating
in any such disposition of Registrable Notes, if any, and any attorney,
accountant or other agent retained by any such selling Holder, each
Participating Broker-Dealer, as the case may be, or underwriter (collectively,
the "INSPECTORS"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate documents
and properties of each Issuer and its subsidiaries (collectively, the "RECORDS")
as shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees of
each Issuer and its subsidiaries to supply all relevant information reasonably
requested by any such Inspector in connection with such Registration Statement.
Records which an Issuer determines, in good faith, to be confidential and any
Records which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (iii) the information in
such Records has been made generally available to the public other than as a
result of a disclosure or failure to safeguard by such Inspector or (iv)
disclosure of such information is, in the opinion of counsel for any Inspector,
necessary or advisable in connection with any action, claim, suit or proceeding,
directly or indirectly, involving or potentially involving such Inspector and
arising out of, based upon, related to, or involving this Agreement, or any
transactions contemplated hereby or arising hereunder. Each selling Holder of
such Registrable Notes and each Participating Broker-Dealer will be required to
agree in writing that information obtained by it as a result of such inspections
shall be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of any Issuer unless and until such is
made generally available to the public. Each Inspector, each selling Holder of
such Registrable Notes and each Participating Broker-Dealer will be required to
further agree in writing that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction pursuant to clauses (ii)
or (iv) of the previous sentence or otherwise, promptly give notice to the
Issuers and allow the Issuers at their expense to undertake appropriate action
to obtain a protective order or otherwise prevent disclosure of the Records
deemed confidential.
(o) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a), as the case may be, to be qualified
under the TIA not later than the effective date of the Exchange Offer or the
first Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such indenture and
the Holders of the Registrable Notes, to effect such changes to such indenture
as may be required
<PAGE>
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for such indenture to be so qualified in accordance with the terms of the TIA;
and execute, and use its best efforts to cause such trustee to execute, all
documents as may be required to effect such changes, and all other forms and
documents required to be filed with the Commission to enable such indenture to
be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the
Commission and make generally available to its securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Notes are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(q) If requested by the Trustee, upon consummation of the
Exchange Offer or a Private Exchange, obtain an opinion of counsel to the
Issuers, in a form customary for underwritten transactions, addressed to the
Trustee for the benefit of all Holders of Registrable Notes participating in the
Exchange Offer or the Private Exchange, as the case may be, that the Exchange
Notes or the Private Exchange Notes, as the case may be, and the related
indenture constitute legally valid and binding obligations of the Issuers,
enforceable against the Company in accordance with their respective terms.
(r) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Issuers
(or to such other Person as directed by the Company) in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be, the Issuers
shall mark, or caused to be marked, on such Registrable Notes that such
Registrable Notes are being cancelled in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be; in no event shall such Registrable
Notes be marked as paid or otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the NASD.
<PAGE>
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(t) Use its best efforts to take all other steps reasonably
necessary to effect the registration of the Registrable Notes covered by a
Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Issuers such
information regarding such seller and the distribution of such Registrable Notes
as the Issuers may, from time to time, reasonably request. The Issuers may
exclude from such registration the Registrable Notes of any seller who fails to
furnish such information within a reasonable time after receiving such request.
Each seller as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Issuers all information required to be
disclosed in order to make the information previously furnished to the Issuers
by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Issuers of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi), such Holder will
forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, and, in each case,
dissemination of such Prospectus until such Holder's or Participating
Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), or until it is advised in writing (the "ADVICE")
by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event the
Issuers shall give any such notice, the Applicable Period shall be extended by
the number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Registrable Notes
covered by such Registration Statement or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k) or
(y) the Advice.
6. REGISTRATION EXPENSES
All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the Issuers
whether or not the Exchange Offer or a Shelf Registration is filed or becomes
effective, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation,
<PAGE>
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reasonable fees and disbursements of counsel in an amount not to exceed $20,000
in connection with Blue Sky qualifications of the Registrable Notes or Exchange
Notes and determination of the eligibility of the Registrable Notes or Exchange
Notes for investment under the laws of such jurisdictions (x) where the holders
of Registrable Notes are located, in the case of the Exchange Notes, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form eligible
for deposit with The Depository Trust Company and of printing prospectuses if
the printing of prospectuses is requested by the managing underwriter or
underwriters, if any, or by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in any Registration Statement or by any
Participating Broker-Dealer, as the case may be, (iii) reasonable messenger,
telephone and delivery expenses incurred in connection with the Exchange
Registration Statement and any Shelf Registration, (iv) reasonable fees and
disbursements of counsel for the Issuers, and (exclusive of any counsel retained
pursuant to Section 7 hereof) fees and disbursements of special counsel for the
Initial Purchasers and the sellers of Registrable Notes not to exceed $20,000,
(v) fees and disbursements of all independent certified public accountants
referred to in Section 5(n)(iii) (including, without limitation, the expenses of
any special audit and "cold comfort" letters required by or incident to such
performance), (vi) rating agency fees, (vii) Securities Act liability insurance,
if the Issuers desire such insurance, (viii) fees and expenses of all other
Persons retained by the Issuers, (ix) internal expenses of the Issuers
(including, without limitation, all salaries and expenses of officers and
employees of the Issuers performing legal or accounting duties), (x) the expense
of any annual or special audit, (xi) the fees and expenses incurred in
connection with any listing of the securities to be registered on any securities
exchange, (xii) the fees and disbursements of underwriters, if any, customarily
paid by issuers or sellers of securities (but not including any underwriting
discounts or commissions or transfer taxes, if any, attributable to the sale of
the Registrable Notes which underwriting discounts and commissions or taxes
shall be paid by Holders of such Registrable Notes) and (xiii) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement.
7. INDEMNIFICATION
(a) Each of the Issuers jointly and severally agrees to
indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer, the officers, directors, employees and agents of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "PARTICIPANT"), from and against any and all losses,
claims, damages
<PAGE>
-22-
and liabilities (including, without limitation, the reasonable legal fees and
other reasonable expenses actually incurred in connection with any suit, action
or proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the Issuers
shall have furnished any amendments or supplements thereto) or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Participant furnished to the Issuers in writing by or on behalf of such
Participant expressly for use therein; PROVIDED, HOWEVER, that the Issuers shall
not be liable if such untrue statement or omission or alleged untrue statement
or omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding and any such loss, liability, claim, damage or expense suffered or
incurred by the Participants resulted from any action, claim or suit by any
Person who purchased Registrable Notes or Exchange Notes which are the subject
thereof from such Participant and it is established in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the confirmation of the
sale of such Registrable Notes or Exchange Notes sold to such Person if required
by applicable law, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of noncompliance by the
Issuers with Section 5 of this Agreement.
(b) Each Participant, by virtue of its beneficial ownership of
Notes, agrees, severally and not jointly, to indemnify and hold harmless each
Issuer, its directors, managers, officers (including each officer of the Issuers
who signed the Registration Statement), employee and agents and each Person who
controls each Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Participant, but only with reference to information
relating to such Participant furnished to the Issuers in writing by or on behalf
of such Participant expressly for use in any Registration Statement or
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
The liability of any Participant under this paragraph shall in no event exceed
the proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes giving rise to such obligations.
<PAGE>
-23-
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such Person (the "INDEMNIFIED
PERSON") shall promptly notify the Person against whom such indemnity may be
sought (the "INDEMNIFYING PERSON") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; PROVIDED, HOWEVER, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise, except to the extent that it is materially
prejudiced by such failure. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and counsel for the Indemnified Person shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
Indemnified Persons such Indemnifying Person. It is understood that, unless
there is a conflict among Indemnified Persons, the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Notes sold by all such Participants and any such separate firm
for each Issuer, its directors, managers, officers and such control Persons of
each Issuer shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there is a final
non-appealable judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for reasonable fees and expenses actually
incurred by counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its consent if (i) such settlement is entered into
more than 30 days after receipt by such Indemnifying Person of the aforesaid
request (ii) such Indemnifying Person shall have received notice of a proposed
<PAGE>
-24-
settlement at least 2 business days prior to such settlement being entered into,
and (iii) such Indemnifying Person shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such settlement;
PROVIDED, HOWEVER, that the Indemnifying Person shall not be liable for any
settlement effected without its consent pursuant to this sentence if the
Indemnifying Person is contesting, in good faith, the request for reimbursement.
No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional release of such Indemnified
Person, in form and substance satisfactory to such Indemnified Person, from all
liability on claims that are the subject matter of such proceeding and (B) does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of an Indemnified Person.
(d) If the indemnification provided for in the first and
second paragraphs of this Section 7 is unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions (or alleged statements or omissions) that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers on the one hand
or by the Participants or such other Indemnified Person, as the case may be, on
the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and any other
equitable considerations appropriate under the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses
<PAGE>
-25-
actually incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall a Participant be required to contribute any amount
in excess of the amount by which proceeds received by such Participant from
sales of Registrable Notes or Exchange Notes, as the case may be, exceeds the
amount of any damages that such Participant has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
8. RULES 144 AND 144A
Each of the Issuers covenants that it will use its reasonable
best efforts to file the reports, if any, required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder in a timely manner and, if at any time it is not required
to file such reports, it will, upon the request of any Holder of Registrable
Notes, make publicly available other information so long as necessary to permit
sales of such Holder's Registrable Notes pursuant to Rule 144 and Rule 144A
under the Securities Act. The Issuers further covenant, for so long as any
Registrable Notes remain outstanding, to make available to any Holder or
beneficial owner of Registrable Notes in connection with any sale thereof and
any prospective purchaser of such Registrable Notes from such Holder or
beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Notes pursuant to
Rule 144A.
9. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering and must be reasonably acceptable to
the Issuers.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
<PAGE>
-26-
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such underwriting arrangements.
10. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by any Issuer of any of
its obligations under this Agreement, each Holder of Registrable Notes and each
Participating Broker-Dealer holding Exchange Notes, in addition to being
entitled to exercise all rights provided herein, in the Indenture or, in the
case of an Initial Purchaser, in the Purchase Agreement, or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. Each Issuer agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
any of the provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. None of the Issuers has
entered, as of the date hereof, and none of the Issuers shall enter, after the
date of this Agreement, into any agreement with respect to any of its securities
that is inconsistent with the rights granted to the Holders of Registrable Notes
in this Agreement or otherwise conflicts with the provisions hereof. None of the
Issuers has entered and none of the Issuers shall enter into any agreement with
respect to any of its securities which will grant to any Person piggy-back
rights with respect to a Registration Statement.
(c) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. None of the
Issuers shall, directly or indirectly, take any action with respect to the
Registrable Notes as a class that would adversely affect the ability of the
Holders of Registrable Notes to include such Registrable Notes in a registration
undertaken pursuant to this Agreement.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with the
prior written consent of (A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and (B) in
circumstances that would adversely affect Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority in aggregate
principal amount of the Exchange Notes held by all Participating Broker-Dealers;
PROVIDED, HOWEVER, that Section 7 and this Section 10(d) may not be amended,
modified or supplemented without the prior written consent of each Holder and
each Participating Broker-Dealer (including any person who was a Holder or
Participating Broker-Dealer of Registrable
<PAGE>
-27-
Notes or Exchange Notes, as the case may be, disposed of pursuant to any
Registration Statement). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Notes whose securities are
being tendered pursuant to the Exchange Offer or sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders of Registrable Notes may be given by
Holders of at least a majority in aggregate principal amount of the Registrable
Notes being tendered or being sold by such Holders pursuant to such Registration
Statement.
(e) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
1. if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar under the Indenture, with a copy in like
manner to the Initial Purchasers as follows:
CIBC WORLD MARKETS CORP.
c/o CIBC World Markets Corp.
425 Lexington Avenue
3rd Floor
New York, New York 10017
Facsimile No.: (212) 885-4998
Attention: Corporate Finance Department
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: Roger Meltzer, Esq.
2. if to the Initial Purchasers, at the address specified in
Section 10(e)(1);
<PAGE>
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3. if to the Issuers, as follows:
Aavid Thermal Technologies, Inc.
One Eagle Square
Suite 509
Concord, NH 03301
Facsimile No.: (603) 227-9338
Attention: General Counsel
with copies to:
Willis Stein & Partners
227 West Monroe Street
Suite 4300
Chicago, IL 60606
Facsimile No.: (312) 422-2424
Attention: General Counsel
Bartlit, Beck, Herman, Palenchar & Scott
511 16th Street
Suite 700
Denver, CO 80202
Facsimile No.: (303) 592-3140
Attention: Thomas Stephens, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; one Business
Day after being timely delivered to a next-day air courier guaranteeing
overnight delivery; and when receipt is acknowledged by the addressee, if
telecopied.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee
under the Indenture at the address specified in such Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto and the Holders; PROVIDED, HOWEVER, that this Agreement shall not inure
to the benefit of or be binding upon a successor or assign of a Holder unless
and then only to the extent such successor or assign holds Registrable Notes.
<PAGE>
-29-
(g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(k) NOTES HELD BY ANY ISSUER OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by any Issuer or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(l) THIRD PARTY BENEFICIARIES. Holders of Registrable Notes
and Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(m) ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter
<PAGE>
-30-
contained herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence,
conversations and memoranda among the Initial Purchasers on the one hand and the
Issuers on the other, or between or among any agents, representatives, parents,
subsidiaries, affiliates, predecessors in interest or successors in interest
with respect to the subject matter hereof and thereof are merged herein and
replaced hereby.
<PAGE>
-31-
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ John W. Mitchell
--------------------------------------
Name: John W. Mitchell
Title: Vice President
CIBC WORLD MARKETS CORP.
By: /s/ Fotis Hasiotis
--------------------------------------
Name: Fotis Hasiotis
Title: Executive Director
FLEETBOSTON ROBERTSON STEPHENS INC.
By: /s/ Timothy C. Shoyer
--------------------------------------
Name: Timothy C. Shoyer
Title: Managing Director
<PAGE>
-32-
FLUENT HOLDINGS, INC.
AAVID THERMAL PRODUCTS, INC.
THERMALLOY INVESTMENT CO., INC.
THERMALLOY, INC.
AAVID THERMALLOY, LLC
APPLIED THERMAL TECHNOLOGIES, LLC
AAVID THERMALLOY SW, LLC
AAVID THERMALLOY OF TEXAS, LLC
By: /s/ Bharatan Patel
-------------------------------------
Name: Bharatan Patel
Title: Chief Executive
Officer
<PAGE>
Exhibit 10.3
- --------------------------------------------------------------------------------
COMMON STOCK REGISTRATION RIGHTS
AGREEMENT
Dated as of February 2, 2000
among
AAVID THERMAL TECHNOLOGIES, INC.,
HEAT HOLDINGS CORP.
and
CIBC WORLD MARKETS CORP. and
FLEETBOSTON ROBERTSON STEPHENS INC.,
as Initial Purchasers
- --------------------------------------------------------------------------------
<PAGE>
THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT (the
"AGREEMENT") is made and entered into as of February 2, 2000, among Aavid
Thermal Technologies, Inc., a Delaware corporation (the "COMPANY"), Heat
Holdings Corp., a Delaware corporation (the "INVESTOR"), and CIBC World Markets
Corp. ("CIBC"), and FleetBoston Robertson Stephens Inc. (the "INITIAL
PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement,
dated as of January 31, 2000 among the Company and the Initial Purchasers (the
"PURCHASE AGREEMENT"), relating to the sale by the Company to the Initial
Purchasers of an aggregate of 150,000 Units, each Unit consisting of $1,000
principal amount 12 3/4% Senior Subordinated Notes due 2007 of the Company (the
"NOTES") and one (1) Warrant (collectively, "WARRANTS") to purchase initially
.0004 shares of Class A Common Stock and .0004 shares of Class H Common Stock of
the Company. In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide to the Holders (as defined
herein) the registration rights for the Registrable Securities (as defined
herein) set forth in this Agreement and the Investor has agreed to provide the
Holders, among other things, the tag-along rights for the Warrants and the
Registrable Securities set forth herein. The execution of this Agreement is a
condition to the obligations of the Initial Purchasers to purchase the Units
under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"ADVICE" shall have the meaning ascribed to that term in the
last paragraph of Section 4.
"AFFILIATE" of any specified Person shall mean any other
Person which, directly or indirectly, controls, is controlled by, or is under
direct or indirect common control with, such specified Person. For the purposes
of this definition, "control," when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"AGREEMENT" shall have the meaning ascribed to that term in
the preamble hereto.
"BUSINESS DAY" shall mean a day that is not a Legal Holiday.
<PAGE>
-2-
"CAPITAL STOCK" shall mean, with respect to any Person, any
and all shares, interests, participations, rights in or other equivalents
(however designated and whether voting and/or non-voting) of capital stock,
partnership interests or any other participation, right or other interest in the
nature of an equity interest in such Person or any option, warrant or other
security convertible into or exercisable or exchangeable for any of the
foregoing.
"CIBC" shall have the meaning ascribed to that term in the
preamble hereto.
"COMMON STOCK" shall mean the Class A Common Stock of the
Company, par value $.0001 per share, and the Class H Common Stock of the
Company, par value $.0001 per share, and any options, warrants or securities
convertible into or exercisable or exchangeable for such common stock.
"COMPANY" shall have the meaning ascribed to that term in the
preamble hereto and shall also include the Company's successors.
"EFFECTIVENESS PERIOD" shall mean the shorter of (a) 180 days
or (b) such period of time as all of the Subject Equity included in such
Registration Statement shall have been sold thereunder.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"FAIR MARKET VALUE" shall mean the value of any securities as
determined by the Company's Board of Directors in good faith.
"HOLDER" shall mean the Initial Purchasers, for so long as
each Initial Purchaser owns any Warrants or Registrable Securities, and each of
their successors, assigns and direct and indirect transferees who become
registered owners of Warrants or Registrable Securities.
"INITIAL PUBLIC EQUITY OFFERING" shall mean a primary public
offering (whether or not underwritten, but excluding any offering pursuant to
Form S-8 under the Securities Act or any other publicly registered offering
pursuant to the Securities Act pertaining to an issuance of shares of Common
Stock or securities exercisable therefor under any benefit plan, employee
compensation plan, or employee or director stock purchase plan) of Common Stock
of the Company or the Investor pursuant to an effective registration statement
under the Securities Act in which the Company or the Investor receives aggregate
gross proceeds of at least $50 million.
"INITIAL PURCHASERS" shall have the meaning ascribed to that
term in the preamble hereto.
<PAGE>
-3-
"INVESTOR" shall have the meaning ascribed to that term in th
e preamble hereto.
"LEGAL HOLIDAY" shall mean a Saturday, a Sunday or a day on
which banking institutions in New York, New York are required by law, regulation
or executive order to remain closed.
"NOTES" shall have the meaning ascribed to that term in the
preamble hereto.
"PARTICIPATING HOLDER" shall have the meaning ascribed to that
term in Section 3.2(a).
"PERSON" shall mean an individual, partnership, corporation,
limited liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"PIGGY-BACK REGISTRATION" shall have the meaning ascribed to
that term in Section 2.1.
"PROPOSED PURCHASER" shall have the meaning ascribed to that
term in Section 3.2(a).
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated pursuant
to the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference, if
any, in such prospectus.
"PURCHASE AGREEMENT" shall have the meaning ascribed to that
term in the preamble hereto.
"REGISTRABLE SECURITIES" shall mean any of (i) the Common
Stock issued and issuable upon exercise of the Warrants and (ii) any other
securities issued or issuable with respect to the Warrants or Warrant Shares by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (a) a registration statement with
respect to the offering of such securities by the holder thereof shall have been
declared effective under the Securities Act and such securities shall have been
disposed of by such holder pursuant to such registration statement, (b) such
securities have been sold to the public pursuant to, or are eligible for sale to
the
<PAGE>
-4-
public without volume or manner of sale restrictions under, Rule 144(k) (or
any similar provision then in force, but not Rule 144A) promulgated under the
Securities Act, (c) such securities shall have been otherwise transferred and
new certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(d) such securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean all expenses incident to
the Company's performance of or compliance with this Agreement, including,
without limitation, all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees and
expenses of compliance with securities or blue sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), rating agency fees, printing
expenses, messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants and any
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities (but not including any underwriting discounts or commissions, fees of
counsel to the Holders or transfer taxes, if any, attributable to the sale of
Subject Equity by Holders of such Subject Equity).
"REGISTRATION STATEMENT" shall mean any registration statement
of the Company which covers any of the Subject Equity pursuant to the provisions
of this Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"REQUISITE SHARES" shall mean a number of Warrants, Warrant
Shares and Registrable Securities equivalent to a majority of the Warrant Shares
subject to the originally issued Warrants.
"RULE 144" shall mean Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
"RULE 144A" shall mean Rule 144A under the Securities Act, as
such Rule may be amended from time to time.
"SEC" shall mean the Securities and Exchange Commission.
<PAGE>
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"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
"STOCKHOLDERS AGREEMENT" shall mean that certain Securities
Holders' Agreement dated February 2, 2000 by and among the Investor, Heat
Holdings II Corp. and all of the Investor's stockholders.
"SUBJECT EQUITY" shall mean the Warrants, Warrant Shares and
Registrable Securities.
"TAG-ALONG NOTICE" shall have the meaning ascribed to that
term in Section 3.2(a).
"TAG-ALONG RIGHT" shall have the meaning ascribed to that term
in Section 3.2(a).
"TRANSFER" shall have the meaning ascribed to that the term in
Section 3.2(a).
"TRANSFER NOTICE" shall have the meaning ascribed to that term
in Section 3.2(a).
"WARRANTS" shall have the meaning ascribed to that term in the
preamble hereto.
"WARRANT SHARES" shall mean the shares of Common Stock issued
and issuable upon exercise of the Warrants and any other securities issued or
issuable with respect to the Warrants by way of stock dividend, stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.
"WITHDRAWAL ELECTION" shall have the meaning ascribed to that
term in Section 2.2(c).
2. REGISTRATION RIGHTS.
2.1. PIGGY-BACK REGISTRATION. If at any time the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any of
its respective securityholders covering the sale of Common Stock (other than (a)
a registration statement on Form S-4 or S-8 or any similar or successor form or
in connection with a registration the primary purpose of which is to register
debt securities (I.E., in connection with a so-called "equity kicker"), or (b) a
registration statement filed in connection with an offer of securities solely to
the Company's existing securityholders) for sale on the same terms and
conditions as the securities of the Company or any other selling securityholder
included therein, then the Company shall give written notice of
<PAGE>
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such proposed filing to the Holders of Registrable Securities as soon as
practicable (but in no event less than 10 Business Days before the
anticipated filing date), and such notice shall offer such Holders the
opportunity to register such number of Registrable Securities as each such
Holder may request (which request shall specify the Registrable Securities
intended to be disposed of by such Holder and the intended method of
distribution thereof) (a "PIGGY-BACK REGISTRATION"). The Company shall use
its commercially reasonable efforts to cause the managing underwriter or
underwriters of such proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be
included on the same terms and conditions as any similar securities of the
Company or any other securityholder included therein and to permit the sale
or other disposition of such Registrable Securities in accordance with the
intended method of distribution thereof. Any Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.2 by giving written notice
to the Company of its request to withdraw. The Company may withdraw a
Piggy-Back Registration at any time prior to the time it becomes effective;
PROVIDED that the Company shall give prompt notice thereof to participating
Holders. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this
Section 2.1, and each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to a registration statement
effected pursuant to this Section 2.1.
No failure to effect a registration under this Section 2.1 and
to complete the sale of Registrable Securities in connection therewith shall
relieve the Company of any other obligation under this Agreement.
2.2. REDUCTION OF PIGGY-BACK REGISTRATION. (a) If the lead
managing underwriter of any underwritten offering described in Section 2.1 has
informed, in writing, the Holders of the Registrable Securities requesting
inclusion in such offering that it is its view that the total number of
securities which the Company, the Holders and any other Persons desiring to
participate in such registration intend to include in such offering exceeds the
number which can be sold in an orderly manner within a price range acceptable to
the Company and without adversely affecting the marketability of the offering,
then the securities the Company proposes to sell shall first be included in such
offering, and then the number of Registrable Securities to be offered for the
account of such Holders and the number of such securities to be offered for the
account of all such other Persons (other than the Company) participating in such
registration shall be reduced or limited PRO RATA in proportion to the
respective number of securities owned by the participating Persons to the extent
necessary to reduce the total number of securities requested to be included in
such offering to the number of securities, if any, recommended by such lead
managing underwriter.
<PAGE>
-7-
(b) If the lead managing underwriter of any underwritten
offering described in Section 2.1 notifies the Holders requesting inclusion of
Registrable Securities in such offering that the kind of securities that such
Holders, the Company and any other Persons desiring to participate in such
registration intend to include in such offering is such as to materially and
adversely affect the success of such offering, (x) the Registrable Securities to
be included in such offering shall be reduced as described in clause (a) above
or (y) if a reduction in the Registrable Securities pursuant to clause (a) above
would, in the judgment of the lead managing underwriter, be insufficient to
substantially eliminate the adverse effect that inclusion of the Registrable
Securities requested to be included would have on such offering, such
Registrable Securities will be excluded from such offering.
(c) If, as a result of the proration provisions of this
Section 2.2, any Holder shall not be entitled to include all Registrable
Securities in a Piggy-Back Registration that such Holder has requested to be
included, such Holder may elect to withdraw his request to include Registrable
Securities in such registration (a "WITHDRAWAL ELECTION"); PROVIDED that a
Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, a Holder shall no longer have any right to include Registrable
Securities in the registration as to which such Withdrawal Election was made.
3. TRANSFERS.
3.1. GENERALLY. All Subject Equity at any time and from time
to time outstanding shall be held subject to the conditions and restrictions set
forth in this Section 3. All shares of Capital Stock now or hereafter held by
the Investor shall be held subject to the conditions and restrictions set forth
in this Section 3. Each Holder of Subject Equity and the Investor by executing
this Agreement or by accepting a certificate representing Capital Stock or other
indicia of ownership therefor from the Company agree with the Company and with
each other Stockholder to such conditions and restrictions.
3.2. TAG-ALONG RIGHTS. (a) Prior to an Initial Public Equity
Offering, each of the Holders of Subject Equity shall have the right (the
"TAG-ALONG RIGHT") to require the Proposed Purchaser (as defined below) to
purchase from each of them all (subject to (c) below) Subject Equity owned by
such Holder in the event of any proposed direct or indirect sale or other
disposition (collectively, a "TRANSFER") of Capital Stock of the Company or
Capital Stock of the Investor (whether now or hereafter issued) to any Person or
Persons (such other Person or Persons being hereinafter referred to as the
"PROPOSED PURCHASER") by the Investor or any of its Affiliates in any
transaction or series of related transactions of the Company's Common Stock
representing 25% or more of the aggregate number of shares of common stock of
the Company owned by the Investor on the date hereof or more than 25% of the
common stock of the Investor (other than sales in a bona fide public offering
pursuant to an effective registration statement under the Securities Act, sales
to the public pursuant to the
<PAGE>
-8-
provisions of Rule 144 (or any similar rule or rules then in effect) under
the Securities Act, transfers to the Investor or one or more of its
stockholders pursuant to the right of first refusal contained in Section
3.1(b) of the Stockholders Agreement and transfers to Affiliates and certain
other transfers permitted by Section 3.1(d) of the Stockholders Agreement).
Any Investor proposing a transfer which triggers the rights under this
Section 3.2(a) shall notify, or cause to be notified, each Holder of Subject
Equity in writing (a "TRANSFER NOTICE") of each such proposed Transfer at
least 10 Business Days prior to the date thereof. Such notice shall set
forth: (a) the name of the Proposed Purchaser and the number of shares of
Common Stock and other securities, if any, proposed to be transferred, (b)
the proposed amount of consideration and terms and conditions of payment
offered by such Proposed Purchaser (if the proposed consideration is not
cash, the Transfer Notice shall describe the terms of the proposed
consideration) and (c) that either the Proposed Purchaser has been informed
of the "Tag-Along Right" and has agreed to purchase Subject Equity in
accordance with the terms hereof or that the Investor or any of its
Affiliates will make such purchase. The Tag-Along Right may be exercised by
any Holder of Subject Equity by delivery of a written notice to the Investor
who delivered the Transfer Notice ("TAG-ALONG NOTICE"), within 5 Business
Days of receipt of the Transfer Notice, indicating its election to exercise
the Tag-Along Right (the "PARTICIPATING HOLDERS"). The Tag-Along Notice shall
state the amounts of Subject Equity that such Holder proposes to include in
such Transfer to the Proposed Purchaser. Failure by any Holder to provide a
Tag-Along Notice within the 5 Business Day notice period shall be deemed to
constitute an election by such Holder not to exercise its Tag-Along Right.
The closing with respect to any sale to a Proposed Purchaser pursuant to this
Section shall be held at the time and place specified in the Transfer Notice.
Consummation of the sale of Common Stock by the Investor or any of its
Affiliates to a Proposed Purchaser shall be conditioned upon consummation of
the sale by each Participating Holder to such Proposed Purchaser (or the
Investor) of the Subject Equity entitled to be transferred as described in
(c) below, if any. Additionally:
(b) In the event that the Proposed Purchaser does not purchase
Subject Equity entitled to be transferred as described in (c) below, on the same
terms and conditions as purchased from the Investor or any of its Affiliates,
then the Investor or to its Affiliates shall purchase such Subject Equity if the
Transfer occurs.
(c) Each Holder shall have the right to require the Proposed
Purchaser to purchase from such Holder that percentage of the aggregate number
of shares of Common Stock desired to be transferred by such Holder equal to a
fraction, expressed as a percentage, equal to (i) if the transaction is a sale
of Capital Stock of the Company, the percentage of the Investor's Capital Stock
of the Company being sold by the Investor, or (ii) if the transaction is a sale
of Capital Stock of the Investor, the percentage of the Investor's Capital Stock
being sold by the parties to the Stockholders Agreement.
<PAGE>
-9-
(d) Any Subject Equity purchased from the Participating
Holders pursuant to this Section 3.2 shall be paid for in the same type of
consideration and at the same price per share of Common Stock and upon the same
terms and conditions of such proposed Transfer of Common Stock by the Investor
and/or any of its Affiliates. The price per Warrant to be paid by the Proposed
Purchaser shall be reduced by the exercise price of such Warrant per share. If
the Subject Equity to be purchased includes securities or property other than
Common Stock, the price to be paid for such securities or property shall be the
same price per share or other denomination paid by the Proposed Purchaser for
like securities purchased from the Investor or any of its Affiliates. If the
securities being purchased in the transaction consist of Capital Stock of the
Investor, the price paid to the Participating Holders shall be appropriately
adjusted to reflect the Investor's relative ownership of the Company and the
price paid to the Investor's Affiliates in the transaction. The Investor shall
arrange for payment directly by the Proposed Purchaser to each Participating
Holder, upon delivery of the certificate or certificates representing the
Warrants and/or Registrable Securities duly endorsed for transfer, together with
such other documents as the Proposed Purchaser may reasonably request.
(e) If the sale of Common Stock by the Investor or its
Affiliates and the sale of the Subject Equity entitled to be transferred as
provided above have not been completed in accordance with the terms of the
Proposed Purchaser's offer, all certificates representing such Subject Equity
shall be returned to the Participating Holders, and all the restrictions on
Transfer contained in this Agreement with respect to Common Stock owned by the
Investor and its Affiliates shall remain in effect.
(f) If the Investor proposing the Transfer intends to Transfer
a strip of two or more classes of shares and any Participating Holder holds all
such classes, such Participating Holder may only participate in such Transfer if
such Participating Holder participates with respect to all such classes of
shares.
(g) Each Participating Holder shall be required to bear its
PRO RATA share (based upon the number of shares sold) of the expenses incurred
by the transferring stockholders in connection with such transaction to the
extent such costs are incurred for the benefit of all such stockholders and are
not otherwise paid by the Company or the Proposed Purchaser.
3.3. DRAG-ALONG RIGHTS. If at any time prior to an Initial
Public Equity Offering, (i) the Investor and/or any of its Affiliates determines
to sell all or substantially all of the Capital Stock of the Company owned by it
to a Person other than the Investor or an Affiliate of the Investor, or (ii) the
stockholders of the Investor determine to sell all or substantially all of the
Capital Stock of the Investor to a Person other than the Investor or an
Affiliate of the Investor, then the Investor (whether directly or through an
Affiliate) shall have the right to require the Holders of Subject Equity to sell
such Subject Equity to such transferee; PROVIDED
<PAGE>
-10-
that the consideration to be received by the Holders of Subject Equity shall
be the same type of consideration received by the Investor and its
Affiliates. Any Warrants and/or Registrable Securities purchased from the
Holders thereof pursuant to this Section 3.3 shall be paid for at the same
price per share of Common Stock and upon the same terms and conditions of
such proposed transfer of Common Stock or other securities by the Investor
and its Affiliates. The price per Warrant to be paid by the Proposed
Purchaser shall be reduced by the exercise price of such Warrant per share.
If the Subject Equity to be purchased includes securities other than Common
Stock, the price to be paid for such securities shall be the same price per
share or other denomination paid by the Proposed Purchaser for like
securities purchased from the Investor and its Affiliates or, if like
securities are not purchased from the Investor and its Affiliates, the Fair
Market Value of such securities.
4. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect
to any Registration Statement pursuant to Section 2.1 hereof, the Company shall:
(a) A reasonable period of time prior to the initial filing of
a Registration Statement or Prospectus and a reasonable period of time
prior to the filing of any amendment or supplement thereto (including
any document that would be incorporated or deemed to be incorporated
therein by reference), furnish to the Initial Purchasers and the
managing underwriters, if any, copies of all such documents proposed to
be filed, which documents (other than those incorporated or deemed to
be incorporated by reference) will be subject to the review of such
Holders, and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent
certified public accountants to the Company to respond to such
reasonable inquiries as shall be necessary, in the opinion of counsel
to such underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act; PROVIDED that the foregoing inspection
and information gathering shall be coordinated on behalf of the Initial
Purchasers by CIBC;
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective
for the applicable time period required hereunder; cause the related
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities
covered by such Registration Statement during such period in accordance
with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or in such
Prospectus as so supplemented;
<PAGE>
-11-
(c) Notify the holders of Registrable Securities to be sold
and the managing underwriters, if any, promptly, and (if requested by
any such person), confirm such notice in writing, (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment is
proposed to be filed, and (B) with respect to a Registration Statement
or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (iii) of
the issuance by the SEC, any state securities commission, any other
governmental agency or any court of any stop order, order or injunction
suspending or enjoining the use of a Prospectus or the effectiveness of
a Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for
such purpose, and (v) of the happening of any event or information
becoming known that makes any statement made in a Registration
Statement or related Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration
Statement, Prospectus or documents so that it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, not misleading, and that in the case of a Prospectus, it will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading;
(d) Use its reasonable best efforts to avoid the issuance of
or, if issued, obtain the withdrawal of any order enjoining or
suspending the use of a Prospectus or the effectiveness of a
Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment;
(e) If requested by the managing underwriters, if any, (i)
promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters, if any
reasonably believe should be included therein, and (ii) make all
required filings of such Prospectus supplement or such post-effective
amendment under the Securities Act as soon as practicable after the
Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment; PROVIDED,
HOWEVER, that the Company shall not be required to take any action
pursuant to this Section 4(e) that would, in the opinion of counsel for
the Company, violate applicable law;
<PAGE>
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(f) Upon written request to the Company, furnish to each
Holder of Registrable Securities to be sold pursuant to a Registration
Statement and each managing underwriter, if any, without charge, at
least one conformed copy of such Registration Statement and each
amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested (including those
previously furnished or incorporated by reference) as soon as
practicable after the filing of such documents with the SEC;
(g) Deliver to each Holder of Registrable Securities to be
sold pursuant to a Registration Statement, and the underwriters, if
any, without charge, as many copies of the Prospectus (including each
form of prospectus) and each amendment or supplement thereto as such
persons reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement
thereto;
(h) Prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate
with the Holders of Registrable Securities to be sold, the
underwriters, if any, and their respective counsel in connection with
the registration or qualification (or exemption from such registration
or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as any such
Holder or underwriter reasonably requests in writing; use its
reasonable best efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period such Registration
Statement is required to be kept effective hereunder and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement; PROVIDED, HOWEVER, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in
any jurisdiction where they are not so subject;
(i) In connection with any sale or transfer of Registrable
Securities that will result in such securities no longer being
Registrable Securities, cooperate with the Holders thereof and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold, which certificates shall not bear any restrictive legends and
shall be in a form eligible for deposit with The Depository Trust
Company and to enable such Registrable Securities to be in such
denominations and registered in such names as the managing
underwriters, if any, or such Holders may request at least two Business
Days prior to any sale of Registrable Securities;
<PAGE>
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(j) Upon the occurrence of any event contemplated by Section
4(c)(v), as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(k) Enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings) and take all such other reasonable actions in connection
therewith (including those reasonably requested by the managing
underwriters, if any, or the Holders of a majority of the Registrable
Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities, and, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration, (i) make such
representations and warranties to the Holders of such Registrable
Securities and the underwriters, if any, with respect to the business
of the Company and its subsidiaries (including with respect to
businesses or assets acquired or to be acquired by any of them), and
the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each
case, in form, substance and scope as are customarily made by issuers
to underwriters in underwritten offerings, and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any, addressed to each selling Holder of Registrable
Securities (if so requested by them) and each of the underwriters, if
any), covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such underwriters; (iii) use their reasonable best efforts
to obtain customary "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data is, or is required to
be, included in the Registration Statement), addressed (where
reasonably possible) to each selling Holder of Registrable Securities
(if so requested by them) and each of the underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings; (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures
no less favorable to the selling Holders and the underwriters, if any,
than those set forth in Section 5 hereof (or such other provisions and
procedures
<PAGE>
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acceptable to Holders of a majority of Registrable Securities
covered by such Registration Statement and the managing underwriters,
if any); and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority of the Registrable
Securities being sold and the managing underwriters, if any, to
evidence the continued validity of the representations and warranties
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company;
(l) Make available for inspection by a representative of the
Initial Purchasers selling Registrable Securities, any underwriter
participating in any such disposition of Registrable Securities, and
any attorney, consultant or accountant retained by such Initial
Purchasers or underwriter, at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(including with respect to businesses and assets acquired or to be
acquired to the extent that such information is available to the
Company), and cause the officers, directors, agents and employees of
the Company and its subsidiaries (including with respect to businesses
and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in
each case reasonably requested by any such representative, underwriter,
attorney, consultant or accountant in connection with such Registration
Statement; PROVIDED, HOWEVER, that such persons shall first agree in
writing with the Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the
time of delivery of such information shall be kept confidential by such
Persons, unless (i) disclosure of such information is required by court
or administrative order or is necessary to respond to inquiries of
regulatory authorities, (ii) disclosure of such information is required
by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of the Registration
Statement or the use of any Prospectus), (iii) such information becomes
generally available to the public other than as a result of a
disclosure or failure to safeguard such information by such Person or
(iv) such information becomes available to such Person from a source
other than the Company and its subsidiaries and such source is not
bound by a confidentiality agreement; and PROVIDED, FURTHER, that the
foregoing inspection and information gathering shall be coordinated on
behalf of the Initial Purchasers by CIBC;
(m) Comply with all applicable rules and regulations of the
SEC and make generally available to their securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 under the Securities Act, no later than 60 days after
the end of any 12-month period (or 135 days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the
end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment
<PAGE>
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or reasonable efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day
of the first fiscal quarter after the effective date of a
Registration Statement, which statement shall cover said period,
consistent with the requirements of Rule 158 under the Securities
Act; and
(n) Cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.
The Company may require a Holder of Registrable Securities to
be included in a Registration Statement to furnish to the Company such
information regarding (i) the intended method of distribution of such
Registrable Securities, (ii) such Holder and (iii) the Registrable Securities
held by such Holder as is required by law to be disclosed in such Registration
Statement and the Company may exclude from such Registration Statement the
Registrable Securities of any Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
If any such Registration Statement refers to any Holder by
name or otherwise as the Holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance reasonably satisfactory to such Holder, to the effect that
the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act, the deletion of the reference to such Holder in
any amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii),
4(c)(iv) or 4(c)(v) hereof, such Holder will forthwith discontinue disposition
of such Registrable Securities covered by such Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(j) hereof, or until it is advised
in writing (the "ADVICE") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus. If the Company shall give any such
notice, the Effectiveness Period shall be extended by the number of days during
such period from and including the date of the giving of such notice to and
including the date when each Holder of Registrable Securities covered by such
Registration Statement shall have
<PAGE>
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received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 4(j) hereof or (y) the Advice, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Initial
Purchasers, each Holder, each underwriter who participates in an offering of
Registrable Securities, their respective Affiliates, each Person, if any, who
controls any of such parties within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and each of their respective directors,
officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto),
covering Registrable Securities, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the prior
written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by
CIBC), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any court
or governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) of this Section
5(a);
<PAGE>
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PROVIDED that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission (i) made in reliance upon and in
conformity with written information furnished to the Company by such Holder or
any underwriter in writing expressly for use in the Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) or (ii) contained in any preliminary prospectus if such Holder or such
underwriter failed to send or deliver a copy of the Prospectus (in the form it
was first provided to such parties for confirmation of sales) to the Person
asserting such losses, claims, damages or liabilities on or prior to the
delivery of written confirmation of any sale of securities covered thereby to
such Person in any case where such delivery is required by the Securities Act
and such Prospectus would have corrected such untrue statement or omission. Any
amounts advanced by the Company to an indemnified party pursuant to this Section
5 as a result of such losses shall be returned to the Company if it shall be
finally determined by such a court in a judgment not subject to appeal or final
review that such indemnified party was not entitled to indemnification by the
Company.
(b) By accepting the benefits of this Agreement, each Holder
agrees, severally and not jointly, to indemnify and hold harmless the Company,
each Initial Purchaser, each underwriter who participates in an offering of
Registrable Securities and the other selling Holders and each of their
respective directors, officers (including each officer of the Company who signed
the Registration Statement), employees and agents and each Person, if any, who
controls the Company, the Initial Purchasers, any underwriter or any other
selling Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all loss, liability, claim,
damage and expense whatsoever described in the indemnity contained in Section
5(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such selling Holder expressly for use in the
Registration Statement (or any amendment thereto), or any such Prospectus (or
any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 5(a) above, counsel to the indemnified parties shall be selected by
CIBC and, in the case of parties indemnified pursuant to Section 5(b) above,
counsel to the indemnified parties shall be selected by the Company.
Notwithstanding the foregoing sentence, in case any such action is brought
<PAGE>
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against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may wish, jointly with any other indemnifying
party similarly notified, unless such indemnified party shall have one or more
legal defenses available to it which are not available to the indemnifying
party, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party of its election as aforesaid to assume the defense thereof and
approval by such indemnified party of counsel appointed to defend such action,
the indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any Judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 5 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Holders
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
<PAGE>
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Company, and the Holders, as incurred; PROVIDED that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Company, on the one hand, and the Holders, on the other hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or by or on
behalf of the Holders, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Holders of the Registrable Securities
agree that it would not be just and equitable if contribution pursuant to this
Section 5 were to be determined by PRO RATA allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5, each Affiliate of a Holder, and
each director, officer, employee, agent and Person, if any, who controls a
Holder or such Affiliate within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Holder, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Company.
6. RULES 144 AND 144A.
The Company shall use its reasonable best efforts to file any
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time it is not required to file such reports
but in the past had been required to or did file such reports, it will, upon the
request of any Holder of Warrants or Registrable Securities, make available
other information as required by, and so long as necessary to permit, sales of
its Warrants and Registrable Securities pursuant to Rule 144A. Notwithstanding
the foregoing, nothing in this Section 6 shall be deemed to require the Company
to register any of its securities pursuant to the Exchange Act.
7. UNDERWRITTEN REGISTRATIONS.
If any of the Registrable Securities covered by any
Registration Statement are to be sold in an underwritten public offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Company.
<PAGE>
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No Person may participate in any underwritten public offering
hereunder unless such person (i) agrees to sell such Registrable Securities on
the basis reasonably provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
If the Company has complied with all its obligations under
this Agreement with respect to a Piggy-Back Registration relating to an
underwritten public offering, all holders of Warrants and Registrable
Securities, upon request of the lead managing underwriter with respect to such
underwritten public offering, will be required to not sell or otherwise dispose
of any Warrant or Registrable Security owned by them for a period not to exceed
90 days from the consummation of such underwritten public offering.
8. MISCELLANEOUS.
8.1. REMEDIES. In the event of a breach by the Company, the
Investor or by a Holder of any of its obligations under this Agreement, each
Holder, the Investor and the Company, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company, the
Investor and each Holder agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach of any of the
provisions of this Agreement and each hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
8.2. NO CONFLICTING AGREEMENTS. The Company and the Investor
will not enter into any agreement that conflicts with the rights granted to the
Holders and indemnified persons in this Agreement or otherwise conflicts with
the provisions hereof. Without the written consent of the Holders of a majority
of the Registrable Securities, the Company and the Investor shall not grant to
any Person any rights which conflict with the provisions of this Agreement.
8.3. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent of the Holders
of not less than the Requisite Shares; PROVIDED, HOWEVER, that, for the purposes
of this Agreement, Warrants, Warrant Shares and Registrable Securities that are
owned, directly or indirectly, by the Company, the Investor or any of their
Affiliates are not deemed outstanding. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights
<PAGE>
-21-
of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority of the Registrable Securities
being sold by such Holders pursuant to such Registration Statement; PROVIDED,
HOWEVER, that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence. Notwithstanding the foregoing, no amendment,
modification, supplement, waiver or consent with respect to Section 5 shall
be made or given otherwise than with the prior written consent of each Person
affected thereby.
8.4. NOTICES. All notices and other communications provided
for herein shall be made in writing by hand-delivery, next-day air courier,
certified first-class mail, return receipt requested, telex or telecopier to the
Company, as provided in the Purchase Agreement,
(a) if to the Investor or the Company
Heat Holdings Corp./
Aavid Thermal Technologies, Inc.
c/o Willis Stein & Partners
227 West Monroe Street
Suite 4300
Chicago, IL 60606
Attention: Dan Blumenthal
Telecopy No.: (312) 422-2424
With a copy, which shall not constitute notice, to:
Bartlit Beck Herman Palenchar & Scott
511 16th Street, Suite 700
Denver, Colorado 80202
Attention: Thomas Stephens
Telecopy No.: (303) 592-3140
or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the
sending party.
(b) if to the Initial Purchasers, as provided in the Purchase
Agreement, or
(c) if to any other Person who is then the registered Holder
of Warrants or Registrable Securities, to the address of such Holder as
it appears in the register therefor of the Company.
<PAGE>
-22-
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a
next-day air courier; 5 Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
8.5. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. Notwithstanding the
foregoing, no successor or assignee of the Company shall have any of the rights
granted under this Agreement until such Person shall acknowledge its rights and
obligations hereunder by a signed written statement of such person's acceptance
of such rights and obligations.
8.6. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement.
8.7. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK. THE COMPANY, THE INVESTOR AND THE INITIAL PURCHASERS HEREBY IRREVOCABLY
SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS.
<PAGE>
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8.8. SEVERABILITY. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
8.9. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. All references made in this Agreement to "Section" and
"paragraph" refer to such Section or paragraph of this Agreement, unless
expressly stated otherwise.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Common Stock
Registration Rights Agreement to be duly executed as of the date first written
above.
AAVID THERMAL TECHNOLOGIES, INC.
By: /s/ Bharatan Patel
-----------------------------------------
Name: Bharatan Patel
Title: Chief Executive Officer
HEAT HOLDINGS CORP.
By: /s/ Daniel H. Blumental
-----------------------------------------
Name: Daniel H. Blumental
Title: Vice President
CIBC WORLD MARKETS CORP.
By: /s/ Fotis Hasiotis
-----------------------------------------
Name: Fotis Hasiotis
Title: Executive Director
FLEETBOSTON ROBERTSON STEPHENS INC.
By: /s/ Timothy C. Shoyer
-----------------------------------------
Name: Timothy C. Shoyer
Title: Managing Director
