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
TABLE OF CONTENTS
PAGE
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
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
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
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
EXHIBITS
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
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
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
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.
"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:
Alternate Base
Total Leverage Ratio Rate Loans Eurodollar Loans
-------------------- ---------------- -----------------
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%
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
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.
"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.
"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.
"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
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.
"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.
"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
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.
"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
"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).
"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.
"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
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
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
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
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
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.
"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
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.
"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
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:
(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
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
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).
"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).
"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.
"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.
"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
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.
"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.
"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,
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
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
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.
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
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
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
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).
(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.
(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.
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
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
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
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
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.
(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
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.
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.
(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
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
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
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
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
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
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
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.
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
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
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.
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
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
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.
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.
(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
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.
(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
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
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
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.
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
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
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
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;
(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.
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
(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:
Period Interest Coverage Ratio
------ -----------------------
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
(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:
Period Fixed Charges Ratio
------ -------------------
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
(c) TOTAL LEVERAGE RATIO. Permit the Total Leverage Ratio during any period
to exceed the ratio set forth opposite such period below:
Period Total Leverage Ratio
------ --------------------
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
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
(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:
Period Senior Leverage Ratio
------ ---------------------
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
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;
(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
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;
(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;
(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
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.
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.
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
(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
(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;
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
(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
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.
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
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
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:
(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.
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.
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:
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
; 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,
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.
(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.
(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.
(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
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:
(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.
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
BANKBOSTON, N.A., as Documentation Agent
By: /s/ David M. Crane
-----------------------------------------
Name: David M. Crane
Title: Director
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
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),
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:
Schedule A
TO AMENDED AND RESTATED REVOLVING
CREDIT NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF EURODOLLAR LOANS
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
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
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Schedule B
TO AMENDED AND RESTATED REVOLVING
CREDIT NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF ALTERNATE BASE RATE LOANS
- -------------------- ------------------ -------------------- ---------------- ------------------ ---------------- ------------------
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
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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
"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:
Schedule A
TO AMENDED AND
RESTATED TERM NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF EURODOLLAR LOANS
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
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
- ------------------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------------
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Schedule B
TO AMENDED AND
RESTATED TERM NOTE
LOANS, CONVERSIONS AND
PAYMENTS OF ALTERNATE BASE RATE LOANS
- ----------------- ----------------- -------------------- ---------------- ------------------- ----------------- -------------------
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
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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.
$__________.](2) [$_________ 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.
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.
(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.
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.
"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
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
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
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
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
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
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
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
SCHEDULE I
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
Name of Jurisdiction of Class of Shares Number of Shares Share Certificate Letter
Subsidiary Organization
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
10
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
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
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
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
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
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
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
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
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
SCHEDULE I
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
Name of Jurisdiction of Class of Shares Number of Shares Share Certificate Letter
Subsidiary Organization
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
- ------------------ -------------------- -------------------------- ------------------------- ------------------------------
10
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;
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
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
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
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
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
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
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
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
SCHEDULE I
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
Name of Subsidiary Jurisdiction of Class of Shares Number of Shares Share Certificate Letter
Organization
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
Aavid Thermal
Products UK Holdings
Ltd.
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
- ---------------------- ----------------------- --------------------- ----------------------- ------------------------------
10
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;
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
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
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
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
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
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
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
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
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
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 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
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
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
Schedule B
to
Amended and Restated Borrower Intellectual Property Security Agreement
Dated as of February 2, 2000
LICENSE AGREEMENTS
14
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;
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,
-2-
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
-3-
(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
-4-
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:
-5-
(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-
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.
-7-
(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
-8-
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
-9-
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
-10-
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
-11-
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
-12-
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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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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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.
-15-
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
---------------------
-17-
ANNEX A
TO BORROWER
SECURITY AGREEMENT
------------------
AAVID THERMAL TECHNOLOGIES, INC.
LIST OF INVESTMENT PROPERTY
---------------------------
-18-
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;
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
"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
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
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
(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
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
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
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
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
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
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
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
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
----- --- ------ ------
14
SCHEDULE II
TO BORROWER
PLEDGE AGREEMENT
----------------
DESCRIPTION OF PLEDGED DEBT
Issuer Date of Debt Amount of Debt
------ ------------ --------------
15
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
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
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
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
LENDERS:
[_____________________________]
By:___________________________
Name:
Title:
5
Acknowledged and Consented to
this 31st day of January, 2000
AAVID THERMAL TECHNOLOGIES, INC.
By:___________________________
Name:
Title:
6
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;
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.
2
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
3
By: ___________________________
Name:
Title:
Aavid Thermalloy SW, LLC
By: ___________________________
Name:
Title:
Aavid Thermal Products, Inc.
By: ___________________________
Name:
Title:
4
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;
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
(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
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
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
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
6
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
7
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.
8
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
9
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
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
2
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;
3
(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
4
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
5
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.
6
(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
7
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.
8
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.
9
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
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
SCHEDULE I
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Class of Certificate Number Percentage
Issuer Units Number of Units of Units
------- ----- ------- -------- --------
Aavid Thermalloy LLC, a Delaware limited
liability company.
13
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
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
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
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
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
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
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,
7
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.
8
(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
9
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
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
11
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
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.
13
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
14
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
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
SCHEDULE I
TO SECURITY AGREEMENT
HEAT HOLDINGS II CORP.
[ADDRESS]
LOCATION OF INVENTORY
LOCATION OF EQUIPMENT
17
ANNEX A
TO SECURITY AGREEMENT
HEAT HOLDINGS II CORP.
[ADDRESS]
LIST OF INVESTMENT PROPERTY
18
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
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
"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
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
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
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
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
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
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
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
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
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
SCHEDULE I
TO SUBSIDIARY
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Class of Certificate Number Percentage
Issuer Units Number of Units of Units
------ ----- ------ -------- --------
Aavid Thermal Technologies, Inc., a
Delaware corporation
13
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
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
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
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
4
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
5
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.
6
(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,
7
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.
8
(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
9
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
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
11
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
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.
13
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
14
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
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
SCHEDULE I
TO SECURITY AGREEMENT
HEAT HOLDINGS CORP.
[ADDRESS]
LOCATION OF INVENTORY
LOCATION OF EQUIPMENT
17
ANNEX A
TO SECURITY AGREEMENT
HEAT HOLDINGS CORP.
[ADDRESS]
LIST OF INVESTMENT PROPERTY
18
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;
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
2
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
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
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
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.
6
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
7
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
8
(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.
9
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:
10
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;
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
2
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:
3
(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
4
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.
5
(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
6
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
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.
8
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
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.
10
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
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
SCHEDULE I
TO [______]
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Class of Certificate Number Percentage
Issuer Shares Number of Shares of Shares
------ ------ ------ --------- --------
* Common unless otherwise indicated.
13
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
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
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
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
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
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
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
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
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
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
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
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
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
Schedule B
to
Aavid Thermal Products, Inc. Amended and Restated
Intellectual Property Security Agreement
Dated as of February 2, 2000
LICENSE AGREEMENTS
14
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.
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
ATTACHMENT 1
EBITDA
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) $_________
- -------------------
(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
(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)
- -------------------
(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
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)
- -------------------
(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
ATTACHMENT 2
TOTAL LEVERAGE RATIO
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):
PERIOD TOTAL LEVERAGE RATIO
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
6
ATTACHMENT 3
FIXED CHARGES RATIO
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):
PERIOD FIXED CHARGES RATIO
March 31, 2001 through December 31, 2001 1.00 to 1.0
January 1, 2002 and thereafter 1.10 to 1.0
7
ATTACHMENT 4
INTEREST COVERAGE RATIO
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):
PERIOD INTEREST COVERAGE RATIO
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
- ------------------------------
(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
ATTACHMENT 5
EXCESS CASH FLOW
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) $_________
9
ATTACHMENT 6
FUNDED DEBT
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) $__________
10
ATTACHMENT 7
INDEBTEDNESS
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)
11
ATTACHMENT 8
INTEREST EXPENSE
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) $__________
12
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;
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
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
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
(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
5
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
6
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.
7
(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
8
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
9
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
10
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.
11
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
12
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.
13
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
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
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
SCHEDULE I
TO SUBSIDIARY
SECURITY AGREEMENT
AAVID THERMAL PRODUCTS, INC.
LOCATION OF INVENTORY
LOCATION OF EQUIPMENT
17
ANNEX A
TO SUBSIDIARY
SECURITY AGREEMENT
AAVID THERMAL PRODUCTS, INC.
LIST OF INVESTMENT PROPERTY
18
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
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
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
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
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.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her
name.
HEAT HOLDINGS II CORP.
By:______________________________
Name:
Title:
Date: , 2000
2
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)
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
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
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,
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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
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
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
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
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
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
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
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
(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