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EXHIBIT 99.3
Form of Exchange Agency Agreement
September , 1997
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 4th Floor
Boston, Massachusetts 02110
Attention: Ms. Traci Hopkins
Assistant Secretary
Ladies and Gentlemen:
Fedders North America, Inc., a Delaware corporation (the "Company") is
offering to exchange, upon the terms and subject to the conditions set forth in
the Prospectus dated September ___, 1997 (the "Prospectus"), and the
accompanying Letter of Transmittal (the "Letter of Transmittal") (which together
constitute the "Exchange Offer") $1,000 principal amount of its 9-3/8% Senior
Subordinated Notes due 2007, which have been registered under the Secuirites Act
of 1933, as amended, pursuant to the Registration Statement of which the
Prospectus is a part (the "New Notes") for each of the Company's outstanding
9-3/8% Senior Subordinated Notes due 2007 (the "Old Notes") of which
$100,000,000 principal amount is outstanding. The Old Notes and the New Notes
are guaranteed (the "Guarantee") on a senior subordinated basis by Fedders
Corporation, a Delaware corporation (the "Guarantor"). References herein to the
New Notes and the Old Notes shall include the related Guarantees.
You are hereby appointed and authorized to act as agent (the "Exchange
Agent") to effectuate the exchange of Old Notes for New Notes, on the terms and
subject to the conditions of this agreement (the "Agreement"). In that
connection, the following documents have been delivered to you in sufficient
quantities to enable you to satisfy paragraph 9 below:
(i) the Exchange Offer;
(ii) the Letter of Transmittal accompanying the Exchange Offer, to be used
by the holders of Old Notes ("Old Noteholders") in tendering their Old Notes";
and
(iii) the Notice of Guaranteed Delivery to be used by Old Noteholders in
tendering their Old Notes when those securities are not immediately available or
time will not permit a Letter of Transmittal and the accompanying documents to
reach you prior to the expiration of the Offer.
The Offer will expire at the time and on the date specified in the Exchange
Offer (the "Expiration Date") or at any subsequent time and date to which the
Company may extend the Offer, in which case the term "Expiration Date" shall
mean the latest date to which the Exchange Offer is extended.
You are hereby requested, and you hereby agree, to act as follows:
1. You are to accept Old Notes which are accompanied by the appropriate
Letter of Transmittal or facsimile thereof, properly completed and duly executed
in accordance with the instructions thereon and any requisite collateral
documents and all other instruments and communications submitted to you in
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connection with the Offer and to hold the same upon the terms and conditions set
forth in this Agreement.
2. You are to examine the Letters of Transmittal, Old Notes and other
documents delivered or mailed to you by or for Old Noteholders to ascertain
whether (i) the Letters of Transmittal are properly completed and duly executed
in accordance with the instructions set forth therein, (ii) the other documents
are properly completed and duly executed, and (iii) the Old Notes have otherwise
been properly tendered. You need not pass on the legal sufficiency of any
signature or verify any signature guarantee. You are also to tabulate the number
of consents received in response to the consent solicitation of the holders of
Old Notes contained in the Exchange Offer.
3. In the event any Letter of Transmittal or other document has been
improperly executed or completed or any of the certificates are not in proper
form or have been improperly tendered or any book-entry delivery of Old Notes
has been improperly made, or if some other irregularity in connection with the
delivery of Old Notes by a holder thereof exists, you are authorized, upon
consultation with the Company or its counsel, to endeavor to take such action as
may be necessary to cause such irregularity to be corrected. You are authorized,
upon consultation with the Company or one of its representatives, to request
from any person tendering Old Notes such additional documents or undertakings as
you may deem appropriate. All questions as to the form of the related documents
and the validity, eligibility (including time of receipt) and acceptance of
tendered Old Notes will be determined by the Company, in its sole discretion,
whose determination will be final and binding. The Company reserves the absolute
right to reject any or all tenders of any particular Old Notes, which would, in
the opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Old Notes, and the Company's interpretation of
the terms and conditions of the Offer (including the Letter of Transmittal and
the instructions set forth therein) will be final. No tender of Old Notes will
be deemed to have been properly made until all defects and irregularities have
been cured or waived.
4. Tenders of Old Notes may be made only as set forth in the Exchange
Offer, and securities shall be considered properly tendered to you only when:
a. a properly completed and duly executed Letter of Transmittal, with
any required signature guarantees and any other required documents as set forth
in the Letter of Transmittal, are received by you at your address set forth in
the Exchange Offer, and Old Notes are received by you at such addresses; or a
properly completed and duly executed Notice of Guaranteed Delivery substantially
in the form provided by the Company, with an appropriate guarantee of signature
and delivery from an Eligible Institution, is received by you at or prior to the
Expiration Date. For the purposes of this Agreement, an "Eligible Institution"
shall mean a member of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States. The Notice of
Guaranteed Delivery may be delivered to you by hand or transmitted by telegram,
facsimile transmission or letter;
b. Old Notes (in respect of which there have been delivered to you
prior to the Expiration Date a properly completed and duly executed Notice of
Guaranteed Delivery) in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), and
any other required documents as set forth in the Letter of Transmittal, are
received by you within five trading days of The New York Stock Exchange, Inc.
after the date of execution of such Notice of Guaranteed Delivery; and
c. the adequacy of the items relating to Old Notes, the Letter of
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Transmittal therefor and any Notice of Guaranteed Delivery has been favorably
passed upon as above provided.
Notwithstanding the provisions of the preceding paragraph, Old Notes which
the Company shall approve as having been properly tendered shall be considered
to be properly tendered.
5. Holders of Old Notes may make book-entry delivery of their securities.
You will establish in your name or the name of your nominee an account with
respect to the Old Notes at Depository Trust Company ("DTC") for purpose of the
Offer to permit book-entry transfers of Old Notes. Except as otherwise provided
below, Old Notes, or any book-entry transfer into your account at DTC of Old
Notes tendered electronically, as well as a properly completed and duly executed
copy of the Letter of Transmittal, and any other documents required by the
Letter of Transmittal, must be received by you or, in the case of tenders of
book-entry transfer, confirmed to you by transfer to your account on or prior to
the Expiration Date.
6. a. A tendering Old Noteholder may withdraw tendered Old Notes in
accordance with the procedures set forth in the Exchange Offer, in which event,
except as may be otherwise specified in the Old Noteholder's notice of
withdrawal, all items in your possession which shall have been received from the
Noteholder with respect to those Old Notes shall be promptly returned to or upon
the order of the Noteholder and the Old Notes covered by those items shall no
longer be considered to be properly tendered.
b. A withdrawal may not be rescinded. Withdrawn Old Notes may,
however, be tendered at anytime on or prior to the Expiration Date.
7. You are to record and to hold all tenders received by you and to
promptly notify by telephone after the close of business on each business day,
the following person as to the total number of Old Notes tendered on such day
and the cumulative numbers with respect to the Old Notes received through the
time of such call:
Robert N. Edwards, Vice President and General Counsel of the Company.
Each daily report should be divided into the following categories: the number
and principal amount of Old Notes represented by (i) certificates, and (ii)
Notices of Guaranteed Delivery actually received by you through the time of the
report. The foregoing information should also be sent to Mr. Edwards in a daily
letter.
In addition, you will also provide, and cooperate in making available to Mr.
Edwards, such other information as he or the Company's counsel may reasonably
request upon oral request made from time to time. Your cooperation shall
include, without limitation, the granting by you to the Company, and such other
persons as it may reasonably request, of access to those persons on your staff
who are responsible for receiving tenders of Old Notes in order to insure that
immediately prior to the Expiration Date, the Company shall have received
information in sufficient detail to enable it to decide whether to extend the
Offer.
8. Letters of Transmittal, Notices of Guaranteed Delivery and telegrams,
facsimile transmissions and letters submitted in lieu thereof pursuant to the
Offer shall be stamped by you as to the date and time of receipt and shall be
retained in your possession until the Expiration Date. As promptly as
practicable after the Expiration Date, you will deliver those items, together
with all properly tendered Old Notes to the Company.
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9. You are to satisfy requests of brokers, dealers, commercial banks, trust
companies and other persons for copies of the documents and other materials
specified in items (i) through (iii) of the introduction to this Agreement. You
are not authorized to offer or to pay any concessions of commissions to any
brokers, banks or other persons or to engage or to utilize any persons to
solicit tenders.
10. You are to follow up and to act upon any amendments, modifications or
supplements to these instructions mutually satisfactory to you and the Company,
and upon any further information in connection with the terms of the Offer, any
of which may be given to you by the Company, including instructions with respect
to (i) any extension or other modification of the Offer, (ii) the amount or
manner of payment for any Old Notes exchanged, and (iii) the cancellation of the
Offer.
11. If under the conditions set forth in the Exchange Offer, the Company
becomes obligated to accept Old Notes tendered, it will, as promptly as
practicable thereafter, deposit with you certificates representing New Notes in
the amount determined according to the ratio prescribed in the Exchange Offer.
Unless otherwise indicated under any Special Issuance Instructions or any
Special Delivery Instructions set forth in any Letter of Transmittal, you shall
mail the certificates representing the New Notes and the certificates for any
Old Notes submitted but not tendered for exchange to the registered owner of the
securities at the address shown in the Letter of Transmittal. In the event that
either or both the Special Issuance Instructions and the Special Delivery
Instructions are completed, you shall mail all certificates representing New
Notes (or Old Notes to be returned, if any) to the person or persons so
indicated in the Letter of Transmittal. Certificates shall be post-marked by you
within a reasonable period of time after certificates have been provided to you.
12. No exchange shall be made as to any Old Notes until you physically
receive a certificate or certificates representing those Old Notes, a properly
completed and duly executed Letter of Transmittal and any other required
documents.
13. For performing your services hereunder, you shall be entitled to
receive from the Company a fee of [$5,000.00] and an additional fee of [$35.00]
per Letter of Transmittal processed. You shall also be reimbursed by the Company
for all reasonable expenses, including counsel fees, if any, and mailing costs
you may incur in connection with the performance of your duties.
14. As Exchange Agent hereunder you:
(a) shall not have duties or obligations other than those specifically
set forth or as may subsequently be agreed to by you and the Company;
(b) shall not be obligated to take any legal action hereunder which
might in your judgment involve any expense or liability unless you have been
furnished with reasonable indemnification;
(c) may rely on and shall be protected in acting upon any certificate,
instrument, opinion, notice, letter, telegram or other document or security
delivered to you and believed by you to be genuine and to have been signed by
the proper party or parties;
(d) may rely on and shall be protected in acting or refraining from
acting upon the written instructions of Mr. Edwards; and
(e) may consult counsel satisfactory to you (including counsel to the
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Company), and the opinion of such counsel shall be full and complete
authorization and protection with respect to any action taken, suffered, or
omitted by you hereunder in good faith and in accordance with the opinion of
such counsel.
(f) You shall be deemed to have notice of any fact, claim or demand
with respect hereto unless actually known by an officer charged with
responsibility for administering this Agreement or unless in writing received by
you and making specific reference to this Agreement.
(g) No provision of this Agreement shall require you to expend or risk
your own funds, or to take any legal or other action hereunder which might in
your judgment involve it in, or require it to incur in connection with the
performance of your duties hereunder, any expense or any financial liability
unless it shall be furnished with indemnification acceptable to it.
15. You undertake the duties and obligations imposed herein upon the
following additional terms and conditions:
(a) you shall perform your duties and obligations hereunder with due
care;
(b) you shall not be under any responsibility in respect of the
validity or sufficiency (not only as to genuineness, but also as to its due
execution, the genuineness of signatures appearing thereon and as to the truth
and accuracy of any information therein contained) of any Letter of Transmittal,
certificate for Old Notes, book-entry transfer of securities or Notice of
Guaranteed Delivery; and
(c) Neither you nor any of your directors, officers or employees shall
be liable to anyone for any error of judgment, or for any act done or step taken
or omitted to be taken by you or any of your directors, officers or employees,
or for any mistake of fact or law, or for anything which you or any of your
directors, officers or employees, may do or refrain from doing in connection
with or in the administration of this Agreement, unless and except to the extent
the same constitutes gross negligence or willful misconduct on your part.
16. You are not authorized to make any recommendation on behalf of the
Company as to whether a holder of Old Notes should or should not tender his, her
or its securities.
17. All certificates for New Notes and all certificates representing New
Notes shall be forwarded by (i) first-class mail [under a blanket surety bond]
protecting you, the Company and the Guarantor from loss or liability arising out
of the non-receipt or non-delivery of such certificates or (ii) registered mail,
insured separately for the replacement value of such certificates.
18. You are authorized to cooperate with and furnish information to any
organization (and its representatives) designated from time to time by the
Company, in any manner reasonably requested by any of them and acceptable to you
in connection with the Offer and tenders thereunder.
19. The Company covenants and agrees to reimburse indemnify and hold you
harmless against any costs, expenses (including reasonable expenses of your
legal counsel), losses or damages which, without negligence, misconduct or bad
faith on your part may be paid, incurred or suffered by you or to which you may
become subject by reason of or as a result of the administration of your duties
hereunder or by reason of or as a result of your compliance with the
instructions set forth herein or with any written or oral instructions
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delivered to you pursuant hereto, or liability resulting from your actions as
Exchange Agent pursuant hereto, including any claims against you by any holder
tendering Old Notes for exchange. The Company shall be entitled to participate
at its own expense in the defense, and if the Company so elects at any time
after receipt of such notice, the Company shall assume the defense of any suit
brought to enforce any such claim. In the event that the Company assumes the
defense of any such suit, the Company shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you, unless in your
judgment, which must be reasonable, it is advisable for you to be represented by
separate counsel. In no case shall the Company be liable under this indemnity
with respect to any claim or action against you, unless the Company shall be
notified by you, by letter or by cable or by telecopy confirmed by letter, of
the written assertion of a claim against you or of any action commenced against
you, promptly after you shall have received any such written assertion of a
claim or shall have been served with a summons or other first legal process
giving information as to the nature and basis of an action, but failure so to
notify the Company shall not relieve the Company from any liability which it may
have otherwise than on account of this indemnity.
20. You hereby acknowledge receipt of the Exchange Offer and each of the
documents listed in items (i) through (iii) of the introduction to this
Agreement and further acknowledge that you have examined the same. Any
inconsistency between this Agreement on the one hand and the Exchange Offer and
related Letters of Transmittal, as they may from time to time be amended, on the
other, shall be resolved in favor of the latter, except with respect to the
duties, liabilities and indemnification of you as Exchange Agent.
21. All notices, statements and other communications hereunder shall be in
writing, signed by a duly authorized officer of the party sending such notices,
and shall be deemed given when delivered by hand or by certified mail, postage
prepaid, addressed as follows:
To the Company:
Fedders North America, Inc.
c/o Fedders Corporation
Westgate Corporate Center
505 Martinsville Road
P.O. Box 813
Liberty Corner, New Jersey 07938
Attention: Robert N. Edwards
Vice President and General Counsel
Facsimile: (908) 604-9317
Telephone: (908) 604-8686
to you:
State Street Bank and Trust Company
Corporate Trust Department
Two International Place
Boston, MA 02102-0778
Attention: Fedders North America, Inc. Exchange
Facsimile: (617) 664-5365
Telephone: (617) 664-5553
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or to such other address as either party may furnish hereunder by notice;
provided that notice of change of address shall be deemed given only when
received.
22. This agreement shall be construed and enforced in accordance with the
law of the State of New York applicable to agreements made and to be performed
in New York and shall inure to the benefit of, and the obligations created
hereby shall be binding upon, the successors and assigns of the parties hereto.
23. These instructions may be reasonably modified or supplemented by the
Company or by any officer thereof authorized to give notice, approval or waiver
on its behalf.
24. As used herein, "business day" shall mean any day other than a Saturday
or Sunday, or any other day on which you are authorized or required to be closed
for business.
Please acknowledge receipt of this letter and confirm the arrangements
herein provided by signing and returning the enclosed copy.
Very truly yours,
FEDDERS NORTH AMERICA, INC.
By:_________________________________
Name:
Title:
ACCEPTED AS OF
September , 1997
STATE STREET BANK AND TRUST COMPANY
As Exchange Agent
By:_________________________________________