Amended And Restated Credit Agreement

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, ...