Document:

exv4w1

 

Exhibit 4.1

 

THIRD SUPPLEMENTAL INDENTURE

 

     THIRD
SUPPLEMENTAL INDENTURE, dated as of March 21, 2006 (this “Supplemental Indenture”),
among Aavid Thermal Technologies, Inc., a Delaware corporation (the “Company”), the Guarantors
named on the signature page hereto (the “Guarantors”) and Deutsche Bank Trust Company Americas
(f/k/a Bankers Trust Company), a New York banking corporation, as trustee under the Indenture
referred to below (the “Trustee”).

     WHEREAS, the Company and the Guarantors have heretofore executed and delivered to the Trustee
an Indenture dated as of February 2, 2000, as amended by the First Supplemental Indenture dated as
of April 30, 2001 and the Second Supplemental Indenture dated as of February 14, 2006 (as so
amended, the “Indenture”), providing for the creation and issuance of the Company’s 12-3/4% Senior
Subordinated Notes due 2007 (the “Notes”) (capitalized terms used herein but not otherwise defined
have the meanings ascribed thereto in the Indenture); and

     WHEREAS, in accordance with Section 8.02 of the Indenture, the Trustee and the Company and the
Guarantors, when authorized by a Board Resolution, together with the written consent of the Holders
of at least a majority in aggregate principal amount of the Notes outstanding as of the date
hereof, may amend or waive certain terms and covenants in the Indenture as described below; and

     WHEREAS, the Company and each of the Guarantors are undertaking to execute and deliver this
Supplemental Indenture to amend certain terms and covenants in the Indenture in connection with the
Offer to Purchase and Consent Solicitation Statement of the Company dated March 8, 2006 and any
amendments, modifications or supplements thereto (the “Offer and Consent Solicitation”); and

     WHEREAS, this Supplemental Indenture has been duly authorized by all necessary corporate
action on the part of the Company and each of the Guarantors.

     NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company, each of the Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as
follows:

ARTICLE I

Amendments and Waivers

     SECTION 1.01.      Applicability of Certain Indenture Provisions to the Offer and Consent
Solicitation. The application of the provisions of Article IV of the Indenture are hereby
waived to the extent that such provisions might otherwise interfere with the ability to enter into
agreements contemplated by, and to consummate, the Offer and Consent Solicitation.

     SECTION 1.02.      Amendments to the Indenture. The amendments to the Indenture set forth
herein shall become effective upon the execution and delivery by the Trustee, the Company and the
Guarantors of this Supplemental Indenture, and shall become operative at the time the

 

 

Company first
accepts for payment Notes validly tendered pursuant to the Offer and Consent Solicitation and
deposits with Deutsche Bank Trust Company Americas, as Depositary under the Offer and Consent
Solicitation, an amount of money sufficient to pay for such Notes and make all consent payments
required under the Offer and Consent Solicitation:

     (a)      Definitions.

        (i)      The definition of “Restricted Subsidiary” set forth in Section 1.01 of the
Indenture is hereby amended in its entirety to read as follows:

       ““Restricted Subsidiary” means a Subsidiary of the Company other than an
Unrestricted Subsidiary.”

        (ii)      The definition of “Senior Credit Facility” set forth in Section 1.01 of the
Indenture is hereby amended in its entirety to read as follows:

       ““Senior Credit Facility” means the Credit Agreement, by and among ANSYS, Inc.,
the lenders party thereto in their capacities as lenders thereunder, Bank of America, N.A.,
as administrative agent, and Banc of America Securities LLC, as sole lead arranger and sole
book manager, together with the related documents thereto (including, without limitation,
any guarantee agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or otherwise
modified from time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding Restricted Subsidiaries of ANSYS, Inc. as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or any other
agent, lender or group of lenders.”

        (iii)      The definition of “Unrestricted Subsidiary” set forth in Section 1.01 of the
Indenture is hereby amended in its entirety to read as follows:

       ““Unrestricted Subsidiary” means (1) any Subsidiary of an Unrestricted
Subsidiary and (2) any Subsidiary of the Company which is classified after the Issue Date as
an Unrestricted Subsidiary by a Board Resolution, until such time as the Board of Directors
of the Company may designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary.”

        (iv)      All definitions set forth in the Indenture that relate to defined terms used
solely in sections deleted by this Supplemental Indenture are hereby deleted in their
entirety.

     (b)      Redemption Notices.

        (i)      Section 3.01 of the Indenture is hereby amended in its entirety to read as follows:

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“Section 3.01.      Notices to Trustee.

If the Company elects to redeem Notes pursuant to paragraph 7 of the Notes, at
least 5 days prior to the Redemption Date or during such other period as the Trustee
may agree to, the Company shall notify the Trustee in writing of the Redemption
Date, the principal amount of Notes to be redeemed and the Redemption Price, and
deliver to the Trustee an Officers’ Certificate stating that such redemption will
comply with the conditions contained herein and in the Notes, as appropriate.”

     (ii)      The first paragraph of Section 3.03 of the Indenture is hereby amended in its
entirety to read as follows:

“Section 3.03.      Notice of Redemption.

Notice of redemption shall be mailed by first class mail at least 5 but not
more than 60 calendar days before the Redemption Date to each Holder of Notes to be
redeemed at its registered address. If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed.”

     (c)      Covenants. The Indenture is hereby amended to delete Sections 4.02, 4.03, 4.05,
4.09, 4.10, 4.11, 4.14, 4.15, 4.16, 4.18, 4.19, 4.20, 4.21, 4.22 and 4.24 and clauses (a) and (c)
of Section 4.04 in their entirety and all references thereto contained elsewhere in the Indenture
in their entirety.

     (d)      Successor Corporation. Section 5.01 of the Indenture is hereby amended to
delete all text set forth therein following clause (1) thereof and all references thereto contained
elsewhere in the Indenture in their entirety.

     (e)      Events of Default. Section 6.01 of the Indenture is hereby amended to delete
clauses (d), (e), (f), (g) and (h) thereof and all references thereto contained elsewhere in the
Indenture in their entirety.

     (f)      Defeasance. Section 9.04 of the Indenture is hereby amended to delete clauses
(b), (c), (d), (f), (h) and (j) thereof and all references thereto contained elsewhere in the
Indenture in their entirety.

     (g)      Notices. The notice information for the Company set forth in Section 12.02 of the
Indenture is hereby amended in its entirety to read as follows:

     “If to the Company:

Aavid Thermal Technologies, Inc.

275 Technology Drive

Southpointe

Cannonsburg, PA 15317

Attention: Sheila S. DiNardo, Esq.

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Tel: (724) 746-3304

Fax: (724) 514-3609

     Copy to:

Goodwin Procter LLP

Exchange Place

53 State Street

Boston, MA

Attention:   John R. LeClaire

                    Joseph L. Johnson III

Tel: (617) 570-1000

Fax: (617) 523-1231

     (h)      Exhibits. Exhibit B to the Indenture, the form of Exchange Notes, is hereby
replaced in its entirety with Exhibit B attached hereto.

     (i)      Section References. All references in the Indenture to sections, definitions and
exhibits amended hereby shall mean such section, definitions and exhibits as amended or further
amended by this Supplemental Indenture.

ARTICLE II

Miscellaneous

     SECTION 2.01.      Ratification of Indenture; Supplemental Indentures Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

     SECTION 2.02.      Trustee Makes No Representation. The recitals contained herein shall
be taken as the statements of the Company and the Guarantors, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to the validity or
sufficiency of this Supplemental Indenture.

     SECTION 2.03.      Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF
THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.

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     SECTION 2.04.      Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement.

     SECTION 2.05.      Severability. In case any provision of this Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof or of the Indenture shall not in any way be affected or impaired
thereby.

     SECTION 2.06.      Effects of Headings. The section headings herein are for convenience
only and shall not affect the construction thereof.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed all as of the date first above written.

	 	 	 	 	 
	 	AAVID THERMAL TECHNOLOGIES, INC.

 	 
	 	By:  	/s/  John W. Mitchell
 	 
	 	 	Name:  	John W. Mitchell 	 
	 	 	Title:  	Vice President 	 
	 
	 	Guarantors:

FLUENT INC. (f/k/a Fluent Holdings, Inc.)

AAVID THERMAL PRODUCTS, INC.

THERMALLOY INVESTMENT CO., INC.

THERMALLOY, INC.

AAVID THERMALLOY, LLC

APPLIED THERMAL TECHNOLOGIES, LLC

AAVID THERMALLOY SW, LLC

AAVID THERMALLOY OF TEXAS, LLC

ENDUCTIVE SOLUTIONS, INC.

TROY III, INC.

 	 
	 	By:  	/s/  John W. Mitchell
 	 
	 	 	Name:  	John W. Mitchell 	 
	 	 	Title:  	Vice President 	 

6

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS (f/k/a Bankers
Trust Company), as Trustee

 	 
	 	By:  	Deutsche Bank National Trust Company
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/
David Contino
 	 
	 	 	Name: 	David Contino	 
	 	 	Title: 	Assistant Vice President	 
	 
	 	 	 
	 	By:  	/s/
Yana Kalachikova
 	 
	 	 	Name:  	Yana Kalachikova	 
	 	 	Title:  	Assistant Vice President	 

7

 

	 	 	 	 	 

EXHIBIT B

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE
OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, AND
TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.

ISIN No.:               

AAVID THERMAL TECHNOLOGIES, INC.

 

12-3/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B

 

			
	No.
	 	$          
	 	 	 

     AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the “Company,” which term includes
any successor entity), for value received promises to pay to                 or registered assigns, the
principal sum of $________ on           , 2007.

Interest Payment Dates: February 1 and August 1, commencing August 1, 2000.

Record Dates: January 15 and July 15.

Reference is made to the further provisions of this Note contained herein and the Indenture (as
defined), which will for all purposes have the same effect as if set forth at this place.

8

 

     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by
its duly authorized officers.

	 	 	 	 	 
	 	AAVID THERMAL TECHNOLOGIES, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

9

 

	 	 	 	 	 

Certificate of Authentication

     This is one of the 12 3/4% Senior Subordinated Notes due 2007, Series B, referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS,

not in its individual capacity, but solely as Trustee

 	 
	 	By:  	Deutsche Bank National Trust Company
 	 
	 	 	  	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

10

 

	 	 	 	 	 

(REVERSE OF SECURITY)

12 3/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B

 

1.      Interest. AAVID THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
“Company”), promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original issuance of the
Notes. The Company will pay interest semi-annually in arrears on each Interest Payment Date,
commencing August 1, 2000. Interest will be computed on the basis of a 360-day year of twelve
30-day months.

The Company shall pay interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) to the extent lawful from time to time on demand
at the rate borne by the Notes.

2.      Method of Payment. The Company shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business on July 15 or
January 15 preceding the Interest Payment Date (whether or not such day is a Business Day) even if
the Notes are cancelled on registration of transfer or registration of exchange after such Record
Date. Holders must surrender Notes to a Paying Agent to collect principal payments. Payments of
principal and premium, if any, will be made (on presentation of such Notes if in certificated form)
in money of the United States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Company may pay principal, premium, if any, and interest
by check payable in such money. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder’s registered address.

3.      Paying Agent and Registrar. Initially, Deutsche Bank Trust Company Americas, a banking
organization organized under the laws of New York (the “Trustee”), will act as Paying Agent
and Registrar. The Company may change any Paying Agent, Registrar or co-Registrar without notice
to the Holders. Neither the Company nor any of its Subsidiaries or Affiliates may act as Paying
Agent but may act as Registrar or co-Registrar.

4.      Indenture. The Company issued this Note under an Indenture, dated as of February 2,
2000, as amended by the First Supplemental Indenture dated as of April 30, 2001, the Second
Supplemental Indenture, dated as of February 14, 2006, and the Third Supplemental Indenture dated
as of March ___, 2006 (as supplemented, the “Indenture”), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of Notes of the Company
designated as its 12 3/4% Senior Subordinated Notes due 2007, Series B (the “Exchange
Notes”), issued in exchange for the initial 12 3/4% Senior Subordinated Notes due 2007, Series A
(the “Initial Notes” and, together with the Exchange Notes, the “Notes”). The
Notes are limited in aggregate principal amount to $150,000,000. Capitalized terms herein are used
as defined in the Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such
terms, and Holders of Notes are referred to the Indenture and the TIA for a statement of them.

5.      Subordination. Except to the extent set forth in paragraph 10, the Notes are general

11

 

unsecured obligations of the Company and subordinated in right of payment, in the manner and to the
extent set forth in the Indenture, to the prior payment in full in cash of all Senior Indebtedness
of the Company, whether outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound by such provisions
and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the Indenture and appoints
the Trustee his attorney-in-fact for such purposes.

6.      Guarantee. The obligations of the Company hereunder are guaranteed on a senior
subordinated basis by the Guarantors. Each Guarantee by a Guarantor is subordinated in right of
payment to all Guarantor Senior Indebtedness of such Guarantor to the same extent that the Notes
are subordinated to Senior Indebtedness of the Company.

7.      Redemption.

(a)      The Notes will be redeemable at the option of the Company, in whole or in part, during the
24-month period beginning February 1, 2004 at a price equal to 100% of the principal amount
thereof, plus and applicable Make Whole Premium, and thereafter at 102% of the principal amount, in
each case, with accrued and unpaid interest, if any, to the date of redemption; provided, however,
that at maturity the Notes shall be redeemable at 100% of principal amount outstanding.

For the purposes of the foregoing, the “Make Whole Premium” means, with respect to a Note, an
amount equal to the excess, if any, of (1) the present value as of the date of such prepayment of
the remaining semi-annual interest payments, if any, and the principal payment including premium
due on such Note as if such Note were redeemed on February 1, 2006, computed using a discount rate
equal to the Treasury Rate plus 75 basis points, over (2) the outstanding principal amount of such
Note. In no case shall the Make Whole Premium be negative.

(b)      Optional Redemption Upon Public Equity Offerings. Notwithstanding the foregoing, the
Company may redeem in the aggregate up to 35% of the original principal amount of Notes at any time
and from time to time prior to February 2, 2003 at a Redemption Price equal to 112.75% of the
aggregate principal amount so redeemed, plus accrued and unpaid interest, if any, to the Redemption
Date out of the Net Proceeds of one or more Public Equity Offerings; provided that

	(1)	 	at least 65% of the principal amount of Notes originally issued remains outstanding
immediately after the occurrence of any such redemption, and
	 
	(2)	 	any such redemption occurs within 60 days following the closing of any such Public Equity
Offering.

8.      Notice of Redemption. Notice of redemption under paragraphs 6(a) and 6(b) of this Note
will be mailed at least 5 days but not more than 60 days before the Redemption Date to each Holder
of Notes to be redeemed at such Holder’s registered address.

Except as set forth in the Indenture, if monies for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on such Redemption Date,
then, unless the Company defaults in the payment of such Redemption Price plus accrued interest, if
any, the Notes called for redemption will cease to bear interest from and after such

12

 

Redemption
Date and the only right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.

9.      Offers to Purchase. The Indenture provides that, after certain Asset Sales and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Indenture.

10.      Denominations; Transfer; Exchange. The Notes are in registered form, without coupons,
in denominations of $1,000 and integral multiples thereof. A Holder shall register the transfer or
exchange of Notes in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any Notes or portions
thereof selected for redemption.

11.      Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner
of it for all purposes.

12. Unclaimed Money. If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the Company. After
that, Holders entitled to money must look to the Company for payment as general creditors unless an
“abandoned property” law designates another person.

13.      Defeasance and Covenant Defeasance. If the Company at any time deposits with the
Trustee U.S. legal tender and/or U.S. Government Obligations sufficient to pay the principal of and
interest on the Notes to redemption or maturity and complies with the other provisions of the
Indenture relating to defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its obligation to pay the
principal of and interest on the Notes).

14.      Amendments, Supplements, and Waivers. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented with the written consent of the holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any existing Default or
Event of Default or noncompliance with any provision may be waived with the written consent of the
holders of a majority in aggregate principal amount of the Notes then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.

15.      Restrictive Covenants. The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, merge or consolidate with any other
person, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the Company’s or any Guarantor’s assets. Such limitations are subject to a number of important
qualifications and exceptions.

16.      Successor Entity. When a successor entity assumes, in accordance with the Indenture,
all the obligations of its predecessor under the Notes and the Indenture, and immediately before
and thereafter no Default exists and certain other conditions are satisfied, the predecessor entity
will be released from those obligations.

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17.      Defaults and Remedies. Events of Default are set forth in the Indenture. If an Event
of Default shall have occurred and be continuing, then the Trustee or the holders of not less than
25% in aggregate principal amount of the Notes then outstanding, may declare to be immediately due
and payable the entire principal amount of all the Notes then outstanding plus accrued interest to
the date of acceleration; provided, however, that after such acceleration but before a judgment or
decree based on such acceleration is obtained by the Trustee, the holders of a majority in
aggregate principal amount of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of principal, premium, if
any, or interest that has become due solely because of the acceleration, have been cured or waived.
No such rescission shall affect any subsequent Default or impair any right consequent thereto.

18.      Trustee Dealings with Company. The Trustee under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform services for the Company,
and may otherwise deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the Trustee.

19.      No Recourse Against Others. As more fully described in the Indenture, no director,
officer, employee, stockholder or incorporator, as such, of the Company shall have any liability
for any obligation of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Noteholder by accepting a Note
waives and releases all such liability. Such waiver and release are part of the consideration for
the issuance of the Notes.

20.      Authentication. This Note shall not be valid until the Trustee or Authenticating Agent
manually signs the certificate of authentication on this Note.

21.      Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS
AGREED TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

22.      Abbreviations and Defined Terms. Customary abbreviations may be used in the name of a
Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST
(= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

22.      CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes
as a convenience to the Holders. No representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the other identification numbers printed
hereon.

23.      Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the terms
and provisions of the Indenture, as the same may be amended from time to time. The Company will
furnish to any Holder of a Note upon written request and without charge a copy of the Indenture,
which has the text of this Note in larger type. Requests may be made to: Aavid Thermal
Technologies, Inc., 275 Technology Drive, Southpointe, Cannonsburg, PA 15317, Attention: Sheila S.
DiNardo, Esq.

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ASSIGNMENT FORM

If you the Holder want to assign this Note, fill in the form below and have your signature
guaranteed:

I or we assign and transfer this Note to:

 

 

	 	 	 
	 
	(Print or type name, address and zip code and

social security or tax ID number of assignee)

and
irrevocably appoint
_______________________________________________________________,
agent to transfer this Note on the books of the Company. The agent may substitute another to act
for him.

	 	 	 
	Date:
_____________________________________

	 	Signed:
______________________________________________________

               (Sign exactly as your name appears on the other
side of this Note)

Medallion
Guarantee:  ____________________________________

15

 

[OPTION OF HOLDER TO ELECT PURCHASE]

If you want to elect to have this Note purchased by the Company pursuant to Section 4.13 or Section
4.17 of the Indenture, check the appropriate box:

Section 4.13  o

Section 4.17  o

If you want to elect to have only part of this Note purchased by the Company pursuant to Section
4.13 or Section 4.17 of the Indenture, state the amount you elect to have purchased:

$ __________________

	 	 	 
	Date:
_______________________________________

	 	_________________________________________________________

NOTICE: The signature on this assignment must
correspond with the name as it appears upon the face
of the within Note in every particular without
alteration or enlargement or any change whatsoever
and be guaranteed by the endorser’s bank or broker.

Medallion
Guarantee: _________________________________

16THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE ‘‘ACT’’). THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THOSE LAWS.

CONVERTIBLE
NOTE

							
	March
    ,
2006		$             
	

CREATIVE
ENTERPRISES INTERNATIONAL, INC. , a Nevada corporation (the
‘‘Company’’ or the
‘‘Maker’’) hereby promises
to pay to                  (the
‘‘Holder’’) the sum of
                 Dollars
($             ) (the
‘‘Principal’’) on the
earlier of (i) March  , 2007 (the
‘‘Maturity Date’’), and (ii)
the date on which there is an acceleration pursuant to the terms of
this Convertible Note (the
‘‘Note’’), and to pay
interest on the Principal, which shall accrue at the rate of 10%
per annum (except as provided in Section 1.3), calculated for the
actual number of days the Principal is outstanding and interest is
accrued and unpaid based on a 360-day year, in accordance with the
terms hereof. Such payment shall be made in lawful money of the United
States of America at such address as the Holder shall hereafter give to
the Maker by written notice made in accordance with the provisions
hereof.

The following terms apply to this Note:

ARTICLE
I
ACCELERATION; INTEREST; PREPAYMENT

1.1
 Acceleration of Maturity Date.   Subject to Article
III of this Note, the Principal and accrued and unpaid Interest shall
become immediately due and payable upon the occurrence of an Event of
Default (as defined herein), which event shall be deemed an
Acceleration Date.

1.2 Payment of
Interest.   Payment of accrued Interest on the Principal shall
be paid in cash in full on the Maturity Date or such earlier date on
which the Principal is paid to the Holder or on which the Note is
converted pursuant to the terms hereof. Notwithstanding the foregoing,
unless previously converted in full in accordance with Section 2 hereof
and so long as the Interest Shares (as defined below) are covered by an
effective registration statement providing for the resale thereof, the
accrued but unpaid interest on this Note may be paid, at the sole
option of the Company, in cash or in shares (the
‘‘Interest Shares’’) of Common Stock, par
value $.001 per share, of the Company, upon at least ten (10)
days’ prior written notice (the ‘‘Interest Share
Notice’’). In such event, the holder of this Note shall
be entitled to receive that number of Interest Shares equal to (i) the
then-accrued but unpaid interest of this Note divided by the average
closing price for the five (5) consecutive trading days ending not more
than three (3) days prior to the date of the Interest Share Notice. All
payments made by the Maker on this Note shall be applied first to the
payment of accrued and unpaid Interest on this Note and then to the
reduction of the unpaid principal balance of this Note. Payments of
Principal and Interest shall be deemed made on the date such payment is
deposited or, if mailed, on the date deposited in the mail with proper
postage and addressed to the Holder at the address shown on the records
of the Company, or such other address as provided to the Maker in
writing by the Holder. In the event that the date for the payment of
any amount payable under this Note falls due on a Saturday, Sunday or
public holiday under the laws of the State of New York, the time for
payment of such amount shall be extended to the next succeeding
business day and Interest shall continue to accrue on any principal
amount so effected until the payment thereof on such extended due
date.

1.3  Prepayment.   The principal of and
accrued interest on this Note may be prepaid in full or in part, at any
time without premium or penalty. If this Note is called for prepayment
pursuant this Section 1.3, the Company shall give written notice to the
Holder not less than ten (10) days nor more than sixty (60) days prior
to the date the Company intends to effect the prepayment (the
‘‘Prepayment Date’’), setting forth the
prepayment price to be paid, instructions for presentation of

1

the Notes for prepayment and the Prepayment
Date. The Holder shall, upon receipt of notice of prepayment, cause
this Note to be timely delivered to the Company at its principal
offices. If on or before the Prepayment Date all funds necessary to pay
for the Notes to be prepaid shall have been set aside by the Company
for the benefit of such Holders, then, on and after such date,
notwithstanding that any Note subject to prepayment shall not have been
surrendered for prepayment, the obligation evidenced by all Notes not
surrendered for prepayment shall be deemed no longer outstanding, and
all rights with respect thereto shall forthwith cease and terminate,
except only the right of the holder of each Note subject to prepayment
to receive the prepayment amount to which he would be entitled upon
receiving notice of prepayment. Holders may convert their Notes
pursuant to Article II of this Note during the period from the date of
notice of prepayment until 5:00 p.m. Eastern Time on the business day
immediately prior to the Prepayment Date.

1.4 Holder
Deemed Owner.   The registered Holder hereof may be deemed the
absolute owner of this Note (whether or not this Note shall be overdue
and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Maker, for the purpose of receiving payment
hereof or thereof or on account hereof and for all other purposes) and
the Maker shall not be affected by notice to the
contrary.

ARTICLE II
CONVERSION RIGHTS; CONVERSION
PRICE

2.1 Voluntary Conversion by
Holder.   The Holder shall have the right prior to the date on
which this Note is paid in full, to convert, in connection with a
Subsequent Financing (as defined below), any part of the outstanding
Principal amount of this Note into fully paid and non-assessable
securities issued in such Subsequent Financing
(‘‘Conversion Securities’’)
at the Conversion Price (as defined below) determined as provided
herein. Promptly after the surrender of this Note, accompanied by a
Notice of Conversion of Convertible Note in the form attached hereto as
Exhibit 1, properly completed and duly executed by the Holder
(a ‘‘Conversion Notice’’),
the Maker shall issue and deliver to or upon the order of the Holder
that number of Conversion Securities for the amount of this Note
converted, as shall be determined in accordance herewith. The Company
shall provide 10 business days’ prior written notice of the
anticipated closing date of the Subsequent Financing. The term
‘‘Subsequent Financing’’ shall mean the
closing of a sale of equity or debt securities by the Company or any
Subsidiary (as defined herein), or series of closings, as part of the
same transaction, of equity or debt securities within a period of three
months during the term of this Note which occurs prior to the Maturity
Date.

2.2 The number of Conversion Securities to be issued
upon each conversion of this Note shall be determined by dividing (i)
the amount of Principal to be converted by (ii) the Conversion Price
(as defined below) in effect on the date the Conversion Notice is
delivered to the Maker by the Holder.

2.3 Conversion
Price.   The Conversion Price shall be equal to the sale price
of the securities sold by the Company in the Subsequent Financing,
subject to adjustment from time to time upon the happening of certain
events (the ‘‘Conversion
Price’’), as set forth below.

2.4 Reclassification, Consolidation or
Merger.   At any time while this Note remains outstanding, in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with another corporation in which the
Company is a continuing corporation and which does not result in any
reclassification or change, other than a change in par value, or from
par value to no par value per share, or from no par value per share to
par value, or as a result of a subdivision or combination Common
Stock), or in the case of any sale or transfer to another corporation
of the property of the Company as an entirety or substantially as an
entirety, the Company, or such successor or purchasing corporation, as
the case may be, shall, without payment of any additional consideration
therefor, execute new Notes providing that the holders of the Notes
shall have the right to exercise such new Notes (upon terms not less
favorable to the holders than those then applicable to the Notes) and
to receive upon such exercise, in lieu of the Conversion Securities
theretofore issuable upon conversion of the Notes, the kind and amount
of shares of stock, other securities, money or property receivable upon
such consolidation, merger, sale or transfer by the Holder of such
Conversion 

2

Securities issuable upon conversion of the
Notes had the Notes been converted immediately prior to such
consolidation, merger, sale or transfer. Such new Notes shall provide
for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article II. The
provisions of this Section 2.4 shall similarly apply to successive
consolidations, mergers, sales and
transfers.

2.5 Method of Conversion.   Except
as otherwise provided in this Note or agreed to by the Holder, this
Note may be converted by the Holder pursuant to its conversion rights
set forth in Section 2.1 in whole at any time or in part (provided such
partial conversion is at least $10,000) as follows. In the event of a
Holder electing to exercise its conversion rights, submitting to the
Maker a Conversion Notice (by facsimile dispatched on the Conversion
Date and confirmed by U.S. mail or overnight mail service sent within
two business days thereafter) and surrendering this Note with the
mailed confirmation of the Conversion Notice at the principal office of
the Maker. Upon a partial conversion of this Note, a new Note
containing the same date and provisions as this Note shall be issued by
the Maker to the Holder for the balance due hereunder which shall not
have been converted.

2.6 Restrictions on
Securities.   This Note has been issued by the Maker pursuant
to the exemption from registration under the Securities Act of 1933, as
amended (the ‘‘Act’’).
Neither this Note nor the Conversion Securities issuable upon
conversion of this Note may be offered, sold or otherwise transferred
unless (i) they first shall have been registered under the Act and
applicable state securities laws or (ii) the Maker shall have been
furnished with an opinion of legal counsel (in form, substance and
scope reasonably acceptable to Maker) to the effect that such sale or
transfer is exempt from the registration requirements of the Act. Each
certificate for Conversion Securities issuable upon conversion of this
Note that have not been so registered and that have not been sold
pursuant to an exemption that permits removal of the applicable legend,
shall bear a legend substantially in the following form, as
appropriate:

THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
‘‘ACT’’). THE SECURITIES REPRESENTED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH
OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.

2.7 Reservation of Securities.   The
Company shall at all times have authorized and reserved, for the
purpose of issuance, a sufficient number of shares of Conversion
Securities to provide for the issuance of Conversion Securities
underlying the then outstanding aggregate Principal and Interest amount
of the Notes.

ARTICLE III
EVENTS OF
DEFAULT

3.1 Default.   If one or more of the
following events shall occur for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

(a) default
in the due and punctual payment of the Principal of, or Interest on
this Note or any other Note when and as the same shall become due and
payable, whether at the Maturity Date, the Acceleration Date or
otherwise and continuance of such default for a period of 20
days;

(b) The Company makes, or consents to, an assignment
for the benefit of creditors or admits in writing its inability to pay
its debts generally as they become due;

(c) An order,
judgment or decree is entered adjudicating the Company or any
Subsidiary bankrupt or insolvent;

3

(d) The Company or any Subsidiary,
petitions or applies to any tribunal for the appointment of a trustee
or receiver of the Company or any Subsidiary, or of any substantial
part of the assets of the Company or any Subsidiary, or commences any
proceedings (other than proceedings for the voluntary liquidation and
dissolution of a Subsidiary) relating to the Company or a Subsidiary
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any
jurisdiction whether now or hereafter in effect;

(e) Any
such petition or application is filed, or any such proceedings are
commenced, against the Company or any Subsidiary, and the Company or
any Subsidiary by any act indicates its approval thereof, consent or
acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee or receiver, or approving the petition in
any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 60 days;

(f) Any
order, judgment or decree is entered in any proceedings against the
Company or any Subsidiary decreeing the dissolution of the Company and
such order, judgment or decree remains unstayed and in effect for more
than 60 days;

(g) Any order, judgment or decree is
entered in any proceedings against the Company or any Subsidiary
decreeing a split-up of the Company which requires the divestiture of
in excess of 25% of the consolidated assets of the Company and
its Subsidiaries, or the divestiture of the stock of a Subsidiary and
such order, judgment or decree remains unstayed and in effect for more
than 60 days; or

(h)  The dissolution of Maker or
any material Subsidiary of Maker or any vote in favor thereof by the
board of directors and shareholders of Maker or any material Subsidiary
of Maker;

and the holders of the holders of not less than
50% of principal amount of the Note outstanding at the time (the
‘‘Majority Holders’’) shall have given
fifteen (15) days prior written notice to the Company by certified or
registered mail, return receipt requested (or such longer period of
time as may be specified for any particular subsection of this Section
3.1), and the Company shall not have cured the default within such
applicable time period, then an event of default shall be deemed to
have occurred (herein called, after the giving of such notice as is
applicable, an ‘‘Event of
Default’’).

3.2 Upon the occurrence of any
Event of Default described in Sections 3.1, and so long as such Event
of Default shall not have been remedied, the holder of this Note, by
notice in writing to the Company, may declare the principal of this
Note then outstanding and the interest accrued thereon if not already
due and payable, to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and
payable, anything in this Note contained to the contrary
notwithstanding.

ARTICLE
IV
MISCELLANEOUS

4.1 Failure or Indulgency Not
Waiver.   No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies
existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise
available.

4.2 Notices.   Any notice herein
required or permitted to be given shall be in writing and may be
personally served or delivered by courier or sent by United States mail
and shall be deemed to have been given upon receipt if personally
served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United
States mail, certified, with postage pre-paid and properly addressed,
if sent by mail. For the purposes hereof, the address of the Holder
shall be as shown on the records of the Maker; and the address of the
Maker shall be 461 Park Avenue South, Suite 303, New York, New York
10016. Both the Holder and the Maker may change the address for service
by delivery of written notice to the other as herein provided.

4.3 Amendment Provision.   This Note and any
provision hereof may be amended only by an instrument in writing signed
by the Maker and the Holder.

4

4.4 Assignability.   This
Note shall be binding upon the Maker and its successors and assigns and
shall inure to be the benefit of the Holder and its successors and
assigns; provided, however, that so long as no
Event of Default has occurred, this Note shall only be transferable in
whole or in increments of $10,000 subject to the restrictions contained
in the restrictive legend on the first page of this
Note.

4.5 No Recourse.   Each Note is issued
upon the express condition, to which each successive holder expressly
assents and by receiving the same agrees, that no recourse under or
upon any obligation, covenant or agreement of the Notes, or for the
payment of the Principal of, or premium, if any, or the Interest on, a
Note, or for any claim based on a Note, or otherwise in respect hereof,
shall be had against any incorporator or any past, present or future
stockholder, officer or director, as such, of the Company or of any
successor corporation, whether by virtue of the constitution, statute
or rule of law or by any assessment or penalty or otherwise howsoever,
all such individual liability being hereby expressly waived and
released as a condition of and as a part of the consideration for the
execution and issue of the Notes; provided, however, that nothing
herein shall prevent enforcement of the liability, if any, of any
stockholder or subscriber to capital stock upon or in respect of
capital stock not fully paid.

4.6 Waiver of
Demand.   Maker hereby expressly waives demand and presentment
for payment notice of nonpayment, notice of dishonor, protest, notice
of protest, bringing of suit, and diligence in taking any legal action
or remedy to collect amounts called for
hereunder.

4.7 Cost of Collection.   If
default is made in the payment of this Note, the Maker shall pay the
Holder hereof costs of collection, including reasonable
attorneys' fees.

4.8 Governing
Law.   This Note shall be governed by the internal laws of the
State of New York, without regard to conflicts of laws principles. The
parties hereto hereby submit to the exclusive jurisdiction of the state
or federal courts located in the City of New York, in the State of New
York with respect to any dispute arising under this
Note.

4.9 Suits for Enforcement and
Remedies.   If any one or more Events of Default shall occur,
the Holder may proceed to (i) protect and enforce Holder’s
rights either by suit in equity or by action at law, or both, whether
for the specific performance of any covenant, condition or agreement
contained in this Note or in any agreement or document referred to
herein or in aid of the exercise of any power granted in this Note or
in any agreement or document referred to herein, (ii) enforce the
payment of this Note, or (iii) enforce any other legal or equitable
right of the Holder. No right or remedy herein or in any other
agreement or instrument conferred upon the Holder of this Note is
intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and shall be in addition
to every right and remedy given hereunder or now or hereafter existing
at law or in equity or by statute or
otherwise.

4.10 Denominations.   At the
request of the Holder, upon surrender of this Note, the Maker shall
promptly issue new Notes in the aggregate outstanding principal amount
hereof, in the form hereof, in such denominations of at least $10,000
as the Holder shall request.

4.11 Replacement of
Note.   Upon receipt of evidence reasonably satisfactory to the
Maker of the loss, theft, destruction or mutilation of this Note and,
in the case of any such loss, theft or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to the
Maker, or, in the case of any such mutilation, upon surrender and
cancellation of this Note, the Maker, at its expense, will execute and
deliver, in lieu thereof, a new Note of like
tenor.

4.12 Withholding Tax.   The Holder of
this Note agrees to bear the cost of any U.S. withholding tax on
interest payable under this Note.

4.13 Investment
Purpose.   The Holder of this Note, by acceptance hereof,
agrees that this Note is being acquired for investment and that such
Holder will not offer, sell or otherwise dispose of this Note or the
Conversion Securities issuable upon the conversion of this Note except
under circumstances that will not result in a violation of the Act or
any applicable state securities laws or similar laws relating to the
sale of securities.

5

4.14 Severability.   In
case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if
possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this
Note will not in any way be affected or impaired
thereby.

4.15 Interest Rate.   If any interest
rate specified herein is held to be impermissible, then the rate
charged on the indebtedness represented hereby shall be reduced to the
highest rate then permitted by
law.

4.16 Headings.   The headings of the
sections of this Note are inserted for convenience only and do not
affect the meaning of such section.

IN WITNESS WHEREOF, the Maker
has caused this Note to be executed this   day of March,
2006.

											
	[SEAL]		CREATIVE
ENTERPRISES INTERNATIONAL,
INC.
	 		By:		 
	 		Name:
Christopher Durkin
Title:Chief Executive
Officer
	

6

Exhibit 1

NOTICE OF
CONVERSION
OF CONVERTIBLE NOTE

TO:
[                                            ]

1. Pursuant
to the terms of the attached Convertible Note (the
"Note"), the undersigned hereby elects to
convert $              principal
amount of the Note into Conversion Securities of Creative Enterprises
International, Inc. (the "Maker").
Capitalized terms used herein and not otherwise defined herein have the
respective meanings provided in the Note.

2. Please
issue a certificate or certificates for the number of Conversion
Securities into which such principal amount of the Note is convertible
in the name(s) specified immediately below or, if additional space is
necessary, on an attachment
hereto:

							
	 		 
	Name		Name
	 		 
	Address		Address
	 		 
	SS
or Tax ID Number		SS or Tax ID
Number
	

3. In the event of partial
exercise, please reissue an appropriate Note(s) for the balance that
shall not have been converted.

4.  The undersigned
represents and warrants that (i) all of the requirements of the
Securities Act of 1933, as amended (the
"Act"), applicable to the undersigned
have been complied with by the undersigned and (ii) the undersigned has
not engaged in any transaction or series of transactions that is a part
of or a plan or scheme to evade the registration requirements of the
Act.

							
	 		 
	Date:   ______________________________		Signature
of Registered Holder
 (Must be signed exactly as name appears in the
Note. The signature must be
notarized.)
	

7

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