Today's CPUs consume a significant amount of power and generate a high amount of heat, requiring an active cooling system to support reliable operations. In case of cooling system failure s, these CPUs can reduce clock speed to prevent damage due to overheating. Unfortunately, when these CPUs are used in a real-time system, a clock control based on frequency-throttling can cause missed deadlines. In this paper, we first develop and validate a system-wide thermal model that can account for various thermal fault types such as failure of a CPU fan, faults in the case fan and air-conditioning malfunctions. Then we validate the thermal model through experimentation and measurements in AMD Linux boxes. Our soft real-time power-aware load-distribution algorithm for data centers incorporates a thermal model to minimize the number of missed deadlines that can be caused by thermal faults. We implemented the algorithm in a webserver farm simulator to test the efficacy of thermal-aware load-balancing. Our results show that the new algorithm helps keep CPU temperatures within the desired thermal envelope, even in the presence of thermal faults. When thermal faults occur, our algorithm improves the QoS, at the expense of higher energy consumption.