EQUITY CONTRIBUTION AGREEMENTEquity Contribution Agreement |
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GOODMAN APPLIANCE HOLDING CO | Hellman & Friedman Capital Partners VI, LP | Hellman & Friedman LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.18
FORM OF EQUITY CONTRIBUTION AGREEMENT
EQUITY CONTRIBUTION AGREEMENT, dated as of October 21, 2007 (this Agreement), between Chill Holdings, Inc., a Delaware corporation (Parent) and [ ], an individual (the Rollover Investor).
WHEREAS, Parent has entered into an Agreement and Plan of Merger, dated as of October 21, 2007 (as may be amended from time to time, the Merger Agreement; capitalized terms used but not defined herein shall have the meaning set forth in the Merger Agreement), with Chill Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (Merger Sub) and Goodman Global, Inc., a Delaware corporation (the Company) pursuant to which Merger Sub will merge with and into the Company, with the Company as the surviving corporation, all upon the terms and subject to the conditions set forth therein (the Merger);
WHEREAS, the Rollover Investor desires to contribute certain shares of common stock, $.01 par value per share, of the Company (Company Stock) to Parent in exchange for the issuance to the Rollover Investor of an amount of common stock, par value $0.01 per share, of Parent (Parent Common Stock) as determined in accordance with this Agreement, and in connection and concurrently with the Rollover Investors contribution, Hellman & Friedman Capital Partners VI, L.P., Hellman & Friedman Capital Partners VI (Parallel), L.P., Hellman & Friedman Capital Executives VI, L.P. and Hellman & Friedman Capital Associates VI, L.P. (collectively, H&F) will invest the amounts contemplated by the Merger Agreement in exchange for shares of Parent Common Stock; and
WHEREAS, the parties hereto desire to make certain agreements, representations, warranties and covenants in connection with the contributions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions as hereinafter set forth, the parties hereto do hereby agree as follows:
| I | CONTRIBUTION |
1.1. Contribution. Subject to Section 1.3 and 1.4, at the Contribution Closing (as defined below), upon the terms and subject to the conditions of this Agreement, the Rollover Investor hereby agrees to transfer, contribute and deliver to Parent the number of shares of Company Stock (the Contributed Shares) with a value equal to $[] (the Contributed Amount). In consideration for the Contributed Shares and the performance by the Rollover Investor of its obligations under Section 1.5 below, Parent hereby agrees to issue at the Closing to the Rollover Investor the Rollover Shares. Notwithstanding the foregoing, the Contributed Shares shall not include any shares of Company Stock held in a trust on the date hereof.
1.2. Certain Definitions. The following terms have the following meanings when used in this Agreement:
(a) Rollover Shares means the number of shares, rounded to the nearest whole number to avoid the issuance of a fractional share, of Parent Common Stock equal to (i) the Contributed Amount divided by (ii) the Rollover Price.
(b) Rollover Price means an amount equal to the price for each share of Parent Common Stock to be issued to H&F in respect of the capital contributions to be made by H&F in connection and concurrently with the Contribution Closing and the Merger.
1.3. After Tax Investment Election. Within fifteen (15) days after the date hereof, the Rollover Investor may, by written notice to the Company, elect, in lieu of contributing the Contributed Shares in exchange for the Rollover Shares as described in Section 1.1, to purchase for cash at the Closing, a number of shares of Parent Common Stock with an aggregate value (based upon the Rollover Price) equal to 90% of the Contributed Amount. In such event, the shares of Parent Common stock so purchased will be referred to herein as the Rollover Shares.
1.4. Rollover Options. Notwithstanding Section 1.1, in the event the Rollover Investor does not make the election described in Section 1.3 and the Rollover Investor does not own Contributed Shares immediately prior to Closing with an aggregate value at least equal to the Contributed Amount, then the Rollover Investor shall contribute all of the Contributed Shares as described in Section 1.1 and shall also, as of the Closing, rollover and exchange (and the Rollover Investor shall not exercise prior to the Closing) options to acquire Company Stock held by the Rollover Investor immediately prior to the Closing (Existing Options) with an Intrinsic Value equal to the Deficiency Amount for vested options to acquire Parent Common Stock (Rollover Options), which shall be assumed by Parent, with the same Intrinsic Value, in lieu of receiving any cash payments in respect of such rolled over and exchanged Existing Options pursuant to the Merger Agreement. Such rollover and exchange shall be effected in a manner intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended. Any such rollover and exchange of Existing Options shall be effected by exchanging those Existing Options with lowest exercise prices on a priority allocation basis; provided that within fifteen (15) days of the date hereof, to the extent that the Rollover Investor is using Existing Options to satisfy the Deficiency Amount, a schedule setting forth such Existing Options shall be attached hereto.
(a) Deficiency Amount shall mean the excess of the Contributed Amount over the aggregate value (based on the Rollover Price) of the Contributed Shares actually contributed by the Rollover Investor pursuant to Section 1.1.
(b) Intrinsic Value shall mean, (i) with respect to the Existing Options, the excess of the value of the shares of Company Stock subject to the Existing Options as of the Closing Date (based upon the Rollover Price) over the exercise price of the Existing Options and (ii) with respect to the Rollover Options, the excess of the value of the shares of Parent Common Stock subject to the Rollover Options as of the Closing Date (based upon the Rollover Price) over the exercise price of the Rollover Options.
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In the event Section 1.4 becomes applicable, for purposes of calculating the Rollover Shares pursuant to Section 1.2(a), the Contributed Amount shall be deemed to be reduced by the Deficiency Amount.
1.5. Delivery of Contributed Shares and Certificates. Subject to the satisfaction (or waiver by the parties entitled to the benefit thereof) of the conditions set forth in Section 1.6 of this Agreement, the closing of the transactions contemplated hereby (the Contribution Closing) will take place immediately prior to the Closing; provided that the rollover, exchange and assumption of any Existing Options shall take place at Closing . At the Contribution Closing, Parent will issue the Rollover Investor the Parent Common Stock (and, if applicable, Rollover Options), against (i) the transfer and contribution to Parent of the Contributed Shares (including the delivery of certificates evidencing the applicable number of shares of Company Stock with respect to the Rollover Investor, duly endorsed to Parent), free and clear of any mortgage, pledge, security interest, claim, encumbrance, hypothecation, transfer restriction, lien or charge of any kind (each, a Lien), which shall represent payment in full for the Contributed Shares (and of the Existing Options described in Section 1.4, if applicable) and (ii) a duly executed copy of the Management Stockholders Agreement having terms consistent with the term sheet set forth in Exhibit A hereto and such other terms as Parent reasonably requests (the Stockholder Agreement). On the date of the Closing, Parent shall deliver (i) certificates evidencing the Parent Common Stock issued at the Contribution Closing (and, if applicable, the Rollover Options) and (ii) a copy of the Rollover Investor Stockholders Agreement duly executed by the parties thereto other than the Rollover Investor. Immediately after receipt by Parent of the Contributed Shares and prior to the Effective Time, Parent shall contribute such Contributed Shares to Merger Sub, and the Contributed Shares shall be cancelled pursuant to Section 2.1 of the Merger Agreement.
1.6. Conditions to the Obligations of the Parties Hereunder; Failure of the Merger to Occur. The obligations of the Rollover Investor to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction or waiver by Parent, Merger Sub and/or the Company, as applicable, of all of the conditions to the consummation of the Merger. Upon the satisfaction or waiver of such conditions, the Contribution Closing will occur immediately prior to the Closing. If for any reason the Merger contemplated by the Merger Agreement fails to occur but the Contribution Closing has already taken place, then the Rollover Investor shall return to Parent the Parent Common Stock, and Parent shall return to the Rollover Investor the Contributed Shares and the Stockholder Agreement shall immediately be terminated by the parties thereto.
1.7. Termination. This Agreement shall automatically terminate if, at any time prior to the Contribution Closing, the Merger Agreement shall have been terminated in accordance with its terms. In the event of any termination of this Agreement as provided in this Section 1.7, this Agreement shall forthwith become wholly void and of no further force or effect (except Section 3.3 and Article IV) and there shall be no liability on the part of any parties hereto or their respective officers or directors, except as provided in such Section 3.3 and Article IV. Notwithstanding the foregoing, no party hereto shall be relieved from liability for any willful breach of this Agreement.
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1.8. Legends. Each outstanding certificate representing Parent Common Stock shall bear the legends required by the Stockholder Agreement.
| II | REPRESENTATIONS AND WARRANTIES |
2.1. Representations and Warranties of Parent. Parent represents and warrants to the Rollover Investor as follows:
(a) Parent is a corporation, validly existing and in good standing under the laws of the state of Delaware and has all requisite corporate power and authority to execute and deliver this Agreement and the agreements contemplated hereby and to perform its obligations hereunder and thereunder. The execution and delivery by Parent of this Agreement and the agreements contemplated hereby, the performance by Parent of its obligations hereunder and thereunder, and the consummation by Parent of the transactions contemplated hereby and thereby have been duly authorized. This Agreement has been duly executed and delivered by Parent and, assuming the due execution and delivery thereof by the Rollover Investor, constitutes a legal, valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law).
(b) The execution, delivery and performance by Parent of this Agreement and the agreements contemplated hereby and the consummation by Parent of the transactions contemplated hereby and thereby do not and will not, with or without the giving of notice or the passage of time or both, (i) violate the provisions of any law, rule or regulation applicable to Parent or its properties or assets; (ii) violate the provisions of the governing documents of Parent, as amended to date; or (iii) violate any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to Parent or its properties or assets.
(c) The Parent Common Stock, when issued and delivered to the Rollover Investor in accordance with the terms hereof and upon receipt of the consideration required to be paid hereunder, will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of any Lien, except as may be otherwise set forth in this Agreement and the Stockholder Agreement and required by the Securities Act of 1933 (the Securities Act) and state securities laws.
2.2. Representations and Warranties of the Rollover Investor. In addition, the Rollover Investor represents and warrants to Parent that:
(a) The Rollover Investor is competent to, and has sufficient capacity to, execute and deliver this Agreement and the agreements contemplated hereby and to perform the Rollover Investors obligations hereunder and thereunder. This Agreement has been, and at the Contribution Closing






