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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 Investor’s 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:
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.
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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
limite
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