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Exhibit
10.6
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TERM LOAN
GUARANTEE
TERM LOAN GUARANTEE, dated as
of February 13, 2008 (this “ Guarantee ”),
made among CHILL INTERMEDIATE HOLDINGS, INC., a Delaware
corporation (“ Holdings ”), each of the
subsidiaries of CHILL ACQUISITION, INC., a Delaware corporation
(which on the Closing Date shall be merged with and into GOODMAN
GLOBAL, INC., a Delaware corporation, with GOODMAN GLOBAL, INC.
surviving such merger as the borrower, the “ Borrower
”) listed on Annex A hereto (each such subsidiary,
individually, a “ Subsidiary Guarantor ” and,
collectively, the “ Subsidiary Guarantors ”; and
together with Holdings and the Borrower, collectively, the “
Guarantors ”), and GENERAL ELECTRIC CAPITAL
CORPORATION, as collateral agent for the Secured Parties (as
defined below) (in such capacity, together with its successors in
such capacity, the “ Collateral Agent
”).
WITNESSETH:
WHEREAS, (a) pursuant to
the term loan credit agreement, dated as of February 13, 2008
(the “ Term Loan Credit Agreement ”), among
Holdings, the Borrower, the lending institutions from time to time
party thereto (the “ Lenders ”), BARCLAYS
CAPITAL, the investment banking division of BARCLAYS BANK PLC, and
CALYON NEW YORK BRANCH, as Joint Lead Arrangers, BARCLAYS CAPITAL,
the investment banking division of BARCLAYS BANK PLC, CALYON NEW
YORK BRANCH and GENERAL ELECTRIC CAPITAL CORPORATION, as Joint
Bookrunners, and GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent and Collateral Agent, the Lenders have
severally agreed to make Loans to the Borrower upon the terms and
subject to the conditions set forth therein, (b) one or more
Hedge Banks may from time to time enter into Secured Hedging
Agreements with any Credit Party or any Restricted Subsidiary and
(c) one or more Cash Management Banks may from time to time
provide Cash Management Services pursuant to Secured Cash
Management Agreements to any Credit Party or any Restricted
Subsidiary (clauses (a), (b) and (c), collectively, the
“ Extensions of Credit ”);
WHEREAS, Holdings is an
affiliate of the Borrower and each Subsidiary Guarantor is a
Domestic Subsidiary of the Borrower;
WHEREAS, the proceeds of the
Extensions of Credit will be used in part to enable the Borrower to
make valuable transfers to the Guarantors in connection with the
operation of their respective businesses;
WHEREAS, each Guarantor
acknowledges that it will derive substantial direct and indirect
benefit from the making of the Extensions of
Credit; and
WHEREAS, it is a condition
precedent to the obligations of the Lenders to make their
respective Extensions of Credit to the Borrower under the Term Loan
Credit Agreement that the Guarantors shall have executed and
delivered this Guarantee to the Collateral Agent for the ratable
benefit of the Secured Parties (as defined below).
NOW, THEREFORE, in
consideration of the premises and to induce the Agents and the
Lenders to enter into the Term Loan Credit Agreement and to induce
the Lenders to make their respective Extensions of Credit to the
Borrower under the Term Loan Credit Agreement, to
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induce one or more Hedge Banks to enter
into Secured Hedging Agreements with any Credit Party or any
Restricted Subsidiary and to induce one or more Cash Management
Banks pursuant to Secured Cash Management Agreements to provide
Cash Management Services to any Credit Party or any Restricted
Subsidiary, the Guarantors hereby agree with the Collateral Agent,
for the ratable benefit of the Secured Parties, as
follows:
1. Defined Terms .
(a) Unless otherwise defined herein, terms defined in the Term
Loan Credit Agreement and used herein (including terms used in the
preamble and recitals hereto) shall have the meanings given to them
in the Term Loan Credit Agreement.
(b) The rules of construction
and other interpretative provisions specified in Sections 1.2, 1.5,
1.6 and 1.7 of the Term Loan Credit Agreement shall apply to this
Guarantee, including terms defined in the preamble and recitals
hereto.
(c) As used herein, the term
“ Obligations ” shall have the meaning assigned
to the term “ Obligations ” in the Term Loan
Credit Agreement.
(d) As used herein, the term
“ Secured Parties ” shall have the meaning
assigned to the term “ Secured Parties ” in the
Term Loan Credit Agreement.
(e) As used herein, the term
“ Termination Date ” means the date on which all
Obligations are paid in full in cash (other than Hedging
Obligations under Secured Hedging Agreements, Cash Management
Obligations under Secured Cash Management Agreements or contingent
indemnification obligations).
2. Guarantee .
(a) Subject to the provisions of Section 2(b), each of
the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees, as primary obligor and not merely as
surety, to the Collateral Agent for the ratable benefit of the
Secured Parties, the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Borrower or any
other Credit Party to pay any Obligation when and as the same shall
become due (whether at the stated maturity, by acceleration or
otherwise), each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Collateral Agent for distribution
to the applicable Secured Parties the amount of such unpaid
Obligation. Upon payment by any Guarantor of any sums to the
Collateral Agent as provided above, all rights of such Guarantor
against the Borrower or any other Guarantor arising as a result
thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be
subject to Sections 3 and 5 hereof.
(b) Anything herein or in any
other Credit Document to the contrary notwithstanding, the maximum
liability of each Subsidiary Guarantor hereunder and under the
other Credit Documents shall in no event exceed the amount that can
be guaranteed by such Subsidiary Guarantor under Applicable Laws
relating to the insolvency of debtors.
(c) To the extent required by
Section 12.5 of the Term Loan Credit Agreement, each Guarantor
further agrees to pay any and all reasonable and documented
out-of-pocket costs and expenses (including all reasonable fees and
disbursements of counsel) that may
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be paid or incurred by the Collateral
Agent or any other Secured Party in enforcing, or obtaining advice
of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, such Guarantor under
this Guarantee.
(d) Each Guarantor agrees
that the Obligations may at any time and from time to time exceed
the amount of the liability of such Guarantor hereunder without
impairing this Guarantee or affecting the rights and remedies of
the Collateral Agent or any other Secured Party
hereunder.
(e) No payment or payments
made by the Borrower, any other Guarantor, any other guarantor or
any other Person or received or collected by the Collateral Agent
or any other Secured Party from the Borrower, any other Guarantors,
any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the
Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder, which shall,
notwithstanding any such payment or payments other than payments
made by such Guarantor in respect of the Obligations or payments
received or collected from such Guarantor in respect of the
Obligations, remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Termination
Date.
(f) Each Guarantor agrees
that whenever, at any time, or from time to time, it shall make any
payment to the Collateral Agent or any other Secured Party on
account of its liability hereunder, it will notify the Collateral
Agent in writing that such payment is made under this Guarantee for
such purpose.
(g) Each Guarantor assumes
all responsibility for being and keeping itself informed of the
Borrower’s and each other Credit Party’s financial
condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs
hereunder, and agrees that none of the Collateral Agent or the
other Secured Parties will have any duty to advise such Guarantor
of information known to it or any of them regarding such
circumstances or risks.
3. Right of
Contribution . Each Guarantor hereby agrees that to the extent
a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to
seek and receive contribution from and against any other Guarantor
hereunder that has not paid its proportionate share of such
payment. Each Guarantor’s right of contribution shall be
subject to the terms and conditions of Section 5 hereof. The
provisions of this Section 3 shall in no respect limit the
obligations and liabilities of any Guarantor to the Collateral
Agent and the other Secured Parties, and each Guarantor shall
remain liable to the Collateral Agent and the other Secured Parties
for the full amount guaranteed by such Guarantor
hereunder.
4. Right of Set-off .
In addition to any rights and remedies of the Secured Parties
provided by Applicable Law, each Guarantor hereby irrevocably
authorizes each Secured Party at any time and from time to time
following the occurrence and during the continuance of an Event of
Default without notice to such Guarantor or any other Guarantor,
any such notice
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being expressly waived by each
Guarantor, upon any amount becoming due and payable by such
Guarantor hereunder (whether at stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount
any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Secured Party to or for the
credit or the account of such Guarantor. Each Secured Party shall
notify such Guarantor promptly of any such set-off and the
appropriation and application made by such Secured Party;
provided that the failure to give such notice shall not
affect the validity of such set-off and appropriation and
application.
5. No Subrogation .
Notwithstanding any payment or payments made by any of the
Guarantors hereunder or any set-off or appropriation and
application of funds of any of the Guarantors by the Collateral
Agent or any other Secured Party, no Guarantor shall be entitled to
be subrogated to any of the rights of the Collateral Agent or any
other Secured Party against the Borrower or any other Guarantor or
any collateral security or guarantee or right of offset held by the
Collateral Agent or any other Secured Party for the payment of the
Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrower or any other
Guarantor in respect of payments made by such Guarantor hereunder,
until the Termination Date. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time prior
to the Termination Date, such amount shall be held by such
Guarantor in trust for the Collateral Agent and the other Secured
Parties, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the
Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required),
to be applied against the Obligations, whether due or to become
due, in such order as the Collateral Agent may determine, subject
to the terms and conditions of the Intercreditor
Agreement.
6. Amendments, etc. with
Respect to the Obligations; Waiver of Rights . Except for
termination of a Guarantor’s obligations hereunder as
expressly provided in Section 25, each Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further
assent by any Guarantor, (a) any demand for payment of any of
the Obligations made by the Collateral Agent or any other Secured
Party may be rescinded by such party and any of the Obligations
continued, (b) the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or
released by the Collateral Agent or any other Secured Party,
(c) the Term Loan Credit Agreement, the other Credit Documents
and any other documents executed and delivered in connection
therewith, the Secured Hedging Agreements and any other documents
executed and delivered in connection therewith and the Secured Cash
Management Agreements and any other documents executed and
delivered in connection therewith, may be amended, waived,
modified, supplemented or terminated, in whole or in part, in
accordance with the terms of the applicable document and
(d) any collateral security, guarantee or right of offset at
any time held by the Collateral Agent or any other Secured Party
for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Collateral Agent nor any other
Secured Party shall have any obligation to protect, secure, perfect
or insure any Lien at any time held by it as security for the
Obligations or for this Guarantee or any property subject
thereto.
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When making any demand hereunder against
any Guarantor, the Collateral Agent or any other Secured Party may,
but shall be under no obligation to, make a similar demand on the
Borrower or any other Guarantor or other guarantor, and any failure
by the Collateral Agent or any other Secured Party to make any such
demand or to collect any payments from the Borrower or any other
Guarantor or other guarantor or any release of the Borrower or any
other Guarantor or other guarantor shall not relieve any Guarantor
in respect of which a demand or collection is not made or any
Guarantor not so released of its several obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Collateral Agent
or any other Secured Party against any Guarantor. For the purposes
hereof, “ demand ” shall include the
commencement and continuance of any legal proceedings.
7. Guarantee Absolute and
Unconditional . Each Guarantor waives any and all notice of the
creation, contraction, incurrence, renewal, extension, amendment,
waiver or accrual of any of the Obligations, and notice of or proof
of reliance by the Collateral Agent or any other Secured Party upon
this Guarantee or acceptance of this Guarantee, t
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