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Exhibit
10.8
EXECUTION COPY
TERM LOAN PLEDGE
AGREEMENT
TERM LOAN PLEDGE
AGREEMENT , dated as of February 13, 2008 (this “
Agreement ”), among CHILL INTERMEDIATE HOLDINGS,
INC. , a Delaware corporation (“ Holdings
”), 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 ”), each of the subsidiaries of the Borrower
listed on Schedule 1 hereto (each such subsidiary, individually, a
“ Subsidiary Pledgor ” and, collectively, the
“ Subsidiary Pledgors ”; and together with
Holdings and the Borrower, collectively, the “
Pledgors ”), 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 ,
(1) Holdings and the Borrower have entered into a term loan
credit agreement, dated as of February 13, 2008 (the “
Term Loan Credit Agreement ”), with 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 and Collateral Agent, pursuant
to which the Lenders have severally agreed to make loans to the
Borrower upon the terms and subject to the conditions set forth
therein, (2) one or more Hedge Banks may from time to time
enter into Secured Hedging Agreements with any Credit Party or any
Restricted Subsidiary and (3) 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 (1), (2) and (3),
collectively, the “ Extensions of Credit
”);
WHEREAS , pursuant to
the Term Loan Guarantee, dated as of February 13, 2008 (the
“ Term Loan Guarantee ”), Holdings and each of
the Subsidiary Pledgors has agreed to guarantee, 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;
WHEREAS , each
Subsidiary Pledgor 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 Holdings and the Subsidiary
Pledgors in connection with the operation of their respective
businesses;
WHEREAS , each Pledgor
acknowledges that it will derive substantial direct and indirect
benefit from the making of the Extensions of Credit;
WHEREAS , it is a
condition precedent to the obligation of the Lenders to make their
respective Extensions of Credit to the Borrower under the Term Loan
Credit Agreement that the Pledgors shall have executed and
delivered this Agreement to the Collateral Agent for the ratable
benefit of the Secured Parties; and
WHEREAS , (1) the
Pledgors are the legal and beneficial owners of the Equity
Interests described in Schedule 2 and issued by the entities named
therein (such Equity Interests, together with all other Equity
Interests required to be pledged pursuant to Section 8.11 of
the Term Loan Credit Agreement (the “ After-acquired
Shares ”), are referred to collectively herein as the
“ Pledged Shares ”), and (2) each of the
Pledgors is the legal and beneficial owner of the promissory notes,
chattel paper and instruments evidencing Indebtedness owed to it
described in Schedule 2 and issued by the entities named therein
(such notes and instruments, together with any other Indebtedness
owed to any Pledgor hereafter and required to be pledged pursuant
to Section 8.11 of the Term Loan Credit Agreement (the “
After-acquired Debt ”), are referred to collectively
herein as the “ Pledged Debt ”), in each case as
such schedule may be amended pursuant to Section 8.11 of the
Term Loan Credit Agreement.
NOW, THEREFORE , in
consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, 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 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 to provide Cash Management Services pursuant to Secured Cash
Management Agreements to any Credit Party or any Restricted
Subsidiary, the Pledgors 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 the recitals)
shall have the meanings given to them in the Term Loan Credit
Agreement and all terms defined in the Uniform Commercial Code from
time to time in effect in the State of New York (the “ NY
UCC ”) and not defined herein or in the Term Loan Credit
Agreement shall have the meanings specified therein (and if defined
in more than one article of the NY UCC, shall have the meaning
specified in Article 9 thereof); the term “instrument”
shall have the meaning specified in Article 9 of the NY
UCC.
(b) The rules of construction
and other interpretive provisions specified in Sections 1.2, 1.5,
1.6 and 1.7 of the Term Loan Credit Agreement shall apply to this
Pledge Agreement, including terms defined in the preamble and
recitals hereto.
(c) The following terms shall
have the following meanings:
“ After-acquired
Shares ” shall have the meaning assigned to such term in
the recitals hereto.
“ After-acquired
Debt ” shall have the meaning assigned to such term in
the recitals hereto.
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“ Agreement
” shall have the meaning assigned to such term in the
preamble hereto.
“ Borrower
” shall have the meaning assigned to such term in the
preamble hereto.
“ Collateral
Agent ” shall have the meaning assigned to such term in
the preamble hereto.
“ Credit
Documents ” shall have the meaning assigned to the term
“Credit Documents” in the Term Loan Credit
Agreement.
“ Equity
Interests ” shall mean shares, interests, participations
or other equivalents (however designated) of capital stock,
partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership
interests in a Person of whatever nature, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire
any of the foregoing.
“ Excluded Capital
Stock ” shall have the meaning assigned to the term
“Excluded Capital Stock” in the Term Loan Credit
Agreement.
“ Extensions of
Credit ” shall have the meaning assigned to such term in
the recitals hereto.
“ Holdings
” shall have the meaning assigned to such term in the
preamble hereto.
“ Intercreditor
Agreement ” shall have the meaning assigned to such term
in the Term Loan Credit Agreement.
“ Lenders
” shall have the meaning assigned to such term in the
recitals hereto.
“ Obligations
” shall have the meaning assigned to the term
“Obligations” in the Term Loan Credit
Agreement.
“ Pledged Debt
” shall have the meaning assigned to such term in the
recitals hereto.
“ Pledged Shares
” shall have the meaning assigned to such term in the
recitals hereto.
“ Pledgors
” shall have the meaning assigned to such term in the
preamble hereto.
“ Revolving
Collateral ” shall have the meaning assigned to such term
in the Intercreditor Agreement.
“ Revolving Credit
Documents ” shall mean the “Credit Documents”
as defined in the Revolving Credit Agreement.
“ Revolving
Liens ” shall mean Liens granted in favor of the Secured
Parties (as defined in the Revolving Credit Agreement) pursuant to
the Revolving Credit Documents.
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“ Revolving Pledge
Agreement ” shall mean the Revolving Pledge Agreement
dated as of February 13, 2008 , among Holdings, the Borrower,
each of the subsidiaries of the Borrower party thereto and General
Electric Capital Corporation, as collateral agent for the Secured
Parties (as defined in the Revolving Pledge Agreement).
“ Secured Debt
Documents ” shall mean, collectively, the Credit
Documents, each Secured Hedging Agreement entered into with a Hedge
Bank and each Secured Cash Management Agreement entered into with a
Cash Management Bank.
“ Secured
Parties ” shall have the meaning assigned to the term
“Secured Parties” in the Term Loan Credit Agreement.
“ Subsidiary Pledgors ” shall have the meaning
assigned to such term in the preamble hereto.
“ Securities Act
” shall have the meaning assigned to such term in
Section 12(e).
“ Term Loan Credit
Agreement ” shall have the meaning assigned to such term
in the recitals hereto.
“ Term Loan
Guarantee ” shall have the meaning assigned to such term
in the recitals hereto.
“ Termination
Date ” shall mean 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).
(d) Where the context
requires, terms relating to the Collateral or any part thereof,
when used in relation to a Pledgor, shall refer to such
Pledgor’s Collateral or the relevant part thereof.
2. Grant of Security.
As security for the prompt and complete payment when due (whether
at the stated maturity, by acceleration or otherwise) of the
Obligations, each Pledgor hereby transfers, assigns and pledges to
the Collateral Agent, for the ratable benefit of the Secured
Parties, and hereby grants to the Collateral Agent, for the ratable
benefit of the Secured Parties, a security interest in and
continuing lien on all of such Pledgor’s right, title and
interest in and to all of the following, whether now owned or
existing or hereafter acquired or existing (collectively, the
“ Collateral ”):
(a) the Pledged Shares held
by such Pledgor and the certificates, if any, representing such
Pledged Shares and any interest of such Pledgor, including all
interests documented in the entries on the books of the issuer of
the Pledged Shares or any financial intermediary pertaining to the
Pledged Shares and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of, or in
exchange for, any or all of the Pledged Shares; provided
that the Pledged Shares under this Agreement shall not include any
Excluded Capital Stock;
(b) the Pledged Debt and the
instruments evidencing the Pledged Debt owed to such Pledgor, and
all payments of principal or interest, cash, instruments and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of such Pledged Debt;
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(c) all other property that
may be delivered to and held by the Collateral Agent pursuant to
the terms of this Section 2;
(d) subject to
Section 8, all rights and privileges of such Pledgor with
respect to the securities and other property referred to in
clauses (a), (b) and (c) above; and
(e) to the extent not covered
by clauses (a), (b), (c) and (d) above, respectively, all
proceeds of any or all of the foregoing Collateral. For purposes of
this Agreement, the term “proceeds” includes whatever
is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes proceeds of
any indemnity or guarantee payable to any Pledgor or the Collateral
Agent from time to time with respect to any of the
Collateral.
TO HAVE AND TO HOLD the
Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto
the Collateral Agent, for the ratable benefit of the Secured
Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
3. Security for the
Obligations . This Agreement secures the full and prompt
payment when due (whether at stated maturity, by acceleration or
otherwise) of, and the performance of, all the Obligations. Without
limiting the generality of the foregoing, this Agreement secures
the payment of all amounts that constitute part of the Obligations
and would be owed to the Collateral Agent or the Secured Parties
under the Secured Debt Documents but for the fact that they are
unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any
Pledgor.
4. Delivery of the
Collateral . (a) All certificates or instruments, if any,
representing or evidencing the Collateral shall be promptly
delivered to and held by or on behalf of the Collateral Agent
pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Collateral Agent. The Collateral
Agent shall have the right, at any time after the occurrence and
during the continuation of an Event of Default and without notice
to any Pledgor (except as otherwise expressly provided herein), to
transfer to or to register in the name of the Collateral Agent or
any of its nominees any or all of the Pledged Shares. After the
occurrence and during the continuance of an Event of Default, each
Pledgor will promptly give to the Collateral Agent copies of any
notices or other communications received by it with respect to
Pledged Shares registered in the name of such Pledgor. After the
occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the right to exchange the certificates
representing Pledged Shares for certificates of smaller or larger
denominations for any purpose consistent with this Agreement. Each
delivery of Collateral (including any After-acquired Shares and
After-acquired Debt) shall be accompanied by a schedule describing
the securities theretofore and then being pledged hereunder, which
shall be attached hereto as part of Schedule 2 and made a part
hereof; provided that the failure to attach any such
schedule hereto shall not affect the validity of such pledge of
such securities. Each schedule so delivered shall supersede any
prior schedules so delivered.
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(b) As soon as practicable
and in any event within 60 days of the Closing Date, or such later
date as the Collateral Agent may reasonably determine after any
request for extension by the Borrower, each relevant Pledgor shall
execute any document or agreement and shall carry out any formality
or perfection steps that are required in connection with the pledge
over Pledged Shares issued by Goodman Company Canada which the
Collateral Agent reasonably determines is necessary under any
relevant Applicable Law to create a perfected first priority
security interest in such Collateral, securing the payment of the
Obligations, in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties enforceable vis-à-vis third
parties.
5. Representations and
Warranties . Each Pledgor represents and warrants to the
Collateral Agent and each other Secured Party that:
(a) Schedule 2 hereto
(i) correctly represents as of the date hereof (A) the
issuer, the issuer’s jurisdiction of formation, the
certificate number, if any, the Pledgor and the record and
beneficial owner, the number and class and the percentage of the
issued and outstanding Equity Interests of such class of all
Pledged Shares and (B) the issuer, the issuer’s
jurisdiction, the initial principal amount, the Pledgor and holder,
date of issuance and maturity date of all Pledged Debt and
(ii) together with the comparable schedule to each supplement
hereto, includes, all Equity Interests, debt securities and
promissory notes required to be pledged pursuant to
Section 8.11 of the Term Loan Credit Agreement and
Section 9(b) hereof. Except as set forth on Schedule 2, the
Pledged Shares represent all of the issued and outstanding Equity
Interests of each class of Equity Interests (or 65% of all of the
issued and outstanding voting Equity Interests in the case of
pledges of Equity Interests in Foreign Subsidiaries) in the issuer
on the date hereof.
(b) Such Pledgor is the legal
and beneficial owner of the Collateral pledged or assigned by such
Pledgor hereunder free and clear of any Lien, except for the Liens
created by this Agreement and the Liens created by the Revolving
Pledge Agreement.
(c) As of the date of this
Agreement, the Pledged Shares pledged by such Pledgor hereunder
have been duly authorized and validly issued and, in the case of
Pledged Shares issued by a corporation, are fully paid and
non-assessable.
(d) Except for restrictions
and limitations imposed by the Credit Documents, the Revolving
Credit Documents or securities laws generally and except as
described in the Perfection Certificate, the Collateral is freely
transferable and assignable, and none of the Collateral is subject
to any option, right of first refusal, shareholders agreement,
charter or by-law provisions or contractual restriction of any
nature that might prohibit, impair, delay or otherwise affect the
pledge of such Collateral hereunder, the sale or disposition
thereof pursuant hereto or the exercise by the Collateral Agent of
rights and remedies hereunder.
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(e) No consent or approval of
any Governmental Authority, any securities exchange or any other
Person was or is necessary to the validity of the pledge effected
hereby (other than such as have been obtained and are in full force
and effect).
(f) The execution and
delivery by such Pledgor of this Agreement and the pledge of the
Collateral pledged by such Pledgor hereunder pursuant hereto create
a valid and enforceable security interest in such Collateral and,
upon the earlier of (i) delivery of such Collateral to the
Collateral Agent in accordance with this Agreement and
(ii) the filing of the applicable Uniform Commercial Code
financing statements described in Section 3.3(a) of the
Security Agreement, shall create a perfected first priority
security interest in such Collateral, securing the payment of the
Obligations, in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors’ rights
generally and general principles of equity (whether considered in a
proceeding in equity or law).
(g) The pledge effected
hereby is effective to vest in the Collateral Agent, for the
ratable benefit of the Secured Parties, the rights of the
Collateral Agent in the Collateral as set forth herein.
(h) Such Pledgor has full
power, authority and legal right to pledge all the Collateral
pledged by such Pledgor pursuant to this Agreement and this
Agreement constitutes a legal, valid and binding obligation of such
Pledgor, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors’ rights generally and general principles of equity
(whether considered in a proceeding in equity or law).
(i) The issuers listed on
Schedule 2 are the only Subsidiaries of such Pledgor as of the
Closing Date (with the exception of AsureCare Corp., a Florida
corporation, which is a direct subsidiary of Goodman Company,
L.P.).
(j) The Pledged Debt
constitutes all of the outstanding Indebtedness for money borrowed
or for the deferred purchase price of property owed to such Pledgor
as of the Closing Date and required to be pledge hereunder or
pursuant to Section 8.11 of the Term Loan Credit
Agreement.
6. Certification of
Limited Liability Company Interests, Limited Partnership Interests
and Pledged Debt . (a) Unless otherwise consented to by
the Collateral Agent, Equity Interests required to be pledged
hereunder in any Domestic Subsidiary that is organized as a limited
liability company or limited partnership and pledged hereunder
shall either (i) be represented by a certificate, and in the
Organizational Documents of such Domestic Subsidiary the applicable
Pledgor shall cause the issuer of such interests to elect to treat
such interests as a “security” within the meaning of
Article 8 of the Uniform Commercial Code of its jurisdiction of
organization or formation, as applicable, by including in its
organizational documents language substantially similar to the
following and, accordingly, such interests shall be governed by
Article 8 of the Uniform Commercial Code:
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“The
[partnership/limited liability company] hereby irrevocably elects
that all [partnership/membership] interests in the
[partnership/limited liability company] shall be securities
governed by Article 8 of the Uniform Commercial Code of
[jurisdiction of organization or formation, as applicable]. Each
certificate evidencing [partnership/membership] interests in the
[partnership/limited liability company] shall bear the following
legend: “This certificate evidences an interest in [name of
[partnership/limited liability company]] and shall be a security
for purposes of Article 8 of the Uniform Commercial
Code.” No change to this provision shall be effective until
all outstanding certificates have been surrendered for cancellation
and any new certificates thereafter issued shall not bear the
foregoing legend.”
or (ii) not have elected to be
treated as a “security” within the meaning of Article 8
of the Uniform Commercial Code and shall not be represented by a
certificate.
(b) Subject to the
limitations set forth herein and in Section 8.11 of the Term
Loan Credit Agreement, each Pledgor will cause any Indebtedness for
borrowed money having an aggregate principal amount in excess of
$2,500,000 (individually) owed to any Pledgor and required to be
pledged pursuant to the Term Loan Credit Agreement to be evidenced
by a duly executed promissory note that is pledged and delivered to
the Collateral Agent pursuant to the terms hereof.
7. Further Assurances
. Each Pledgor agrees that at any time and from time to time, at
the expense of such Pledgor, it will execute or otherwise authorize
the filing of any and all further documents, financing statements,
agreements and instruments, and take all such further actions
(including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents),
which may be required under any Applicable Law, or which the
Collateral Agent may reasonably request, in order (x) to
perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby (including the priority
thereof) or (y) to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any
Collateral.
8. Voting Rights;
Dividends and Distributions; Etc . (a) So long as no Event
of Default shall have occurred and be continuing:
(i) Each Pledgor shall be
entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral or any part thereof for any purpose
not prohibited by the terms of th
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