EXHIBIT 9
CONTRIBUTION AGREEMENT
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THIS CONTRIBUTION AGREEMENT (the "Agreement") is made as of the 29th day of
February, 2000, by and among Xxxxxxxxxx Fund II, L.P., a Delaware limited
partnership ("Xxxxxxxxxx") and Quilvest American Equity Ltd., a British Virgin
Islands international business company ("Quilvest").
BACKGROUND
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WHEREAS, pursuant to the terms of that certain Securities Purchase
Agreement (the "Purchase Agreement") by and among Pameco Corporation, Xxxxxxxxxx
and Quilvest dated as of February 18, 2000, each of Xxxxxxxxxx and Quilvest have
purchased shares of Series A Preferred Shares (as defined in the Purchase
Agreement);
WHEREAS, each of Xxxxxxxxxx and Quilvest have entered into that certain
shareholders agreement (the "Shareholders Agreement") by and among Pameco
Corporation, Xxxxxxxxxx and Quilvest dated as of February18, 2000 relating to
the ownership of certain capital stock of Pameco Corporation, a Georgia
Corporation (the "Company");
WHEREAS, pursuant to the terms and conditions of the Shareholders
Agreement, Xxxxxxxxxx is entitled to an Overadvance Fee (as defined in the
Shareholders Agreement) payable by the Company in connection with Out-of-Formula
Loans as defined in and pursuant to the terms of the Credit Agreement (as
defined in the Shareholders Agreement), up to $5 million, which Xxxxxxxxxx is
required to guarantee (the "Overadvance") under a limited guaranty agreement
(the "Guaranty") entered into by Xxxxxxxxxx pursuant to the Credit Agreement.
WHEREAS, Xxxxxxxxxx and Quilvest desire that Quilvest will contribute 20%,
up to $1 million, of any amount paid by Xxxxxxxxxx pursuant to the Guaranty in
exchange for payment to Quilvest of 20% of the Overadvance Fee; and
WHEREAS, Xxxxxxxxxx and Quilvest acknowledge that Xxxxxxxxxx would not
enter into the Guaranty if Quilvest did not agree to execute, deliver and
perform this Agreement and that Quilvest is entering into this Agreement to
induce Xxxxxxxxxx to execute, deliver and perform the Guaranty which will
provide substantial benefits to Quilvest;
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:
1. Contribution. In the event that Xxxxxxxxxx shall pay any amounts
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pursuant to the Guaranty, Quilvest agrees unconditionally, absolutely and
without and right of set-off except as to the Quilvest Fee provided in Section 2
to contribute and pay to Xxxxxxxxxx an amount equal to 20%, up to $1 million, of
the Overadvance paid paid to Xxxxxxxxxx in accordance with the terms of this
Section 1. Xxxxxxxxxx agrees to provide Quilvest with written notice (the
"Overadvance Notice") of Xxxxxxxxxx'x receipt of any notice demanding payment
under the Guaranty of an Overadvance under the Credit Agreement, such
Overadvance Notice to include the total amount
of the Overadvance required to be paid by Xxxxxxxxxx. Quilvest unconditionally,
absolutely and without any right of set-off except as to the Quilvest Fee
provided in Section 2, agrees to pay to Xxxxxxxxxx, within five days after the
receipt by Quilvest of the Overadvance Notice, the Quilvest Contribution by wire
transfer of immediately available funds to an account designated by Xxxxxxxxxx
in the Overadvance Notice.
2. Quilvest Fee. As consideration for Quilvest to enter into this
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Agreement, Xxxxxxxxxx agrees to pay to Quilvest an amount equal to 20% of the
Overadvance Fee that it actually receives from the Company in accordance with
Section 13(b) of the Shareholders Agreement (the "Quilvest Fee"). The Quilvest
Fee shall be payable from time to time within five days only after actual
receipt by Xxxxxxxxxx of the Overadvance Fee; provided, however, the failure of
Xxxxxxxxxx to pay the Quilvest Fee shall not relieve Quilvest of its obligations
under Section 1 above. If Xxxxxxxxxx fails to pay Quilvest any portion of the
Quilvest Fee due and owing to Quilvest and Quilvest is required to pay the
Quilvest Contribution pursuant to Section 1 above, Quilvest may deduct the
unpaid portion of the Quilvest Fee from the payment it is required to make
pursuant to Section 1 above. Nothing contained in this Section 2 is intended to
relieve Xxxxxxxxxx of its obligation to pay the Quilvest Fee as and when due and
payable hereunder or, expressly as set forth herein, to limit Quilvest's
remedies at law to recover the amount of the Quilvest Fee as and when it is due
and payable hereunder.
3. Notices. All notices and other communications hereunder shall be in
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writing and shall be given to the party either by hand delivery or by United
States express mail, postage prepaid, or by overnight courier services
guaranteeing next business day delivery, charges prepaid, or by telecopier, to:
If to Xxxxxxxxxx, to:
Xxxxxxxxxx & Co., LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxxxx, Xx.
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
Attention: Xxxxx X. Xxxxxxx, Esquire
Facsimile: 000-000-0000
Telephone: 000-000-0000
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If to Quilvest, to:
c/o Three Cities Research, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Willem X.X. Xx Xxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esquire
Facsimile: 000-000-0000
Telephone: 000-000-0000
If the notice is sent by United States express mail or by overnight courier
services, it shall be deemed to have been given to the person entitled thereto
one business day after deposited with the post office or the courier service for
delivery to that person or, in the case of a notice given by hand delivery or
telecopy, when received. Notice of any change in any such address shall also be
given in the manner set forth above. Whenever the giving of notice is required,
the giving of such notice may be waived by the party entitled to receive such
notice.
4. Counterparts and Facsimile Signatures. This Agreement may be executed,
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including by facsimile signature, in one or more counterparts, each of which
when so executed shall be deemed to be an original and all of which together
shall constitute one and the same instrument.
5. Interpretation. Unless the context of this Agreement otherwise
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requires, (i) words of any gender include each gender and the neuter; (ii) words
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (v)
the term "including" or similar words shall be construed as to refer to such
matter without limitation thereof. Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless business days are
specified. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
6. Governing Law; Consent to Jurisdiction. This Agreement shall be
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construed and enforced in accordance with the laws of the State of New York
without regard to the application of the principles of conflicts or choice of
laws. Each party hereto submits to the jurisdiction of the courts of the State
of New York in New York County and to the jurisdiction of the United States
District Court for the Southern District of New York, and hereby agrees that
service of process may be effected in accordance with the delivery methods
described in Section 3 above.
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7. Severability. Whenever possible, each provision of this Agreement will
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be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
8. Entire Agreement. This Agreement is intended by the parties as a final
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expression of their agreement with regard to the subject matter hereof and
intended to be a complete and exclusive statement of the agreement and matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
9. No Third Parties Benefited. Nothing in this Agreement, express or
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implied, is intended, except as set forth herein, to confer upon any third party
any rights, remedies, obligations or liabilities.
10. Successors and Assigns. This Agreement shall inure to the benefit of
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and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns agreeing to be bound by all and the
terms and conditions of this Agreement.
11. Effectiveness. This Agreement shall become effective upon the
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completion of the Initial Closing (as such term is defined in the Purchase
Agreement), and only if the Initial Closing actually occurs.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first above written.
XXXXXXXXXX FUND II, L.P.
By: Xxxxxxxxxx Associates II, L.L.C., its
General Partner
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
________________________________
Name: Xxxxx X. Xxxxxxxxxx, Xx.
Title: Managing Member
QUILVEST AMERICAN EQUITY, LTD.
By: /s/ Willem X. X. xxXxxxx
_______________________________
Name: Willem X. X. xxXxxxx
Title: Attorney-in-Fact
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