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Exhibit 10.18
SAFELITE GLASS CORP.
$55,000,000
9 7/8% SERIES C SENIOR SUBORDINATED NOTES DUE 2006
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
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December 18, 1998
CHASE SECURITIES INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
SALOMON BROTHERS INC
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Safelite Glass Corp., a Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement dated December 15, 1998 (the "Purchase Agreement"),
$55,000,000 principal amount of its 9 7/8% Series C Senior Subordinated Notes
due 2006 (the "Securities"). Capitalized terms used but not specifically defined
herein are defined in the Purchase Agreement. As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, the Company agrees with you, for the
benefit of the holders of the Securities (including the Initial Purchasers) (the
"Holders"), as follows:
1. REGISTERED EXCHANGE OFFER. The Company shall prepare and, not later than
120 days following the date of original issuance of the Securities (the "Issue
Date"), shall file with the Commission a registration statement (the "Exchange
Offer Registration Statement") on an appropriate form under the Securities Act
with respect to a proposed offer (the "Registered Exchange Offer") to the
Holders to issue and deliver to such Holders, in exchange for the Securities, a
like aggregate principal amount of debt securities of the Company (the "Exchange
Securities") identical in all material respects to the Securities, except for
the transfer restrictions relating to the Securities, shall use its reasonable
best efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act no later than 240 days after the Issue Date
and to cause the Registered Exchange Offer to be consummated no later than 270
days after the Issue Date, and shall keep the Exchange Offer Registration
Statement effective for
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not less than 30 days (or longer, if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders (such period being called
the "Exchange Offer Registration Period"). The Exchange Securities and the
Private Exchange Securities (as defined below, if any) will be issued under the
Indenture or an indenture (the "Exchange Securities Indenture") between the
Company and the Trustee or such other bank or trust company reasonably
satisfactory to you, as trustee (the "Exchange Securities Trustee"), such
indenture to be identical in all material respects to the Indenture except for
the transfer restrictions relating to the Securities (as described above).
Upon the effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not (i) an affiliate of the Company within the meaning of the Securities Act or
(ii) an Exchanging Dealer (as defined below) not complying with the requirements
of the next sentence, (b) is not an Initial Purchaser with Securities that have
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business and (d) has
no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, the Initial Purchasers and
each Exchanging Dealer (as defined below) acknowledge that, pursuant to current
interpretations by the Commission's staff of Section 5 of the Securities Act,
(i) each Holder which is a broker-dealer electing to exchange Securities,
acquired for its own account as a result of market making activities or other
trading activities, for Exchange Securities (an "Exchanging Dealer"), is
required to deliver a prospectus containing the information set forth in Annex A
hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section, and in Annex C hereto
in the "Plan of Distribution" section of such prospectus in connection with a
sale of any such Exchange Securities received by such Exchanging Dealer pursuant
to the Registered Exchange Offer and (ii) if any Initial Purchaser elects to
sell Private Exchange Securities acquired in exchange for Securities
constituting any portion of an unsold allotment it is required to deliver a
prospectus containing the information required by Items 507 or 508 of Regulation
S-K under the Securities Act, as applicable, in connection with such a sale.
If, prior to the consummation of the Registered Exchange Offer, any Holder
holds any Securities acquired by it that have, or that are reasonably likely to
be determined to have, the status of an unsold allotment in the initial
distribution of the Securities, or any Holder is not entitled to participate in
the Registered Exchange Offer, the Company shall, upon the request of any such
Holder, simultaneously with the delivery of the Exchange Securities in the
Registered Exchange Offer, issue and deliver to any such Holder, in exchange for
the Securities held by such Holder (the "Private Exchange"), a like principal
amount of debt securities of the Company (the "Private Exchange Securities")
that are identical in all material respects to the Exchange Securities, except
for the transfer restrictions relating to such Private Exchange Securities. The
Private Exchange Securities will be issued under the same indenture as the
Exchange Securities,
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and the Company shall use its reasonable best efforts to cause the Private
Exchange Securities to bear the same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(b) keep the Registered Exchange offer open for not less than 30 days
after the date notice of the Exchange Offer is mailed to the Holders (or
longer if required by applicable law);
(c) utilize the services of a Depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last business day on which
the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws applicable to the
Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange
Offer and any Private Exchange, the Company shall:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(b) deliver to the Trustee for cancellation all Securities so accepted
for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder of Securities,
Exchange Securities or Private Exchange Securities, as the case may be,
equal in principal amount to the Securities of such Holder so accepted for
exchange.
The Company shall make available for a period of 90 days after the
consummation of the Registered Exchange Offer, a copy of the prospectus forming
part of the Exchange Offer Registration Statement to any broker-dealer for use
in connection with any resale of any Exchange Securities.
Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Securities surrendered in exchange
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therefor or, if no interest has been paid on the Securities, from the date of
original issue of the Securities.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company
within the meaning of the Securities Act, or if it is an affiliate, it will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include, as of the consummation of the Registered
Exchange Offer, an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
2. SHELF REGISTRATION. If (i) applicable interpretations of the staff
of the Commission do not permit the Company to effect the Registered Exchange
Offer as contemplated by Section 1 hereof or (ii) any Holder either (A) is not
eligible to participate in the Registered Exchange Offer or (B) participates in
the Registered Exchange Offer and does not receive freely transferrable Exchange
Securities in exchange for tendered Securities (which shall include Initial
Purchasers with an unsold allotment), the following provisions shall apply:
(a) The Company shall use all reasonable efforts to as promptly as
practicable file with the Commission and thereafter shall use its reasonable
best efforts to cause to be declared effective a shelf registration statement on
an appropriate form under the Securities Act relating to the offer and sale of
the Transfer Restricted Securities (as defined below) by the Holders from time
to time in accordance with the methods of distribution set forth in such
registration statement (hereafter, a "Shelf Registration Statement" and,
together with any Exchange Offer Registration Statement, a "Registration
Statement"); PROVIDED, HOWEVER, that no Holder of Securities or Exchange
Securities (other than any Initial Purchaser) shall be entitled to have
Securities or Exchange Securities held by it covered by such Shelf Registration
Statement unless such Holder agrees in writing to be bound by all the provisions
of this Agreement applicable to such Holder.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders for a period of two years
from the Issue Date or such shorter period
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that will terminate when either (i) all the Securities and Exchange Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (in any such case, such period being called the "Shelf
Registration Period") or (ii) all the Securities and Exchange Securities are
eligible for sale pursuant to Rule 144(k) promulgated under the Securities Act.
The Company shall be deemed not to have used its reasonable best efforts to keep
the Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of Securities or
Exchange Securities covered thereby not being able to offer and sell such
Securities or Exchange Securities during that period, unless such action is
required by applicable law; PROVIDED, HOWEVER, that the foregoing shall not
apply to actions taken by the Company in good faith and for valid business
reasons (not including avoidance of its obligations hereunder), including,
without limitation, the acquisition or divestiture of assets, so long as the
Company within 120 days thereafter complies with the requirements of Section
4(j) hereof. Any such period during which the Company fails to keep the
registration statement effective and usable for offers and sales of Securities
and Exchange Securities is referred to as a "Suspension Period." A Suspension
Period shall commence on and include the date that the Company gives notice that
the Shelf Registration Statement is no longer effective or the prospectus
included therein is no longer usable for offers and sales of Securities and
Exchange Securities and shall end on the date when each Holder of Securities and
Exchange Securities covered by such registration statement either receives the
copies of the supplemented or amended prospectus contemplated by Section 4(j)
hereof or is advised in writing by the Company that use of the prospectus may be
resumed. If one or more Suspension Periods occur, the two-year time period
referenced above shall be extended by the number of days included in each such
Suspension Period.
(c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto (in
either case, other than with respect to information included therein in reliance
upon or in conformity with written information furnished to the Company by or on
behalf of any Holder specifically for use therein (the "HOLDERS' INFORMATION"))
does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) any prospectus forming
part of any Shelf Registration Statement, and any supplement to such prospectus
(in either case, other than with respect to Holders' Information), does not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. LIQUIDATED DAMAGES. (a) The parties hereto agree that the Holders
of Securities will suffer damages if the Company fails to fulfill its
obligations under Section 1 or Section 2, as applicable, and that it would not
be feasible to ascertain the extent of such damages. Accordingly, if (i) the
applicable Registration Statement is not filed with the Commission on or prior
to 120 days after the Issue Date, (ii) the Exchange Offer Registration Statement
or the Shelf Registration Statement, as the case may be, is not declared
effective within 240 days after the Issue Date (or in the case of a Shelf
Registration Statement required to be filed in response to a change in law or
the applicable interpretations of Commission's Staff, if later, within 45 days
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after publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 270 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
240 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of Commission's Staff, if later, within 45 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 60 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company will
generally be obligated to pay liquidated damages to each holder of Transfer
Restricted Securities (as defined below), during the period of one or more such
Registration Defaults, in an amount equal to $ 0.192 per week per $1,000
principal amount of the Securities constituting Transfer Restricted Securities
held by such holder until the applicable Registration Statement is filed or
declared effective, the Registered Exchange Offer is consummated or the Shelf
Registration Statement again becomes effective, as the case may be. Following
the cure of all Registration Defaults, the accrual of liquidated damages will
cease. "Transfer Restricted Securities" means each Security or Exchange Security
until (i) the date on which such Security or Exchange Security has been
exchanged for a freely transferrable Exchange Security in the Registered
Exchange Offer, (ii) the date on which such Security or Private Exchange
Security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iii) the date on
which such Security or Private Exchange Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is salable pursuant to Rule
144(k) under the Securities Act. Notwithstanding anything to the contrary in
this Section 3(a), the Company shall not be required to pay liquidated damages
to the holder of Transfer Restricted Securities if such holder failed to comply
with its obligations to make the representations in the second to last paragraph
of Section 1 or to provide the information required to be provided by it, if
any, pursuant to Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent under
the Indenture immediately upon the happening of each and every Registration
Default. The Company shall pay the liquidated damages due on the Transfer
Restricted Securities by depositing with the Paying Agent (which may not be the
Company for these purposes), in trust, for the benefit of the Holders thereof,
prior to 10:00 a.m., New York City time on the next interest payment date
specified by the Indenture and the Securities, sums sufficient to pay the
liquidated damages then due. The liquidated damages due shall be payable on each
interest payment date specified by the Indenture to the record holder entitled
to receive the interest payment to be made on such date. Each obligation to pay
liquidated damages shall be deemed to accrue from and including the applicable
Registration Default.
(c) The parties hereto agree that the liquidated damages provided for
in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by holders of Transfer
Restricted Securities by reason of the failure of the Shelf Registration
Statement or the Exchange Offer Registration Statement, as the case may be, to
be filed, to be declared effective or to remain effective, or the Exchange Offer
to be consummated, as the case may be, to the extent required by this Agreement.
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4. REGISTRATION PROCEDURES. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to you, prior to the filing thereof
with the Commission, a copy of the Registration Statement and each amendment
thereof and each supplement, if any, to the prospectus included therein and, in
the event that any of the Initial Purchasers (with respect to any portion of an
unsold allotment from the original offering) are participating in the Registered
Exchange Offer or the Shelf Registration, shall use reasonable efforts to
reflect in each such document, when so filed with the Commission, such comments
as you reasonably may propose; (ii) if applicable, include the information set
forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of the prospectus forming a part
of the Exchange Offer Registration Statement, and include the information set
forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and (iii) if requested by any Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement.
(b) The Company shall advise the Initial Purchasers, each Exchanging
Dealer and the Holders (if applicable), and, if requested by you or any such
Holder, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto has
been filed with the Commission and when such Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities or the
Exchange Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus so that, as of
such date, the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(c) The Company will make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time.
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(d) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of the prospectus or
any amendment or supplement thereto by each of the selling Holders of Transfer
Restricted Securities in connection with the offering and sale of the Transfer
Restricted Securities covered by the prospectus or any amendment or supplement
thereto.
(f) The Company will furnish to each Exchanging Dealer or Initial
Purchaser, as applicable, and to any Holder which so requests, without charge,
at least one copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Exchanging Dealer, Initial Purchaser or Holder, as applicable, so
requests in writing, all exhibits (including those incorporated by reference).
(g) The Company will, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer or Initial Purchaser and such other
persons that are required to deliver a prospectus, as applicable, without
charge, as many copies of the prospectus included within the coverage of the
Exchange Offer Registration Statement and any amendment or supplement thereto as
such Exchanging Dealer or Initial Purchaser, as applicable, may reasonably
request for delivery by (i) such Exchanging Dealer in connection with a sale of
Exchange Securities received by it pursuant to the Registered Exchange Offer or
(ii) such Initial Purchaser in connection with a sale of Exchange Securities
received by it in exchange for Securities constituting any portion of an unsold
allotment; and the Company consents to the use of the prospectus or any
amendment or supplement thereto by any such Exchanging Dealer or Initial
Purchaser, as applicable, as aforesaid.
(h) Prior to any public offering of Securities, Exchange Securities or
Private Exchange Securities pursuant to any Registration Statement, the Company
will use its best efforts to register or qualify or cooperate with the Holders
of Securities included therein and their respective counsel in connection with
the registration or qualification of such securities for offer and sale under
the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Securities, Exchange Securities or Private Exchange Securities covered by such
Registration Statement; PROVIDED, HOWEVER, that the Company will not be required
to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so subject.
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(i) The Company will cooperate with the Holders of Securities,
Exchange Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities, Exchange
Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as Holders may request in writing prior to sales of
Securities, Exchange Securities or Private Exchange Securities pursuant to such
Registration Statement.
(j) If (i) any event contemplated by paragraphs (b)(ii) through (v)
above occurs during the period for which the Company is required to maintain an
effective Registration Statement or (ii) any Suspension Period remains in effect
more than 120 days after the occurrence thereof, the Company will promptly
prepare a post-effective amendment to the Registration Statement or a supplement
to the related prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Securities, Exchange Securities or
Private Exchange Securities from a Holder, the prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities, Exchange
Securities or Private Exchange Securities, as the case may be, and provide the
applicable trustee with printed certificates for the Securities, Exchange
Securities or Private Exchange Securities, as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all applicable rules and regulations
of the Commission and will make generally available to its security holders as
soon as practicable after the effective date of the applicable Registration
Statement an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act; PROVIDED that in no event shall such earnings statement be
delivered later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statements shall cover such 12-month period.
(m) The Company will cause the Indenture or the Exchange Securities
Indenture, as the case may be, to be qualified under the Trust Indenture Act as
required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Transfer Restricted Securities as the Company may from time to time reasonably
require for inclusion in such Registration Statement, and the Company may
exclude from such registration the Transfer Restricted Securities of any Holder
that fails to furnish such information within a reasonable time after receiving
such request.
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(o) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice of the Company (i) of a Suspension Period under Section 2(b) hereof or
(ii) pursuant to Section 4(b)(ii) through (v) hereof, such Holder will
discontinue disposition of such Transfer Restricted Securities until such
▇▇▇▇▇▇'s receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(j) hereof or until advised in writing (the "Advice")
by the Company that the use of the applicable prospectus may be resumed. If the
Company shall give any notice under Section 4(b)(ii) through (v) during the
period that the Company is required to maintain an effective Registration
Statement (the "Effectiveness Period"), such Effectiveness Period shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller of Transfer
Restricted Securities covered by such Registration Statement shall have received
(x) the copies of the supplemental or amended prospectus contemplated by Section
4(j) (if an amended or supplemental prospectus is required) or (y) the Advice
(if no amended or supplemental prospectus is required).
5. REGISTRATION EXPENSES. The Company will bear all expenses incurred
in connection with the performance of its obligations under Sections 1, 2, 3 and
4 hereof and the Company will reimburse the Initial Purchasers and the Holders
for the reasonable fees and disbursements of one firm of attorneys chosen by the
Holders of a majority in aggregate principal amount of the Securities and the
Exchange Securities to be sold pursuant to each Registration Statement (the
"Special Counsel") acting for the Initial Purchasers or Holders in connection
therewith.
6. INDEMNIFICATION. (a) In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Exchanging Dealer or Initial Purchaser, as
applicable, the Company shall indemnify and hold harmless each Holder, its
directors, officers, agents and employees and each person, if any, who controls
such Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and the directors, officers, agents and employees of such
controlling persons as follows:
(i) against any and all loss, liability, claim and damage whatsoever,
as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and
(ii) against any and all expense (including, subject to Section 6(c)
hereof, the fees and disbursements of counsel chosen by the indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental or regulatory agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission;
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PROVIDED, HOWEVER, that (i) this indemnity shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with Holders' Information and (ii) this indemnity with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any related preliminary prospectus shall not inure to the
benefit of any indemnified party from whom the person asserting any such loss,
claim, damage or liability received Securities, Exchange Securities or Private
Exchange Securities if such persons did not receive a copy of the final
prospectus at or prior to the confirmation of the sale of such Securities,
Exchange Securities or Private Exchange Securities to such person in any case
where such delivery is required by the Securities Act and the untrue statement
or omission of material fact contained in the related preliminary prospectus was
corrected in the final prospectus unless such failure to deliver the final
prospectus was a result of noncompliance by the Company with Section 4(d), 4(e),
4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each Holder agrees
to indemnify and hold harmless the Company, its directors, officers, agents and
employees and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act and the
directors, officers, agents and employees of such controlling persons against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 6(a) hereof, as incurred, arising out of or based
upon any untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment or supplement
thereto) in reliance on and in conformity with Holders' Information furnished to
the Company by such Holder; PROVIDED, HOWEVER, that no such Holder shall be
liable for any indemnity claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Securities, Exchange
Securities or Private Exchange Securities pursuant to the Registration
Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any claim or action commenced against
it in respect of which indemnity may be sought hereunder; PROVIDED, HOWEVER,
that failure to so notify an indemnifying party shall not relieve such
indemnifying party from any obligation that it may have pursuant to this Section
except to the extent that it has been materially prejudiced by such failure;
PROVIDED FURTHER, HOWEVER, that the failure to notify an indemnifying party
shall not relieve it from any liability that it may have to an indemnified party
otherwise than on account of this indemnity agreement. If any such claim or
action shall be brought against an indemnified party, the indemnified party
shall notify the indemnifying party thereof, and the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; PROVIDED, HOWEVER, that an indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
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concluded (based on the written advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on the written advice of counsel to the
indemnified party) between the indemnified party and indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel for the indemnified party will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm of attorneys (in addition to any local counsel)
at any one time for all such indemnified party or parties. Each indemnified
party, as a condition of the indemnity agreements contained in Sections 6(a) and
6(b), shall use all reasonable efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent, but if settled with its written consent or if there be a final judgment
of the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If a claim by an indemnified party for indemnification under this
Section 6 is unenforceable even though the express provisions hereof provide for
indemnification in such case, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any losses shall be deemed to include, subject
to the limitations set forth in Section 6(c) herein, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, an
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indemnifying party that is a holder of Transfer Restricted Securities or
Exchange Securities shall not be required to contribute any amount in excess of
the amount by which the total price at which the Transfer Restricted Securities
or Exchange Securities sold by such indemnifying party and distributed to the
public were offered to the public exceeds the amount of any damages that such
indemnifying party would have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to any contribution from any person who
was not guilty of such fraudulent misrepresentation.
7. MISCELLANEOUS. (a) AMENDMENTS AND WAIVERS. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, Exchange Securities and the Private Exchange
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of the Holders of Securities, Exchange
Securities or Private Exchange Securities whose Securities, Exchange Securities
or Private Exchange Securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities or Private Exchange Securities being sold by
such Holders pursuant to such Registration Statement.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 7(b),
which address initially is, with respect to each Holder, the address of
such Holder maintained by the Registrar under the Indenture, with a copy in
like manner to Chase Securities Inc., BT ▇▇▇▇. ▇▇▇▇▇ Incorporated and
Salomon Brothers Inc;
(2) if to you, initially at your respective addresses set forth in the
Purchase Agreement; and
(3) if to the Company, initially at the address of the Company set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns.
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(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopies) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(g) NO INCONSISTENT AGREEMENTS. The Company has not and shall not, on
or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the holders of Transfer Restricted
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company has not previously entered into any agreement which remains in
effect granting any registration rights with respect to any of its debt
securities to any person. Without limiting the generality of the foregoing,
without the written consent of the holders of a majority in aggregate principal
amount of the then outstanding Transfer Restricted Securities, the Company shall
not grant to any person the right to request the Company to register any debt
securities of the Company under the Securities Act unless the rights so granted
are not in conflict or inconsistent with the provisions of this Agreement.
(h) NO PIGGYBACK ON REGISTRATIONS. Neither the Company nor any of its
security holders (other than the holders of Transfer Restricted Securities in
such capacity) shall have the right to include any securities of the Company in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.
(i) SEVERABILITY. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and you.
Very truly yours,
SAFELITE GLASS CORP.
By: /s/ ▇.▇. ▇▇▇▇▇▇
--------------------------
Title: Sr. VP & CFO
Accepted in New York, New York
CHASE SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Vice President
BT ALEX. BROWN INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title:
SALOMON BROTHERS INC
By: /s/ [illegible]
--------------------------
Title: Managing Director
16
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 90 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
17
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
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ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 90 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until _______________,
199_, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.(1)
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
----------
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
19
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:__________________________________________
Address:_______________________________________
__________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
