1
EXHIBIT 10.11
EXHIBIT F
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 20, 1996 (the "Existing
Pledge Agreement"), as amended and restated through December 17, 1997 (as
further amended, modified or supplemented from time to time, this "Agreement"),
made by each of the undersigned (each a "Pledgor" and, together with any other
entity that becomes a party hereto pursuant to Section 23 hereof, the
"Pledgors"), in favor of THE CHASE MANHATTAN BANK, as Collateral Agent (the
"Pledgee"), for the benefit of the Secured Creditors (as defined below). Except
as otherwise defined herein, terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Safelite Glass Corp. (the "Borrower"), the lenders
from time to time party thereto (the "Banks"), Bankers Trust Company, as
Syndication Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as Documentation Agent,
and The Chase Manhattan Bank, as Administrative Agent (together with any
successor agent, the "Administrative Agent", and together with the Pledgee, the
Banks, the Syndication Agent and the Documentation Agent, the "Bank Creditors"),
have entered into a Credit Agreement, dated as of December 20, 1996, as amended
and restated through December 17, 1997 (as further amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to the Borrower and the issuance of, and participation in,
Letters of Credit for the account of the Borrower, all as contemplated therein;
WHEREAS, the parties hereto have elected to amend and restate
the Existing Pledge Agreement pursuant to this Agreement rather than enter into
a new pledge agreement for their convenience and intend that all indebtedness,
obligations and liens created under the Existing Pledge Agreement and the other
Credit Documents be continued hereunder and thereunder and remain in full force
and effect and not be discharged, paid, satisfied or cancelled;
WHEREAS, the Borrower may from time to time be party to one or
more (i) interest rate agreements, interest rate cap agreements, interest rate
collar agreements or other similar agreements or arrangements, (ii) foreign
exchange contracts, currency swap agreements or similar agreements or
arrangements designed to protect against the fluctuations in currency values
and\or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement with an Other Creditor (as hereinafter defined), an
"Interest Rate Protection Agreement or Other Hedging Agreement"), with a Bank or
an affiliate of a Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a
2
Page 2
Bank under the Credit Agreement for any reason, together with such Bank's or
affiliate's successors and assigns, collectively, the "Other Creditors", and
together with Bank Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiary Guaranty, each Pledgor
(other than the Borrower) has jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and the Interest Rate
Protection Agreements and Other Hedging Agreements;
WHEREAS, it is a condition precedent to the making of Loans to
the Borrower under the Credit Agreement that each Pledgor shall have executed
and delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of
such Pledgor, now existing or hereafter incurred under, arising out of
or in connection with any Credit Document to which such Pledgor is a
party and the due performance and compliance by such Pledgor with the
terms of each such Credit Document (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection
Agreements or Other Hedging Agreements, being herein collectively
called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of
such Pledgor, now existing or hereafter incurred under, arising out
3
Page 3
of or in connection with any Interest Rate Protection Agreement or
Other Hedging Agreement including, in the case of Pledgors other than
the Borrower, all obligations of such Pledgor under its Guaranty in
respect of Interest Rate Protection Agreements or Other Hedging
Agreements (all such obligations and liabilities under this clause (ii)
being herein collectively called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred
to in clauses (i), (ii) and (iii) above, after an Event of Default
(such term, as used in this Agreement, shall mean any Event of Default
under, and as defined in, the Credit Agreement, or any payment default
by the Borrower under any Interest Rate Protection Agreement or Other
Hedging Agreement and shall in any event include, without limitation,
any payment default (after the expiration of any applicable grace
period) on any of the Obligations (as hereinafter defined)) shall have
occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of
this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein: (i) the term "Stock" shall mean (x) with respect to corporations
incorporated under the laws of the United States or any State or territory
thereof (each a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any Domestic Corporation at any time owned by each
Pledgor and (y) with respect to corporations which are not Domestic Corporations
(each a "Foreign Corporation"), all of the issued and outstanding shares of
capital stock at any time owned by any Pledgor of any Foreign Corporation,
provided that except as provided in the last sentence of this Section 2, such
Pledgor shall not be required to pledge hereunder more than 65% of the total
combined voting power of all classes of capital stock of any Foreign Corporation
entitled to vote; (ii) the term "Notes" shall mean (x) all Intercompany Notes at
any time issued to each Pledgor and (y) all other promissory notes with a face
amount of $500,000 or more from time to time issued to, or held by, each
Pledgor, provided that except as provided in the last sentence of
4
Page 4
this Section 2, no Pledgor shall be required to pledge hereunder any promissory
notes issued to such Pledgor by any Subsidiary of such Pledgor which is a
Foreign Corporation; and (iii) the term "Securities" shall mean all of the Stock
and Notes. Each Pledgor represents and warrants that on the date hereof (i) each
Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex
A hereto; (ii) the Stock held by such Pledgor consists of the number and type of
shares of the stock of the corporations as described in Annex B hereto; (iii)
such Stock constitutes that percentage of the issued and outstanding capital
stock of the issuing corporation as is set forth in Annex B hereto; (iv) the
Notes held by such Pledgor consist of the promissory notes described in Annex C
hereto where such Pledgor is listed as the Bank; and (v) on the date hereof,
such Pledgor owns no other Securities. In the circumstances and to the extent
provided in Section 7.14 of the Credit Agreement, the 65% limitation set forth
in clause (i)(y) and the limitation in the proviso of clause (ii) in each case
of this Section 2 and in Section 3.2 hereof shall no longer be applicable and
such Pledgor shall duly pledge and deliver to the Pledgee such of the Securities
not theretofore required to be pledged hereunder.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes
set forth in Section 1 hereof, each Pledgor hereby: (i) grants to the Pledgee a
security interest in all of the Collateral owned by such Pledgor; (ii) pledges
and deposits as security with the Pledgee the Securities owned by such Pledgor
on the date hereof, and delivers to the Pledgee certificates or instruments
therefor, duly endorsed in blank in the case of Notes and accompanied by
undated stock powers duly executed in blank by such Pledgor in the case of
Stock, or such other instruments of transfer as are acceptable to the Pledgee;
and (iii) assigns, transfers, hypothecates, mortgages, charges and sets over to
the Pledgee all of such Pledgor's right, title and interest in and to such
Securities (and in and to all certificates or instruments evidencing such
Securities), to be held by the Pledgee, upon the terms and conditions set forth
in this Agreement; provided, however, that no Pledgor shall be required to grant
a security interest in any Pledged Securities to the extent that granting such
security interest in such Pledged Securities would violate any contractual
obligation to which such Pledgor is subject.
3.2. Subsequently Acquired Securities. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, such Pledgor will forthwith
pledge and deposit such Securities (or certificates or instruments representing
such Securities) as security with the Pledgee and deliver to the Pledgee
certificates therefor or instruments thereof, duly endorsed in blank in the case
of Notes and accompanied by undated stock powers duly executed in blank in the
case of Stock, or such other instruments of transfer as are acceptable to the
Pledgee, and will
5
Page 5
promptly thereafter deliver to the Pledgee a certificate executed by any
Authorized Officer of such Pledgor describing such Securities and certifying
that the same have been duly pledged with the Pledgee hereunder. Subject to the
last sentence of Section 2 hereof, no Pledgor shall be required at any time to
pledge hereunder any Stock which is more than 65% of the total combined voting
power of all classes of capital stock of any Foreign Corporation entitled to
vote.
3.3. Uncertificated Securities. Notwithstanding anything to
the contrary contained in Sections 3.1 and 3.2 hereof, if any Securities
(whether now owned or hereafter acquired) are uncertificated securities, the
respective Pledgor shall promptly notify the Pledgee thereof, and shall promptly
take all actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York UCC, if applicable). Each Pledgor further agrees to take such actions
as the Pledgee deems reasonably necessary or desirable to effect the foregoing
and to permit the Pledgee to exercise any of its rights and remedies hereunder,
and agrees to provide an opinion of counsel reasonably satisfactory to the
Pledgee with respect to the creation and perfection of any such pledge of
uncertificated Securities promptly upon request of the Pledgee.
3.4. Definition of Pledged Stock, Pledged Notes, Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock," all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes," and all of the Pledged Stock and Pledged Notes together are
hereinafter called the "Pledged Securities," which together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, is hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of such Pledgor, endorsed or assigned
in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or
a sub-agent appointed by the Pledgee. The Pledgee agrees to promptly notify the
relevant Pledgor after the appointment of any sub-agent; provided, however, that
the failure to give such notice shall not affect the validity of such
appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
(i) an Event of Default shall have occurred and be continuing and (ii) the
relevant Pledgor has knowledge of or written notice thereof shall have been
given by the Pledgee to the relevant Pledgor (provided that if an Event of
Default specified in Section 9.05 of the Credit
6
Page 6
Agreement shall occur, no such notice shall be required), each Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Securities and to give all consents, waivers or ratifications in
respect thereof; provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate any of the terms of
this Agreement, any other Credit Document or any Interest Rate Protection
Agreement or Other Hedging Agreement (collectively, the "Secured Debt
Agreements"), or which would have the effect of impairing the position or
interests of the Pledgee or any other Secured Creditor. All such rights of such
Pledgor to vote and to give consents, waivers and ratifications shall cease in
case an Event of Default shall occur and be continuing, and Section 7 hereof
shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless (i) an Event of
Default shall have occurred and be continuing and (ii) the relevant Pledgor has
knowledge of or written notice thereof shall have been given by the Pledgee to
the relevant Pledgor (provided that if an Event of Default specified in Section
9.05 of the Credit Agreement shall occur, no such notice shall be required), all
cash dividends payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the respective Pledgor; provided
that all cash dividends payable in respect of the Pledged Stock which are
determined by the Pledgee to represent in whole or in part an extraordinary,
liquidating or other distribution in return of capital shall be paid, to the
extent so determined to represent an extraordinary, liquidating or other
distribution in return of capital, to the Pledgee and retained by it as part of
the Cash Collateral Account (as defined in the Security Agreement). The Pledgee
shall also be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional stock or other securities or
property (other than cash) paid or distributed by way of dividend or
otherwise in respect of the Pledged Stock;
(ii) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged
Stock by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and
(iii) all other or additional stock or other securities or
property (including cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar corporate reorganization;
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other
7
Page 7
Secured Debt Agreement or by law) for the protection and enforcement of its
rights in respect of the Collateral, and the Pledgee shall be entitled, without
limitation, to exercise the following rights, which each Pledgor hereby agrees
to be commercially reasonable:
(i) to receive all amounts payable in respect of the
Collateral payable to such Pledgor under Section 6 hereof;
(ii) to transfer all or any part of the Pledged Securities
into the Pledgee's name or the name of its nominee or nominees (the
Pledgee agrees to promptly notify the relevant Pledgor after such
transfer; provided, however, that the failure to give such notice shall
not affect the validity of such transfer);
(iii) to accelerate any Pledged Note which may be accelerated
in accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) subject to the giving of written notice to the relevant
Pledgor in accordance with clause (ii) of Section 5 hereof (to the
extent required by such Section 5), to vote all or any part of the
Pledged Stock (whether or not transferred into the name of the Pledgee)
and give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto as though it were the
outright owner thereof (each Pledgor hereby irrevocably constituting
and appointing the Pledgee the proxy and attorney-in-fact of such
Pledgor, with full power of substitution to do so); and
(v) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine; provided that at least 10 days' written notice of the time
and place of any such sale shall be given to such Pledgor. Each Pledgor
hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling
the Collateral and any other security for the Obligations or otherwise.
At any such sale, unless prohibited by applicable law, the Pledgee on
behalf of the Secured Creditors may bid for and purchase all or any
part of the Collateral so sold free from any such right or equity of
redemption. Neither
8
Page 8
the Pledgee nor any Secured Creditor shall be liable for failure to
collect or realize upon any or all of the Collateral or for any delay
in so doing nor shall any of them be under any obligation to take any
action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or now or hereafter existing at law
or in equity or by statute shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or beginning
of the exercise by the Pledgee or any other Secured Creditor of any one or more
of the rights, powers or remedies provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. The Secured Creditors
agree that this Agreement may be enforced only by the action of the
Administrative Agent or the Pledgee, in each case acting upon the instructions
of the Required Banks (or, after the date on which all Credit Document
Obligations have been paid in full, the holders of at least the majority of the
outstanding Other Obligations) and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the Pledgee,
as the case may be, for the benefit of the Secured Creditors upon the terms of
this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency remaining in the
Obligations after receipt of the proceeds of Collateral.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
9
Page 9
11. INDEMNITY. Each Pledgor jointly and severally agrees to
indemnify and hold harmless the Pledgee in such capacity and each other Secured
Creditor from and against any and all claims, demands, losses, judgments and
liabilities of whatsoever kind or nature, including all costs and expenses,
including reasonable attorneys' fees, growing out of or resulting from this
Agreement or the exercise by the Pledgee of any right or remedy granted to it
hereunder or under any other Secured Debt Agreement (the "Indemnified
Liabilities") except for those Indemnified Liabilities arising from the
Pledgee's or such other Secured Creditor's gross negligence or willful
misconduct. In no event shall the Pledgee be liable, in the absence of gross
negligence or willful misconduct on its part, for any matter or thing in
connection with this Agreement other than to account for moneys actually
received by it in accordance with the terms hereof. If and to the extent that
the obligations of the Pledgors under this Section 11 are unenforceable for any
reason, each Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law.
12. FURTHER ASSURANCES. Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor's own expense, file and
refile under the applicable UCC or appropriate local equivalent, such financing
statements, continuation statements and other documents in such offices as the
Pledgee may deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
13. THE PLEDGEE AS AGENT. (a) The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Pledgee as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. The Pledgee shall act hereunder on
the terms and conditions set forth herein and in Section 11 of the Credit
Agreement;
(b) The Pledgee's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the
same manner as the Pledgee deals with similar securities and property for its
own account, except that the Pledgee shall have no
10
Page 10
obligation to invest funds held in any Cash Collateral Account and may hold the
same as demand deposits. Neither the Pledgee, any Bank nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Borrower or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.
14. TRANSFER BY PLEDGORS. Except for sales or dispositions of
Collateral permitted pursuant to the Credit Agreement, no Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except for the
Liens and security interests created by this Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. Each
Pledgor represents, warrants and covenants that (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement and liens permitted under
clauses (a) and (e) of Section 8.03 of the Credit Agreement; (ii) it has full
power, authority and legal right to pledge all the Securities pledged by it
pursuant to this Agreement; (iii) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms,
except to the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); (iv) no consent of any other
party (including, without limitation, any stockholder or creditor of such
Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by such
Pledgor in connection with the execution, delivery or performance of this
Agreement, or in connection with the exercise of its rights and remedies
pursuant to this Agreement, except as may be required in connection with the
disposition of the Securities by laws affecting the offering and sale of
securities generally; (v) the execution, delivery and performance of this
Agreement by such Pledgor do not violate any provision of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of the certificate
of incorporation or by-laws of such Pledgor or of any securities issued by such
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, deed
of trust, agreement, instrument or undertaking to which such Pledgor or any of
its Subsidiaries is a party or which purports to be binding upon such Pledgor or
any of its Subsidiaries or upon
11
Page 11
any of their respective assets and will not result in the creation or imposition
of any lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (vi) all the shares of
Stock of Subsidiaries of the Borrower have been duly and validly issued, are
fully paid and nonassessable; (vii) each of the Pledged Notes constituting
Intercompany Notes, when executed by the obligor thereof, will be the legal,
valid and binding obligation of such obligor, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law); and (viii)
the pledge and assignment of the Securities pursuant to this Agreement, together
with the delivery of the Securities pursuant to this Agreement (which delivery
has been made), creates a valid and perfected first security interest in such
Securities and the proceeds thereof, subject to no prior lien or encumbrance or
to any agreement purporting to grant to any third party a lien or encumbrance on
the property or assets of such Pledgor which would include the Securities. Each
Pledgor covenants and agrees that it will defend the Pledgee's right, title and
security interest in and to the Securities and the proceeds thereof against the
claims and demands of all persons whomsoever; and such Pledgor covenants and
agrees that it will have like title to and right to pledge any other property at
any time hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the Pledgee
and the other Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any other instrument or agreement referred to therein, or any assignment or
transfer of any thereof; (ii) any waiver, consent, extension, indulgence or
other action or inaction under or in respect of any such agreement or instrument
or this Agreement; (iii) any furnishing of any additional security to the
Pledgee or its assignee or any acceptance thereof or any release of any security
by the Pledgee or its assignee; (iv) any limitation on any party's liability or
obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; or (v) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or knowledge
of any of the foregoing.
12
Page 12
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, such Pledgor
as soon as practicable and at its expense will use its reasonable efforts, to
the extent it has the right and authority to do so, to cause the issuer of such
Pledged Stock to effect (and to keep effective) a registration and will use its
reasonable efforts to cause such qualification and compliance to be effected
(and be kept effective) as may be so requested and as would permit or facilitate
the sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933 as then in effect (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other government
requirements; provided that the Pledgee shall furnish to such Pledgor such
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Such Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will cause to be furnished to the
Pledgee by the issuer such number of prospectuses, offering circulars or other
documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee, each other Secured Creditor and all
others participating in the distribution of the Pledged Stock against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished (or failed to be furnished) in writing to such Pledgor or
issuer by the Pledgee or such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine
to exercise its right to sell all or any part of the Pledged Securities pursuant
to Section 7 hereof, such Pledged Securities or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as then in effect, the Pledgee may, in its sole and
absolute discretion, sell such Pledged Securities or part thereof by private
sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration; provided that at least 10 days' notice of the time and place
of any such sale shall be given to such Pledgor. Without limiting the generality
of the foregoing, in any such event the Pledgee, in its sole and absolute
discretion: (i) may proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Securities or
part thereof
13
Page 13
shall have been filed under such Securities Act; (ii) may approach and negotiate
with a single possible purchaser to effect such sale; and (iii) may restrict
such sale to a purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view to the
distribution or sale of such Pledged Securities or part thereof. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Pledged Securities at a price which the Pledgee,
in its sole and absolute discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will promptly execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly release from the security interest created hereby and
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Pledgee and as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement. As used in this Agreement, "Termination
Date" shall mean the date upon which the Total Commitment and all Interest Rate
Protection Agreements or Other Hedging Agreements have been terminated, no Note
(as defined in the Credit Agreement) or Letter of Credit is outstanding (other
than Letters of Credit, together with all Fees that have accrued and will accrue
thereon through the stated termination date of such Letters of Credit, which
have been supported in a manner satisfactory to the Letter of Credit Issuer as
provided in the Credit Agreement) and all other Obligations (other than
indemnities described in Section 11 hereof and in Section 12.13 of the Credit
Agreement which are not then due and payable) have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed in connection with a sale or other disposition permitted by
Section 8.02 of the Credit Agreement or is otherwise released at the direction
of the Required Banks (or all the Banks if required by Section 12.12 of the
Credit Agreement), the Pledgee, at the request and expense of such Pledgor will
duly release from the security interest created hereby and assign, transfer and
deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and as may be in possession of the Pledgee and has not theretofore been
released pursuant to this Agreement and will execute all instruments as may be
reasonably necessary to accomplish the same.
14
Page 14
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 18(a) or (b), it shall deliver to
the Pledgee a certificate signed by an Authorized Officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b).
19. PLEDGOR'S RETAINED RIGHTS. In order to permit Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to Section 5 hereof and/or to receive the dividends and distributions that it is
authorized to receive and retain pursuant to Section 6 hereof, the Pledgee
shall, if necessary, upon the written request of Pledgor, from time to time
execute and deliver to Pledgor all such proxies, dividend payment orders and
other instruments as Pledgor may reasonably request.
20. NOTICES, ETC. All notices and other communications
hereunder shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, addressed:
(a) if to any Pledgor, at its address set forth opposite its
signature below;
(b) if to the Pledgee, at:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Bank (other than the Pledgee), at such address
as such Bank shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Pledgor and the
Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of either (x) the Required
Banks (or all the Banks if required by Section 12.12 of the Credit Agreement) at
all times prior to the time on which all Credit Document
15
Page 15
Obligations have been paid in full or (y) the holders of at least a majority of
the outstanding Other Obligations at all times after the time on which all
Credit Document Obligations have been paid in full); provided that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class. For the purpose of this Agreement,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (i)
the Bank Creditors as holders of the Credit Document Obligations or (ii) the
Other Creditors as holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (i)
with respect to the Credit Document Obligations, the Required Banks and (ii)
with respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection
Agreements or Other Hedging Agreements.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.
23. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to Sections 7.13 and/or 8.15 of the
Credit Agreement shall automatically become a Pledgor hereunder by executing a
counterpart hereof and delivering the same to the Pledgee.
* * *
16
Page 16
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
Address: SAFELITE GLASS CORP.,
Safelite Glass Corp. as a Pledgor
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: Vice President