1
Exhibit 10.9
THL MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement") is entered into as of the 20th
day of December 1996 by and between Safelite Glass Corp., a Delaware corporation
(the "Company"), and Xxxxxx X. Xxx Company, a sole proprietorship ("THL").
WHEREAS, on the date hereof the Company has consummated certain
transactions (such transactions being referred to herein as the
"Recapitalization"), pursuant to that certain Recapitalization Agreement and
Plan of Merger and Stock Purchase Agreement, dated as of November 8, 1996, by
and among Xxxx Xxxxxxx Holdings Corp., the LS Selling Stockholders, the Company,
LSNWY Corp., Lite Acquisition Corp. and L.S. Acquisition Corp.
WHEREAS, THL is providing advisory and other services to the Company in
connection with the senior secured financing (the "Senior Financing") being
provided in connection with the Recapitalization pursuant to a Credit Agreement
dated on the date hereof (the "Credit Agreement"), among the Company, The Chase
Manhattan Bank and Bankers Trust Company, as agents, and the lending
institutions from time to time party thereto;
WHEREAS, certain affiliates of THL have provided equity financing (the
"Equity Investments") in connection with the Recapitalization;
WHEREAS, THL has staff specifically skilled in corporate finance, strategic
corporate planning, and other management skills and services;
WHEREAS, the Company will require THL's special skills and management
advisory services in connection with its general business operations; and
WHEREAS, THL is willing to provide such skills and services to the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. SERVICES. THL hereby agrees that, during the term of this Agreement (the
"Term"), it will:
a. provide the Company with advice in connection with the negotiation and
consummation of agreements, contracts, documents and instruments
necessary to provide the Company with financing from banks or other
financial institutions or other entities on terms and conditions
satisfactory to the Company; and
b. provide the Company with financial, managerial and operational advice
in connection with its day-to-day operations, including, without
limitation:
i. advice with respect to the investment of funds; and
2
ii. advice with respect to the development and implementation of
strategies for improving the operating, marketing and financial
performance of the Company.
2. PAYMENT OF FEES. The Company hereby agrees to:
a. pay to THL (or its designee) a fee in the amount of $5,000,000 in
connection with the structuring of the Senior Financing for the
Recapitalization, together with reimbursement of THL's expenses
incurred on behalf of the Company through the Closing Date in
connection with the Recapitalization, such fees and expenses being
payable by the Company at the closing of the Recapitalization;
b. during the Term, pay to THL (or its designee) a management fee in an
amount equal to $500,000 per annum in exchange for the services
provided to the Company by THL, such fee being payable by the Company
quarterly in advance, the first such payment to be made at or after
the closing of the Recapitalization (provided, however, that if during
any fiscal quarter of the Company a Default or Event of Default (as
such terms are defined in the Credit Agreement) exists, only one-half
of such fee for such fiscal quarter may be paid and the remaining one-
half of such fee shall be paid at such time as all Defaults and Events
of Default (as defined in the Credit Agreement) have been cured or
waived); and
c. during the Term, allow THL to participate in the negotiation and
consummation of senior financing for any acquisition transactions by
the Company or any of its direct or indirect subsidiaries, and pay to
THL (or its designee) a fee in connection therewith equal to one
percent (1%) of the gross purchase price of the transaction (including
all liabilities assumed or otherwise included in the transaction),
such fee to be due and payable for the foregoing services at the
closing of such transaction, whether or not any such senior financing
is actually committed or drawn upon.
Each payment made pursuant to this Section 2 shall be paid by wire transfer
of immediately available federal funds to the account(s) specified by THL
(or its designee).
3. TERM. This Agreement shall continue in full force and effect, unless and
until terminated by mutual consent of the parties, for so long as THL (or
any successor or permitted assign, as the case may be) continues to carry
on the business of providing services of the type described in Section 1
above; provided, however, that either party may terminate this Agreement
following a material breach of the terms of this Agreement by the other
party hereto and a failure to cure such breach within 30 days following
written notice thereof; and provided further that each of (a) the
obligations of the Company under Section 4 below, (b) any and all accrued
and unpaid obligations of the Company owed under
- 2 -
3
Section 2 above and (c) the provisions of Section 7 shall survive any
termination of this Agreement to the maximum extent permitted under
applicable law.
4. EXPENSES; INDEMNIFICATION.
a. Expenses. The Company agrees to pay on demand all expenses incurred by
THL and its affiliates (or any of them) in connection with this
Agreement, the Recapitalization and such other transactions and all
operations hereunder or in respect of the Equity Investments or
otherwise incurred in connection with the Recapitalization or the
Company, including but not limited to (i) the fees and disbursements
of: (A) Xxxxxxxx, Xxxxxxx & Xxxxxxx A Professional Corporation,
counsel to THL, (B) KPMG Peat Marwick, accountant to THL, and (C) any
other consultants or advisors retained by THL or either of the parties
identified in clauses (A) and (B) arising in connection therewith
(including but not limited to the preparation, negotiation and
execution of this Agreement and any other agreement executed in
connection herewith or in connection with the Recapitalization, the
Senior Financing or the consummation of the other transactions
contemplated hereby (and any and all amendments, modifications,
restructurings and waivers, and exercises and preservations of rights
and remedies hereunder or thereunder) and the operations of the
Company and any of its subsidiaries), and (ii) any out-of-pocket
expenses incurred by THL in connection with the provision of services
hereunder or the attendance at any meeting of the board of directors
(or any committee thereof) of the Company or any of its affiliates.
b. Indemnity and Liability. In consideration of the execution and
delivery of this Agreement by THL, the Company hereby agrees to
indemnify, exonerate and hold each of THL, and its affiliates, and
each of their respective partners, shareholders, affiliates,
directors, officers, fiduciaries, employees and agents and each of the
partners, shareholders, affiliates, directors, officers, fiduciaries,
employees and agents of each of the foregoing (collectively, the
"Indemnitees") free and harmless fro m and against any and all
actions, causes of action, suits, losses, liabilities and damages, and
expenses in connection therewith, including without limitation
reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnitees or any of them
as a result of, or arising out of, or relating to the
Recapitalization, the execution, delivery, performance, enforcement or
existence of this Agreement or the transactions contemplated hereby or
thereby (including but not limited to any indemnification obligation
assumed or incurred by any Indemnitee to or on behalf of TRW, or its
accountants or other representatives, agents or affiliates) except for
any such Indemnified Liabilities arising on account of such
Indemnitee's gross negligence or willful misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the
- 3 -
4
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
None of the Indemnitees shall be liable to the Company or any of its
affiliates for any act or omission suffered or taken by such
Indemnitee that does not constitute gross negligence or willful gross
negligence or misconduct.
5. ASSIGNMENT, ETC. Except as provided below, neither party shall have the
right to assign this Agreement. THL acknowledges that its services under
this Agreement are unique. Accordingly, any purported assignment by THL
shall be void. Notwithstanding the foregoing, THL may assign all or part of
its rights and obligations hereunder to any affiliate of THL which provides
services similar to those called for by this Agreement, in which event THL
shall be released of all of its rights and obligations hereunder.
6. AMENDMENTS AND WAIVERS. No amendment or waiver of any term, provision or
condition of this Agreement shall be effective, unless in writing and
executed by each of THL and the Company. No waiver on any one occasion
shall extend to or effect or be construed as a waiver of any right or
remedy on any future occasion. No course of dealing of any person nor any
delay or omission in exercising any right or remedy shall constitute an
amendment of this Agreement or a waiver of any right or remedy of any party
hereto.
7. MISCELLANEOUS.
a. Choice of Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of law
provision or rule that would cause the application of the domestic
substantive laws of any other jurisdiction.
b. Consent to Jurisdiction. Each of the parties agrees that all actions,
suits or proceedings arising out of or based upon this Agreement or
the subject matter hereof shall be brought and maintained exclusively
in the federal and state courts of The Commonwealth of Massachusetts.
Each of the parties hereto by execution hereof (i) hereby irrevocably
submits to the jurisdiction of the federal and state courts in The
Commonwealth of Massachusetts for the purpose of any action, suit or
proceeding arising out of or based upon this Agreement or the subject
matter hereof and (ii) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such action, suit or proceeding, any
claim that it is not subject personally to the jurisdiction of the
above-named courts, that it is immune from extraterritorial injunctive
relief or other injunctive relief, that its property is exempt or
immune from attachment or execution, that any such action, suit or
proceeding may not be brought or maintained in one of the above-named
courts, that any such action, suit
- 4 -
5
or proceeding brought or maintained in one of the above-named courts
should be dismissed on grounds of FORUM NON CONVENIENS, should be
transferred to any court other than one of the above-named courts,
should be stayed by virtue of the pendency of any other action, suit
or proceeding in any court other than one of the above-named courts,
or that this Agreement or the subject matter hereof may not be
enforced in or by any of the above-named courts. Each of the parties
hereto hereby consents to service of process in any such suit, action
or proceeding in any manner permitted by the laws of The Commonwealth
of Massachusetts, agrees that service of process by registered or
certified mail, return receipt requested, at the address specified in
or pursuant to Section 9 is reasonably calculated to give actual
notice and waives and agrees not to assert by way of motion, as a
defense or otherwise, in any such action, suit or proceeding any claim
that service of process made in accordance with Section 9 does not
constitute good and sufficient service of process. The provisions of
this Section 7(b) shall not restrict the ability of any party to
enforce in any court any judgment obtained in a federal or state court
of The Commonwealth of Massachusetts.
c. Waiver of Jury Dial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY
ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT HEREOF, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN
CONTRACT OR TORT OR OTHERWISE. Each of the parties hereto acknowledges
that it has been informed by each other party that the provisions of
this Section 7(c) constitute a material inducement upon which such
party is relying and will rely in entering into this Agreement and the
transactions contemplated hereby. Any of the parties hereto may file
an original counterpart or a copy of this Agreement with any court as
written evidence of the consent of each of the parties hereto to the
waiver of its right to trial by jury.
8. MERGER/ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes any
prior communication or agreement with respect thereto.
9. NOTICE. All notices, demands, and communications of any kind which any
party may require or desire to serve upon any other party under this
Agreement shall be in writing and shall be served upon such other party and
such other party's copied persons as specified below by personal delivery
to the address set forth for it below or to such other address as such
party shall have specified by notice to each other party or by mailing a
- 5 -
6
copy thereof by certified or registered mail, or by Federal Express or any
other reputable overnight courier service, postage prepaid, with return
receipt requested, addressed to such party and copied persons at such
addresses. In the case of service by personal delivery, it shall be deemed
complete on the first business day after the date of actual delivery to
such address. In case of service by mail or by overnight courier, it shall
be deemed complete, whether or not received, on the third day after the
date of mailing as shown by the registered or certified mail receipt or
courier service receipt. Notwithstanding the foregoing, notice to any party
or copied person of change of address shall be deemed complete only upon
actual receipt by an officer or agent of such party or copied person.
If to the Company, to it at:
Safelite Glass Corp.
0000 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Secretary
If to THL, to it at:
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Xx. Xxxxxxx X. XxXxxx
with a copy to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
10. SEVERABILITY. If in any judicial or arbitral proceedings a court or
arbitrator shall refuse to enforce any provision of this Agreement, then
such unenforceable provision shall be deemed eliminated from this Agreement
for the purpose of such proceedings to the extent necessary to permit the
remaining provisions to be enforced. To the full extent, however, that the
provisions of any applicable law may be waived, they are hereby waived to
the end that this Agreement be, deemed to be valid and binding agreement
enforceable in accordance with its terms, and in the event that any
provision hereof shall be found to be invalid or unenforceable, such
provision shall be construed by limiting it so as to be valid
- 6 -
7
and enforceable to the maximum extent consistent with and possible under
applicable law.
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts
and by each of the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
THE COMPANY: SAFELITE GLASS CORP.
By:/s/ Xxxx Xxxxxx
-------------------------
Name: Xxxx Xxxxxx
Title: Treasurer
THL: XXXXXX X. XXX COMPANY
By:/s/ Xxxxxxx X. XxXxxx
-------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
- 7 -
