EXHIBIT 10.10
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
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This Preferred Stock Registration Rights Agreement (the "Agreement") is
dated as of the 8/th/ day of July 1998 by and among FS Equity Partners IV, LP, a
Delaware limited partnership (the "FS Stockholder"), Xxxxxx X. Xxxxxxx
("Xxxxxxx") and Century Maintenance Supply, Inc., a Delaware corporation (the
"Company").
R E C I T A L S
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A. The FS Stockholder and Xxxxxxx have each acquired shares of the
Company's 13 1/4% Series B Senior Exchangeable Preferred Stock, (the "Preferred
Stock").
B. The FS Stockholder and Xxxxxxx are to be granted certain registration
rights with respect to the Preferred Stock and, if applicable, the Exchange
Debentures (as defined below) held by them.
C. In order to ensure that such parties are granted such rights, the
parties hereto desire to enter into this Agreement.
A G R E E M E N T
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NOW, THEREFORE, the parties agree as follows:
ARTICLE I
SECTION 1.1 Definitions. Terms defined in that certain Stockholders
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Agreement of even date herewith by and among, inter alia, the FS Stockholder,
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Xxxxxxx and the Company (the "Stockholders Agreement") are used herein as
therein defined. In addition, the following terms shall have the following
meanings:
"Demand Registration" means a Demand Registration as defined in Section
2.1.
"Exchange Debentures" means the Company's 13 1/4% Subordinated Exchange
Debentures for which the Preferred Stock is exchangeable at the Company's
option.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
"Holder" means the FS Stockholder and Xxxxxxx (or any Permitted Transferee
or permitted assignee thereof).
"Registrable Securities" means shares of Preferred Stock or Exchange
Debentures outstanding until (i) a registration statement covering such
securities has been declared effective by the SEC and such securities have been
disposed of pursuant to such effective registration statement, (ii) such
securities are sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met or such securities may be sold pursuant to Rule 144(k)
under such Act or (iii) such securities have been otherwise Transferred, the
Company has delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend under the Securities Act and such
securities may be resold without subsequent registration under the Securities
Act.
"Requisite Security Amount" means an amount of Registrable Securities
representing not less than 5% of the total number of shares of Preferred Stock
or principal amount of Exchange Debentures then outstanding.
"Securities Act" means the Securities Act of 1933 and the rules and
regulations thereunder.
"SEC" means the Securities and Exchange Commission.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement under the Securities Act.
"Stockholders Agreements" means the Stockholders Agreement and that certain
Amended and Restated Stockhholders Agreement dated as of May 5, 1998 by and
among the Company, Xxxxxxx, the FS Stockholder and certain of the Company's
other Stockholders.
"Termination Date" means the date on which any exchange offer registration
statement or resale shelf registration statement required by that Registration
Rights Agreement dated July 8, 1998 between the Company and Xxxxxxx Xxxxx Xxxxxx
have ceased to be effective and are no longer required to be effective.
"Transfer" means any direct or indirect transfer, sale, assignment or other
disposition of a security.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
ARTICLE II
SECTION 2.1 Demand Registration.
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(a) Request for Registration. At any time on or after the Termination
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Date, any Holder or Holders owning, individually or in the aggregate, at least
the Requisite Security Amount may make a written request that the Company
register under the Securities Act of all or
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part of its or their Registrable Securities (a "Demand Registration"); provided
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that the Holder or Holders making the request are together requesting that the
Requisite Security Amount be registered; provided further that the Company shall
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not be obligated to effect (i) more than one Demand Registration for the FS
Stockholder and its Permitted Transferees and permitted assignees, as a group;
or (ii) more than one Demand Registration for Xxxxxxx and his Permitted
Transferees and permitted assignees as a group. Such request will specify the
amount of Registrable Securities proposed to be sold and will also specify the
intended method of disposition thereof. The Company shall give written notice of
such registration request within ten days after the receipt thereof to all other
Holders. Within ten days after receipt by a Holder of notice of the request for
a Demand Registration by another Holder, a Holder may request in writing that
Registrable Securities be included in such Demand Registration. Each such
request by such other Holders (each, an "Other Holder Notice") shall specify the
amount of Registrable Securities proposed to be sold and the intended method of
disposition thereof. However, unless the Holder that initiated such Demand
Registration shall consent in writing, no other party, including the Company and
any Holder who has given an Other Holder Notice, shall be permitted to offer
securities under any Demand Registration.
(b) Effective Registration. A registration will not count as a Demand
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Registration (or request therefor) until it has become effective.
(c) Underwritten Offering. If the initiating Holder of a Demand
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Registration so elects, the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of an underwritten offering. The
Company and the initiating Holder of the Demand Registration shall jointly
select one or more nationally recognized firms of investment bankers to act as
the managing Underwriter or Underwriters in connection with such offering and
shall select any additional managers to be used in connection with the offering.
(d) Required Delays. Notwithstanding anything contained in this
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Section 2.1 to the contrary, if any request for Demand Registration is delivered
at a time when (i) the Company has determined or is currently planning (and has
discussed with its Board of Directors its plan) to file a Registration Statement
with respect to an underwritten primary registration of securities on behalf of
the Company (so long as a Registration Statement is filed with respect thereto
within two months of the Holder's or Holders' request for Demand Registration),
the Company may require the Holder or Holders to postpone such request until the
expiration of the 90-day period following the effective date of such
registration, or (ii) in the opinion of a majority of the members of the
Company's Board such registration would adversely affect a material acquisition
or merger to which the Company is a party, or otherwise materially and adversely
affect the Company or the market for the Company's Common Stock (it being
understood that the ordinary effect of a Demand Registration on the market for
securities does not meet the foregoing standard) (a "Material Event
Postponement"), the Company may require the Holder to postpone such request for
an appropriate period (not to exceed 90 consecutive days (with a 30-day break
between any two consecutive periods) or 180 days in any 12-month period). In
the event of a Material Event Postponement, the Company shall deliver a
certificate signed by the
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President or the Chairman confirming the Company's reasons for postponing the
registration and will effect such registration as promptly as possible after
removal of such reasons.
ARTICLE III
SECTION 3.1 Filings; Information. Whenever any Holder requests that any
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Registrable Securities be registered pursuant to Section 2.1, the Company will
use its commercially reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any such
request:
(a) The Company will, subject to Section 2.1(d), as expeditiously as
possible prepare and file with the SEC a registration statement on any form for
which the Company then qualifies and which form shall be available for the sale
of the Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its commercially reasonable
best efforts to cause such filed registration statement to become and remain
effective until the earlier of (i) 90 days from the date such registration
statement became effective or (ii) the date on which the sale of Registrable
Securities has been completed. If the Company receives multiple demands for
registration in accordance with this Agreement, then, except as provided in
Section 2.1(a), such demands shall be handled in the order received.
(b) The Company will, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to each Selling
Holder, one counsel representing all such Selling Holders, and each Underwriter,
if any, of the Registrable Securities covered by such registration statement,
copies of such registration statement as proposed to be filed, together with
exhibits thereto, which documents will be subject to prompt review and approval
by the foregoing, and thereafter furnish to such Selling Holder, counsel and
Underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such Selling Holder or Underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Selling Holder.
(c) After the filing of the registration statement, the Company will
promptly notify each Selling Holder of Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
(d) The Company will use its commercially reasonable best efforts to
(i) register or qualify the Registrable Securities under such other securities
or blue sky laws of such jurisdictions in the United States as any Selling
Holder reasonably (in light of such Selling Holder's intended plan of
distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be necessary by virtue of the business and
operations of the Company and do any
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and all other acts and things that may be reasonably necessary or advisable to
enable such Selling Holder to consummate the disposition of the Registrable
Securities owned by such Selling Holder; provided that the Company will not be
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required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e) The Company will immediately notify each Selling Holder of such
Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment.
(f) The Company will enter into customary agreements (including, if
applicable, an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities.
(g) The Company will deliver promptly to each Selling Holder of such
Registrable Securities and each Underwriter, if any, subject to restrictions
imposed by the United States federal government or any agency or instrumentality
thereof, copies of all correspondence between the SEC and the Company, its
counsel or auditors and all memoranda relating to discussions with the SEC or
its staff with respect to the registration statement and make available for
inspection by any Selling Holder of such Registrable Securities, any Underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained by any such Selling Holder
or Underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), subject to restrictions imposed by any
governmental authority governing access to classified information, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection with
such registration statement. Records which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the disclosure or release of such Records is
requested or required pursuant to oral questions, interrogatories, requests for
information or documents or a subpoena or other order from a court of competent
jurisdiction or other process; provided that prior to any disclosure or release
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pursuant to clause (ii), the Inspectors shall provide the Company with prompt
notice of any such request or requirement so that the Company may seek an
appropriate protective order or waive such Inspectors' obligation not to
disclose such Records; and provided further, that if failing the entry of a
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protective order or the waiver by the Company permitting the disclosure or
release of such Records, the Inspectors,
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upon advice of counsel, are compelled to disclose such Records, the Inspectors
may disclose that portion of the Records which counsel has advised the
Inspectors that the Inspectors are compelled to disclose. Each Selling Holder of
such Registrable Securities agrees that information obtained by it solely as a
result of such inspections (not including any information obtained from a third
party who, insofar as is known to the Selling Holder after reasonable inquiry,
is not prohibited from providing such information by a contractual, legal or
fiduciary obligation to the Company) shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the securities of the
Company or its Affiliates unless and until such is made generally available to
the public. Each Selling Holder of such Registrable Securities further agrees
that it will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
(h) The Company will otherwise use its commercially reasonable best
efforts to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning within three months
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
(i) The Company will use its commercially reasonable best efforts (a)
to cause all such Registrable Securities to be listed on each national
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then permitted
under the rules of such exchange or (b) to secure designation of all such
Registrable Securities as a National Association of Securities Dealers Automatic
Quotation ("NASDAQ") "national market system security" within the meaning of
Rule 11Aa2-l of the SEC or, to secure NASDAQ authorization for such Registrable
Securities, if similar securities issued by the Company are so designated.
(j) The Company may require each Selling Holder of Registrable
Securities to promptly furnish in writing to the Company such information
regarding the distribution of the Registrable Securities as the Company may from
time to time reasonably request and such other information as may be legally
required in connection with such registration.
(k) The Chairman of the Board of Directors of the Company, the Chief
Executive Officer of the Company and other members of the management of the
Company will cooperate fully in any offering of Registrable Securities pursuant
to Section 2.1 hereof, including, without limitation, participation in meetings
with potential investors, preparation of all materials for such investors, and
making management of the Company available for "road show" presentations and
similar selling efforts.
Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(e)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
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supplemented or amended prospectus contemplated by Section 3.1(e) hereof (such
period during which a Selling Holder is required to refrain from disposition of
Registrable Securities, a "Suspension Period"), and, if so directed by the
Company, such Selling Holder will deliver to the Company all copies, other than
permanent file copies then in such Selling Holder's possession, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective (including the period referred to in Section 3.1(a) hereof) by the
number of days during the period from and including the date of the giving of
notice pursuant to Section 3.1(e) hereof to the date when the Company shall make
available to the Selling Holders of Registrable Securities covered by such
registration statement a prospectus supplemented or amended to conform with the
requirements of Section 3.1(e) hereof.
SECTION 3.2 Registration Expenses. In connection with any Demand
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Registration, the Company shall pay the following registration expenses incurred
in connection therewith, whether or not such registration becomes effective: (i)
all registration and filing fees, (ii) fees and expenses of compliance with
securities or blue sky laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
printing expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses, if any, incurred in
connection with the listing of the Registrable Securities, (vi) the fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company, (vii) the fees and
expenses of any special experts retained by the Company in connection with such
registration, and (viii) the reasonable fees and expenses of one counsel (who
shall be reasonably acceptable to the Company) for all of the Selling Holders
(in addition to counsel for the Company), with such counsel selected by Holder
initiating the Demand Registration. The Company shall have no obligation to pay
any underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any other out-of-pocket expenses of the Holders.
ARTICLE IV
SECTION 4.1 Indemnification by the Company.
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(a) The Company agrees to indemnify and hold harmless each Selling
Holder, its officers, directors and agents, and each Person, if any, who
controls such Selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any loss, claim, damage
or liability and any action in respect thereof to which such Selling Holder, its
officers, directors and agents, and any such controlling Person may become
subject under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or arises out of, or is
based upon, any omission or alleged
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
each Selling Holder, its officers, directors and agents, and each such
controlling Person for any legal and other expenses reasonably incurred by that
Selling Holder, its officers, directors and agents, or any such controlling
Person in investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action. The Company also agrees to indemnify
any Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Selling Holders provided in this Section 4.1.
(b) The indemnity agreement contained in Section 4.1(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage or liability
and any action in respect thereof if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any loss, claim, damage,
liability and any action in respect thereof to the extent that it arises from or
is based upon written information relating to the Indemnified Person furnished
expressly for use in connection with such registration by such Person, nor shall
the Company be liable to any Person for any such loss, claim, damage or
liability and any action in respect thereof to the extent it arises from or is
based upon (a) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or prospectus relating to the
Registrable Securities delivered by such Person after such Person had received
written notice from the Company pursuant to Section 3.1(a) that such
registration statement or prospectus contained such untrue statement or alleged
untrue statement of a material fact and stating specifically that a Suspension
Period is then in effect, (b) any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading after such Person has received written notice
from the Company pursuant to Section 3.1(a) that such registration statement or
prospectus contained such omission or alleged omission and stating specifically
that a Suspension Period is then in effect, or (c) the failure of such Person to
deliver any preliminary or final prospectus, or any amendments or supplements
thereto, required under applicable securities laws, including the Securities
Act, to be so delivered, provided that a sufficient number of copies thereof had
been provided by the Company to such Person.
SECTION 4.2 Indemnification by Selling Holders. Each Selling Holder
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agrees, severally but not jointly, to indemnify and hold harmless the Company,
its officers, directors and agents 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 to the same extent as the foregoing indemnity from the Company
to such Selling Holder, but only with reference to information related to such
Selling Holder furnished in writing by such Selling Holder or on such Selling
Holder's behalf expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Each Selling Holder also agrees to indemnify and
hold harmless Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.2. In no event, however, shall any indemnity obligation under this
Section 4.2 exceed the net proceeds from the offering received by such Selling
Holder.
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SECTION 4.3 Conduct of Indemnification Proceedings. Promptly after
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receipt by any person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the person against whom such indemnity may be
sought (an "Indemnifying Party") notify the Indemnifying Party in writing of the
claim or the commencement of such action provided that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
an Indemnified Party except to the extent of any actual prejudice resulting
therefrom. If any such claim or action shall be brought against an Indemnified
Party, and it shall notify the Indemnifying Party thereof, 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 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 for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided that the Indemnified Party
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shall have the right to employ separate counsel to represent the Indemnified
Party and its controlling Persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Indemnified Party
against the Indemnifying Party, but the fees and expenses of such counsel shall
be for the account of such Indemnified Party unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) based upon the advice of counsel of such Indemnified Party
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settlement is made with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Party shall indemnify the
Indemnified Party from and against any loss, claim, damage, 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
claim or pending or threatened proceeding in respect of which the 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 arising out
of such claim or proceeding.
SECTION 4.4 Contribution. If the indemnification provided for in this is
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unavailable to, or is insufficient to hold harmless, the Indemnified Parties in
respect of any losses, claims, damages or liabilities referred to herein, then
each such 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, claims, damages or liabilities (i) as between the Company
and the Selling Holders on the one hand and the Underwriters on the other, in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Holders on the one hand and the Underwriters on the
other from the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
the Selling Holders on the one hand and of the Underwriters on the other in
connection with the statements or omissions
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which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations and (ii) as between the Company on the
one hand and each Selling Holder on the other, or as among the Selling Holders,
as the case may be, in such proportion as is appropriate to reflect the relative
fault of the Company and of each Selling Holder in connection with such
statements or omissions, as well as any other relevant equitable considerations;
provided, however, that no person found guilty of fraudulent misrepresentation
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(within the meaning of Section 11(f) of the 0000 Xxx) by a court of competent
jurisdiction shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation). The relative benefits received by
the Company and the Selling Holders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Holders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and the Selling Holders on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Selling Holders or by the Underwriters. The
relative fault of the Company on the one hand and of each Selling Holder on the
other, and with respect to the Selling Holders among themselves, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such Selling Holder were
offered to the public (less underwriting discounts and commissions) exceeds the
amount of any damages which such Selling Holder has 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 contribution from
any person who was not guilty of such fraudulent misrepresentation. Each
Selling Holder's
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obligations to contribute pursuant to this Section 4.4 are several in that
proportion which the net proceeds of the offering received by such Selling
Holder bears to the total net proceeds of the offering received by all the
Selling Holders, and not joint.
ARTICLE V
SECTION 5.1 Participation in Underwritten Registrations. No Person may
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participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
Registration Rights; provided that (i) such Person will not be required to make
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any representations or warranties except those which relate solely to themselves
and (ii) the liability of such Person to any Underwriter under such underwriting
agreement will be limited to liability arising from misstatements in, or
omissions from, written information regarding such Person provided by or on
behalf of such Person in writing specifically for inclusion in the prospectus.
SECTION 5.2 Rule 144. After the Company has become subject to the
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periodic reporting requirements of the Exchange Act, the Company covenants that
it will use its reasonable best efforts to file any reports required to be filed
by it under the Securities Act and the Exchange Act and that it will take such
further action as any Holder may reasonably request, all to the extent
reasonably required from time to time to enable Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 or Rule 144A under the Securities
Act, as such Rules may be amended from time to time, or (b) any similar Rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
SECTION 5.3 Holdback Agreements.
-------------------
(a) Each Holder of Registrable Securities agrees not to effect any
sale or distribution of the issue being registered or of a similar security of
the Company, or any securities convertible into or exchangeable or exercisable
for such securities, including a sale pursuant to Rule 144 or Rule 144A under
the Securities Act, during the 14 days prior to, and during the 90-day period
(180 days in the case of the Company's Initial Public Offering) beginning on,
the effective date of the registration statement filed by the Company (except as
part of such registration) if, and to the extent, requested by the managing
Underwriter or Underwriters in the case of an underwritten public offering.
(b) With respect to a Demand Registration effected pursuant to Section
2.1 hereof, the Company agrees not to effect any sale or distribution of any
securities similar to those being registered in accordance with Section 2.1
hereof, or any securities convertible into or exchangeable or exercisable for
such securities, during the 14 days prior to, and during the 90 day
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period beginning on, the effective date of any registration statement (except as
part of a registration statement where the Holder making such Demand
Registration consents) or the commencement of a public distribution of
Registrable Securities; and that any agreement entered into after the date
hereof pursuant to which the Company issues or agrees to issue any privately
placed securities shall contain a provision under which holders of such
securities agree not to effect any sale or distribution of any such securities
during the periods described in (a) above, in each case including a sale
pursuant to Rule 144 (except as part of any such registration, if permitted);
provided, however, that the provisions of this paragraph (b) shall not prevent
the conversion or exchange of any securities pursuant to their terms into or for
other securities and shall not prevent the issuance of securities by the Company
under any employee benefit, stock option or stock subscription plans or in
private placements.
SECTION 5.4 Stockholders Agreements. Notwithstanding anything above to
-----------------------
the contrary, all Transfers of Registrable Securities subject to the provisions
of the Stockholders Agreements shall be made only in accordance with such
provisions.
SECTION 5.5 Successors and Assigns. This Agreement, and all obligations
----------------------
and rights hereunder, shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns;
provided that the rights of each party under this Agreement may be assigned
--------
only in connection with the transfer of Registrable Securities in the Requisite
Security Amount; and provided further that, in conjunction with such assignment,
-------- -------
the assignee shall enter into a written agreement to be bound by the terms and
conditions of this Agreement.
SECTION 5.6 No Waivers; Amendments.
----------------------
(a) No failure or delay by any party in exercising any right, power,
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
(b) This Agreement may not be amended, modified or supplemented other
than by a written instrument signed by the Company, Xxxxxxx and the FS
Stockholder; provided, that the Company's grant of additional demand and piggy-
--------
back registration rights that do not relate to the registration rights granted
hereunder and do not affect the FS Stockholder differently than they affect
Xxxxxxx shall not be deemed to adversely affect the rights of Xxxxxxx or the FS
Stockholder hereunder and shall not require the approval of any party hereto.
(c) Any provision of this Agreement may be waived if, but only if,
such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
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SECTION 5.7 Notices. All notices, requests, and other communications to
-------
any party hereunder shall be in writing (including telex, telecopy or similar
writing) and shall be given as follows:
if to FS Stockholder:
Xxxxxxx Xxxxxx & Co. LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: J. Xxxxxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxxx & XxXxxxxx
000 X. Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
if to Xxxxxxx:
Xx. Xxxxxx X. Xxxxxxx
c/o Century Maintenance Supply, Inc.
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00/xx/ Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify for the purpose of notice to the other parties.
Each such notice, request or other communication shall be effective (a) if given
by telecopy, when such telecopy is transmitted to the telecopy number specified
in this section and evidence of receipt is received or (b) if given by any other
means, upon delivery or refusal of delivery at the address specified in this
Section 5.7.
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SECTION 5.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware (without regard
to the choice of law provisions thereof).
SECTION 5.9 Entire Agreement. This Agreement constitutes the entire
----------------
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes any and all prior agreements and understandings,
written or oral, relating to the subject matter hereof.
SECTION 5.10 Severability. Any term or provision of this Agreement which
------------
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdictions, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
SECTION 5.11 Counterparts. This Agreement may be signed in counterparts,
------------
each of which shall constitute an original and which together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
/s/ Xxxxxx Xxxxxxx
-----------------------------------------------------
Xxxxxx X. Xxxxxxx
FS EQUITY PARTNERS IV, L.P.,
a Delaware limited partnership
By: FS Capital Partners, LLC
Its: General Partner
By: /s/ Xxx X. Xxxxx
-------------------------------------------------
Xxx X. Xxxxx
Managing Member
CENTURY MAINTENANCE SUPPLY, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxx,
Vice President
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