EXHIBIT 4.2
EXECUTION COPY
CENTURY MAINTENANCE SUPPLY, INC.
280,000 Shares of 13 1/4%
Series A Senior Exchangeable PIK Preferred Stock due 2010
REGISTRATION AGREEMENT
New York, New York
July 8, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Brothers Inc
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Century Maintenance Supply, Inc., a Delaware corporation (the
"Company") proposes to issue and sell to Salomon Brothers Inc (the "Purchaser"),
upon the terms set forth in a purchase agreement dated the date hereof (the
"Purchase Agreement"), 280,000 shares of the Company's 13 1/4% Series A Senior
Exchangeable PIK Preferred Stock due 2010, par value $0.001 with a liquidation
preference of $100.00 per share (the "Preferred Stock"). The Preferred Stock is
exchangeable at the Company's option, subject to certain conditions, in whole
but not in part, for the Company's 13 1/4% Subordinated Exchange Debentures due
2010 (the "Exchange Debentures" and, together with the Preferred Stock, the
"Securities"). As an inducement to the Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with you, (i) for your benefit and (ii) for the benefit of the
holders from time to time of the Securities (including the Purchaser) (each of
the foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
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shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
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regulations of the Commission promulgated thereunder.
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"Affiliate" of any specified person means any other person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations of the Commission promulgated thereunder.
"Exchange Indenture" means the indenture governing the Exchange
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Debentures.
"Exchange Offer Registration Period" means the 180-day period
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following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means one or more registration
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statements of the Company on an appropriate form under the Act with respect to
the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include the Purchaser)
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which is a broker-dealer electing to exchange Securities acquired for its own
account as a result of market-making activities or other trading activities for
New Securities.
"Holder" has the meaning set forth in the preamble hereto.
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"Initial Placement" means the issuance and sale of the Preferred
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Stock.
"Majority Holders" means the Holders of a majority of the aggregate
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principal amount or liquidation preference, as applicable, of any securities
registered under a Registration Statement.
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"Managing Underwriters" means the investment banker or investment
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bankers and manager or managers that shall administer an underwritten offering.
"New Exchange Debentures" means exchange debentures of the Company
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identical in all material respects to the Exchange Debentures (except that the
interest rate step-up provisions and the transfer restrictions will be modified
or eliminated, as appropriate), to be issued pursuant to the Exchange Indenture.
"New Preferred Stock" means preferred stock of the Company identical
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in all material respects to the Preferred Stock (except that the dividend rate
step-up provisions and the transfer restrictions will be modified or eliminated,
as appropriate), to be issued pursuant to the Certificate of Designation for the
Preferred Stock.
"New Securities" means collectively, the New Preferred Stock and, if
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applicable, New Exchange Debentures.
"Prospectus" means the prospectus included in any Registration
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Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the New Securities, covered by such
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
"Registered Exchange Offer" means the proposed offer or offers to the
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Holders to issue and deliver to such Holders, in exchange for the Preferred
Stock (or, if the Preferred Stock has been exchanged therefor, Exchange
Debentures), as applicable, a like principal amount or liquidation preference,
as applicable, of applicable New Securities.
"Registration Securities" has the meaning set forth in Section 3(a)
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hereof.
"Registration Statement" means any Exchange Offer Registration
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Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, all amendments
and supplements to such registration statement, including, without limitation,
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits
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thereto and all material incorporated by reference therein.
"Securities" has the meaning set forth in the preamble hereto.
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"Shelf Registration" means a registration effected pursuant to Section
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3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
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hereof.
"Shelf Registration Statement" means a "shelf" registration statement
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of the Company pursuant to the provisions of Section 3 or Section 5 hereof which
covers some of or all the Securities or New Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Transfer Agent" means the Company's transfer agent for the Preferred
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Stock and the New Preferred Stock.
"Trustee" means the trustee with respect to the Exchange Debentures
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and New Exchange Debentures under the Exchange Indenture.
"underwriter" means any underwriter of securities in connection with
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an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by Exchanging
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Dealers; Private Exchange.
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(a) The Company shall prepare and, not later than 60 days after the
date of the original issuance of the Preferred Stock, shall file with the
Commission the Exchange Offer Registration Statement with respect to the
Registered Exchange Offer. The Company shall use its best efforts to cause the
Exchange Offer Registration Statement to become effective under the Act within
180 days after the date of the original issuance of the Preferred Stock.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offer, it
being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Securities for New Securities (assuming that such Holder is
not an affiliate of the Company within
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the meaning of the Act, acquires the New Securities in the ordinary course of
such Holder's business and has no arrangements with any person to participate in
the distribution of the New Securities and is not prohibited by any law or
policy of the Commission from participating in the Registered Exchange Offer) to
trade such New Securities from and after their receipt without any limitations
or restrictions under the Act and without material restrictions under the
securities laws of the several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(iv) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last business day on which
the Registered Exchange Offer shall remain open; and
(v) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee or the Transfer Agent, as the case may be,
for cancelation all Securities so accepted for exchange; and
(iii) cause the Trustee or the Transfer Agent, as the case may be,
promptly to authenticate and deliver to each Holder of Securities, New
Securities equal in
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principal amount or liquidation preference to the Securities of such Holder
so accepted for exchange.
(e) The Purchaser and the Company acknowledge that, pursuant to
current interpretations by the Commission's staff of Section 5 of the Act, and
in the absence of an applicable exemption therefrom, each Exchanging Dealer is
required to deliver a Prospectus in connection with a sale of any New Securities
received by such Exchanging Dealer pursuant to the Registered Exchange Offer in
exchange for Securities acquired for its own account as a result of market-
making activities or other trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the cover
of the Exchange Offer Registration Statement, in Annex B hereto in the
forepart of the Exchange Offer Registration Statement in a section setting
forth details of the Exchange Offer, in Annex C hereto in the underwriting
or plan of distribution section of the Prospectus forming a part of the
Exchange Offer Registration Statement, and in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act during the Exchange Offer
Registration Period for delivery by Exchanging Dealers in connection with
sales of New Securities received pursuant to the Registered Exchange Offer,
as contemplated by Section 4(h) below.
(f) In the event that the Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment, at the
request of the Purchaser, the Company shall issue and deliver to the Purchaser,
in exchange for such Securities, a like principal amount or liquidation
preference of New Securities (which shall be subject to restrictions on transfer
under the Act and the securities laws of the several states of the United
States). The Company shall seek to cause the CUSIP Service Bureau to issue the
same CUSIP numbers for such New Securities as for New Securities issued pursuant
to the Registered Exchange Offer. The Company shall cause such principal amount
or liquidation preference of New Securities (which shall not be subject to such
restrictions on transfer) to be delivered to a party purchasing such New
Securities from such Purchaser
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registered under a Shelf Registration Statement as contemplated by Section 3
hereof.
3. Shelf Registration. If, (i) because of any change in law or
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applicable interpretations thereof by the Commission's staff, the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 2
hereof, (ii) for any other reason the Exchange Offer Registration Statement is
not declared effective within 180 days after the Closing Date or the Registered
Exchange Offer is not consummated within 210 days after the Closing Date, (iii)
the Purchaser so requests with respect to Securities (or any New Securities
received pursuant to Section 2(f)) not eligible to be exchanged for New
Securities in a Registered Exchange Offer or, in the case that the Purchaser
participates in any Registered Exchange Offer, the Purchaser does not receive
freely tradable New Securities, (iv) any Holder (other than the Purchaser) is
not eligible to participate in the Registered Exchange Offer or (v) in the case
of any such Holder that participates in the Registered Exchange Offer, such
Holder does not receive freely tradable New Securities in exchange for tendered
securities, other than by reason of such Holder being an affiliate of the
Company within the meaning of the Act (it being understood that, for purposes of
this Section 3, (x) the requirement that the Purchaser deliver a Prospectus
containing the information required by Items 507 and/or 508 of Regulation S-K
under the Act in connection with sales of New Securities acquired in exchange
for such Securities shall result in such New Securities being not "freely
tradeable" and (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of New Securities acquired in the Registered
Exchange Offer in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such New Securities
being not "freely tradeable"), the following provisions shall apply:
(a) The Company shall as promptly as practicable (but in no event
more than 30 days after so required or requested pursuant to this Section 3),
file with the Commission and thereafter shall use its best efforts to cause to
be declared effective under the Act a Shelf Registration Statement relating to
the offer and sale of the Securities or the New Securities, as applicable, by
the Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement (such
Securities or New Securities, as applicable, to be sold by such Holders under
such Shelf Registration Statement being referred to herein as "Registration
Securities"); provided, however, that, with
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respect to New Securities received by the Purchaser in exchange for Securities
constituting any portion of an unsold allotment, the Company may, if permitted
by current interpretations by the Commission's staff, file a post-effective
amendment to the Exchange Offer Registration Statement containing the
information required by Regulation S-K Items 507 and/or 508, as applicable, in
satisfaction of its obligations under this paragraph (a) with respect thereto,
and any such Exchange Offer Registration Statement, as so amended, shall be
referred to herein as, and governed by the provisions herein applicable to, a
Shelf Registration Statement.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years after the
later of (x) the date of the original issuance of the Preferred Stock (or until
one year after such date if such Shelf Registration Statement is filed at the
request of the Purchaser) and (y) the last date on which any Affiliate of the
Company, as applicable, was a beneficial owner of the Securities or such shorter
period that will terminate when all the Securities or New Securities, as
applicable, covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement (in any such case, such period being called
the "Shelf Registration Period"). The Company shall be deemed not to have used
its best efforts to keep the Shelf Registration Statement effective during the
Shelf Registration Period if it takes any action that would result in Holders of
securities covered thereby not being able to offer and sell such securities
during that period, unless (i) such action is required by applicable law or (ii)
such action is taken by the Company in good faith and for valid business reasons
(not including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets, so long as the Company promptly thereafter
complies with the requirements of Section 4(k) hereof, if applicable.
4. Registration Procedures. In connection with any Shelf
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Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Purchaser, prior to the filing
thereof with the Commission, a copy of any Shelf Registration Statement and
any Exchange Offer Registration Statement, each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and
shall use its best
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efforts to reflect in each such document, when so filed with the
Commission, such comments as the Purchaser or any Holder reasonably may
propose.
(b) The Company shall use its best efforts to ensure that (i) any
Registration Statement and any amendment thereto and any Prospectus forming
part thereof and any amendment or supplement thereto complies in all
material respects with the Act and the rules and regulations thereunder,
(ii) any Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) any Prospectus forming part
of any Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(c) (1) The Company shall advise the Purchaser and, in the case of a
Shelf Registration Statement, the Holders of securities covered thereby,
and, if requested by the Purchaser or any such Holder, confirm such advice
in writing:
(i) when a Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise the Purchaser and, in the case of a
Shelf Registration Statement, the Holders of securities covered thereby,
and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Company a telephone
or facsimile number and address for
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notices, and, if requested by the Purchaser or any such Holder or
Exchanging Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of any
changes in the Registration Statement or the Prospectus so that, as of
such date, the statements therein are not misleading and do not omit
to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading
(which advice shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made).
(d) The Company shall use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of any Registration Statement at
the earliest possible time.
(e) The Company shall furnish to each Holder of securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if
the Holder so requests in writing, any documents incorporated by reference
therein and all exhibits thereto (including those incorporated by reference
therein).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as
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such Holder may reasonably request; and the Company consents to the use of
the Prospectus or any amendment or supplement thereto by each of the
selling Holders of securities in connection with the offering and sale of
the securities covered by the Prospectus or any amendment or supplement
thereto.
(g) The Company shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if the Exchanging Dealer so
requests in writing, any documents incorporated by reference therein and
all exhibits thereto (including those incorporated by reference therein).
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many copies
of the Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer may
reasonably request for delivery by such Exchanging Dealer in connection
with a sale of New Securities received by it pursuant to the Registered
Exchange Offer; and the Company consents to the use of the Prospectus or
any amendment or supplement thereto by any such Exchanging Dealer, as
aforesaid.
(i) Prior to the Registered Exchange Offer or any other offering of
securities pursuant to any Registration Statement, the Company shall
register or qualify or cooperate with the Holders of securities included
therein and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holder reasonably requests
in writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the securities
covered by such Registration Statement; provided, however, that the Company
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will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject.
(j) The Company shall cooperate with the Holders of Securities to
facilitate the timely preparation and
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delivery of certificates representing securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request prior to
sales of securities pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company shall provide CUSIP numbers for the
Securities or New Securities, as the case may be, registered under such
Registration Statement, and provide the Transfer Agent or the Trustee, as
applicable, with printed certificates for such Securities or New
Securities, in a form, if requested by the applicable Holder or Holder's
Counsel, eligible for deposit with The Depository Trust Company or any
successor thereto under the Certificate of Designation for Preferred Stock
or the Exchange Indenture, as applicable.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission to the extent and so
long as they are applicable to the Registered Exchange Offer or the Shelf
Registration and will make generally available to its security holders a
consolidated earnings statement (which need not be audited) covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act.
(n) The Company shall cause the Exchange Indenture to be qualified
under the Trust Indenture Act of 1939, as amended, on or prior to the
effective date of any Shelf Registration Statement or Exchange Offer
Registration Statement.
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(o) The Company may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such securities as
the Company may from time to time reasonably require for inclusion in such
Registration Statement.
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters and Majority
Holders reasonably agree should be included therein and shall make all
required filings of such Prospectus supplement or post-effective amendment
as soon as notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company
shall enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to the Majority Holders and the Managing
Underwriters, if any), with respect to all parties to be indemnified
pursuant to Section 7 hereof from Holders of Securities to the Company.
(r) In the case of any Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by the Holders of
securities to be registered thereunder, any underwriter participating in
any disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such underwriter
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries; (ii) cause the Company's
officers, directors and employees to supply all relevant information
reasonably requested by the Holders or any such underwriter, attorney,
accountant or agent in connection with any such Registration Statement as
is customary for similar due diligence examinations; provided, however,
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that any information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such
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information shall be kept confidential by the Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality; (iii) make
such representations and warranties to the Holders of securities registered
thereunder and the underwriters, if any, in form, substance and scope as
are customarily made by issuers to underwriters in primary underwritten
offerings; (iv) obtain opinions of counsel to the Company (which counsel
and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each
selling Holder and the underwriters, if any, covering such matters as are
customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Holders and
underwriters; (v) obtain "cold comfort" letters (or, in the case of any
person that does not satisfy the conditions for receipt of a "cold comfort"
letter specified in Statement on Auditing Standards No. 72, an "agreed-upon
procedures" letter) and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each selling Holder of securities registered
thereunder and the underwriters, if any, in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by the Majority
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 4(k) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company.
The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 4(r) shall be performed (A) on the effective date of such
Registration Statement and each post-effective amendment thereto and (B) at
each closing under any underwriting or similar agreement as and to the
extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, the
Company shall, if requested
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of the Purchaser by an Exchanging Dealer, (i) obtain opinions of counsel to
the Company (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Purchaser and its counsel),
addressed to the Purchaser, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Purchaser or its counsel and
(ii) obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements
and financial data are, or are required to be, included in the Registration
Statement), addressed to the Purchaser, in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings, or if requested by such
Purchaser or its counsel in lieu of a "cold comfort" letter, an agreed-upon
procedures letter under Statement on Auditing Standards No. 35, covering
matters requested by the Purchaser or its counsel. The foregoing actions,
if requested as set forth above, shall be performed (A) at the close of the
Registered Exchange Offer and (B) on the effective date of any post-
effective amendment to the Exchange Offer Registration Statement.
5. Registration Expenses. The Company shall bear all expenses
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incurred in connection with the performance of their obligations under Sections
2, 3, and 4 hereof and, (a) in the event of any Shelf Registration Statement,
will reimburse the Holders for the reasonable fees and disbursements of one firm
or counsel (in addition to one local counsel in each relevant jurisdiction)
designated by the Majority Holders to act as counsel for the Holders in
connection therewith ("Holders' Counsel"), and (b) in the case of any Exchange
Offer Registration Statement, will reimburse the Purchaser for the reasonable
fees and disbursements of counsel acting in connection therewith; provided, that
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the Company shall not be obligated to reimburse the Purchaser in excess of
$10,000 in the aggregate pursuant to this clause (b).
6. Indemnification and Contribution. (a) In connection with any
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Registration Statement, the Company agrees to indemnify and hold harmless each
Holder of securities covered thereby (including the Purchaser and, with respect
to any Prospectus delivery as contemplated in
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Section 4(h) hereof, each Exchanging Dealer), the directors, officers, employees
and agents of each such Holder and each other person, if any, who controls any
such Holder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any preliminary
Prospectus or Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
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any case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company and by or on behalf of any
such Holder specifically for inclusion therein; provided further, however, that
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the indemnity agreement contained in this Section 6(a) shall not inure to the
benefit of any indemnified party to the extent that it is determined by a final,
non-appealable judgment that (i) any Registration Statement or Prospectus, or
any amendment thereof or supplement thereto, contained an untrue statement of a
material fact or omitted to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) the
sale to the person asserting any such losses, claims, damages or liabilities was
an initial resale of New Securities by any Exchanging Dealer, (iii) any such
loss, claim, damage or liability of such indemnified party results from the fact
that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such New Securities to such person, a copy of any
amended or supplemented Registration Statement or Prospectus and the Company had
previously furnished copies thereof to such Exchanging Dealer and (iv) the
amended or supplemented Registration Statement or Prospectus as amended or
supplemented corrected such untrue statement or omission.
17
This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses (as
defined below) of, as provided in Section 6(d), any underwriters of Securities
registered under a Shelf Registration Statement, their officers, directors,
employees and agents and each person who controls such underwriters on
substantially the same basis as that of the indemnification of the Purchaser and
the selling Holders provided in this Section 6(a) and shall, if requested by any
Holder, enter into an underwriting agreement reflecting such agreement, as
provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including the Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer) severally and not
jointly agrees to indemnify and hold harmless the Company, each of its directors
and officers and each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to participate therein and, to
the extent it may wish, to assume the defense thereof with counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any
18
separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be satisfactory to the
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indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party; provided that the indemnifying party shall not be
--------
responsible for the expenses of more than one separate counsel (in addition to
one local counsel in each relevant jurisdiction) in any one action. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. An indemnified party will
not, without the prior written consent of the indemnifying party, which consent
will not be unreasonably withheld, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason (other than as provided in paragraph (a)),
then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall have a joint and several obligation
19
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement which resulted in such Losses; provided, however, that in
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no case shall the Purchaser or any subsequent Holder of any Security or New
Security be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in the case of a
New Security, applicable to the Security which was exchangeable into such New
Security, as set forth on the cover page of the Final Memorandum, nor shall any
underwriter be responsible for any amount in excess of the underwriting discount
or commission applicable to the securities purchased by such underwriter under
the Registration Statement which resulted in such Losses. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the sum of (x) the total net proceeds from the Initial Placement (before
deducting expenses) as set forth on the cover page of the Final Memorandum and
(y) the total amount of additional interest or dividend which the Company was
not required to pay as a result of registering the securities covered by the
Registration Statement which resulted in such Losses. Benefits received by the
Purchaser shall be deemed to be equal to the total purchase discounts and
commissions as set forth on the cover page of the Final Memorandum, and benefits
received by any other Holders shall be deemed to be equal to the value of
receiving Securities or New Securities, as applicable, registered under the Act.
Benefits received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. Relative fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand. The
parties agree that it would not be just and equitable if
20
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, the
Company or any underwriter or any of the officers, directors or controlling
persons referred to in this Section 6, and will survive the sale by a Holder of
securities covered by a Registration Statement.
7. Miscellaneous.
--------------
(a) No Inconsistent Agreements. The Company has not, as of the date
---------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
-----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount or Liquidation preference, as the case may be, of Securities
(or, after the consummation of any Exchange Offer in accordance with Section 2
hereof, of New Securities); provided that, with respect to any matter that
--------
directly or indirectly affects the rights of any Purchaser hereunder, the
Company shall obtain the written consent of each such Purchaser against which
such amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing
21
(except the foregoing proviso), a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders, determined on the basis of
securities being sold rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the registrar under the
Exchange Indenture and the Certification of Designation for the
Preferred Stock, with a copy in like manner to Salomon Brothers Inc by
fax (▇▇▇-▇▇▇-▇▇▇▇) and confirmed by mail to it at Seven ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(2) if to you, initially at the address set forth in the Purchase
Agreement; and
(3) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchaser's or the Company's notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
-----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company or subsequent Holders of Securities and/or New Securities. The
Company hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and/or New Securities and any such Holder may specifically enforce
the provisions of this Agreement as if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
-------------
counterparts and by the parties hereto in
22
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
(f) Headings. The headings in this Agreement are for convenience of
---------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
--------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE CONFLICT OF LAW PROVISIONS THEREOF).
(h) Severability. In the event that any one of more of the
-------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
------------------------------------
approval of Holders of a specified percentage of principal amount of Securities
or New Securities is required hereunder, Securities or New Securities, as
applicable, held by the Company or its Affiliates (other than subsequent Holders
of Securities or New Securities if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities or New
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
23
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
CENTURY MAINTENANCE
SUPPLY, INC.
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Secretary
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written
SALOMON BROTHERS INC
By:
/s/ H. ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: H. ▇▇▇▇▇ ▇▇▇▇▇
Title: Director