EXHIBIT 10.10
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and
entered into as of April 22, 1998 by and among HENRY COMPANY, a California
corporation (the "Company"), and Frederick Muhs ("Investor").
The Company and Investor hereby agree as follows:
ARTICLE I
THE SECURITIES PURCHASE
1.1 PURCHASE AND SALE OF THE SECURITIES. Subject to and upon the
terms and conditions contained herein, the Company shall sell to Investor,
and Investor shall purchase from the Company, Twenty-seven Thousand Five
Hundred (27,500) shares of Common Stock, no par value per share (the "Common
Stock").
1.2 CONSIDERATION. The purchase price (the "Purchase Price") for
the Common Stock shall equal an aggregate of Two Million Dollars
($2,000,000).
1.3 CLOSING. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at or be directed from the
offices of Munger, Tolles & Olson LLP, 355 South Grand Avenue, Los Angeles,
California 90071, on April 22, 1998, or at such other date and place as the
Company and Investor shall agree in writing. The day on which the Closing
occurs is herein referred to as the "Closing Date."
1.4 EXECUTION AND DELIVERIES AT CLOSING. At the Closing, (i)
Investor shall deliver the Purchase Price, by wire transfer or certified or
cashier's check, to the Company, (ii) the Company shall deliver to Investor
certificates evidencing the Common Stock and (iii) the Company and Investor
shall execute and deliver each agreement and instrument required or
contemplated by this Agreement to be so executed and delivered and not
theretofore executed and delivered. All actions taken at the Closing shall
be deemed to occur simultaneously.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Investor as follows:
2.1 ORGANIZATION. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of California, has the
requisite corporate power and authority to own and operate its properties and
assets and to carry on its business as it is presently being conducted, to
execute and deliver this Agreement and any other agreement or instrument to
which the Company is or is to be a party the execution and delivery of which
is contemplated by this Agreement.
2.2 AUTHORIZATION. All corporate action on the part of the
Company and its shareholders necessary for the authorization, execution and
delivery of this Agreement, the performance of all obligations of the Company
and Mr. Warner W. Henry ("Mr. Henry") or members of his family ("Henry
Family") thereunder at the Closing, and the authorization, issuance (or
reservation for issuance), sale, and delivery of the Common Stock have been
taken or will be taken prior to the Closing, and this Agreement constitutes a
valid and legally binding obligation of the Company and the Henry Family,
enforceable in accordance with its terms except (i) as limited by
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applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general applicability affecting creditors' rights generally, and (ii) as
limited by laws relating to the availability of specific performance and
other equitable remedies.
2.3 VALID ISSUANCE. The shares of Common Stock being purchased by
Investor under this Agreement, when issued, sold, and delivered in accordance
with the terms and conditions of this Agreement for the Purchase Price, will
be duly and validly issued, fully paid, and nonassessable, and will be free
of restrictions on transfer other than restrictions on transfer under this
Agreement and applicable provisions of federal or state securities laws.
2.4 CAPITALIZATION. As of the Closing, the authorized capital
stock of the Company consists of 1,000,000 shares of common stock, no par
value per share, 30,000 shares of Class A Common Stock, no par value per
share, and 100,000 shares of preferred stock, no par value per share,
Twenty-two Thousand Five Hundred (22,500) shares of which have been
designated Series A Convertible Preferred Stock. As of the date of Closing,
there will be: Two Hundred Twenty-one Thousand Five Hundred (221,500) shares
of Common Stock issued and outstanding and Six Thousand (6,000) shares of
Class A Common Stock outstanding, (ii) Twenty-two Thousand Five Hundred
(22,500) shares of Series A Convertible Preferred Stock issued and
outstanding and Twenty-two thousand Five Hundred (22,500) shares of Common
Stock reserved for issuance upon the conversion of such shares, (iii) 388,000
and 12,000 shares of Common Stock and Class A Common Stock, respectively,
reserved for issuance upon the exercise of warrants, dated October 1, 1997,
issued by the Company to Warner W. Henry (the "Warner Warrants"), and (iv)
Forty-five Thousand (45,000) and Fifty-five Thousand (55,000) shares of
Common Stock reserved for issuance to Mr. Joseph T. Mooney, Jr. and Investor,
respectively, upon exercise of their rights to acquire additional shares of
Common Stock upon exercise of the Warner Warrants (the "Mooney Rights" and
"Investor Rights", respectively). All of the issued and outstanding shares
of Common Stock have been duly and validly issued and are fully paid and
nonassessable and free of any preemptive rights. Other than the Warner
Warrants, the Mooney Rights and the Investor Rights, there is, at the date
hereof, no outstanding security issued by the Company other than the Common
Stock and no outstanding right or option of any kind to purchase, and no
outstanding security issued by the Company convertible or exchangeable into,
any security issued by the Company, and no agreement of the Company to issue
any such right, option, or convertible or exchangeable security.
2.5 NO CONTRAVENTION. The execution, delivery, and performance by
the Company of this Agreement, and the consummation of the transactions
contemplated hereby will not (a) conflict with the Company's Articles of
Incorporation or bylaws, (b) violate laws, orders or regulations applicable
to the Company or any of its material properties; (c) conflict with or result
in a breach of any judgment, order, decree, or ruling to which the Company is
a party or by which it or any material portion of its properties is bound, or
any material agreement to which the Company is a party or by which any
material portion of its properties is bound; or (d) require the approval of
any governmental or nongovernmental third party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor hereby severally represents and warrants to the Company as
follows:
3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Investor has the
requisite power and authority to enter into this Agreement and to perform
Investor's obligations thereunder. This Agreement has been duly and validly
executed and delivered by Investor and this Agreement constitutes a valid and
legally binding obligation of Investor
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enforceable against Investor in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general applicability affecting creditors' rights generally and
(ii) as limited by laws relating to the availability of specific performance
and other equitable remedies.
3.2 NO CONTRAVENTION. The execution, delivery, and performance by
Investor of this Agreement, and the consummation of the transactions
contemplated hereby will not (a) violate laws, orders or regulations
applicable to Investor; (b) conflict with or result in a breach of any
judgment, order, decrees, or ruling to which Investor is a party or any
material agreement to which Investor is a party; or (c) require the approval
of any governmental or nongovernmental third party.
3.3 INVESTMENT INTENTION. The Common Stock will be acquired for
investment for Investor's own account, and not with a view to the resale or
distribution of any part thereof; Investor has no present intention of
selling, transferring, granting any participation in, or otherwise
distributing any of the Common Stock, and has no contract, undertaking,
agreement, or arrangement with any person to sell, transfer, or grant any
participation with respect to any of the Common Stock.
3.4 RELIANCE ON REPRESENTATIONS. Investor understands that the
Common Stock is not registered under the Securities Act of 1933, as amended
(the "Securities Act"), on the ground that the offer and sale provided for in
this Agreement is exempt from registration under such Act by virtue of an
exemption therefrom, and that the Company's reliance on such exemption is
predicated on Investor's representations set forth herein. Investor realizes
that the basis for an exemption may not be present if, notwithstanding such
representations, Investor has in mind merely acquiring the Common Stock for a
fixed or determinable period of time, or for a market rise, or for sale if
the market does rise; and Investor has no such intention.
3.5 FINANCIAL CONDITION. Investor's financial situation is such
that Investor can afford to bear the economic risk of holding the Common
Stock for an indefinite period of time; Investor has adequate means for
providing for Investor's current and reasonably foreseeable needs and
contingencies, and Investor can afford to suffer a complete loss of
Investor's investment in the Common Stock.
3.6 ACCREDITATION AND SOPHISTICATION. Investor is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D under the
Securities Act. Investor's knowledge and experience in financial and
business matters are such that Investor is capable of evaluating the merits
and risks of the investment in the Common Stock.
3.7 SPECULATIVE INVESTMENT. Investor understands that the Company
has no business operations or assets other than those described or referred
to in the Offering Memorandum, that the Common Stock is a speculative
investment involving a high degree of risk of loss of investment, and that
there are substantial restrictions on the transferability of the Common Stock.
3.8 RECEIPT OF INFORMATION. Investor has received the Offering
Memorandum dated April 15, 1998 ("Offering Memorandum") and all other
information that Investor considers necessary or appropriate for deciding
whether to purchase the Common Stock. Investor has been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from, the Company and its representatives concerning the Offering
Memorandum, the Company, and the terms and conditions of the Common Stock,
and to obtain any additional information which Investor deems necessary.
Investor acknowledges that the Offering Memorandum consists of
forward-looking statements that are based on numerous assumptions, including
among others assumptions as to general economic conditions, the condition and
competitive environment of the business in which the Company plans to
operate, and other factors that are beyond the Company's control; that any
projections included in the Offering
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Memorandum were not prepared in accordance with generally accepted accounting
principles; and that there can be no assurance that the Offering Memorandum,
such assumptions, or any such projections will prove to be accurate or that
actual results may not vary materially, including materially to the
detriment, from projected or assumed results.
ARTICLE IV
ANTIDILUTION RIGHTS
4.1 Upon each exercise of the Warner Warrants, Investor shall have
the right to purchase from the Company, on the terms set forth herein, for
cash, .1375 shares of Common Stock for each share of Class A Common Stock or
Common Stock of the Company acquired upon the exercise of the Warner Warrants
at a purchase price per share equal to the exercise price of such Warner
Warrant ("Purchase Price").
4.2 The Company shall notify Investor by written notice not later
than thirty (30) business days after an issuance of Class A Common Stock or
Common Stock arising out of an exercise of Warner Warrants and, subject to
Section 4.3 below, if Investor notifies Company in writing within five (5)
years of such notice of his desire to exercise his rights hereunder, the
Company shall upon such notice and the receipt in cash of the purchase price
promptly effect the sale of Common Stock to Investor as set forth herein. In
the event Investor fails to provide the Company with timely notice of his
desire to exercise his rights hereunder, he shall be deemed to have forfeited
his rights with respect to that particular exercise of the Warner Warrant,
but not as to any subsequent exercise.
4.3 Notwithstanding the foregoing, Investor's rights under Section
4.1 and 4.2 hereunder shall cease (i) upon the termination or expiration of
the Warner Warrants and (ii) upon the consummation of an IPO or Sale as to
any rights with respect to previously exercised Warner Warrants (or Warner
Warrants to be exercised in connection with an IPO or Sale). With respect to
clause (ii), Company shall give Investor notice thirty (30) days in advance
of the effective date of the IPO or Sale (as well as notice of any planned
exercise of the Warner Warrant upon consummation of the IPO or Sale) and
unless Investor notifies the Company of his intent to exercise his rights
hereunder within the first twenty (20) days of such thirty (30) day period
and pays the purchase price prior or on the consummation of the IPO or Sale,
the Company shall be under no obligation to sell Common Stock to Investor
under this Article IV as a result of any exercise of the Warner Warrant.
4.4 For purposes of this Agreement, (i) an IPO shall mean a public
offering of the Company's equity securities having aggregate proceeds to the
Company and/or any selling shareholders (prior to deduction for underwriting
discount and other expenses) of at least Ten Million Dollars ($10,000,000)
and (ii) a Sale shall mean a sale of all or substantially all of the
Company's assets or a merger or consolidation of the Company in a transaction
in which the Company is not the surviving entity or a transaction or related
series of transactions in which in excess of 50% of the voting power of the
Company is transferred.
4.5 If the Company shall (i) declare a dividend or make a
distribution on its Common Stock in shares of its Common Stock, (ii)
subdivide or reclassify the outstanding shares of Common Stock into a greater
number of shares, or (iii) combine or reclassify the outstanding Common Stock
into a smaller number of shares, the Investor rights in effect at the time of
the record date for such dividend or distribution or the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the Investor shall be entitled to receive the number of
shares of Common Stock which he would have been entitled to receive had the
Investor rights been exercised immediately prior to such date. These
antidilution provisions are intended to be equivalent to the antidilution
provisions applicable to the
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Warner Warrants.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 DRAG-ALONG RIGHTS.
(a) In the event that Mr. Henry or the Henry Family (the
"OFFEROR") shall propose to enter into a BONA FIDE agreement to sell or
transfer ("TRANSFER"), other than a BONA FIDE pledge of shares as security
for a loan, or Transfer to any person or group (other than to members of the
Henry Family) all of their economic and voting interest(s) in the Company (an
"EXIT TRANSFER"), then subject to the terms of this Section, such Offeror may
elect to require Investor to sell all his shares of Common Stock owned by him
concurrently with such Exit Transfer to such person or group on terms
(including without limitation, the form and amount of, and the time of
receipt of, consideration therefor) identical to those applicable to the Exit
Transfer. The Offeror may require Investor to sell all his economic and
voting interests beneficially owned by him concurrently with the Exit
Transfer on terms identical to those of such Exit Transfer by giving written
notice to Investor setting forth in detail the terms of the proposed Exit
Transfer and the proposed closing date of the Exit Transfer, which proposed
date shall not be less than ten (10) days or more than sixty (60) days after
the date such notice is delivered to the Offerees.
5.2 TAG-ALONG RIGHTS.
(a) Mr. Henry or the Henry Family shall not enter into a contract
for the sale or transfer ("Transfer") of their economic or voting interests
in the Company to any person or group other than to members of the Henry
Family (the "transferee"), directly or indirectly or through one or more
intermediaries, in a single transaction or a series of transactions, if such
Transfer will result in the transferee of such shares holding more than 50%
of the economic or voting interest in the Company UNLESS Investor is given
the opportunity to Transfer all (or, at his option, a proportionate amount)
of his shares of Common Stock then owned by him concurrently with the
aforementioned Transfer to any such transferee on terms (including, without
limitation, the form and amount of, and the time of receipt of, consideration
therefor) identical to those applicable to such aforementioned Transfer. Mr.
Henry or the Henry Family shall not enter into a Transfer, other than to
members of the Henry Family, of (i) any portion of their economic or voting
interests in the Company if the Transfer is to the Company or (ii) any
portion of the Warner Warrants unless Investor is given the opportunity to
transfer his proportionate interest of his shares of Common Stock then owned
by him concurrently with the aforementioned Transfer to any such transferee
on terms (including, without limitation, the form and amount of, and the time
of receipt of, consideration therefor) identical to those applicable to such
aforementioned Transfer.
(b) No opportunity shall be deemed given to Investor for purposes
of the preceding paragraph of this Section 5.2 unless (i) Investor shall have
been given written notice by Mr. Henry or the Henry Family setting forth in
detail the terms of the applicable proposed Transfer, and shall have been
given at least twenty (20) days after such notice is given within which to
exercise his rights contained in this Section 5.2 by written notice thereof
given to Mr. Henry or the Henry Family, (ii) the terms on which Mr. Henry or
the Henry Family actually sells their shares are no more favorable to Mr.
Henry, than the terms set forth in the notice given by them pursuant to
clause (i) of this sentence, (iii) the transferee to which the applicable
Transfer is proposed to be made makes an offer to purchase any or all
outstanding capital stock beneficially owned by Investor and such offer (A)
is open for acceptance by Investor for a period of at least twenty (20)
business days after such distribution, and (B) provides for per share
consideration identical to that being paid in the Transfer to each holder who
accepts
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such offer, and (iv) the person or group to which Mr. Henry or the Henry
Family actually Transfers their shares actually purchases, at or prior to the
time of purchase of such shares, from Investor at least the number of shares
as Investor shall specify in the notice given by Investor pursuant to clause
(i) of this sentence.
5.3 RIGHT OF FIRST REFUSAL. For so long as such Investor owns any
Common Stock, the Investor will not sell, assign, transfer, pledge,
hypothecate or otherwise dispose of any such shares, except for transfers by
way of devise or intestate succession or to entities controlled by, under
common control with or controlling such Investor (a "Permitted Transferee"),
without first offering to sell, assign or transfer such shares to the Company
on the same terms and conditions as such shares are to be acquired by the
proposed transferee. Such offer shall be made by way of written notice to
the Company given no later than thirty (30) days prior to the proposed date
of transfer, setting forth the identity of the proposed transferee and the
material terms of such sale, assignment, transfer or other disposition. The
Company shall thereupon have the right to acquire all (but not part) of the
shares included in such offer, on the terms set forth therein, by giving the
Investor written notice of acceptance within twenty (20) days after receipt
of the Investor's offer. In that event, the Company's acquisition of said
shares in accordance with the terms of such offer shall occur within thirty
(30) days after the giving of such notice of acceptance. If the Investor's
offer is not so accepted, or if the Company's acquisition of such shares is
not so consummated, then the Investor shall thereafter have the right to
sell, assign, transfer or otherwise dispose of such shares within ninety (90)
days after the date of the Investor's offer to the Company, on the terms and
conditions, and to the proposed transferee, stated therein, and such
transferee shall acquire such securities free of the restrictions contained
in this Section 5.3.
5.4 PROXY. Investor hereby irrevocably grants to Warner W. Henry
his proxy with respect to vote all of Investor's shares of Common Stock on
all matters requiring or calling for a shareholder vote at any shareholder
meeting or any action by written consent. This proxy is coupled with an
interest and is irrevocable for a period of 10 years pursuant to Section
705(e)(2) of the California General Corporate Code, unless earlier terminated
pursuant to Section 5.8 below. The proxy shall also terminate upon Mr.
Henry's death and upon any Transfer of Investor's interest after compliance
with Section 5.3 above, but shall continue with respect to a Permitted
Transferee.
5.5 BOARD OF DIRECTORS. The Henry Family hereby agrees to vote
its shares of Class A Common Stock and Common Stock to elect Investor to the
Company's Board of Directors so long as Investor remains a shareholder of the
Company.
5.6 INFORMATION. Investor shall be entitled to receive the same
information, and at the same time, that the holders of the Company's
outstanding 10% Senior Notes due 2008 are entitled to receive under the terms
of the Indenture dated April 22, 1998 with respect to such Senior Notes, and
such obligation shall survive repayment of the Senior Notes.
5.7 ADDITIONAL ISSUANCE OF CLASS A COMMON STOCK. The Company
agrees that it will not issue any additional shares of Class A Common Stock
to any person other than Mr. Henry, other than upon exercise of the Warner
Warrants.
5.8 TERMINATION. All of the agreements and covenants contained in
this Article V shall terminate upon an IPO.
ARTICLE VI
REGISTRATION RIGHTS
6.1 DEFINITIONS. Terms used in this Article have the following
meanings:
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"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a Demand Registration as defined in
Section 6.1.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Piggyback Registration" means a Piggyback Registration as defined
in Section 6.2.
"Registrable Securities" means all shares of Common Stock owned by
Investor from time to time.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
6.2 DEMAND REGISTRATION. (a) At any time after one year of an
IPO, Investor may make a written request for registration under the 1933 Act
of all or part of his Registrable Securities (a "Demand Registration");
PROVIDED that the Company shall not be obligated to effect more than one
Demand Registration and that the Company qualifies for registration on Form
S-3. Such request will specify the number of shares of Registrable
Securities proposed to be sold and will also specify the intended method of
disposition thereof. A registration will not count as a Demand Registration
until it has become effective.
(b) If Investor so elects, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. Investor shall select the managing Underwriter(s) and
any additional participants in connection with the offering; PROVIDED that
such managing Underwriter(s) must be reasonably satisfactory to the Company.
6.3 PIGGYBACK REGISTRATION. If the Company proposes to file a
registration statement under the 1933 Act with respect to an offering of
Common Stock (i) for the Company's own account (other than a registration
statement on Form S-4 or S-8 (or any substitute form that may be adopted by
the Commission)) or (ii) for the account of any of its holders of Common
Stock or Class A Common Stock, then the Company shall give written notice of
such proposed filing to Investor as soon as practicable (but in no event less
than 10 days before the anticipated filing date), and such notice shall offer
Investor the opportunity to register such number of shares of Registrable
Securities as Investor may request on the same terms and conditions as the
Company or the holder, as the case may be (a "Piggyback Registration").
6.4 REDUCTION OF OFFERING. Notwithstanding anything contained
herein, if the managing Underwriter of an offering described in Section 2.1
or Section 2.2 advises the Company in writing that the success of the
offering would be adversely affected by the inclusion of all or any of the
securities requested to be included, then the number of shares to be
registered by Investor shall be excluded or reduced to the extent necessary
to reduce the total amount of securities to be included in such offering to
the amount recommended by such managing Underwriter; PROVIDED that in the
case of a Demand Registration, the amount of Registrable Securities to be
offered for the account of Investor shall be reduced only after the amount of
securities to be offered for the account of the Company and any other persons
has been reduced to zero.
6.5 FILINGS; INFORMATION. Whenever Investor requests that any
Registrable Securities be registered pursuant to Section 2.1 hereof, the
Company will use its reasonable efforts to effect the registration of such
Registrable Securities as promptly as is practicable, and in connection with
any such request:
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(a) The Company will as expeditiously as possible prepare and file
with the Commission a registration statement on any form for which the
Company then qualifies and which counsel for the Company shall deem
appropriate and available for the sale of the Registrable Securities to
be registered thereunder in accordance with the intended method of
distribution thereof, and use its reasonable efforts to cause such filed
registration statement to become and remain effective for a period of
not less than 90 days; PROVIDED that if the Company shall furnish to
Investor a certificate signed by the Company's Chairman, President or
any Vice-President stating that in his good faith judgment it would be
detrimental or otherwise disadvantageous to the Company or its
shareholders for such a registration statement to be filed as
expeditiously as possible, the Company shall have a period of not more
than 120 days within which to file such registration statement measured
from the date of the Company's receipt of Investor's request for
registration in accordance with Section 2.1.
(b) The Company will, if requested, prior to filing such
registration statement or any amendment or supplement thereto, furnish
to Investor and each applicable managing Underwriter, if any, copies
thereof, and thereafter furnish to Investor and each such Underwriter,
if any, such number of copies of such registration statement, amendment
and supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and the prospectus included
in such registration statement (including each preliminary prospectus)
as Investor or each such Underwriter may reasonably request in order to
facilitate the sale of the Registrable Securities.
(c) After the filing of the registration statement, the Company
will promptly notify Investor of any stop order issued or, to the
Company's knowledge, threatened to be issued by the Commission and take
all reasonable actions required to prevent the entry of such stop order
or to remove it if entered.
(d) The Company will endeavor to qualify the Registrable Securities
for offer and sale under such other securities or blue sky laws of such
jurisdictions in the United States as Investor reasonably requests;
PROVIDED that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction.
(e) The Company will as promptly as is practicable notify Investor,
at any time when a prospectus relating to the sale of the Registrable
Securities is required by law to be delivered in connection with sales
by an Underwriter or dealer, of the occurrence of any 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 facts required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and promptly
make available to Investor and the Under writers any such supplement or
amendment. Investor agrees that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in the
preceding sentence, Investor will forthwith discontinue the offer and
sale of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until receipt by Investor and the
Underwriters of the copies of such supplemented or amended prospectus
and, if so directed by the Company, Investor will deliver to the Company
all copies, other than permanent file copies then in Investor'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
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notice, the Company shall extend the period maintained effective as
provided in Section 3.1(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the
date when the Company shall make available to Investor such supplemented
or amended prospectus.
(f) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the sale of
such Registrable Securities.
(g) The Company will use its reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed or, if not so
listed, on a national securities exchange.
The Company may require Investor promptly to furnish in writing to
the Company such information regarding Investor, the plan of distribution of
the Registrable Securities and other information as the Company may from time
to time reasonably request or as may be legally required in connection with
such registration.
6.6 REGISTRATION EXPENSES. The Company shall pay, the following
expenses incurred in connection with any registration pursuant to this
Article Six: (i) registration and filing fees with the Commission, (ii) fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of a qualified independent underwriter, if
any, counsel in connection therewith and the reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) printing expenses, (iv) fees and expenses
incurred in connection with the listing of the Registrable Securities, (v)
fees and expenses of counsel and independent certified public accountants for
the Company, (vi) fees and expenses of any additional experts retained by the
Company in connection with such registration, (vii) reasonable fees and
expenses of counsel for Investor, (viii) rating agency fees, (ix)
out-of-pocket expenses of the Company and (x) transfer taxes. Investor shall
pay any underwriting fees, discounts or commissions attributable to the sale
of Registrable Securities.
6.7 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. Investor may not
participate in any underwritten registered offering contemplated hereunder
unless Investor (a) agrees to sell its securities on the basis provided in
any underwriting arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably and customarily required under the terms of such
underwriting arrangements and this Article Six.
6.8 RULE 144. The Company covenants that it will file any reports
required to be filed by it under the 1933 Act and the 1934 Act and that it
will take such further action as Investor may reasonably request to the
extent required from time to time to enable Investor to sell Registrable
Securities without registration under the 1933 Act within the limitation of
the exemptions provided by Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, or other appropriate rule or regulation adopted by
the Commission. Upon the request of Investor, the Company will deliver to
Investor a written statement as to whether it has complied with such
reporting requirements.
6.9 HOLDBACK AGREEMENTS. If requested by the Company, Investor
agrees not to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the 14 days prior to, and during the
180-day period beginning on, the effective date of such registration
statement other than the Registrable Securities to be sold pursuant to such
registration statement.
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6.10 TRANSFER. The rights granted to Investor hereunder may not be
transferred or assigned, except to a Permitted Transferee.
ARTICLE VII
MISCELLANEOUS
7.1 LEGEND. So long as required under applicable federal or state
securities laws or this Agreement, each certificate evidencing shares of
Common Stock purchased hereunder (including any certificate issued upon the
transfer of such shares) shall be stamped or otherwise imprinted as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii)
RULE 144 UNDER SUCH ACT, OR (iii) ANY OTHER EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES.
IN THE CASE OF TRANSFERS OR OTHER DISPOSITIONS MADE OTHERWISE THAN
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT, THE
HOLDER SHALL, AT THE COMPANY'S REQUEST, PROVIDE TO THE COMPANY AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS AND ENTITLED TO THE BENEFITS OF A STOCK PURCHASE AGREEMENT,
DATED AS OF APRIL 22, 1998. A COPY OF SUCH AGREEMENT IS ON FILE AT
THE OFFICES OF THE COMPANY.
A copy of this Agreement shall be filed with the Secretary of the Company and
shall be kept at its principal executive office.
7.2 EXPENSES. Whether or not the Closing is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.
7.3 BEST EFFORTS. Each of the Company and Investor agrees to use
its best efforts to take, or cause to be taken, all reasonable actions and to
do, or cause to be done, all reasonable things necessary, proper or advisable
under applicable laws and regulations to consummate the transactions
contemplated hereby.
7.4 BROKERS AND FINDERS. Each of the Company and Investor
represents and warrants to the other that no broker, finder, or other
financial consultant, banker, or adviser has acted on its behalf in
connection with this Agreement or the transactions contemplated hereby in
such a way as to create any liability upon either the Company or Investor.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given upon delivery if delivered
personally, upon the third business day thereafter if mailed by registered or
certified mail (return receipt requested), or upon the day of transmission if
faxed with confirmation of transmission, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
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(a) If to Investor:
Mr. Frederick Muhs
P. O. Box 8
Edgewater, NJ 07020
(b) If to the Company:
Henry Company
2911 Slauson Avenue
Huntington Park, California 90255
Attention: Chief Financial Officer
Fax: (213) 581-1542
8.2 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by Investor and the Company.
8.3 SEVERABILITY. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which
shall remain in full force and effect.
8.4 MISCELLANEOUS. This Agreement (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof; (b) is not intended to confer upon any other person any rights or
remedies hereunder; (c) shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns (including any
executors or administrators of any estate), provided, however, that this
Agreement shall not be assigned, in whole or in part, by operation of law or
otherwise, without the prior written consent of the other party; and (d)
shall be governed by and interpreted under the laws of the State of
California, without regard to its conflicts-of-laws provisions. This
Agreement may be executed in counterparts which together shall constitute a
single agreement.
8.5 HENRY FAMILY. Mr. Henry and the Company agree to use best
efforts to cause members of the Henry Family to join in this agreement.
IN WITNESS WHEREOF, the Company and Investor have signed this
Agreement, or caused this Agreement to be signed by their respective officers
thereunto duly authorized, as of the date first written above.
The Company
HENRY COMPANY, a California corporation
/s/ W. W. Henry
------------------------------------
By W. W. Henry
------------------------------------
Its Chairman and CEO
-----------------------------------
/s/ Frederick H. Muhs
-----------------------------------
Investor
Ted Muhs
/s/ Warner W. Henry
-----------------------------------
Warner W. Henry
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