1
Exhibit 10.7
[FORM OF WARRANT]
THIS SECURITY AND THE SECURITIES ISSUABLE, UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACT WHICH HAS BECOME EFFECTIVE
AND IS CURRENT WITH RESPECT TO THE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC
EXEMPTION FROM REGISTRATION UNDER THE ACT BUT ONLY UPON THE HOLDER HEREOF FIRST
HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE COMPANY, OR OTHER COUNSEL
ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR
SECURITIES LAW.
November 10, 1997
RIVER OAKS FURNITURE, INC.
For good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged by River Oaks Furniture, Inc., a Mississippi
corporation, with its principal office at 0000 XxXxxxxxxx Xxxx., Xxxxxx,
Xxxxxxxxxxx 00000 (the "Company"), _________________________ (the "Holder"),
subject to the terms and conditions of this Warrant, is hereby granted the right
to purchase, at the initial exercise price per share equal to the lesser of (i)
$2.50; or (ii) the closing bid price of the Common Stock of the Company on the
first day it is relisted for trading on NASDAQ or any national exchange at any
one or more times from the date hereof until 5:00 p.m. on November 9, 2002, in
the aggregate, twenty-eight thousand (28,000) shares of Common Stock of the
Company, $.10 par value (the "Shares") subject to adjustment as provided in
Section 5 hereof.
This Warrant initially is exercisable at a price per share equal to the
lesser of (i) $2.50; or (ii) the closing bid price of the Common Stock of the
Company on the first day it is relisted for trading on NASDAQ or any national
exchange payable in cash, by certified or official bank check in New York
Clearing House funds or other form of payment satisfactory to the Company,
subject to adjustment as provided in Section 5 hereof.
2
1. Exercise of Warrant. The purchase rights represented by this Warrant
are exercisable at the option of the Holder hereof, in whole or in part, at one
or more times during any period in which this Warrant may be exercised as set
forth above. The Holder shall not be deemed to have exercised its purchase
rights hereunder until the Company receives written notice of the Holders
interest to exercise its purchase rights hereunder. The written notice shall be
in the form of the Subscription Form attached hereto and made a part hereof.
Less than all of the Shares may be purchased under this Warrant.
2. Issuance of Certificates. Upon the exercise of this Warrant, the
issuance of certificates for Shares underlying this Warrant shall be made
forthwith (and in any event within ten (10) business days after the Company's
receipt of (i) written notice hereunder as specified in Section 1 above) and
(ii) good funds in respect of the Purchase Price pursuant to Section 4 hereof
for the shares so exercised and such certificates shall be issued in the name of
the Holder hereof.
3. Restriction on Transfer and Registration Rights. Neither this
Warrant nor any Shares issuable upon exercise hereof have been registered under
the Securities Act of 1933, as amended (the "Act"), and neither may be sold or
transferred in whole or in part unless the Holder shall have first given prior
written notice to the Company describing such sale or transfer and furnished to
the Company an opinion, satisfactory to counsel for the Company as determined by
such counsel in its sole discretion, to the effect that the proposed sale or
transfer may be made without registration under the Act; provided, however, that
the foregoing shall not apply if there is in effect a registration statement
with respect to this Warrant or the Shares issuable upon exercise hereof, as the
case may be, at the time of the proposed sale or transfer. Upon exercise, in
part or in whole, of this Warrant, each certificate issued representing the
Shares underlying this Warrant shall bear a legend to the foregoing effect. The
Holder shall have such rights to request the Company to register all or any of
the Shares issuable upon exercise of this Warrant as set forth in Annex B hereto
(the "Registration Rights") subject to the terms of Annex B.
2
3
4. Price.
4.1 Initial and Adjusted Purchase Price. The initial Purchase Price per
share shall be equal to the lesser of (i) $2.50; or (ii) the closing bid price
of the Common Stock of the Company on the first day it is relisted for trading
on NASDAQ or any national exchange. The adjusted Purchase Price shall be the
price which shall result from time to time from any and all adjustments of the
initial purchase price in accordance with the provisions of Section 5 hereof.
4.2 Purchase Price. The term "Purchase Price" herein shall mean the
initial purchase price or the adjusted purchase price, as the case may be.
5. Adjustments of Purchase Price and Number of Shares. The Shares
subject to this Warrant and the Purchase Price thereof shall be appropriately
adjusted by the Company in accordance with the Statement of Rights to Warrants
included in Annex A hereto.
6. Replacement of Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in case of such loss, theft, destruction or mutilation, of
indemnity or security reasonably satisfactory to it in its sole discretion, and
reimbursement to the Company of all expenses incidental or relating thereto, and
upon surrender and cancellation of this Warrant (unless lost, stolen or
destroyed), the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
7. Notices to Warrant Holder. Nothing contained in this Warrant shall
be construed as conferring upon the Holder hereof the right to vote or to
consent as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights whatsoever as
a shareholder of the Company. The Company shall, however, during the term of
this warrant supply ________________________ with copies of all flags made with
the SEC under the Securities Exchange Act of 1934, as amended and of all
documents delivered to
3
4
stockholders of the Company.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of this Warrant, to the address of such
Holder as shown on the books of the Company.
(b) If to the Company, to the address set forth on the first page of
this Warrant or to such other address as the Company may designate by notice to
the Holder.
9. Successors. All the agreements contained in this Warrant shall bind
the parties hereto and their respective heirs, executors, administrators,
distributees, permitted successors and assigns. The Holder may assign this
Warrant without the Company's prior written consent provided that the Holder
complies with the provisions of this agreement and applicable securities laws.
Any attempted assignment in violation of the preceding sentence shall be void
and of no effect.
10. Headings. The headings in this Warrant are inserted for purposes of
convenience only and shall have no substantive effect.
11. Law Governing. This Warrant is delivered in the State of
Mississippi and shall be construed and enforced in accordance with, and governed
by, the laws of the State of Mississippi, without giving effect to conflicts of
law principles.
4
5
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its corporate name by, and such signature to be attested to by, a duly
authorized officer as of the date first above written.
RIVER OAKS FURNITURE, INC.
By:
---------------------------------
Xxxxxxx X. Xxxxxx
Its: Chairman and CEO
Attest:
By:
---------------------------
Xxxxxx X. Xxxxxx, Xx.
Its: Secretary
