WARRANT
To Purchase Common Stock of
HICKORY FURNITURE COMPANY
Warrant No. 1
No. of Shares of Common Stock: 6,000
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
SECTION 2. EXERCISE OF WARRANT 4
2.1. Manner of Exercise 4
2.2. Payment of Taxes 5
2.3. Fractional Shares 6
2.4. Continued Validity 6
SECTION 3. TRANSFER, DIVISION AND COMBINATION 6
3.1. Transfer 6
3.2. Division and Combination 7
3.3. Expenses 7
3.4. Maintenance of Books 7
SECTION 4. ADJUSTMENTS 7
4.1. Stock Dividents, Subdivision and
Combinations 7
4.2. Certain Other Distributions 8
4.3. Issuance of Additional Shares of
Common Stock 8
4.4. Issuance of Warrants of Other
Rights 9
4.5. Issuance of Convertible Securities 10
4.6. Superseding Adjustment 11
4.7. Other Provisions Applicable to
Adjustments under this Section 12
4.8. Reorganization, Reclassification,
Merger, Consolidation or
Disposition of Assets 14
SECTION 5. NOTICE TO WARRANT HOLDERS 15
5.1. Notice of Adjustments 15
5.2. Notice of Certain Corporate Action 16
SECTION 6. NO IMPAIRMENT 16
SECTION 7. RESERVATION AND AUTHORIZATION OF COMMON
STOCK; REGISTRATION WITH OR APPROVAL
OF ANY GOVERNMENTAL AUTHORITY 17
SECTION 8. TAKING OF RECORD; STOCK AND WARRANT
TRANSFER BOOKS 17
SECTION 9. RESTRICTION ON TRANSFERABILITY 17
9.1. Restrictive Legend 18
9.2. Notice of Proposed Transfers
Requests for Registration 18
9.3. Termination of Restrictions 19
9.4. Listing on Securities Exchange 20
SECTION 10. SUPPLYING INFORMATION 20
SECTION 11. LOSS OR MUTILATION 20
SECTION 12. OFFICE OF THE COMPANY 20
SECTION 13. FINANCIAL AND BUSINESS INFORMATION 20
13.1. Quarterly Information 20
13.2. Annual Information 21
13.3. Filings 21
SECTION 14. REPURCHASE BY THE COMPANY OF WARRANT 21
14.1. Obligation to Repurchase Warrant
or Warrant Stock 21
14.2. Payment of Repurchase Price 22
SECTION 15. LIMITATION OF LIABILITY 23
SECTION 16. MISCELLANEOUS 23
16.1. Nonwaiver and Expenses 23
16.2. Notice Generally 23
16.3. Successors and Assigns 24
16.4. Amendment 24
16.5. Severability 24
16.6. Headings 25
16.7. Governing Law 25
SIGNATURE 25
EXHIBIT
Exhibit A - Subscription Form
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH
ACT, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT.
Initial No. of Shares of Common Stock: 6,000 Warrant No. 1
To Purchase Common Stock of
HICKORY FURNITURE COMPANY
THIS IS TO CERTIFY THAT INDIANA FINANCIAL INVESTORS, INC., or registered
assigns, is entitled, at any time prior to the Expiration Date (as hereinafter
defined), to purchase from HICKORY FURNITURE COMPANY, a Delaware corporation
(the "Company"), 6,000 shares of Common Stock (as hereinafter defined and
subject to adjustment as provided herein), in whole or in part, at the Current
Warrant Price, all on the terms and conditions and pursuant to the provisions
hereinafter set forth.
I. DEFINITIONS
As used in this Warrant, the following terms have the
respective meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of Common Stock
issued by the Company after the date of this Warrant, other than Warrant
Stock.
"Book Value" shall mean, in respect of any share of Common Stock on any date
herein specified, the consolidated book value applicable to Common Stock of
the Company as of the last day of any month immediately preceding such date,
divided by the number of Fully Diluted Outstanding shares of Common Stock as
determined in accordance with GAAP by a firm of independent certified public
accountants of recognized national standing selected by the Company, and
including in such value the purchase price to be received by the Company upon
the issuance of any such shares which are not yet issued.
"Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of Indiana.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean (except where the context otherwise indicated) the
Common Stock, no par value, of the Company as constituted on the date of this
Warrant, and any capital stock into which such Common Stock may thereafter be
changed, and shall also include (i) capital stock of the Company of any other
class (regardless of how denominated) issued to the holders of shares of
Common Stock upon any reclassification thereof which is also not preferred as
to dividends or assets over any other class of stock of the Company and which
is not subject to redemption and (ii) shares of common stock of any successor
or acquiring corporation (as defined in Section 4.8) received by or
distributed to the holders of Common Stock of the company in the circumstances
contemplated by Section 4.8.
"Convertible Securities" shall mean evidences of indebtedness, shares of
stock, options or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property, for
Additional Shares of Common Stock, either immediately or upon the occurrence
of a specified date or a specified event.
"Current Market Price" shall mean, in respect of any share of Common Stock
on any date herein specified, the higher of (a) the Book Value per share of
Common Stock at such date, and (b) the daily market price per share of Common
Stock as at such date. The daily market price shall be (i) the last sale
price on such date on the principal stock exchange on which such Common Stock
is then listed or admitted to trading, (ii) if no sale takes place on such day
on any such exchange, the average of the last reported closing bid and asked
prices on such day as officially quoted on any such exchange, (ii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the average of the last reported closing bid and asked prices on such day in
the over-the-counter market, as furnished by the National Association of
Securities Dealers Automatic Quotation System or the National Quotation
Bureau, Inc. (iv) if neither such corporation at the time is engaged in the
business of reporting such prices as furnished by any similar firm then
engaged in such business, or (v) if there is no such firm, as furnished by any
member of the NASD selected mutually by the Holder and the Company or, if they
cannot agree upon such selection, as selected by two such members of the NASD,
one of which shall be selected by the Holder and one of which shall be
selected by the Company.
"Current Warrant Price" shall mean, in respect of a share of Common Stock at
any date herein specified, the price at which a share of Common Stock may be
purchased pursuant to this warrant on such date. As of the date of this
warrant, the Current Warrant Price shall be $1.00, subject to adjustment in
accordance with the provisions of Section 4.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
"Exercise Period" shall mean the period during which
this Warrant is exercisable pursuant to Section 2.1.
"Expiration Date' shall mean October 18, 1999.
"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to
be determined, all shares of Common Stock Outstanding at such date and all
shares of Common Stock issuable in respect of this Warrant and other
options or warrants to purchase, or securities convertible into, shares of
Common Stock outstanding on such date which would be deemed outstanding in
accordance with GAAP for purposes of determining book value or net income
per share.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as from time to time
in effect.
"Holder" shall mean the Person or Persons in whose name the Warrant set
forth herein is registered on the books of the Company maintained for such
purposes.
"IFII" shall mean Indiana Financial Investors, Inc. ,
an Indiana corporation.
"NASD" shall mean the National Association of
Securities Dealers, Inc., or any successor corporation thereto.
"Other Property" shall have the meaning set forth in
Section 4.8.
"Outstanding" shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for
the account of the Company or any subsidiary thereof, and shall include
all shares issuable in respect of outstanding scrip or any certificates
representing fractional interests in shares of Common Stock.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department
thereof).
"Repurchase Price" shall have the meaning set forth in
Section 14.1.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Transfer" shall mean any disposition of any Warrant or Warrant Stock or
of any interest in either thereof, which would constitute a sale thereof
within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in
Section 9.2.
"Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination thereof, or in substitution therefor.
All Warrants shall at all times be identical as to terms and conditions
and date, except as to the number of shares of Common Stock for which they
may be exercised.
"Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date
of such exercise.
"Warrant Stock" shall mean the shares of Common Stock purchasable by the
holders of the Warrants upon the exercise thereof.
2. EXERCISE OF WARRANT
2.1. MANNER OF EXERCISE. From and after the date of this Warrant
and until 5:00 p.m., Eastern Standard Time, on the Expiration Date, Holder
may exercise this Warrant from time to time, on any Business Day, for all
or any part of the number of shares of Common Stock purchasable
hereunder.In order to exercise this Warrant, in whole or in part, Holder
shall deliver to the Company at its principal office at 856 Seventh Avenue
S.E., Hickory, North Carolina 28603 or at the office or agency designated
by the Company pursuant to Section 12, (i) a written notice of Holder's
election to exercise this Warrant, which notice shall specify the number
of shares of Common Stock to be purchased, (ii) payment of the Warrant
Price and (ii) this Warrant. Such notice shall be substantially in the
form of the subscription form appearing at the end of this Warrant as
Exhibit A, duly executed by Holder or its agent or attorney. Upon receipt
thereof, the Company shall, as promptly as practicable, and in any event
within five (5) Business Days thereafter, execute or cause to be executed
and deliver or cause to be delivered to Holder a certificate or
certificates representing the aggregate number of full shares of Common
Stock issuable upon such exercise, together with cash in lieu of any
fraction of a share, as hereinafter provided. The stock certificate or
certificates so delivered shall be, to the extent possible, in such
denomination or denominations as such Holder shall request in the notice
and shall be registered in the name of Holder or, subject to Section 9,
such other name as shall be designated in the notice. This Warrant shall
be deemed to have been exercised and such certificate or certificates
shall be deemed to have been issued, and Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the notice,
together with the cash or check or checks and this Warrant, is received by
the Company as described above and all taxes required to be paid by
Holder, if any, pursuant to Section 2.2 prior to the issuance of such
shares have been paid. If this Warrant shall have been exercised in part,
the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Stock deliver to Holder a new warrant
evidencing the rights of Holder to purchase the unpurchased shares of
Common Stock called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the request of
Holder, appropriate notation may be made on this Warrant and the same
returned to Holder. Notwithstanding any provision herein to the contrary,
the Company shall not be required to register shares in the name of any
Person who acquired this Warrant (or part hereof) or any Warrant Stock
otherwise than in accordance with this Warrant.
Payment of the Warrant Price shall be made at the
option of the Holder by certified or cashiers check.
2.2. Payment of Taxes. All shares of Common Stock
issuable upon the exercise of this Warrant pursuant to the terms hereof
shall be validly issued, fully paid and nonassessable. The Company shall
pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery
thereof, unless such tax or charge is imposed by law upon Holder, in which
case such taxes or charges shall be paid by Holder. The Company shall not
be required, however, to pay any tax or other charge imposed in connection
with any transfer involved in the issue of any certificate for shares of
Common Stock issuable upon exercise of this Warrant in any name other than
that of Holder, and in such case the Company shall not be required to
issue or deliver any stock certificate until such tax or other charge has
been paid or it has been established to the satisfaction of the Company
that no such tax or other charge is due.
2.3. FRACTIONAL SHARES. The Company shall not be required to issue
a fractional share of Common Stock upon exercise of any Warrant. As to
any fraction of a share which the Holder of one or more Warrants, the
rights under which are exercised in the same transaction, would otherwise
be entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the
same fraction of the Current Market Price per share of Common Stock on the
date of exercise.
2.4. CONTINUED VALIDITY. A holder of shares of Common Stock issued
upon the exercise of this Warrant, in whole or in part (other than a
holder who acquires such shares after the same have been publicly sold
pursuant to a Registration Statement under the Securities Act or sold
pursuant to Rule 144 thereunder), shall continue to be entitled with
respect to such shares to all rights to which it would have been entitled
as Holder under Sections 9, 10 and 14 of this Warrant. The Company will,
at the time of each exercise of this Warrant, in whole or in part, upon
the request of the holder of the shares of Common Stock issued upon such
exercise hereof, acknowledge in writing, in form reasonably satisfactory
to such holder, its continuing obligation to afford to such holder all
such rights; PROVIDED, HOWEVER, that if such holder shall fail to make any
such request, such failure shall not affect the continuing obligation of
the Company to afford to such holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
3.1. TRANSFER. Subject to compliance with Section
9,transfer of this Warrant and all rights hereunder, in whole
or in part, shall be registered on the books of the Company to
be maintained for such purpose, upon surrender of this Warrant
at the principal office of the Company referred to in Section
2.1 or the office or agency designated by the Company pursuant
to Section 12, together with a written assignment of this
Warrant in a form acceptable to Company duly executed by Holder or its
agent or attorney and if such transfer is not to be made pursuant to
Section 14, funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and, if required, such
payment, the Company shall, subject to Section 9, execute and deliver a
new Warrant or Warrants in the name of the assignee or assignees and in
the denomination specified in such instrument of assignment and shall
issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant,
if properly assigned in compliance with Section 9, may be exercised by a
new Holder for the purchase of shares of Common Stock without having a new
Warrant issued.
3.2. DIVISION AND COMBINATION. Subject to Section 9, this Warrant
may be divided or combined with other Warrants upon presentation hereof at
the aforesaid office or agency of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to
be issued, signed by Holder or its agent or attorney. Subject to
compliance with Section 3.1 and with Section 9, as to any transfer which
may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice.
3.3. EXPENSES. The Company shall prepare, issue and deliver at its
own expense (other than transfer taxes) the new Warrant or Warrants under
this Section 3.
3.4. MAINTENANCE OF BOOKS. The Company agrees to maintain, at its
aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which this warrant is
exercisable, or the price at which such shares may be purchased upon
exercise of this Warrant, shall be subject to adjustment from time to time
as set forth in this Section 4. The Company shall give each Holder notice
of any event described below which requires an adjustment pursuant to this
Section 4 at the time of such event.
4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS.
If at any time the Company shall:
(a) take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend
payable in, or other distribution of, Additional Shares of
Common Stock,
(b) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, then (i) the number of
shares of Common Stock for which this Warrant is exercisable immediately
after the occurrence of any such event shall be adjusted to equal the
number of shares of Common Stock which a record holder of the same number
of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled
to receive after the happening of such event, and (ii) the Current Warrant
Price shall be adjusted to equal (A) the Current Warrant Price multiplied
by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number
of shares for which this Warrant is exercisable immediately after such
adjustment.
4.2. CERTAIN OTHER DISTRIBUTIONS. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive any dividend or other distribution of:
(a) cash,
(b) any evidences of its indebtedness, any shares of
its stock or any other securities or property of any nature
whatsoever (other than cash, Convertible Securities or
Additional Shares of Common Stock), or
(C) any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of its stock or any other
securities or property of any nature whatsoever (other than cash,
Convertible Securities or Additional Shares of Common Stock),
then Holder shall be entitled to receive such dividends or distribution as
if Holder had exercised the Warrant.
A reclassification of the Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par
value) into shares of Common Stock and shares of any other class of stock
shall be deemed a distribution by the Company to the holders of its
Cominon Stock of such shares of such other class of stock within the
meaning of this Section 4.2 and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock
as a part of such reclassification, such change shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares
of Commorr Stock within the meaning of Section 4.1.
4.3. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK.
(a) If at any time the Company shall (except as hereinafter provided)
issue or sell any Additional Shares of Common Stock in exchange for
consideration in an amount per Additional Share of Common Stock less than
the Current Warrant Price in effect at the time the Additional Shares of
Common Stock are issued, or without consideration, then (i) the Current
Warrant Price immediately thereafter shall be equal to such lower price
per share determined in accordance with the provisions of Section 4.7(a);
and (ii) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product obtained by multiplying
the Current Warrant Price in effect immediately prior to such issue or
sale by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such issue or sale and dividing the
product thereof by the Current Warrant Price resulting from the adjustment
made pursuant to clause (i) above.
(b) If at any time the Company shall (except as hereinafter provided)
issue or sell any Additional Shares of Common Stock for consideration in
the amount per Additional Share of Common Stock greater than the Current
Warrant Price, but less than the then current Book Value, then the number
of shares of Common Stock for which this Warrant is exercisable shall be
adjusted to equal the product obtained by multiplying the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to
such issue or sale by a fraction (A) the numerator of which shall be the
number of shares of Common Stock Outstanding immediately after such issue
or sale, and (B) the denominator of which shall be the number of shares of
Common Stock Outstanding immediately prior to such issue or sale plus the
number of shares which the aggregate offering price of the total number of
such Additional Shares of Common Stock would purchase at the then current
Book Value.
(c) The provisions of paragraphs (a) and (b) of this Section 4.3 shall
not apply to any issuance of Additional Shares of Common Stock for which
an adjustment is provided under Section 4.1 or which is subject to Section
4.2. No adjustment of the number of shares of Common Stock for which this
Warrant shall be exercisable shall be made under paragraph (a) or (b) of
this Section 4.3. upon the issuance of any Additional Shares of Common
Stock which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any Convertible Securities, if any such
adjustment shall previously have been made upon the issuance of such
warrants or other rights or upon the issuance of such Convertible
Securities (or upon the issuance of any warrant or other rights therefor)
pursuant to Section 4.4 or Section 4.5.
4.4. ISSUANCE OF WARRANTS OR OTHER RIGHTS. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any warrants or other rights to
subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such warrants or other
rights or upon conversion or exchange of such Convertible Securities shall
be less than the current Book Value immediately prior to the time of such
issue or sale, then the number of shares for which this warrant is
exercisable and, if required, the Current Warrant Price shall be adjusted
as provided in Section 4.3 on the basis that the maximum number of
Additional Shares of Common Stock issuable pursuant to all such warrants
or other rights or necessary to effect the conversion or exchange of all
such Convertible Securities shall be deemed to have been issued and
outstanding and the Company shall have received all of the consideration
payable therefor, if any, as of the date of the actual issuance of such
warrants or other rights. No further adjustments of the Current Warrant
Price shall be made upon the actual issue of such Common Stock upon such
conversion or exchange of such Convertible Securities.
4.5. ISSUANCE OF CONVERTIBLE SECURITIES.. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any Convertible Securities, whether
or not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Corrdnon Stock is issuable
upon such conversion or exchange shall be less than the Current Warrant
Price or current Book Value immediately prior to the time of such issue or
sale, then the number of Shares for which this Warrant is exercisable and,
if required, the Current Warrant Price shall be adjusted as provided in
Section 4.3 on the basis that the maximum number of Additional Shares of
Common Stock necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued and outstanding
and the Company shall have received all of the consideration payable
therefor, if any, as of the date of actual issuance of such Convertible
Securities. No adjustment of the number of Shares for which this Warrant
is exercisable and the Current Warrant Price shall be made under this
Section 4.5 upon the issuance of any Convertible Securities which are
issued pursuant to the exercise of any warrants or other subscription or
purchase rights therefor, if any such adjustment shall previously have
been made upon the issuance of such warrants or other rights pursuant to
Section 4.4. No further adjustments of the number of Shares for which this
Warrant is exercisable and the Current Warrant Price shall be made upon
the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities and, if any issue or sale of such Convertible
Securities is made upon exercise of any warrant or other right to
subscribe for or to purchase or any warrant or other right to purchase any
such Convertible Securities for which adjustments of the number of Shares
for which this Warrant is exercisable and the Current Warrant Price have
been or are to be made pursuant to other provisions of this Section 4, no
further adjustments of the number of Shares for which this warrant is
exercisable and the Current Warrant Price shall be made by reason of such
issue or sale.
4.6. SUPERSEDING ADJUSTMENT. If, at any time after any adjustment
of the number of shares of Common Stock for which this Warrant is
exercisable and/or the Current Warrant Price shall have been made pursuant
to Section 4.4 or Section 4.5 as the result of any issuance of warrants,
rights or Convertible Securities,
(a) such warrants or rights, or the right of conversion or exchange in
such other Convertible Securities, shall expire, and all or a portion of
such warrants or rights, or the right of conversion or exchange with
respect to all or a portion of such other Convertible Securities, as the
case may be, shall not have been exercised, or
(b) the consideration per share for which shares of Common Stock are
issuable pursuant to such warrants or rights, or the terms of such other
Convertible Securities, shall be increased solely by virtue of provisions
therein contained for an automatic increase in such consideration per
share upon the occurrence of a specified date or event,
then such previous adjustment shall be rescinded and annulled and the
Additional Shares of Common Stock which were deemed to have been issued by
virtue of the computation made in connection with the adjustment so
rescinded and annulled shall no longer be deemed to have been issued by
virtue of such computation. Thereupon, a recomputation shall be made of
the effect of such rights or options or other Convertible Securities on
the basis of
(c) treating the number of Additional Shares of Common Stock or other
property, if any, theretofore actually issued or issuable pursuant to the
previous exercise of any such warrants or rights or any such right of
conversion or exchange, as having been issued on the date or dates of any
such exercise and for the consideration actually received and receivable
therefor, and
(d) treating any such warrants or rights or any such other Convertible
Securities which then remain outstanding as having been granted or issued
immediately after the time of such increase of the consideration per share
for which shares of Common Stock or other property are issuable under such
warrants or rights or other Convertible Securities; whereupon a new
adjustment of the number of shares of Common Stock for which this Warrant
is exercisable and the Current Warrant Price shall be made, which new
adjustment shall supersede the previous adjustment so rescinded and
annulled.
4.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENT UNDER THIS SECTION. The
following provisions shall be applicable to
the making of adjustment of the number of shares of Common
Stock for which this Warrant is exercisable and the Current
Warrant Price provided for in this Section 4:
(a) COMPUTATION OF CONSIDERATION. To the extent that any Additional
Shares of Common Stock or any Convertible Securities or any warrants or
other rights to subscribe for or purchase any Additional Shares of Common
Stock or any Convertible Securities shall be issued in cash consideration,
the consideration received by the Company therefor shall be the amount of
the cash received by the Company therefor, or, if such Additional Shares
of Common Stock or Convertible Securities are offered by the Company for
subscription, the subscription price, or, if such Additional Shares of
Common Stock or Convertible Securities are sold to underwriters or dealers
for public offering without a subscription offering, the initial public
offering price (in any such case subtracting any amounts paid or
receivable for accrued interest or accrued dividends and without taking
into account any compensation, discounts or expenses paid or incurred by
the Company for and in the underwriting of, or otherwise in connection
with, the issuance thereof). To the extent that such issuance shall be
for a consideration other than cash, then, except as herein otherwise
expressly provided, the amount of such consideration at the time of such
issuance shall be deemed to be the fair value of such consideration as
determined in good faith by the Board of Directors of the Company. In
case any Additional Shares of Common Stock or any Convertible Securities
or any warrants or other rights to subscribe for or purchase such
Additional Shares of Common Stock or Convertible Securities shall be
issued in connection with any merger in which the Company issues any
securities, the amount of consideration therefor shall be deemed to be the
fair value, as determined in good faith by the Board of Directors of the
Company, of such portion of the assets and business of the nonsurviving
corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock, Convertible
Securities, warrants or other rights, as the case may be. The
consideration for any Additional Shares of Common Stock issuable pursuant
to any warrants or other rights to subscribe for or purchase the same
shall be the consideration received by the Company for issuing such
warrants or other rights plus the additional consideration payable to the
Company upon exercise of such warrants or other rights. The consideration
for any Additional Shares of Common Stock issuable pursuant to the terms
of any Convertible Securities shall be the consideration received by the
Company for issuing warrants or other rights to subscribe for or purchase
such Convertible Securities, plus the consideration paid or payable to the
Company in respect of the subscription for or purchase of such Convertible
Securities, plus the additional consideration, if any, payable to the
Company upon the exercise of the right of conversion or exchange in such
Convertible Securities. In case of the issuance at any time of any
Additional Shares of Common Stock or Convertible Securities in payment or
satisfaction of any dividends upon any class of stock other than Common
Stock, the Company shall be deemed to have received for such Additional
Shares of Common Stock or Convertible Securities a consideration equal to
the amount of such dividend so paid or satisfied. Whenever the Board of
Directors of the Company shall be required to make a determination in good
faith of the fair value of any consideration, such determination shall, if
requested by the Holder, be supported by an opinion of an investment
banking firm of recognized national standing selected by the Company and
acceptable to such Holder.
(b) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by this Section
4 shall be made whenever and as often as any specified event requiring an
adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination
of shares of the Common Stock, as provided for in Section 4.1) up to, but not
beyond the date of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1% of the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the making of such adjustment. Any adjustment representing a change
of less than such minimum amount (except as aforesaid) which is postponed
shall be carried forward and made as soon as such adjustment, together with
other adjustment required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose of
any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
(c) FRACTIONAL INTERESTS. in computing adjustments under this Section 4,
fractional interests in Common Stock shall be taken into account to the
nearest 1/10th of a share.
(d) WHEN ADJUSTMENT NOT REGUIRED. If the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend, distribution, subscription
or purchase rights then thereafter no adjustment shall be required by reason
of the taking of such record and any such adjustment previously made in
respect thereof shall be rescinded and annulled.
(e) ESCROW OF WARRANT STOCK. If after any property becomes distributable
pursuant to this Section 4 by reason of the taking of any record of the
holders of Common Stock, but prior to the occurrence of the event for which
such record is taken, and Holder exercises this Warrant, any Additional Shares
of Common Stock issuable upon exercise by reason of such adjustment shall be
deemed the last shares of Common Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares
or other property shall be held in escrow for Holder by the Company to be
issued to Holder upon and to the extent that the event actually takes place,
upon payment of the then Current Warrant Price. Notwithstanding any other
provision to the contrary herein, if the event for which such record was taken
fails to occur or is rescinded, then such escrowed shares shall be cancelled
by the Company and escrowed property returned.
(f) CHALLENGE TO GOOD FAITH DETERMINATION. Whenever the Board of Directors
of the Company shall be required to make a determination in good faith of the
fair value of any item under this Section 4, such determination may be
challenged in good faith by Holder, and any dispute shall be resolved by an
investment banking firm of recognized national standing selected by the
Company and acceptable to such Holder.
4.8. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all
its property, assets or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation ("Other Property"), are to be received by or distributed to the
holders of Common Stock of the Company, then each Holder shall have the right
thereafter to receive, upon exercise of such Holder's Warrant, the number of
shares of common stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable
upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of shares of the Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 4. For purposes of
this Section 4.8, "common stock of the successor or acquiring corporation"
shall include stock of such corporation of any class which is not preferred as
to dividends or assets over any other class of stock of such corporation and
which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into
or exchangeable for any such stock, either irmnediately or upon the arrival of
a specified date or the happening of a specified event and any warrants or
other rights to subscribe for or purchase any such stock. The foregoing
provisions of this Section 4.8 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
5. NOTICES TO WARRANT HOLDERS
5.1. NOTICE OF ADJUSTMENTS. Whenever the number of shares of Common
Stock for which this Warrant is exercisable, or whenever the price at which a
share of such Common Stock may be purchased upon exercise of the Warrants,
shall be adjusted pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company
setting forth, in reasonable detail, the event requiring the adjustment and
the method by which such adjustment was calculated (including a description of
the basis on which the Board of Directors of the Company determined the fair
value of any evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights referred to in
Section 4.2.), specifying the number of shares of Common Stock for which this
Warrant is exercisable and (if such adjustment was made pursuant to Section
4.8) describing the number and kind of any other shares of stock or Other
Property for which this Warrant is exercisable, and any change in the Current
Warrant Price, after giving effect to such adjustment or change. The Company
shall promptly cause a signed copy of such certificate to be delivered to each
Holder in accordance with Section 16.2. The Company shall keep at its office
or agency designated pursuant to Section 12 copies of all such certificates
and cause the same to be available for inspection at said office during normal
business hours by any Holder or any prospective purchaser of a Warrant
designated by a Holder thereof.
5.2. NOTICE OF CERTAIN CORPORATE ACTION. The Holder shall be entitled
to the same rights to receive notice of corporate action as any holder of
Common Stock.
6. NO IMPAIRMENT
The Company shall not, directly or indirectly, (through a subsidiary) by any
action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all such
action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant.
Upon the request of Holder, the Company will at any time during the period
this warrant is outstanding acknowledge in writing, in form satisfactory to
Holder, the continuing validly of this Warrant and the obligations of the
Company hereunder.
7. RESERVATTON AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTRORITY
From and after the date of this Warrant, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such number
of its authorized but unissued shares of Common Stock as would be sufficient
at such time to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock which shall be so issuable, when issued upon exercise
of any Warrant and payment therefor in accordance with the terms of such
Warrant, shall be duly and validly issued and fully paid and nonassessable,
and their issuance shall not trigger preemptive rights of others.
Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Warrants, the Company shall take
any corporate action which may be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Current Warrant Price.
Before taking any action which would result in an adjustment in the number
of shares of Common Stock for which this Warrant is exercisable or in the
Current Warrant Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
If any shares of Common Stock required to be reserved for issuance upon
exercise of Warrants require registration or qualification with any
governmental authority under any federal or state law (otherwise than as
provided in Section 9) before such shares may be so issued, the Company will
in good faith and as expeditiously as possible and at its expense endeavor to
cause such shares to be duly registered.
8. TAIKING OF RECORD: STOCK AND WARRAHT TRANSFER BOOKS
In the case of all dividends or other distributions by the Company to the
holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, the Company will in each
such case take such a record and will take such record as of the close of
business on a Business Day. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock
transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
9. RESTRICTIONS ON TRANSFERABILITY
The Warrant and the Warrant Stock shall not be
transferred, hypothecated or assigned before satisfaction of
the conditions specified in this Section 9, which conditions are intended to
ensure compliance with the provisions of the Securities Act with respect to
the Transfer of any Warrant or any Warrant Stock. Holder, by acceptance of
this Warrant, agrees to be bound by the provisions of this Section 9.
9.1. RESTRICTIVE LEGEND.
(a) Except as otherwise provided in this Section 9, each certificate for
Warrant Stock initially issued upon the exercise of this Warrant, and each
certificate for Warrant Stock issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
" The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or the securities laws of any state or
other jurisdiction and are subject to the conditions specified in a certain
Warrant dated as of February 13, 1990, originally issued by HICKORY FURNITURE
COMPANY. No transfer of the shares represented by this certificate shall be
valid or effective until such conditions have been fulfilled. A copy of the
form of said Warrant is on file with the Secretary of HICKORY FURNITURE
COMPANY. The holder of this certificate, by acceptance of this certificate,
agrees to be bound by the provisions of such Warrant."
(b) Except as otherwise provided in this Section 9, each Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"This Warrant and the securities represented hereby have not been registered
under the Securities Act of 1933, as amended, or the securities laws of any
state or other jurisdiction and may not be transferred in violation of such
Act, the rules and regulations thereunder or the provisions of this Warrant."
9.2. NOTICE OF PROPOSED TRANSFERS. Prior to any Transfer or attempted
Transfer of any Warrants or any shares of Restricted Common Stock, the holder
of such Warrants or Restricted Common Stock shall give ten days, prior written
notice (a "Transfer Notice") to the Company of such holder's intention to
effect such Transfer, describing the manner and circumstances of the proposed
Transfer, and obtain from counsel to such holder who shall be reasonably
satisfactory to the Company, an opinion reasonably satisfactory to the Company
that the proposed Transfer of such Warrants or such Restricted Common Stock
may be effected without registration under the Securities Act or the
securities laws of any state or other jurisdiction. After receipt of the
Transfer Notice and opinion, the Company shall, within five days thereof,
so notify the holder of such Warrants or such Restricted Common Stock and such
holder shall thereupon be entitled to Transfer such Warrants or such
Restricted Common Stock, in accordance with the terms of the Transfer
Notice. Each certificate, if any, evidencing such shares of Restricted
Common Stock issued upon such Transfer shall bear the restrictive legend
set forth in Section 9.1(a), and each Warrant issued upon such Transfer
shall bear the restrictive legend set forth in Section 9.1(b), unless
in the opinion of such counsel such legend is not required in order to
ensure compliance with the Securities Act. The holder of the Warrants or
the Restricted Common Stock, as the case may be, giving the
Transfer Notice shall not be entitled to transfer such Warrants or such
Restricted Common Stock until receipt of notice from the Company under this
Section 9.2 unless the Company is withholding such notice in bad faith.
9.3. TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing
provisions of Section 9, the restrictions imposed by this Section upon the
transferability of the Warrants, the Warrant Stock and the Restricted Common
Stock (or Common Stock issuable upon the exercise of the Warrants) and the
legend requirements of Section 9.1 shall terminate as to any particular
warrant or share of Warrant Stock or Restricted Common Stock (or Common Stock
issuable upon the exercise of the warrants) (i) when and so long as such
security shall have been effectively registered under the Securities Act and
disposed of pursuant thereto or (ii) when the Company shall have received an
opinion of counsel reasonably satisfactory to it that such shares may be
transferred without registration thereof under the Securities Act. Whenever
the restrictions imposed by Section 9 shall terminate as to this Warrant, as
hereinabove provided, the Holder hereof shall be entitled to receive from the
Company, at the expense of the Company, a new Warrant bearing the following
legend in place of the restrictive legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE
WITHIN WARRANT CONTAINED IN SECTION 9 HEREOF
TERMINATED ON_______________ 19__, AND ARE
OF NO FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed therein. Wherever the restrictions
imposed by this Section shall terminate as to any share of Restricted Common
Stock, as hereinabove provided, the holder thereof shall be entitled to
receive from the Company, at the Company's expense, a new certificate
representing such Common Stock not bearing the restrictive legend set forth in
Section 9.1(a).
9.4. LISTING ON SECURITIES EXCHANGE. If the Company shall list any
shares of Common Stock on any securities exchange, it will, at its expense,
list thereon, maintain and, when necessary, increase such listing of, all
shares of Common Stock issued or, to the extent permissible under the
applicable securities exchange rules, issuable upon the exercise of this
Warrant so long as any shares of Common Stock shall be so listed during the
Exercise Period.
10. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and each holder of
Restricted Common Stock in supplying such information as may be reasonably
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Stock.
11. LOSS OR MUTILATIQN
Upon receipt by the Company from holder of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of
this Warrant and indemnity reasonably satisfactory to it (it being understood
that the written agreement of Holder shall be sufficient indemnity) and in
case of mutilation upon surrender and cancellation hereof, the Company will
execute and deliver in lieu hereof a new Warrant of like tenor to Holder;
PROVIDED, in the case of mutilation, no indemnity shall be required if this
Warrant in identifiable form is surrendered to the Company for cancellation.
12. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
13. FINANCIAL AND BUSINESS INFORMATION
13.1. QUARTERLY INFORMATION. The Company will deliver to each Holder,
as soon as practicable after the end of each of the first three fiscal
quarters of the Company, and in any event within 45 days thereafter, one copy
of an unaudited consolidated balance sheet of the Company and its subsidiaries
as at the close of such quarter, and the related unaudited consolidated
statements of income and cash flow position of the Company for such quarter
and, in the case of the second and third quarters, for the portion of the
fiscal year ending with such quarter, setting forth in each case in
comparative form the figures for the corresponding periods in the previous
fiscal year. Such financial statements shall be prepared by the Company in
accordance with GAAP and accompanied by the certification of the Company's
chief executive officer or chief financial officer that such financial
statements are complete and correct and present fairly the consolidated
financial position, results of operations and cash flow position of the
Company and its subsidiaries as at the end of such quarter and for such year-
to-date period, as the case may be.
13.2. ANNUAL INFORMATIGN. The Company will deliver
to each Holder as soon as practicable after the end of each
fiscal year of the Company, and in any event within 90 days
thereafter, one copy of:
(i) an audited consolidated balance sheet of the
Company and its subsidiaries as at the end of such year, and
(ii) audited consolidated statements of income, retained earnings and cash
flow of the Company and its subsidiaries for such year;
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year; all prepared in accordance
with GAAP, and which audited financial statements shall be accompanied by (i)
an opinion thereon of the independent certified public accountants regularly
retained by the Company, or any other firm of independent certified public
accountants of recognized national standing selected by the Company and (ii) a
report of such independent certified public accountants confirming any
adjustment made pursuant to Section 4 during such year.
13.3. FILINGS. The Company will file on or before the required date all
regular or periodic reports (pursuant to the Exchange Act) with the Commission
and will deliver to Holder promptly upon their becoming available one copy of
each report, notice or proxy statement sent by the Company to its stockholders
generally, and of each regular or periodic report (pursuant to the Exchange
Act) and any Registration Statement, prospectus or written communication
(other than transmittal letters) (pursuant to the Securities Act), filed by
the Company with (i) the Commission or (ii) any securities exchange on which
shares of Common Stock are listed.
14. REPURCHASE BY THE COMPANY OF WARRANT OR WARRANT STOCK
14.1. OHLIGATION TO REPURCHASE WARRANT OR WARRANT
STOCK.
(a) From time to time on or after September 30, 1992 and until the
Expiration Date, upon written demand from any Holder, the Company shall
repurchase, on the date and in the manner set forth in Section 14.2 below,
from such Holder all or the portion of this Warrant or the Warrant Stock held
by Holder designated in such notice for an amount determined by multiplying
(i) the number of shares of Warrant Stock or Common Stock subject to this
Warrant or portion thereof being repurchased by (ii) Sixty-Seven Dollars
($67.00). Nothing herein shall preclude the exercise by Holder of any portion
of this Warrant exercisable at any time prior to such repurchase.
(b) Notwithstanding the provisions of Section 14.1 (a), if, at any time
during the period between the date on which any Holder shall have exercised
its rights under Section 14.1 to cause the Company to repurchase all or a
portion of such Holder's Warrant and, on or prior to the date of such
repurchase, the Company shall consolidate or merge with, or sell all or
substantially all of its property and assets to, any Person and the
consideration received by stockholders in connection with such merger,
consolidation or sale shall consist solely of cash, THEN such Holder shall
(whether or not such Holder shall have previously surrendered such Holder's
Warrant for repurchase by the Company pursuant to this Section 14) be entitled
to receive, on the date of such repurchase, the higher of (i) the amount
payable to such Holder as determined pursuant to Section 14.1(a) and (ii) and
amount equal to the amount of cash such Holder would have received upon such
consolidation, merger or sale had such Holder's Warrant (or the portion
thereof being repurchased) been fully exercised immediately prior thereto LESS
the purchase price payable at such time for the purchase of the shares of
Common Stock then subject to such Holder's Warrant (or the portion thereof
being repurchased).
(c) If the number of shares of Common Stock which may be purchased upon
exercise of this warrant is adjusted pursuant to Section 4 of this Warrant,
the purchase price for any repurchase pursuant to Section 14.1 (the
"Repurchase Price") shall be similarly adjusted so that the aggregate amount
of the Repurchase Price for this Warrant shall be Four Hundred Two Thousand
Dollars ($402,000.00).
14.2. PAYMENT OF REPURCHASE PRICE.
The Repurchase Price shall be payable in cash within 20 days following the
date of the repurchase notice. The Company shall provide to Holder
documentation supporting its calculation of the repurchase price. On the date
of any repurchase of Warrant Stock or Warrants pursuant to Section 14.1,
Holder shall assign to the Company such Holder's Warrant Stock or Warrant or
portion thereof being repurchased, as the case may be, without any
representation or warranty, by the surrender of such Holder's Warrant Stock or
Warrant at the office of the Company referred to in Section 2.1 against
payment therefor of the Repurchase Price by, at the option of such Holder, (i)
wire transfer to an account in a bank located in the United States designated
by such Holder for such purpose or (ii) a certified or official bank check
drawn on a member of the New York Clearing House payable to the order of such
Holder. If less than all of Holder's Warrant is being repurchased, the
Company shall, pursuant to Section 3, cancel such Warrant and issue in the
name of, and deliver to, such Holder a new Warrant for the portion not being
repurchased.
15. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Cormnon Stock, and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of such Holder
for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
16. MISCELLANEOUS
16.1. NONWAIVER AND EXPENSES. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or
remedies. if the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys, fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
16.2. NOTICE GENERALLY. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant shall be sufficiently given or make if in
writing and either delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to Holder or any holder of Warrant Stock, at its last known address
appearing on the books of the Company maintained for such purpose. The
current address of IFII is:
Indiana Financial Investors, Inc.
151 North Delaware Street, Suite 425
Indianapolis, Indiana 46204
Attention: President
(b) If to the Company at
Hickory Furniture Company
856 Seventh Avenue, S.E.
Hickory, North Carolina 28603
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration, delivery or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged, or three (3) Business
Days after the same shall have been deposited in the United States mail.
Failure or delay in delivering copies of any notice, demand, request,
approval, declaration, delivery or other communication to the person
designated above to receive a copy shall in no way adversely affect the
effectiveness of such notice, demand, request, approval, declaration, delivery
or other communication.
16.3. SUCCESSORS AND ASSIGNS. Subject to the provisions of Sections 3.1
and 9, this Warrant and the rights evidenced hereby shall inure to the benefit
of and be binding upon the successors of the Company and the successors and
assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.
16.4. AMENDMENT. This Warrant and all other warrants may be modified or
amended or the provisions hereof waived with the written consent of the
Company and the Holder, provided that no such Warrant may be modified or
amended to reduce the number of shares of Common Stock for which such Warrant
is exercisable or to increase the price at which such shares may be purchased
upon exercise of such Warrant (before giving effect to any adjustment as
provided therein) without the prior written consent of the Holder thereof.
16.5. SEVERABILITY. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Warrant.
16.6. HEADINGS. The headings used in this Warrant
are for the convenience of reference only and shall not, for
any purpose, be deemed a part of this Warrant.
16.7. GOVERNING LAW. This Warrant shall be
governed by the laws of the State of Indiana, without regard to
the provisions thereof relating to conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and its corporate seal to be impressed hereon and attested by its Secretary or
an Assistant Secretary.
Dated: February 13, 1990
HICKORY FURNITURE COMPANY
BY: /S/ RICHARD E. HENKEL
Printed: RICHARD E. HENKEL
Title: PRESIDENT AND CEO
Attest:
By: /S/ MICHAEL A. ROBINSON
Printed: MICHAEL A. ROBINSON
Title: VICE PRESIDENT OF FINANCE
EXHIBIT A
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of ____ Shares of Common Stock of Hickory Furniture
Company, and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered
to _________________ whose address is ____________________________and, if such
shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and
date for the balance of the shares of Common Stock issuable hereunder be
delivered to the undersigned.
(Name of Registered Owner)
(Signature of Registered Owner)
(Street Address)
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name
as written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
1179X/41
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE
HOLDER FOR ITS OWN ACCOUNT, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO THE
DISTRIBUTION OF SUCH SECURITIES. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM.
1179X/42