EXHIBIT 10.8
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PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "AGREEMENT") is
made
effective this 26th day of April, 2007, by and between RonHow, LLC,
a Georgia
limited liability company ("RONHOW"), and Harold's Stores, Inc., an
Oklahoma
corporation (the "COMPANY"), with reference to the following
circumstances:
A. RonHow and the Company previously entered into that certain
Subordinated Loan Agreement dated August 31, 2006, as amended of
even date
herewith (the "SUBORDINATED LOAN AGREEMENT"), pursuant to which the
Company and
certain of its subsidiaries (collectively, the "BORROWERS") may
borrow an
aggregate principal amount of up to $12,000,000.00, plus any
interest converted
into principal in accordance with the terms of the Subordinated
Loan Agreement.
B. RonHow has previously advanced to the Company pursuant to
the
Subordinated Loan Agreement $5,000,000.00 on August 31, 2006 (the
"FIRST
ADVANCE"), an additional $2,000,000.00 on January 4, 2007 (the
"SECOND
ADVANCE"), and certain other advances made subsequent to the First
Advance and
the Second Advance.
C. The Company has authorized its Series 2007-A Senior Preferred
Stock,
par value $0.01 per share and stated value $1,000.00 per share (the
"2007-A
PREFERRED"), pursuant to a Certificate of Designation for the
2007-A Preferred
filed with the Secretary of State of the State of Oklahoma on April
26, 2007
(the "CERTIFICATE").
D. The Company now desires to sell to RonHow, and RonHow desires
to
purchase from the Company, 2,000 shares of 2007-A Preferred in
exchange for the
surrender by RonHow of its rights to receive payment of, and for
the
cancellation of, an amount of principal of the First Advance equal
to
$2,000,000.00.
E. Pursuant to the existing Certificates of Designation with
respect to
such series of preferred stock, the existing holders of the
Company's
outstanding Amended Series 2001-A Preferred Stock, Series 2002-A
Preferred
Stock, Series 2003-A Preferred Stock and Series 2006-A Preferred
Stock have, by
at least a majority in interest, consented to the transactions
contemplated by
this Agreement.
In consideration of the premises and the mutual promises,
representations, warranties and covenants hereinafter set forth,
the Company and
RonHow agree as follows:
1. SALE AND PURCHASE OF 2007-A PREFERRED.
1.1 SALE AND PURCHASE. On and subject to the terms and
conditions of this Agreement, the Company agrees to sell, transfer
and
deliver to RonHow, and RonHow agrees to purchase from the
Company,
2,000 shares of 2007-A Preferred (the "SHARES") at the Closing
(as
hereinafter defined).
1.2 PURCHASE PRICE. The purchase price for the Shares shall be
equal to $1,000.00 per Share for a total purchase price of
$2,000,000.00 (the "PURCHASE PRICE"),
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payable at the Closing by RonHow's surrender of its rights to
receive
payment of, and by the cancellation of, an amount of principal owed
by
the Company to RonHow out of the First Advance under the
Subordinated
Loan Agreement equal to the Purchase Price.
1.3 CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall occur at the Company's
principal
executive
offices at 10:00 a.m. on the date of this Agreement.
1.4 DELIVERIES AT CLOSING.
(a) Company's Delivery at Closing. At the Closing, the Company
shall deliver the Shares to RonHow by physical delivery of
stock
certificates representing the Shares.
(b) RonHow's Delivery at Closing. At the Closing, RonHow shall
deliver the Purchase Price to the Company as provided above in
Section
1.2.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to RonHow that:
2.1 ORGANIZATION AND GOOD STANDING. The Company is a
corporation duly organized and validly existing under the laws of
the
state of Oklahoma and is in good standing under such laws. The
Company
has all requisite corporate power and authority to own and operate
its
property and assets, and to carry on its business as presently
conducted and as currently proposed to be conducted.
2.2 CORPORATE POWERS. The Company has all requisite legal and
corporate power and authority to execute and deliver this
Agreement, to
sell and issue the Shares hereunder, to issue any additional shares
of
2007-A Preferred to be issued in satisfaction of dividends on
the
Shares (the "DIVIDEND STOCK") and to issue the Common Stock
issuable
upon conversion of the Shares and the Dividend Stock as set forth
in
the Certificate (the "UNDERLYING COMMON STOCK").
2.3 VALID ISSUANCE OF STOCK. The Shares, when issued, sold and
delivered in compliance with the provisions of this Agreement, will
be
duly and validly issued, fully paid and non-assessable and issued
in
compliance with all applicable state and federal securities law.
The
Dividend Stock and the Underlying Common Stock have been or will
be
duly and validly reserved and, when issued, will be duly and
validly
issued, fully paid and non-assessable and issued in compliance with
all
applicable state and federal securities laws.
2.4 AUTHORIZATION. All corporate action on the part of the
Company necessary for the authorization, execution, delivery
and
performance of this Agreement by the Company, the authorization,
sale,
issuance (or reservation of issuance) and delivery of t
