EXHIBIT C
THIS WARRANT (THIS "WARRANT") HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE GOOD GUYS, INC. (THE "COMPANY") THAT SUCH REGISTRATION IS NOT
REQUIRED.
Warrant Certificate No. 2000-9
August 22, 2000
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
THE GOOD GUYS, INC.
This certifies that Xxxxxx Xxxxxxx, or his successors or assigns (the
"Holder"), is entitled, subject to the terms set forth below, at any time during
the Exercise Period (defined in Section 3 hereof) to purchase from THE GOOD
GUYS, INC., a Delaware corporation, up to Three Hundred Twenty-Three Thousand
Two Hundred Thirty-Four (323,234) fully paid and non-assessable shares (the
"Warrant Shares") of the Company's Common Stock, par value $.001 per share (the
"Common Stock"), at the purchase price per Warrant Share of $4.6406 (the
"Purchase Price"). The number of Warrant Shares issuable upon exercise of this
Warrant and the Purchase Price per Warrant Share shall be subject to adjustment
from time to time as provided in Section 4 hereto.
1. THIS WARRANT. This Warrant is issued to the Holder in connection with
that certain Stock Purchase Agreement, dated as of August 16, 2000, by
and among the persons listed on the signature page thereto (the "Stock
Purchase Agreement"). This Warrant does not entitle the Holder to any
rights as a stockholder of the Company, except as set forth herein.
2. EXERCISE. During the period beginning on the date hereof and ending on
the third (3rd) anniversary hereof (the "Exercise Period"), this
Warrant may be exercised at an exercise price of $4.5406 per Warrant
Share (the "Exercise Price"). The Warrant may be exercised at any time
on any business day for all or part of the Warrant Shares issuable
hereunder by surrendering this Warrant at the principal office of the
Company at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (or at
such other office of the Company in the United States as the Company
may designate from time to time by notice in writing to the Holder),
with the subscription form attached hereto fully executed, together
with payment in cash or immediately available funds in the amount equal
to the Purchase Price.
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3. PARTIAL EXERCISE. This Warrant may, in accordance with the provisions
of this Section 3, be exercised for less than the full number of
Warrant Shares. Upon any partial exercise, this Warrant shall be
surrendered and a new Warrant of the same tenor and for the purchase of
that number of Warrant Shares not purchased upon such partial exercise
shall be issued by the Company to the Holder. A Warrant shall be deemed
to have been exercised immediately prior to the close of business on
the date of its surrender for exercise as provided above, and the
person entitled to receive the Warrant Shares issuable upon exercise
shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. As soon as practicable
on or after such date, and in any event within five (5) business days,
the Company shall issue and deliver to the person or persons entitled
to receive the Warrant Shares a certificate or certificates for the
full number of Warrant Shares issuable upon such exercise.
4. ADJUSTMENTS.
4.1 ADJUSTMENTS TO WARRANT RIGHTS. The number of Warrant Shares for
which Warrants are exercisable, and the Warrant Price of such shares shall be
subject to adjustment from time to time as set forth in this Section 5.
4.2 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 Warrant Shares for which a Warrant is
exercisable immediately prior to 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 a 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 Warrant Price immediately
prior to the occurrence of such event shall be adjusted to equal the product of
the Warrant Price multiplied by a fraction, the numerator of which shall be the
number of Warrant Shares for which a Warrant is exercisable immediately prior to
the adjustment and the denominator of which shall be the number of Warrant
Shares for which a Warrant is exercisable immediately after such adjustment.
4.3 OTHER DIVIDENDS AND DISTRIBUTIONS. If the Company shall make or fix
a record date for the holders of Common Stock entitled to receive a dividend or
other distribution payable in securities of the Company other than shares of
Common Stock, then lawful and adequate provision shall be made so that Holder
shall be entitled to receive upon exercise of the Warrants, for the aggregate
Warrant Price in effect prior thereto, in addition to the
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number of Warrant Shares immediately theretofore issuable upon exercise of the
Warrants, the kind and number of securities of the Company which Xxxxxx would
have owned and been entitled to receive had the Warrants been exercised
immediately prior to that date (pro rated in the case of any partial exercise).
4.4 RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If the Common Stock is
changed into the same or a different number of shares of any class or classes of
stock, whether by reclassification, exchange, substitution or otherwise (other
than a subdivision or combination of shares, stock dividend or a reorganization,
recapitalization, merger, consolidation or sale of assets, each as provided for
elsewhere in this Section 5) then the Holder of the Warrants shall be entitled
to receive upon exercise of the Warrants, in lieu of the Warrant Shares
immediately theretofore issuable upon exercise of the Warrants, for the
aggregate Warrant Price in effect prior thereto, the kind and amount of stock
and other securities and property receivable upon such reclassification,
exchange, substitution or other change, which Holder would have been entitled to
receive had the Warrants been exercised immediately prior to such
reclassification, exchange, substitution or change (pro rated in the case of any
partial exercise).
4.5 LIQUIDATION. If the Company shall, at any time, prior to the
expiration of the Warrants, dissolve, liquidate or wind up its affairs, Holder
shall have the right, but not the obligation, to exercise the Warrants. Upon
such exercise, holder shall have the right to receive, in lieu of the shares of
Common Stock that Holder otherwise would have been entitled to receive upon such
exercise, the same kind and amount of assets as would have been issued,
distributed or paid to Holder upon any such dissolution, liquidation or winding
up with respect to such shares of Common Stock had Holder been the holder of
record of such shares of Common Stock receivable upon exercise of the Warrants
on the date for determining those entitled to receive any such distribution. If
any such dissolution, liquidation or winding up results in any cash distribution
in excess of the Warrant Price, Holder may, at Holder's option, exercise the
Warrants without making payment of the applicable Warrant Price and, in such
case, the Company shall, upon distribution to Holder, consider the applicable
Warrant Price per Warrant Share to have been paid in full, and in making
settlement to Holder shall deduct an amount equal to the applicable Warrant
Price from the amount payable to Holder.
4.6 REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If any
of the following transactions (each, a "Special Transaction"} shall become
effective: (a) a capital reorganization or recapitalization (other than a
dividend or other distribution, subdivision, combination, reclassification,
substitution or exchange of shares provided for elsewhere in this Section 5),
(b) a consolidation or merger of the Company with and into another entity (where
the Company is not the surviving corporation or where there is a change in, or
distribution with respect to, the Common Stock), or (c) a sale or conveyance of
all or substantially all of the Company's assets, then, as a condition of the
Special Transaction, lawful and adequate provision shall be made so that Holder
shall thereafter have the right to purchase and receive upon exercise of the
Warrants, in lieu of the Warrant Shares immediately theretofore issuable upon
exercise of the Warrants, for the aggregate Warrant Price in effect immediately
prior to such consummation, such shares of stock, other securities, cash or
other assets ("Other Property") as may be issued or paid pursuant to the terms
of such Special Transaction to the holders of shares of Common Stock for which
such Warrants could have been exercised immediately prior to such Special
Transaction (pro rated in the case of any partial
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exercise). In connection with any Special Transaction, appropriate provision
shall be made with respect to the rights and interests of Holder to the end that
the provisions of the Warrants (including without limitation provisions for
adjustment of the Warrant Price and the number of Warrant Shares issuable upon
the exercise of the Warrants), shall thereafter be applicable, as nearly as may
be practicable, to any Other Property thereafter deliverable upon the exercise
of the Warrants. The Company shall not effect any Special Transaction unless
prior to, or simultaneously with, the closing, the successor entity (if other
than the Company), if any, resulting from such consolidation or merger or the
entity acquiring such assets shall assume by written instrument executed and
mailed by certified mail or delivered to Holder at the address of Holder
appearing on the books of the Company, the obligation of the Company or such
successor corporation to deliver to Holder such Other Property, as in accordance
with the foregoing provisions, which Holder shall have the right to purchase.
4.7 NOTICE. Whenever the Warrants or the number of Warrant Shares
issuable hereunder is to be adjusted as provided herein or a dividend or
distribution (in cash, stock or otherwise and including, without limitation, any
distributions under Section 4.5) is to be declared by the Company, or a
definitive agreement with respect to a Special Transaction has been entered
into, the Company shall forthwith cause to be sent to the Holder at the last
address of the Holder shown on the books of the Company, by first-class mail,
postage prepaid, at least 5 business days prior to the record date specified in
Section 4.7(a)(i) below or at least 10 business days before the date specified
in Section 4.7(b) and Section 4.7(a)(ii) below, a notice stating in reasonable
detail the relevant facts and any resulting adjustments and the calculation
thereof, if applicable, and stating (if applicable):
(a) the date to be used to determine (i) which holders of
Common Stock will be entitled to receive notice of such dividend, distribution,
subdivision or combination (the "Record Date"), and (ii) the date as of which
such dividend, distribution, subdivision or combination shall be made; or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, subdivision or combination
are to be determined (provided, that in the event the Company institutes a
policy of declaring cash dividends on a periodic basis, the Company need only
provide the relevant information called for in this Section 4.7(a) with respect
to the first cash dividend payment to be made pursuant to such policy and
thereafter provide only notice of any changes in the amount or the frequency of
any subsequent dividend payments), or
(b) the date on which a Special Transaction is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon consummation of the Special
Transaction (the "Exchange Date").
4.8 FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of shares of Common Stock upon the exercise of a Warrant. If any
fraction of a share of Common Stock would be issuable upon the exercise of a
Warrant, the Company shall, upon such issuance, purchase such fraction for an
amount in cash equal to the current value of such fraction, computed on the
basis of the Current Market Price on the last business day prior to the date of
exercise.
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5. PAYMENT OF TAXES. All Warrant Shares shall be validly issued, fully
paid and nonassessable and free of claims of preemptive rights, and the
Company shall pay all issuance taxes and similar governmental charges
that may be imposed in respect of the issue or delivery thereof, but in
no event shall the Company pay a tax on or measured by the net income
or gain attributed to such exercise. Notwithstanding the foregoing, the
Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the Holder, and the Company
shall not be required to issue or deliver any such certificate unless
and until the Holder shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that
such tax has been paid.
6. TRANSFER AND EXCHANGE. This Warrant shall be transferable in whole or
in part, except as otherwise provided herein and except that the Holder
hereof represents that it is acquiring this Warrant for its own account
and for the purpose of investment and not with a view to any
distribution or resale thereof within the meaning of the Securities
Act. The Holder further agrees that it will not sell, assign or
transfer any of this Warrant unless this Warrant shall have been
registered for sale under the Securities Act or until the Company shall
have received from counsel for the Holder an opinion to the effect that
the proposed sale or other transfer of this Warrant by the Holder may
be effected without such registration. The Holder acknowledges that, in
taking this unregistered Warrant, it must continue to bear the economic
risk of its investment for an indefinite period of time because of the
fact that such Warrant has not been registered under the Securities Act
and further realizes that such Warrant cannot be sold unless it is
subsequently registered under the Securities Act or an exception from
such registration is available. The Holder also acknowledges that
appropriate legends reflecting the status of this Warrant under the
Securities Act may be placed on the face of this Warrant certificate at
the time of their transfer and delivery to the Holder hereof. The
transfer of Warrant Shares issuable upon exercise of this Warrant is
governed by Section 10 hereof.
7. LOSS OR MUTILATION. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this
Warrant or a replacement hereof and, in the case of any such loss,
theft or destruction, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this
Warrant or a replacement, the Company at its expense will execute and
deliver in lieu thereof, a new warrant of like tenor.
8. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery on the exercise of this
Warrant, all Warrant Shares from time to time issuable upon the
exercise of this Warrant and all shares of the Common Stock from time
to time issuable upon the conversion of the Warrant Shares issuable
upon the exercise of this Warrant.
9. NEGOTIABILITY. This Warrant is issued upon the following terms, to all
of which the Holder, by the taking hereof, consents and agrees:
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(a) this Warrant is subject to the terms and provisions of the
Stock Purchase Agreement;
(b) title to this Warrant may be transferred by endorsement
(by the Holder executing the form of assignment at the end hereof} and delivery
in the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery and any person in possession of this Warrant properly
endorsed is authorized to represent himself as absolute owner hereof and is
empowered to transfer absolute title hereto by endorsement and delivery hereof
to a bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or right in this Warrant in favor of each such
bona fide purchaser, and each such bona fide purchaser shall acquire absolute
title hereto and to all rights represented hereby;
(c) until this Warrant is transferred on the books of the
Company, the Company may treat the registered Holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary; and
(d) the Holder, by its acceptance hereof, represents that it
is acquiring this Warrant, for investment purposes only and that it does not
have any present intention to resell this Warrant or to sell or distribute any
Warrant Shares for which this Warrant may be exercised.
10. NOTICES. All notices and other communications from the Company to the
Holder shall be mailed by first class registered or certified mail,
postage prepaid, or sent by express overnight courier service or
electronic facsimile transmission (with a copy by mail) at the address
furnished to the Company in writing by the last Holder of this Warrant
who shall have furnished an address to the Company in writing.
11. CHANGE; WAIVER. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.
12. HEADINGS. The headings in this Warrant are for purposes of convenience
of reference only and shall not be deemed to constitute a part hereof.
13. LAW GOVERNING. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws of Delaware, without
reference to the conflicts of laws provisions in effect therein.
IN WITNESS WHEREOF, the Company has executed this Warrant under seal as
of the date first written above.
THE GOOD GUYS, INC.
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chairman and Chief
Executive Officer
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FORM OF EXERCISE
(To be signed only on exercise of Warrant)
TO: THE GOOD GUYS, INC.
The undersigned, the holder of the Warrant attached hereto, hereby
irrevocably elects to exercise this Warrant for, and to purchase thereunder,
________ shares of the Common Stock of THE GOOD GUYS, INC., and herewith makes
payment of $________ therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to ________________ whose address
is _______________________________.
Dated:
------------------------- ----------------------------------------
(Signature must conform to name of Holder
as specified on the face of the Warrant)
-----------------------------------------
(Address)
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________ the right represented by the Warrant attached
hereto to purchase _______ shares of Common Stock of THE GOOD GUYS, INC. to
which the within Warrant relates, and appoints ______________________________
Attorney-In-Fact to transfer such right on the books of THE GOOD GUYS, INC. with
full power of substitution in the premises.
Dated:
------------------------- ----------------------------------------
(Signature must conform to name of Holder
as specified on the face of the Warrant)
-----------------------------------------
(Address)
Signed in the presence of
------------------------------------------
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EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of the Warrant]
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of the number of shares of Common Stock of The
Good Guys, Inc. (the "COMPANY") as is set forth below, and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
the attached Warrant Certificate 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 the person
specified below whose address is set forth below, and, if such shares of Common
Stock shall not include all of the shares of Common Stock now and hereafter
issuable as provided in the attached Warrant Certificate, then the Company
shall, at its own expense, promptly issue to the undersigned a new Warrant
Certificate of like tenor and date for the balance of the shares of Common Stock
issuable thereunder.
Date:
--------------------------
Amount of Shares Purchased:
-----------------------------
Aggregate Purchase Price: $
-----------------------------
Printed Name of Registered Holder:
-----------------------------------
Signature of Registered Holder:
--------------------------------------
NOTICE: The signature on this Exercise Notice must correspond with the
name as written upon the face of the attached Warrant Certificate
in every particular, without alteration or enlargement or any
change whatsoever.
Stock Certificates to be issued and registered in the following name,
and delivered to the following address:
-------------------------------------
(Name)
-------------------------------------
(Street Address)
-------------------------------------
(City) (State) (Zip Code)
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EXHIBIT B
ASSIGNMENT NOTICE
[To be executed only upon transfer of the Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the person named below, whose address is set forth below, the rights
represented by the attached Warrant Certificate to purchase the number of shares
of the Common Stock of The Good Guys, Inc. (the "COMPANY") as is set forth
below, to which the attached Warrant Certificates relates, and appoints attorney
to transfer such rights on the books of the Company with full power of
substitution in the premises. If such shares of Common Stock of the Company
shall not include all of the shares of Common Stock now and hereafter issuable
as provided in the attached Warrant Certificate, then the Company, at its own
expense, shall promptly issue to the undersigned a new Warrant Certificate of
like tenor and date for the balance of the Common Stock issuable thereunder.
Date:
--------------------------
Amount of Warrants Transferred:
-----------------------------
Printed Name of Registered Holder:
-----------------------------------
Signature of Registered Holder:
--------------------------------------
NOTICE: The signature on this Assignment Notice must correspond with the
name as written upon the face of the attached Warrant Certificate
in every particular, without alteration or enlargement or any
change whatsoever.
The Warrant Certificate for transferred Warrants is to be issued and
registered in the following name, and delivered to the following address:
-------------------------------------
(Name)
-------------------------------------
(Street Address)
-------------------------------------
(City) (State) (Zip Code)
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