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EXHIBIT 10.16
STOCK AND WARRANT PURCHASE AGREEMENT
by and between
THE GOOD GUYS, INC.
and
THE PURCHASERS LISTED ON SCHEDULE A
Dated as of August 16, 2000
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STOCK AND WARRANT PURCHASE AGREEMENT
This Stock and Warrant Purchase Agreement (this "Agreement") is
dated as of August 16, 2000 between The Good Guys, Inc., a Delaware corporation
(the "Company"), and The Purchasers Listed On Schedule A (the "Purchasers"). The
Company and the Purchasers may hereinafter be referred to collectively as the
"Parties" or individually as a "Party." Except as otherwise indicated herein,
capitalized terms used herein are defined in Appendix A.
PRELIMINARY STATEMENTS
A. The Company wishes the Purchasers to make an equity investment in
the Company.
B. The Company and the Purchasers desire to enter into an agreement
pursuant to which the Purchasers will purchase from the Company, and the Company
will sell to the Purchasers, the restricted common stock and the warrants
described herein.
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereof, and for other good, valuable and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
STATEMENT OF AGREEMENT
ARTICLE I
ISSUANCE AND PURCHASE OF SHARES.
1.1 Issuance and Purchase of Common Stock. Subject to the terms and
conditions of this Agreement, the Company shall sell to the Purchasers, and the
Purchasers shall purchase from the Company, 1,517,647 shares (the "Shares") of
the Company's common stock, par value $.001 per share, together with warrants to
purchase 758,822 shares of Common Stock in the form attached hereto as Exhibit A
(the "Warrants") for an aggregate purchase price of $7,042,792.66 (the "Purchase
Price").
1.2 Settlement. The settlement of the transactions contemplated
herein (the "Settlement") shall take place at the offices of Howard, Rice,
Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇, Three ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on or before August 22, 2000, or such
other time, date or place as the Parties may mutually agree (the "Settlement
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Date"). At the Settlement, (a) Purchasers shall pay to the Company, by wire
transfer of immediately available funds to such account or accounts designated
in writing by the Company or by a promissory note in form and substance
satisfactory to the Company, the Purchase Price; (b) the Company shall issue to
Purchasers the Shares and deliver to Purchasers certificates for the Shares duly
registered in the name of Purchasers; and (c) the Company shall deliver the
Warrants, registered in the name of the Purchasers or such other names as may be
designated by Purchasers.
ARTICLE II
RESTRICTIONS ON TRANSFERABILITY.
The Shares shall not be transferred before satisfaction of the
conditions specified in this Article II, which conditions are intended to ensure
compliance with the provisions of the Securities Act and applicable state
securities laws with respect to the transfer of any Shares. Purchasers, by
entering into this Agreement and accepting the Shares, agree to be bound by the
provisions of this Article II.
2.1 Restrictive Legend. Except as otherwise provided in this Article
II, each certificate representing Shares and Warrant Shares (together the
"Restricted Common Stock") shall be stamped or otherwise imprinted with a legend
in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED, UNLESS AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE SECURITIES
LAWS, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER, IS
AVAILABLE. SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND
PRIVILEGES SPECIFIED IN THE STOCK PURCHASE AGREEMENT, DATED AS OF
AUGUST 16, 2000, BETWEEN THE GOOD GUYS, INC. AND THE PURCHASERS
LISTED ON SCHEDULE A THERETO, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE GOOD GUYS, INC. AND WILL BE FURNISHED WITHOUT
CHARGE TO THE
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HOLDER HEREOF UPON WRITTEN REQUEST, THE HOLDER OF THIS CERTIFICATE
AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF SUCH STOCK
PURCHASE AGREEMENT."
2.2 Transfers. Each Holder agrees that it will not sell, transfer or
otherwise dispose of any shares of Restricted Common Stock, in whole or in part,
except pursuant to an effective registration statement under the Securities Act
or an exemption from registration thereunder. Each certificate, if any,
evidencing such shares of Restricted Common Stock issued upon such transfer
shall bear the restrictive legend set forth in Section 2.1, unless in the
written opinion of the transferee's or Holder's counsel delivered to the Company
in connection with such transfer (which opinion shall be reasonably satisfactory
to the Company) such legend is not required in order to ensure compliance with
the Securities Act.
2.3 Termination of Restrictions. The restrictions imposed by this
Article II upon the transferability of the Restricted Common Stock and the
legend requirement of Section 2.1 shall terminate as to any particular Share or
Warrant Share (i) when and so long as such security shall have been registered
under the Securities Act and disposed of pursuant thereto, or (ii) when the
Holder thereof shall have delivered to the Company the written opinion of
counsel to such Holder, which opinion shall be reasonably satisfactory to the
Company, stating that such legend is not required in order to ensure compliance
with the Securities Act. Whenever the restrictions imposed by this Article II
shall terminate as to any Restricted Common Stock, as herein above provided, the
Holder thereof shall be entitled to receive from the Company, at the expense of
the Company, a new certificate representing such Common Stock, not bearing the
restrictive legend set forth in Section 2.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
As a material inducement to Purchasers entering into this Agreement
and purchasing the Shares and Warrants, the Company represents and warrants to
Purchasers as follows:
3.1 Corporate Status. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Company has all requisite corporate power and authority to own
or lease, as the case may be, its properties and to carry on its business as now
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conducted. The Company and its Subsidiaries are qualified or licensed to conduct
business in all jurisdictions where its or their ownership or lease of property
and the conduct of its or their business requires such qualification or
licensing, except to the extent that failure to so qualify or be licensed would
not have a Material Adverse Effect on the Company. There is no pending, or to
the knowledge of the Company threatened, proceeding for the dissolution,
liquidation or insolvency of the Company or any of its Subsidiaries.
3.2 Corporate Power and Authority. The Company has the corporate
power and authority to execute and deliver this Agreement and the Warrants, to
perform its obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby. The Company has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement
and the Warrants and the transactions contemplated hereby and thereby.
3.3 Enforceability. Each of this Agreement and the Warrants has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
3.4 No Violation. The execution and delivery by the Company of each
of this Agreement and the Warrants, the consummation of the transactions
contemplated hereby and thereby, and the compliance by the Company with the
terms and provisions hereof and thereof, will not (a) result in a violation or
breach of, or constitute, with the giving of notice or lapse of time, or both, a
material default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any Contract
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any material portion of the Company's or
its Subsidiaries' properties or assets may be bound, (b) violate any Requirement
of Law applicable to the Company or any of its Subsidiaries or any material
portion of the Company's properties or assets or (c) result in the imposition of
any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries; except where any of the foregoing would not have a Material
Adverse Effect on the Company.
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3.5 Consents/Approvals. No consent, approval, waiver or other action
by any Person under any Contract to which either the Company or any of its
Subsidiaries is a party, or by which any of their respective properties or
assets are bound, is required or necessary for the execution, delivery or
performance by the Company of this Agreement or the Warrants and the
consummation of the transactions contemplated hereby, except where the failure
to obtain such consents, filings, authorizations, approvals or waivers or make
such filings would not have a Material Adverse Effect on the Company.
3.6 Capitalization. The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock and 2,000,000 shares of Preferred
Stock. As of August 15, 2000, the Company had outstanding 20,653,787 shares of
Common Stock, all of which were duly authorized, validly issued, fully paid and
non-assessable and had no outstanding shares of Preferred Stock. Except (a) as
contemplated by this Agreement, (b) the Warrants, (c) options to acquire
1,357,882 shares of Common Stock under the Company's option plans, (d) warrants
to acquire 3,257,901 shares of Common Stock, and (e) as set forth in the
Company's SEC Reports, there are (y) no rights, options, warrants, convertible
securities, subscription rights or other agreements, calls, plans, contracts or
commitments of any kind relating to the issued and unissued capital stock of, or
other equity interest in, the Company outstanding or authorized and (z) no
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of the Company Common Stock. Upon delivery to the Purchasers
of the certificates representing the Shares and payment of the Purchase Price,
the Purchasers will acquire good, valid and marketable title, subject to the
limitations on marketability contained in this Agreement or imposed pursuant to
the Securities Act, to and beneficial and record ownership of the Shares, and
the Shares will be validly issued, fully paid and non-assessable. The Company
has duly reserved, solely for purposes of issuance upon exercise of the
Warrants, the shares of Common Stock issuable upon exercise of the Warrants.
3.7 SEC Reports and Nasdaq Eligibility. Since September 30, 1998,
the Company has made all filings (the "SEC Reports") required to be made by it
under the Securities Act of 1933 (the Securities Act") and the Securities
Exchange Act of ▇▇▇▇, (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"). The SEC Reports, when filed,
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act and the securities laws, rules and
regulations of any state and pursuant to any Requirements of Law. The SEC
Reports, when filed, did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Company has delivered or made
accessible to Purchasers true, accurate and
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complete copies of the SEC Reports which were filed with the SEC since September
30, 1998. The Company's Common Stock is currently eligible for trading on the
Nasdaq National Market.
3.8 Financial Statements. Each of the balance sheets included in the
SEC Reports (including any related notes and schedules) fairly presents in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of its date, and each of the other financial statements included
in the SEC Reports (including any related notes and schedules) fairly presents
in all material respects the consolidated results of operations or other
information therein of the Company and its Subsidiaries for the periods or as of
the dates therein set forth in accordance with GAAP consistently applied during
the periods involved (except that the interim reports are subject to normal
recording adjustments which might be required as a result of year-end audit and
except as otherwise stated therein).
3.9 Undisclosed Liabilities. As of August 14, 2000, except for
liabilities and losses incurred in the ordinary course of business since June
30, 2000, the Company and its Subsidiaries do not have any material direct or
indirect indebtedness, liability, loss, or obligation of a kind required by GAAP
to be set forth on a financial statement, that were not fully and adequately
reflected or reserved for in the financial statements contained in the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000 or
otherwise disclosed in the SEC Reports.
3.10 Company Business. The description of the Company's business
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1999 is not materially inconsistent with its current operations.
Except as set forth in the SEC Reports, since June 30, 2000 there has not been
(i) any direct or indirect redemption, purchase or other acquisition by the
Company of any shares of the Common Stock or (ii) declaration, setting aside or
payment of any dividend or other distribution by the Company with respect of the
Common Stock.
3.11 Investment Company. The Company is not and after giving effect
to the sale of the Shares and Warrant Shares will not be an "investment company"
or an entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
3.12 No Commissions. The Company has not incurred any obligation for
any finder's or broker's or agent's fees or commissions in connection with the
purchase of the Shares.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
As a material inducement to the Company entering into this Agreement
and issuing and/or selling the Warrants and/or the Shares, each Purchaser
represents and warrants to the Company as follows:
4.1 Investment Intent. The Purchaser is acquiring the Shares and
Warrants hereunder and under the Warrant for the Purchaser's own account and
with no present intention of distributing or selling the Shares or Warrants or
any interest in the Shares or Warrants. The Purchaser agrees that it will not
sell or otherwise dispose of any of the Shares or Warrants or any interest in
the Shares or Warrants unless such sale or other disposition has been registered
or qualified (as applicable) under the Securities Act and applicable state
securities laws or, in the opinion of the Purchaser's counsel delivered to the
Company (which opinion shall be reasonably satisfactory to the Company) such
sale or other disposition is exempt from registration or qualification under the
Securities Act and applicable state securities laws. The Purchaser understands
that the sale of the Shares and Warrants acquired by the Purchaser hereunder has
not been registered under the Securities Act, but the Shares and Warrants are
issued through transactions exempt from the registration and prospectus delivery
requirements of Section 4(2) of the Securities Act, and that the reliance of the
Company on such exemption from registration is predicated in part on these
representations and warranties of the Purchaser. The Purchaser acknowledges that
a restrictive legend consistent with the foregoing has been or will be placed on
the certificates representing the Shares and the Warrants until such legend is
permitted to be removed under applicable law. The Purchaser will have no right
to require registration of the Shares and the common stock underlying the
Warrants, and the Company is under no obligation to cause an exemption to be
available, except as provided in the Registration Rights Agreement attached as
Exhibit B hereto.
4.2 Adequate Information. The Company has made available and the
Purchaser has reviewed such information that the Purchaser considers necessary
or appropriate to evaluate the risks and merits of an investment in the Shares
(including, without limitation, the Company's Form 10-K for the fiscal year
ended September 30, 1999 and Form 10-Qs for the quarterly periods ended December
31, 1999, March 31, 2000 and June 30, 2000.
4.3 Opportunity to Question and Other Information. The Purchaser has
had the opportunity to question, and, to the extent deemed necessary or
appropriate, has questioned representatives of the Company so as to receive
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answers and verify information obtained in the Purchaser's examination of the
Company, including the information that the Purchaser has reviewed in relation
to its investment in the Shares and Warrants. The Purchaser has been afforded
the opportunity to obtain, and has been furnished, all material that it has
requested relating to the proposed operation of the Company, any other matters
relating to the business and properties of the Company and the offering and sale
of the Shares and Warrants.
4.4 No Other Representations. No oral or written representations
have been made to the Purchaser in connection with the Purchaser's acquisition
of the Shares and Warrants which were in any way inconsistent with the
information reviewed by the Purchaser. The Purchaser acknowledges that no
representations or warranties of any type or description have been made to it by
any Person with regard to the Company, any of its Subsidiaries, any of their
respective businesses, properties or prospectus or the investment contemplated
herein, other than the representations and warranties set forth in Article III
hereof. The Purchaser has not made its decision to acquire Shares and Warrants
or to execute and deliver this Agreement on the basis of any belief that any
officer, director or affiliate of the Company or any current stockholder of the
Company would make an investment in the Company now or in the future.
4.5 Knowledge and Experience. The Purchaser is an accredited
investor as such term is defined in Rule 501 under the Securities Act. The
Purchaser has such knowledge and experience in financial, tax and business
matters, including substantial experience in evaluating and investing in common
stock and other securities (including the common stock and other securities of
new and speculative companies), so as to enable the Purchaser to utilize the
information made available to the Purchaser in order to evaluate the merits and
risks of an investment in the Shares and Warrants and to make an informed
investment decision with respect thereto.
4.6 Additional Representations. Each Purchaser will make such
additional representations and warranties and furnish such information regarding
the Purchaser's investment experience and financial position as the Company may
reasonably require, and if there should be any material change in the
information set forth herein or in the Purchaser Suitability Questionnaire prior
to the closing of the sale of the Common Stock, the Purchaser will immediately
furnish such revised or corrected information to the Company.
4.7 Legal Existence and Authority. If the Purchaser is a
corporation, partnership, limited liability company, trust or other entity, the
Purchaser has been duly formed and is validly existing and in good standing
under
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the laws of the jurisdiction of its formation with full power and authority to
acquire and hold the Shares and Warrants and to execute, deliver and comply with
the terms of this Agreement and such other documents required to be executed and
delivered by the undersigned in connection with this subscription.
4.8 No Defaults or Conflicts. The execution and delivery of this
Agreement by the Purchaser and the performance of its obligations hereunder does
not conflict with or constitute a default under any instruments governing the
Purchaser, or any law, regulation, order or agreement to which the Purchaser is
a party or to which the undersigned is bound.
4.9 Validity: Enforceability: Binding Effect. This Agreement and the
Registration Rights Agreement delivered herewith have been duly and validly
authorized, executed and delivered by the Purchaser, and the agreements herein
and therein constitute valid, binding and enforceable agreements of the
Purchaser. The Purchaser is not a partnership, common trust fund, special trust,
pension fund, retirement plan or other entity in which the partners or
participants, as the case may be, may designate the particular investments to be
made or the allocation thereof.
4.10 Confidentiality. Unless required by law, the Purchaser shall
not disclose, and shall maintain confidential any non-public information related
to the Company, provided that the undersigned may disclose such information to
any of its advisors, attorneys arid accountants, if such advisor, attorney
and/or accountant shall have agreed to be bound by this provision.
ARTICLE V
COVENANTS.
5.1 Filings. Each of the Company and the Purchasers shall make on a
prompt and timely basis all governmental or regulatory notifications and filings
required to be made by it for the consummation of the transactions contemplated
hereby.
5.2 Further Assurances. Each of the Company and the Purchasers shall
execute and deliver such additional instruments and other documents and shall
take such further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby.
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5.3 Cooperation. Each of the Company and the Purchasers agree to
cooperate with the other in the preparation and filing of all forms,
notifications, reports and information, if any, required or reasonably deemed
advisable pursuant to any Requirement of Law in connection with the transactions
contemplated by this Agreement and to use their respective best efforts to agree
jointly on a method to overcome any objections by any Governmental Authority to
any such transactions; provided that, any reasonable, out-of-pocket expenses
incurred by the Purchasers shall be reimbursed by the Company. Except as may be
specifically required hereunder, none of the Parties or their respective
Affiliates shall be required to agree to take any action that in the reasonable
opinion of such Party would result in or produce a Material Adverse Effect on
such Party.
5.4 Notification of Certain Matters. Each of the Company and the
Purchasers shall give prompt notice to the other of the occurrence, or
non-occurrence, of any event which would be likely to cause any representation
or warranty herein to be untrue or inaccurate, or any covenant, condition or
agreement herein not to be complied with or satisfied.
5.5 Share Maintenance. The Company covenants and agrees that (a) all
Warrant Shares, upon issuance in accordance with the terms thereof, and the
payment of the purchase price therefor, will be duly authorized, validly issued
and outstanding, fully paid and nonassessable, and free from all taxes, liens
and charges with respect to the issuance thereof other than those created by or
arising through the Purchasers, and all such Warrant Shares shall be sold to the
Purchasers pursuant to an exemption from registration under the Securities Act
or an effective registration statement, (b) the Company will from time to time
take all actions necessary to assure that the par value per share of the Common
Stock is at all times equal to or less than the applicable Warrant Price, and
(c) the Company will at all times during the exercise period have authorized and
reserved sufficient shares of Common Stock to provide for the exercise of the
Warrants in full.
ARTICLE VI
INDEMNIFICATION.
6.1 Indemnification Generally. The Company, on the one hand, and the
Purchasers, on the other hand, shall indemnify the other from and against any
and all losses, damages, liabilities, claims, charges, actions, proceedings,
demands, judgments, settlement costs and expenses of any nature whatsoever
(including, without limitation, attorneys' fees and expenses) or deficiencies
resulting from any breach of a representation, warranty or covenant by the
Indemnifying Party (including indemnification by the Company of the Purchasers
for any failure by
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the Company to deliver, or for any failure by the Purchasers to receive, stock
certificates representing the Shares on the Settlement Date) and all claims,
charges, actions or proceedings incident to or arising out of the foregoing
("Losses"). Notwithstanding the foregoing, the Indemnifying Party shall not be
liable for any Losses to the extent such Losses arise out of, result from, or
are increased by, the breach of this Agreement by, or the fraudulent acts of,
the Indemnified Party.
6.2 Indemnification Procedures. Each Person entitled to
indemnification under this Article VI (an "Indemnified Party") shall give notice
as promptly as reasonably practicable to each party required to provide
indemnification under this Article VI (an "Indemnifying Party") of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing in respect of which indemnity may be sought hereunder; provided,
however, failure to so notify an Indemnifying Party shall not relieve such
Indemnifying Party from any liability that it may have otherwise than on account
of this indemnity agreement so long as such failure shall not have materially
prejudiced the position of the Indemnifying Party. Upon such notification, the
Indemnifying Party shall assume the defense of such action if it is a claim
brought by a third party, and after such assumption the Indemnified Party shall
not be entitled to reimbursement of any expenses incurred by it in connection
with such action except as described below. In any such action, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
contrary or (ii) the named parties in any such action (including any impleaded
parties) include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing or conflicting interests between them. An
Indemnifying Party who is not entitled to, or elects not to, assume the defense
of a claim shall not be obligated to pay the fees and expenses of more than one
counsel in any one jurisdiction for all parties indemnified by such Indemnifying
Party with respect to such claim, unless in the reasonable judgment of any
Indemnified Party a conflict of interest may exist between such Indemnified
Party and any other of such Indemnified Parties with respect to such claim, in
which event the Indemnifying Party shall be obligated to pay the fees and
expenses of such additional counsel or counsels. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent (which shall not be unreasonably withheld or delayed by such
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Indemnifying Party shall indemnify the
Indemnified Party from and against any loss, damage or liability by reason of
such settlement or judgment.
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ARTICLE VII
MISCELLANEOUS.
7.1 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such Party shall designate
in writing to the other Party):
(a) if to the Company to:
The Good Guys, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Howard, Rice, Nemerovski, Canady, ▇▇▇▇ & Rabkin
Three ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to a Purchaser, at its last known address appearing on
the books of the Company maintained for such purpose.
7.2 Loss or Mutilation. Upon receipt by the Company from any Holder
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of a certificate representing Shares and
indemnity reasonably satisfactory to it (it being understood that the written
agreement of the Holder or an Affiliate thereof shall be sufficient indemnity)
and in case of mutilation upon surrender and cancellation hereof or thereof, the
Company will execute and deliver in lieu hereof or thereof a new stock
certificate of like tenor to such Holder; provided, in the case of mutilation,
no indemnity shall be required if the certificate representing Shares in
identifiable form is surrendered to the Company for cancellation.
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7.3 Survival. Each representation, warranty, covenant and agreement
of the parties set forth in this Agreement is independent of each other
representation, warranty, covenant and agreement. Each representation and
warranty made by any Party in this Agreement shall survive the Settlement
through the period ending on the date six months from the date of this
Agreement. Notwithstanding the foregoing, the Purchasers expressly acknowledges
that a restrictive legend will be placed on the certificates representing the
Shares, the Warrant and the Warrant Shares until such legend is permitted to be
removed under applicable law.
7.4 Remedies.
(a) Each Party acknowledges that the other Parties would not
have an adequate remedy at law for money damages in the event that any of the
covenants or agreements of such Party in this Agreement was not performed in
accordance with its terms, and it is therefore agreed that each Party in
addition to and without limiting any other remedy or right such Party may have,
shall have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach and enforcing specifically the
terms and provisions hereof, and each Party hereby waives any and all defenses
such Party may have on the ground of lack of jurisdiction or competence of the
court to grant such an injunction or other equitable relief.
(b) All rights, powers and remedies under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any Party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such Party.
7.5 Entire Agreement. This Agreement (including the exhibits,
appendices and schedules attached hereto) and other documents delivered at the
Settlement pursuant hereto, contain the entire understanding of the Parties in
respect of the subject matter hereof and supersede all prior agreements and
understandings between or among the Parties with respect to such subject matter.
The exhibits and schedules hereto constitute a part hereof as though set forth
in full above.
7.6 Expenses; Taxes. Except as otherwise provided in this Agreement,
the Parties shall pay their own fees and expenses, including their own counsel
fees, incurred in connection with this Agreement or any transaction contemplated
hereby. Further, except as otherwise provided in this Agreement, any sales tax,
stamp duty, deed transfer or other tax (except taxes based on the income of the
Purchasers) arising out of the sale of the Shares by the Company to
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the Purchasers and consummation of the transactions contemplated by this
Agreement shall be paid by the Company.
7.7 Amendment. This Agreement may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Purchasers.
7.8 Waiver. No failure to exercise, and no delay in exercising, any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
implied from any course of dealing between the Parties. No extension of time for
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for performance of any
other obligations or any other acts. The rights and remedies of the Parties
under this Agreement are in addition to all other rights and remedies, at law or
equity, that they may have against each other.
7.9 Binding Effect: Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of the Parties and their
respective successors and legal assigns. The provisions of this Agreement are
intended to be for the benefit of all Holders from time to time of the Shares
and shall be enforceable by any such Holder.
7.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
7.11 Headings. The headings contained in this Agreement are for
convenience of reference only and are not to be given any legal effect and shall
not affect the meaning or interpretation of this Agreement.
7.12 Governing Law: Interpretation. This agreement shall be
construed in accordance with and governed for all purposes by the laws of the
state of Delaware.
7.13 Severability. The parties stipulate that the terms and
provisions of this Agreement are fair and reasonable as of the date of this
Agreement. However, if any provision of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full
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force and effect and shall in no way be affected, impaired or invalidated. If,
moreover, any of those provisions shall for any reason be determined by a court
of competent jurisdiction to be unenforceable because excessively broad or vague
as to duration, geographical scope, activity or subject, it shall be construed
by limiting, reducing or defining it, so as to be enforceable.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed and delivered as of the date first above written.
THE GOOD GUYS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
PURCHASER
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
PURCHASER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
PURCHASER
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, Operations
PURCHASER
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title:
PURCHASER
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:
-▇▇-
▇▇
▇▇▇▇▇▇▇▇▇
▇▇: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
PURCHASER
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
PURCHASER
1994 ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
Children's Trust
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trustee
PURCHASER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
PURCHASER
Ravensgate Partner Trust
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Trustee
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APPENDIX A
DEFINITIONS
1. Defined Terms. As used herein the following terms shall have the
following meanings:
"Agreement" means this Stock Purchase Agreement.
"Business Day" means 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
Delaware.
"Common Stock" means the common stock, $.001 par value per share, of
the Company, as constituted on the date hereof, 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 received by or distributed to
the holders of Common Stock of the Company.
"The Company" has the meaning set forth in the Preamble of this
Agreement.
"Contract" means any agreement, indenture, lease, sublease, license,
sublicense, promissory note, evidence of indebtedness, insurance policy,
annuity, mortgage, restriction, commitment, obligation or other contract,
agreement or instrument (whether written or oral).
"Convertible Securities" means evidences of indebtedness, shares of
stock 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.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations
promulgated thereunder, all as the same shall be in effect from time to time.
"GAAP" means generally accepted accounting principles in effect in
the United States of America from time to time.
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"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any entity or official exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
"Holder" means each Person in whose name the Shares are registered
on the books of the Company maintained for such purpose.
"Indemnified Party" has the meaning set forth in Section 6.2 of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 6.2 of
this Agreement.
"Lien" means any mortgage, pledge, security interest, assessment,
encumbrance, lien, lease, sublease, adverse claim, levy, or charge of any kind,
or any conditional Contract, title retention Contract or other contract to give
or refrain from giving any of the foregoing.
"Losses" has the meaning set forth in Section 6.1 of this Agreement.
"Person(s)" means any individual, sole proprietorship, partnership,
joint venture, trust, limited liability company, 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).
"Purchase Price" has the meaning set forth in Section 1.1 of this
Agreement.
"Purchasers" has the meaning set forth in the Preamble of this
Agreement.
"Requirement of Law" means as to any Person, the articles of
incorporation, bylaws or other organizational or governing documents of such
Person, and any domestic or foreign and federal, state or local law, rule,
regulation, statute or ordinance or determination of any arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its properties or to which such Person or any of its property
is subject.
"Restricted Common Stock" has the meaning set forth in Section 2.1
of this Agreement.
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"SEC" means the Securities and Exchange Commission.
"SEC Reports" has the meaning set forth in Section 3.7 of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the applicable time.
"Settlement" has the meaning set forth in Section 1.2 of this
Agreement.
"Settlement Date" has the meaning set forth in Section 1.2 of this
Agreement.
"Shares" has the meaning set forth in Section 1.1 of this Agreement.
"Subsidiary" means each of those Persons of which another Person,
directly or indirectly owns beneficially securities having more than 50% of the
voting power in the election of directors (or persons fulfilling similar
functions or duties) of the owned Person (without giving effect to any
contingent voting rights).
"Warrants" has the meaning set forth in Section 1.1 of this
Agreement.
"Warrant Shares" means those shares of the Company's common stock,
par value $.001 per share, which Purchasers are entitled to purchase pursuant to
the Warrant.
2. Other Definitional Provisions.
(a) All references to "dollars" or "$" refer to currency of
the United States of America.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
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(e) The words "hereof," "herein" and "hereunder," and words of
similar import, when used in this Agreement shall refer to this Agreement as a
whole (including any exhibits or schedules hereto) and not to any particular
provision of this Agreement.
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SCHEDULE A
PURCHASER SHARES WARRANTS PURCHASE PRICE
--------- ------ -------- --------------
▇▇▇▇ ▇▇▇▇▇ 161,617 80,808 $ 749,999.85
▇▇▇ ▇▇▇▇▇▇▇ 20,000 10,000 $ 92,812.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10,774 5,387 $ 49,997.82
Ravensgate Partner Trust 107,744 53,872 $ 499,996.81
▇▇▇▇▇▇ ▇▇▇▇▇▇ 107,744 53,872 $ 499,996.81
▇▇▇▇ ▇▇▇▇▇▇ 215,489 107,744 $ 999,998.25
▇▇▇ ▇▇▇▇▇▇ 215,489 107,744 $ 999,998.25
1994 ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
Children's Trust 10,774 5,387 $ 49,997.82
▇▇▇ ▇▇▇▇▇▇▇ 646,468 323,234 $2,999,999.40
▇▇▇ ▇▇▇▇▇▇▇▇ 21,548 10,774 $ 99,995.65
TOTAL: 1,517,647 758,822 $7,042,792.66