SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Information to be included in statements filed pursuant
to rule 13d-1(a) and Amendments thereto filed pursuant
to rule 13d-2(a)
Under the Securities Exchange Act of 1934
The Good Guys, Inc.
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(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
382091106
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(CUSIP Number)
Gary M. Lawrence
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Ave., Suite 4100
Dallas, Texas 75201
(214) 969-2800
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 1, 1999
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
<PAGE>
CUSIP NO. 382091106 13D
(1) Name of Reporting Person Ronald A. Unkefer
I.R.S. Identification
No. of Above Person (Entities Only)
(2) Check the Appropriate Box if a (a)
Member of a Group (See Instructions) (b)
SEC Use Only
(4) Source of Funds (See instructions) PF
(5) Check if Disclosure of Legal Proceedings Not applicable
is Required Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization United States of
America
Number of Shares (7) Sole Voting Power 1,450,000
Beneficially Owned
By Each Reporting (8) Shared Voting Power None
Person with:
(9) Sole Dispositive Power 1,450,000
(10) Shared Dispositive Power None
(11) Aggregate Amount Beneficially 1,450,000
Owned by Each Reporting Person
Check if the Aggregate Amount in
Row (11) Excludes Certain Shares
(See instructions) [ ]
(13) Percent of Class Represented by Amount 9.1%
in Row (11)
(14) Type of Reporting Person (See IN
instructions)
<PAGE>
CUSIP NO. 514614106 13D
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the common stock, par value
$.001 per share (the "Common Stock"), of The Good Guys, Inc. (the
"Company"), a Delaware corporation. The address of the Company's principal
executive offices is 7000 Marina Boulevard, Brisbane, California 94005.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by Ronald A. Unkefer ("Unkefer").
(b) The principal business address of Unkefer is 750 North St. Paul,
Tenth Floor, Dallas, Texas 75201.
(c) The present principal occupation or employment of Unkefer is to
serve as Chairman and CEO of First Broadcasting Company, L.P.. The address
of First Broadcasting Company's offices is 750 North St. Paul, Tenth Floor,
Dallas, Texas 75201. Effective July 1, 1999, Unkefer will begin serving
as Chairman and Chief Executive Officer of the Company.
(d) Unkefer has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Unkefer has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgement, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Unkefer is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On June 1, 1999 Unkefer purchased from the Company for an aggregate
purchase price of $4,689,880 (i) 1,450,000 shares of Common Stock Rule and
(ii) common stock purchase warrants (the "Warrants") to purchase 1,435,500
shares of Common Stock, a copy of which is attached hereto as EXHIBIT A and
incorporate herein by reference. Unkefer is not the beneficial owner of
the 1,435,500 shares of Common Stock underlying the Warrants because the
Warrants may not be exercised in whole or in part within sixty (60) days of
the date hereof. To acquire such shares and Warrants, Unkefer used the net
proceeds obtained from a loan provided by First Broadcasting Management,
LLC ("First Broadcasting") pursuant to that certain Promissory Note, dated
as of June 8, 1999, by and between Unkefer and First Broadcasting, LLC, a
copy of which is attached hereto as EXHIBIT B and incorporated herein by
reference (the "Note").
ITEM 4. PURPOSE OF TRANSACTION.
Unkefer acquired the shares of Common Stock for investment purposes
only.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) As of the date hereof, Unkefer directly and beneficially owns
1,450,000 shares of Common Stock, which represents approximately 9.1% of
the outstanding shares of Common Stock of the Company, calculated in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Counsel for the Issuer notified Unkefer that 15,982,350 shares of
Common Stock are issued and outstanding as of June 8, 1999.
(b) Unkefer has the sole power to vote or direct the vote of and the sole
power to dispose or to direct the disposition of the shares of Common Stock
beneficially owned by Unkefer.
(c) Other than the transaction reported in Item 3 above, during the past
60 days and including the date hereof, Unkefer has effected no transactions
in the Common Stock of the Company.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Unkefer has no contracts, arrangements, understandings or
relationships (legal or otherwise) between itself and any person with
respect to any securities of the Company other than the Note and the
Warrants.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following are filed as Exhibits to this Statement on Schedule 13D:
Exhibit A Warrant
Exhibit B Promissory Note, dated as of June 8, 1999, by and between
Unkefer and First Broadcasting
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement
is true, complete and correct.
Date: June 11, 1999
/s/ RONALD A. UNKEFER
-------------------------------------
Ronald A. Unkefer
<PAGE>
EXHIBIT INDEX
PAGE
Exhibit A Warrant 7
Exhibit B Promissory Note, dated as of June 8, 1999, by 21
and between Unkefer and First Broadcasting
EXHIBIT A
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 JUNE
1, 1999, BETWEEN THE GOOD GUYS, INC. AND RONALD UNKEFER, A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE GOOD GUYS, INC. AND WILL BE FURNISHED
WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST. THE HOLDER OF
THIS CERTIFICATE AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF SUCH
STOCK PURCHASE AGREEMENT.
WARRANT CERTIFICATE
No. 001
To Purchase 1,435,500 Shares of Common Stock of:
THE GOOD GUYS, INC.
THIS IS TO CERTIFY THAT Ronald Unkefer (the "Holder") or Holder's
registered assigns, is entitled to purchase from THE GOOD GUYS, INC., a
Delaware corporation (the "Company"), up to One Million Four Hundred Thirty-
Five Thousand Five Hundred (1,435,500) shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), on the terms and
conditions hereinafter set forth.
1 GRANT OF WARRANT
1.1 GRANT. The Company hereby grants the Holder Warrants to purchase One
Million Four Hundred Thirty-Five Thousand Five Hundred (1,435,500) shares
of Common Stock at a purchase price of $3.39612 per share (as adjusted from
time to time pursuant to Section 2 hereof, the "Warrant Price"), as
follows:
(a) Series A Warrants to purchase 478,500 shares of Common Stock
at the Warrant Price, exercisable in whole or in part at any
time and from time to time during the five year period
beginning on the first anniversary of the date hereof (the
"Issue Date") or, if such date is not a regular business
day, on the next occurring regular business day (as adjusted
from time to time pursuant to Section 2 hereof, the "First
Tranche Warrants").
(b) Series B Warrants to purchase 478,500 shares of Common Stock
at the Warrant Price, exercisable in whole or in part at any
time and from time to time during the five year period
beginning on the second anniversary of the Issue Date or, if
such date is not a regular business day, on the next
occurring regular business day (as adjusted from time to
time pursuant to Section 2 hereof, the "Second Tranche
Warrants").
(c) Series C Warrants to purchase 478,500 shares of Common Stock
at the Warrant Price, exercisable in whole or in part at any
time and from time to time during the five year period
beginning on the third anniversary of the Issue Date or, if
such date is not a regular business day, on the next
occurring regular business day (as adjusted from time to
time pursuant to Section 2 hereof, the "Third Tranche
Warrants," and together with the First Tranche Warrants and
the Second Tranche Warrants, the "Warrants," and the shares
of Common Stock to be issued upon the exercise of the
Warrants are the "Warrant Shares").
1.2 SHARES TO BE ISSUED: RESERVATION OF SHARES. The Company covenants and
agrees that (a) all Warrant Shares, upon issuance in accordance with the
terms hereof, 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 Holder, and all such
Warrant Shares shall be sold to the Holder pursuant to an exemption from
registration under the Securities Act of 1933, and in accordance with any
applicable blue sky laws, (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.
2 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 2.
The Company shall give Holder notice of any event described below which
requires an adjustment pursuant to this Section 2 within a reasonable
period of time, but in no event greater than 30 days.
2.1 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time the
Company shall:
2.1.1 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,
2.1.2 subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
2.1.3 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.
2.2 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
number of Warrant Shares immediately theretofore issuable upon exercise of
the Warrants, the kind and number of securities of the Company which Holder
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).
2.3 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 2) 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).
2.4 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
2), (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 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 a 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.
2.5 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.
2.6 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 2.5) 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 2.6.1(a) below or at least 10 business
days before the date specified in Section 2.6.2 and Section 2.6.1(b) below,
a notice stating in reasonable detail the relevant facts and any resulting
adjustments and the calculation thereof, if applicable, and stating (if
applicable):
2.6.1 the date to be used to determine (a) which holders of Common
Stock will be entitled to receive notice of such dividend, distribution,
subdivision or combination (the "Record Date"), and (b) 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 2.6.1 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
2.6.2 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").
2.7 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.
2.8 EFFECT OF ALTERNATIVE SECURITIES. If at any time, as a result of an
adjustment made pursuant to this Section 2, Holder shall become entitled to
receive any securities of the Company other than shares of Common Stock,
then the number of such other securities receivable upon exercise of the
Warrants shall be subject to adjustment from time to time on terms as
nearly equivalent as practicable to the provisions with respect to shares
of Common Stock contained in this Section 2.
2.9 SUCCESSIVE APPLICATION. The provisions of this Section 2 shall
similarly apply from time to time to successive events covered by this
Section 2.
2.10 WHEN ADJUSTMENTS ARE TO BE MADE. The adjustments required by this
Section 2 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment to the
number of shares for which the Warrants are 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
2.1) up to, but not beyond, the date and time of exercise of any Warrants
if such adjustment, when taken in the aggregate with all other adjustments
not previously made, adds or subtracts less than 1% to the number of shares
of Common Stock for which the Warrants initially issued pursuant to this
Agreement are 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 all other adjustments
required by this Section 2 and not previously made, would result, in the
aggregate, 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.
2.11 WHEN ADJUSTMENT NOT REQUIRED. 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 making of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
2.12 SUPERSEDING ADJUSTMENT. If, at any time after any adjustment of the
Warrant Price shall have been made pursuant to this Section 2 as the result
of any issuance of warrants, options, rights or convertible or exchangeable
securities, and such warrants, options or rights, or the right of
conversion or exchange in such other convertible or exchangeable
securities, shall expire, and all or a portion of such warrants, options or
rights, or the right of conversion or exchange with respect to all or a
portion of such other convertible or exchangeable securities, as the case
may be, shall not have been exercised, then such previous adjustment shall
be rescinded and annulled and, if applicable, the Warrant Price shall be
recalculated as if all such expired and unexercised warrants, or options,
rights, or convertible or exchangeable securities had never been issued,
provided that, if such expiration would result in an increase in the
Warrant Price then in effect, such increase shall not be effective until 30
days after written notice thereof has been given to all Holders.
3 EXERCISE
3.1 EXERCISE OF WARRANT.
3.1.1 Holder may exercise a Warrant by surrendering this Warrant
Certificate, with the form of exercise notice attached hereto as EXHIBIT A
duly executed by Holder, and making payment to the Company of the aggregate
Warrant Price for the applicable Warrant Shares (i) in cash, by certified
check, bank check or wire transfer to an account designated by the Company
or (ii) by surrender of the appropriate part of this Warrant determined in
accordance with the provisions of Section 3.1.2, or by a combination of the
foregoing. Upon any partial exercise of the Warrants, the Company, at its
expense, shall promptly issue to Holder for its surrendered Warrant
Certificate a replacement Warrant Certificate identical in all respects to
this Warrant Certificate, except that the number of Warrant Shares shall be
reduced accordingly.
3.1.2 Should the Holder elect to make payment of all or any
part of the Warrant Price attributable to the Warrant Shares being
purchased by surrender of this Warrant, the Warrant may be exercised by
being exchanged in whole or in part for a number of Warrant Shares having
an aggregate Current Market Price on the date of such exercise equal to
the amount that is equal to (x) the aggregate Current Market Price of the
Warrant Shares subject to the Warrant designated by the Holder hereof on
the date of the exercise minus (y) the aggregate Warrant Price of such
designated Warrant Shares (the "Warrant Consideration Amounts"). Upon
any such cashless exercise, the number of Warrant Shares purchasable upon
exercise of the Warrant shall be reduced by such designated number of
Warrant Shares, and if a balance of purchasable Warrant Shares remains
after such exercise, the Company shall execute and deliver to the Holder
hereof a new Warrant for such balance of Warrant Shares. In the event of
any exercise of the rights represented by this Warrant, unless this Warrant
has expired, a new Warrant representing the number of Warrant Shares equal
to the number of Warrant Shares purchasable under this Warrant less the
number of Warrant Shares purchased hereunder shall be issued to the Holder
hereof within such time. For purposes of this Agreement, "Current Market
Price" shall mean, in respect of any share of Common Stock on any date
herein specified, (a) if there shall then be a public market for the
Common Stock, the last sale price on the Nasdaq National Market ("Nasdaq")
or principal stock exchange on which such Common Stock is then listed on
the third business day immediately preceding such date, (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
Nasdaq or such principal exchange, (iii) if the Common Stock is not then
listed or admitted to trading on Nasdaq or 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 quotation systems upon which the
Common Stock is then quoted, provided that such quotation systems are
operated by the National Association of Securities Dealers ("NASD") or its
affiliates or the National Quotation Bureau, Inc. or its affiliates, (iv)
if none of such entities 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 then routinely making price quotations in the Company's Common
Stock selected by the Company; or (b) at any time that there is no public
market for the Common Stock, the fair market value per share of Common
Stock on such date as determined in good faith by the Board of Directors of
the Company.
3.1.3 Each person in whose name any Warrant Share certificate is
issued upon exercise of any Warrants shall for all purposes be deemed to
have become the holder of record of the Warrant Shares for which such
Warrant was exercised, and such Warrant Share certificate shall be dated
the date upon which the Warrant exercise notice was duly surrendered and
payment of the purchase price was tendered to the Company.
3.1.4 Notwithstanding any other provision hereof, if an exercise
of any portion of any Warrant is to be made in connection with any Special
Transaction, the exercise of such portion may, at the election of the
holder of such portion, be conditioned upon the consummation of such
Special Transaction, in which case such exercise shall not be deemed to be
effective until the consummation of such transaction.
3.2 ISSUANCE OF WARRANT SHARES. The Warrant Shares purchased shall be
issued to the holder exercising the Warrants as of the close of business on
the date on which all actions and payments required to be taken or made by
Holder, pursuant to Section 3.1, shall have been so taken or made.
Certificates for the Warrant Shares so purchased shall be delivered to
Holder within 10 days after the Warrants are surrendered.
4 RIGHTS OF HOLDER
4.1 RIGHTS PRIOR TO EXERCISE. Holder shall not, solely by virtue of the
Warrants and prior to the issuance of the Warrant Shares upon the exercise
thereof, be entitled to any rights of a shareholder in the Company,
including without limitation the right to receive cash dividends payable to
the Company's shareholders. No provision hereof, in the absence of
affirmative action by Holder to purchase, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability for the
Warrant Price of the Common Stock acquirable by exercise hereof or as a
shareholder of the Company.
4.2 ISSUANCE OF WARRANT SHARES. The Company shall not 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
the Warrants, 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, including assisting Holder in making any governmental filings
necessary prior to or in connection with any exercise of the Warrants.
Without limiting the generality of the foregoing, the Company will (a) 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 the Warrants and (b) 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 with respect to the Warrants.
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 validity of the Warrants and the
obligations of the Company hereunder.
4.3 CLOSING OF BOOKS. Unless the Company is closing its books with respect
to all shares of Common Stock, the Company shall not close its books
against the transfer of any Warrant or Warrant Share issued or issuable
upon exercise of the Warrants.
5 TRANSFERABILITY
Subject to the requirements of the Securities Act or any applicable
state securities laws, Holder may sell, assign, transfer or otherwise
dispose of all or any portion of the Warrants or the Warrant Shares
acquired upon any exercise hereof at any time and from time to time. Upon
the sale, assignment, transfer or other disposition of all or any portion
of the Warrants, Holder shall deliver to the Company a written notice of
such in the form attached hereto as EXHIBIT B, duly executed by Holder,
which includes the identity and address of any purchaser, assignor or
transferee.
6 LEGEND ON WARRANT SHARES
Certificates evidencing the Warrant Shares shall bear the following
legend until such time as the terms of the Stock Purchase Agreement have
expired:
"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 JUNE 1, 1999,
BETWEEN THE GOOD GUYS, INC. AND RONALD UNKEFER, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE GOOD GUYS, INC. AND WILL BE FURNISHED
WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST. THE HOLDER
OF THIS CERTIFICATE AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF
SUCH STOCK PURCHASE AGREEMENT."
7 PIGGY-BACK AND DEMAND REGISTRATION
7.1 PIGGY-BACK REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at
any time intends to register any of its debt or equity securities, or any
instrument convertible into or exchangeable for its debt or equity
securities ("Securities"), of the type and the class of Securities
issuable, from time to time, upon exercise of this Warrant, under the
Securities Act of 1933, (the "Securities Act") (other than by a
registration on Form S-8 or S-4 or any successor or similar form), whether
or not for sale for its own account, it will each such time give prompt
written notice to Holder of its intention to do so and of Holder's rights
under this SECTION 7.1. If the Holder so elects, the Company will use its
best efforts to effect the registration under the Securities Act of all
Securities which the Company has been so requested to register by the
Holder. The Company will pay all Registration Expenses in connection with
each registration of Securities requested pursuant to this SECTION 7.1.
(b) PRIORITY. Holder's right to include Registrable Securities
in such offering shall be subject to usual and customary cut-back
restrictions.
(c) NUMBER OF INCIDENTAL REGISTRATIONS. Holder shall be
entitled to have Holder's Securities included in an unlimited number of
registrations pursuant to this SECTION 7.1.
7.2 DEMAND REGISTRATION.
(a) REQUEST. At any time following the second anniversary of
the Issue Date and upon the written request of Holder requesting that the
Company effect the registration under the Securities Act of all or part of
Holder's Securities and specifying the intended method of disposition
thereof, the Company will, subject to the terms of this Agreement, effect
the registration under the Securities Act of Securities which the Company
has been so requested to register by Holder for disposition in accordance
with the intended method of disposition stated in such request, all to the
extent requisite to permit the disposition of the Securities, so to be
registered. Usual and customary deferral provisions, not to exceed one
hundred eighty (180) days, shall apply.
(b) REGISTRATION STATEMENT FORM. Registrations under this
SECTION 7.2 shall be on such appropriate registration form of the
Securities and Exchange Commission (the "Commission") (i) as shall be
selected by the Company and reasonably acceptable to Holder and (ii) as
shall permit the disposition of such Securities in accordance with the
intended method or methods of disposition specified in its request for such
registration.
(c) EXPENSES. The Company will pay all Registration Expenses in
connection with any registration required pursuant to this SECTION 7.2.
(d) EFFECTIVE REGISTRATION STATEMENT. A registration statement
pursuant to this SECTION 7.2 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective,
(ii) if, after it has become effective, such registration becomes subject
to any stop order, injunction or other order or requirement of the
Commission or court for any reason which is not lifted, or (iii) the
conditions to closing specified in the purchase agreement or underwriting
agreement, if any, entered into in connection with such registration are
not satisfied, other than by reason of some act or omission by Holder.
(e) NUMBER OF REQUESTED REGISTRATIONS. The Company shall be
obligated to effect only one demand registration, regardless of the number
of owners of the Warrants or any Securities issued pursuant to exercise of
such Warrants.
7.3 REFERENCE TO HOLDERS. If any registration statement refers to Holder
by name or otherwise as the holder of any Securities of the Company, then
Holder shall have the right to require (x) the insertion therein of
language, in form and substance satisfactory to Holder to the effect that
the holding by Holder of such Securities does not necessarily make Holder a
"controlling person" of the Company within the meaning of the Securities
Act and is not to be construed as a recommendation by Holder of the
investment quality of the Company's debt or equity securities covered
thereby and that such holding does not imply that Holder will assist in
meeting any future financial requirements of the Company, or (y) in the
event that such reference to Holder by name or otherwise is not required by
the Securities Act or any rules and regulations promulgated thereunder, the
deletion of the reference to Holder.
8 MISCELLANEOUS
8.1 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 prepaid), or guaranteed
overnight delivery, to the Company at the address at which its principal
business office is located from time to time, and Holder at the address of
which it advises the Company in writing.
8.2 PAYMENT OF TAXES. The Company shall pay all expenses in
connection with, and all taxes and other governmental charges that may be
imposed with respect to, the issuance or delivery of Warrant Shares, 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 Warrant Shares 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.
8.3 AMENDMENT; WAIVER. This Warrant Certificate may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by the Company and Holder. No failure to exercise, and no delay in
exercising, any right, power or privilege under this Warrant Certificate
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 Company and Holder. 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 time for performance of any
other obligations or any other acts.
8.4 HEADINGS. The headings contained in this Warrant Certificate 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 Warrant
Certificate.
8.5 GOVERNING LAW; INTERPRETATION. This Warrant Certificate shall be
construed in accordance with and governed for all purposes by the laws of
the State of Delaware.
8.6 WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. The Warrants
are exchangeable, upon the surrender hereof by Holder at the principal
office of the Company, for new Warrants of like tenor representing in the
aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Holder
at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "Issue Date" hereof regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by the Warrants shall be issued.
8.7 REPLACEMENT. Upon receipt of evidence reasonably satisfactory to
the Company (an affidavit of the Holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing any Warrant, and in the case of any such loss, theft or
destruction, upon the posting by such Holder of a bond in such reasonable
amount as the Company may direct as indemnity against any claim that may be
made against it with respect to such Warrant or receipt of indemnity
reasonably satisfactory to the Company (provided that if the Holder is a
financial institution or other institutional investor its own agreement
shall be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Company shall (at its expense) execute
and deliver in lieu of such certificate a new certificate of like kind
representing the same rights represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and delivered as of the 1st day of June, 1999.
THE GOOD GUYS, INC.
By: /S/ ROBERT A. GUNST
------------------------------------
Name: ROBERT A. GUNST
Title: CHIEF EXECUTIVE OFFICER
<PAGE>
EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of Series _____ Warrant]
The undersigned registered owner of this Series _____ 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)
<PAGE>
EXHIBIT B
ASSIGNMENT NOTICE
[To be executed only upon transfer of Series _____ 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 Series _____ 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)
EXHIBIT B
PROMISSORY NOTE
$5,000,000.00 Dallas, Texas
June 8, 1999
FOR VALUE RECEIVED, Ronald A. Unkefer, a Texas resident, (the
"Maker"), HEREBY PROMISES TO PAY in full to the order of First Broadcasting
Management, LLC, a Delaware limited liability company (the "Payee"), or any
assignee thereof (collectively, the "Holder"), at Payee's principal
business address of First Broadcasting Management, 750 N. St. Paul, Tenth
Floor, Dallas, Texas 75201, or at such other place as the Holder may
hereafter designate in writing, the principal sum of FIVE MILLION and
NO/100THS Dollars ($5,000,000.00) on or before December 31, 1999 (the
"Stated Maturity Date"), together with interest on the unpaid balance of
that principal sum at the rate per annum of the floating prime interest
rate plus an additional 1% (calculated on the basis of a 360-day year)
payable on the date that unpaid balance shall become due and payable.
Interest shall accrue on that unpaid balance from and including the date
hereof to, but excluding, the date that unpaid balance is paid in full.
The Maker shall pay on demand interest on any overdue principal and
interest at the rate per annum equal to the lesser of (i) 18% calculated as
set forth above) and (ii) the highest lawful rate permitted by applicable
law (the "Highest Lawful Rate").
Both the principal of and the interest on this Promissory Note are
payable in United States dollars by certified or official bank check or by
wire transfer pursuant to written wire transfer instructions delivered by
the Holder to the Maker. The unpaid principal of and accrued and unpaid
interest on this Promissory Note may be prepaid at any time without premium
or penalty.
If at any time the rate of interest hereinabove provided for would
exceed the Highest Lawful Rate, the rate of interest to accrue on the
unpaid balance of principal under this Promissory Note shall be limited to
the Highest Lawful Rate. At all such times, if any, as Texas law shall
establish the Highest Lawful Rate, the Highest Lawful Rate shall be the
"indicated" ceiling (as defined in Chapter One of the Texas Credit Code,
V.T.C.S. Art. 5069-1.04 et seq.) from time to time in effect. Regardless
of any provision contained herein, or in any other document executed in
connection herewith, the holder hereof shall never be entitled to receive,
collect or apply, as interest hereon, any amount in excess of the Highest
Lawful Rate, and in the event the holder hereof ever receives, collects or
applies, as interest, any such excess, such amount shall be deemed a
partial prepayment of principal, and, if the principal hereof is paid in
full, any remaining excess shall forewith be refunded to the payor. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Maker and the Holder
shall, to the maximum extent permitted by law, (a) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayment and the effects thereof and (c) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of this Promissory Note so that the
interest rate is uniform throughout the entire term hereof.
In case any one or more of the provisions contained in this Promissory
Note shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision hereof.
This Promissory Note shall be governed by, and construed and
interpreted in accordance with, the substantive laws (but not the rules
governing conflicts of laws) of the State of Texas.
IN WITNESS WHEREOF, the undersigned has caused the Note to be duly
executed and delivered in his name and on his behalf, all as of the date
and year first written above.
MAKER:
/S/ RONALD A. UNKEFER
- ----------------------------
Ronald A. Unkefer
PROMISSORY NOTE SIGNATURE PAGE
