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Exhibit 4.3  


PRIVILEGED & CONFIDENTIAL

ATTORNEY WORK PRODUCT

FOR INTERNAL REVIEW ONLY  


  
 

    RIGHTS AGREEMENT
  
  
  DATED AS OF MARCH 7, 2003
  
  
  BY AND BETWEEN
  
  
  GAMETECH INTERNATIONAL, INC.
  
  
  AND
  
  
  MELLON INVESTOR SERVICES LLC,
  AS RIGHTS AGENT    







TABLE OF CONTENTS  



	 
	 	 
	 	Page

	Section 1.	 	Definitions	 	1
	Section 2.	 	Appointment of Rights Agent	 	4
	Section 3.	 	Issue of Right Certificates	 	4
	Section 4.	 	Form of Right Certificates	 	6
	Section 5.	 	Countersignature and Registration	 	6
	Section 6.	 	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	 	6
	Section 7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	8
	Section 8.	 	Cancellation and Destruction of Right Certificates	 	9
	Section 9.	 	Availability of Preferred Shares	 	9
	Section 10.	 	Preferred Shares Record Date	 	10
	Section 11.	 	Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights	 	10
	Section 12.	 	Certificate of Adjusted Purchase Price or Number of Shares	 	17
	Section 13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 	17
	Section 14.	 	Fractional Rights and Fractional Shares	 	19
	Section 15.	 	Rights of Action	 	21
	Section 16.	 	Agreement of Right Holders	 	21
	Section 17.	 	Right Certificate Holder Not Deemed A Stockholder	 	21
	Section 18.	 	Concerning the Rights Agent	 	22
	Section 19.	 	Merger or Consolidation or Change of Name of Rights Agent	 	22
	Section 20.	 	Rights and Duties of Rights Agent	 	23
	Section 21.	 	Change of Rights Agent	 	25
	Section 22.	 	Issuance of New Right Certificates	 	26
	Section 23.	 	Redemption	 	26
	Section 24.	 	Exchange	 	26
	Section 25.	 	Notice of Certain Events	 	27
	Section 26.	 	Notices	 	28
	Section 27.	 	Supplements and Amendments	 	29
	Section 28.	 	Successors	 	29
	Section 29.	 	Benefits of this Agreement	 	29
	Section 30.	 	Determinations and Actions by the Board of Directors	 	29
	Section 31.	 	Severability	 	30
	Section 32.	 	Governing Law	 	30
	Section 33.	 	Counterparts	 	30
	Section 34.	 	Descriptive Headings	 	30
	

Exhibit A    —    Form of Certificate of Designations	
 	

 
	

Exhibit B    —    Form of Right Certificate	
 	

 
	

Exhibit C    —    Summary of Rights to Purchase Preferred Shares	
 	

 








RIGHTS AGREEMENT  


        RIGHTS AGREEMENT, dated as of March 7, 2003, between GameTech International, Inc., a Delaware corporation (the
"Company"), and Mellon Investor Services LLC, a New Jersey limited liability company, as rights agent (the "Rights
Agent"). 


        The
Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a "Right" and,
collectively, the "Rights") for each Common Share (as hereinafter defined) of the Company outstanding as of the Close of Business (as defined below) on
March 17, 2003 (the "Record Date"), each Right representing the right to purchase one one-thousandth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with
respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined). 


        Accordingly,
for and in consideration of the premises and the mutual agreements set forth herein, and for other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows: 


        Section 1.
Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated (other terms may be
defined elsewhere in this Agreement): 



        (a)  "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding, but shall not include an Exempt Person (as such term is hereinafter defined);  provided, however, that (i) if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an "Acquiring Person" (as defined in this Section 1(a)) became or has become such inadvertently (including, without
limitation, because (A) such Person was unaware that it beneficially owned an amount or percentage of Common Shares that would otherwise cause such Person to be an "Acquiring Person" or
(B) such Person was aware of the extent of its Beneficial Ownership of Common Shares but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and
without any intention of changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement unless
and until such Person shall have failed to divest itself, as soon as practicable (as determined, in good faith, by the Board of Directors of the Company), of Beneficial Ownership of a sufficient
number of Common Shares so that such Person would no longer otherwise qualify as an "Acquiring Person" under this Agreement; (ii) if, as of the date
hereof or at any time
after the date hereof and prior to the first public announcement of the adoption of this Agreement, any Person (other than a Grandfathered Person, as defined and addressed in clause (iii)
immediately below) is or becomes the Beneficial Owner of 15% or more of the Common Shares then outstanding (an "Existing 15% Holder"), such Person shall
not be deemed to be or to become an "Acquiring Person" unless and until such time as such Person shall, after the first public announcement of the adoption of this Agreement, become the Beneficial
Owner of an additional 1.0% or more of the Common Shares then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares or pursuant to
a split or subdivision of the outstanding Common Shares), unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 15% or more of
the Common Shares then outstanding; provided, however, that the exception (from qualification as an
"Acquiring Person" under this Agreement) provided in this clause (ii) shall not apply to any Person who or which is not an Affiliate or Associate of an Existing 15% Holder on the date of the
first public announcement of the adoption of this Agreement and who or which subsequently acquires direct or indirect control of an Existing 15% Holder without the prior written approval of the Board
of Directors of the Company; (iii) if, as of February 25, 2003, any individual (other than an Existing 15% Holder, as defined and addressed in
clause (ii) immediately 






 


above) who on such date both (A) was a member of the Board of Directors of the Company and (B) beneficially owned 15% or more of the Common Shares then outstanding (a
"Grandfathered Person"), such individual shall not be deemed to be, to have become or to become an "Acquiring Person" unless and until such time as such
Person shall, after February 25, 2003, become the Beneficial Owner of an additional 1.0% or more of the Common Shares then outstanding (other than pursuant to a dividend or distribution paid or
made by the Company on the outstanding Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), unless, upon becoming the Beneficial Owner of such additional Common
Shares, such Person is not then the Beneficial Owner of 15% or more of the Common Shares then outstanding; and (iv) no Person shall become an "Acquiring Person" solely as the result of the
purchase or acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of Common Shares beneficially owned by such Person to
15% (or such other percentage as would otherwise result in such person becoming an "Acquiring Person" under this Section 1(a)) or more of the Common Shares then outstanding;  provided, however, that if a Person shall become the Beneficial Owner of 15% (or such other percentage)
or more of the Common Shares then outstanding by reason of such share purchase or acquisition by the Company (as addressed in clause (iv) of this Section 1(a)) and such Person shall
thereafter become the Beneficial Owner of any additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person shall be deemed to be an "Acquiring Person" unless upon becoming the Beneficial Owner of such additional Common Shares such
Person does not beneficially own 15% (or such other percentage as would otherwise result in such person becoming an "Acquiring Person" under this Section 1(a)) or more of the Common Shares then
outstanding. 


        (b)  "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement. 


        (c)  "Associate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement. 



        (d)  A
Person shall be deemed the "Beneficial Owner" of and shall be deemed to "beneficially
own" any securities: 



        (i)    which
such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly; 


        (ii)  which
such Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide
underwritten public offering of securities), or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise;  provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
(x) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (y) securities which such Person has a right to acquire upon the exercise of Rights at any time prior to the time that any Person becomes an Acquiring Person, or
(z) securities issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring Person if such Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof ("Original Rights") or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to Original Rights; or (B) the right to vote pursuant to any agreement, arrangement or 




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understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or 


        (iii)  which
are beneficially owned, directly or indirectly, by any other Person and with respect to which such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company. 





        Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase "then outstanding," when used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder. 



        (e)  "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of
Nevada are authorized or obligated by law or executive order to close. 


        (f)    "Close of Business" on any given date shall mean 5:00 P.M., Pacific time, on such date;  provided, however, that, if
such date is not a Business Day, it shall mean 5:00 P.M., Pacific
time, on the next succeeding Business Day. 


        (g)  "Common Shares" when used with reference to the Company shall mean the shares of common stock, par value $0.001 per
share, of the Company. "Common Shares" when used with reference to any Person other than the Company shall mean the capital stock (or, in the case of a non-corporation entity, equivalent
or similar equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such
first-mentioned Person. 


        (h)  "Distribution Date" shall have the meaning set forth in Section 3(a) hereof. 


        (i)    "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 


        (j)    "Exchange Ratio" shall have the meaning set forth in Section 24(a) hereof. 



        (k)  "Exempt Person" shall mean the Company or any Subsidiary (as such term is hereinafter defined) of the Company, in each
case including, without limitation, in its fiduciary capacity, or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding Common Shares for or
pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company. 


        (l)    "Final Expiration Date" shall have the meaning set forth in Section 7(a) hereof. 



        (m)  "NASDAQ" shall mean the National Association of Securities Dealers, Inc. Automated Quotation System. 


        (n)  "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and
shall include any successor (by merger or otherwise) of such entity. 



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        (o)  "Preferred Shares" shall mean shares of Series A Junior Participating Preferred Stock, par value $0.001 per share,
of the Company having the rights and preferences set forth in the Form of Certificate of Designations attached to this Agreement as Exhibit A. 


        (p)  "Purchase Price" shall have the meaning set forth in Section 4 hereof. 


        (q)  "Record Date" shall have the meaning set forth in the second paragraph hereof. 



        (r)  "Redemption Date" shall have the meaning set forth in Section 7(a) hereof. 


        (s)  "Redemption Price" shall have the meaning set forth in Section 23(a) hereof. 


        (t)    "Right" and "Rights" shall have the meanings set forth in the second
paragraph hereof. 


        (u)  "Right Certificate" shall have the meaning set forth in Section 3(a) hereof. 



        (v)  "Shares Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such, or such earlier date
that the Board of Directors has become aware that an Acquiring Person has become such. 


        (w)  "Subsidiary" of any Person shall mean any corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by such Person. 


        (x)  "Summary of Rights" shall have the meaning set forth in Section 3(b) hereof. 


        (y)  "Trading Day" shall have the meaning set forth in Section 11(d) hereof. 




        Section 2.
Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or
desirable. The Rights Agent shall have no duty to supervise, and in no event shall be liable for, the acts or omissions of any such co-Rights Agents. 


        Section 3.
Issue of Right Certificates. (a) Until the Close of Business on the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors of the Company prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than an Exempt Person) of, or of the first public announcement of the intention of such Person (other than an Exempt Person)
to commence, a tender or exchange offer the consummation of which would result in any Person (other than an Exempt Person) becoming the Beneficial Owner of Common Shares of the Company aggregating 15%
or more of the then outstanding Common Shares of the Company (including any such date which is after the date of this Agreement and prior to the issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares of the Company registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) Rights (and any right to receive Right Certificates) will be transferable only in connection with the transfer of Common Shares of the Company. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested and provided with all
necessary information, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company as of the Close of Business on the Distribution Date (other than any
Acquiring Person or any Affiliate or Associate of any Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of  Exhibit B hereto (a "Right Certificate"), evidencing one Right 


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(subject to adjustment as provided herein) for each Common Share so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 


        The
Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution Date and, if such notification is given orally, the Company shall confirm the same
in writing on or prior to the Business Day next following. Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date has
not occurred. 



        (b)  On
the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form of  Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company. With respect to certificates for Common Shares of the Company
outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with a copy of the Summary of
Rights. Until the Distribution Date (or, if earlier, the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Shares of the Company outstanding on
the Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby. 


        (c)  Rights
shall be issued in respect of all Common Shares issued or disposed of (including, without limitation, upon disposition of Common Shares out of treasury stock or
issuance or reissuance of Common Shares out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, or in certain
circumstances provided in Section 22 hereof, after the Distribution Date. Certificates issued for Common Shares (including, without limitation, upon transfer of outstanding Common Shares,
disposition of Common Shares out of treasury stock or issuance or reissuance of Common Shares out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form: 



THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN GAMETECH INTERNATIONAL, INC. AND MELLON INVESTOR SERVICES LLC, AS
RIGHTS AGENT, DATED AS OF MARCH 7, 2003, AS IT MAY BE AMENDED FROM TIME TO TIME (THE "AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF GAMETECH INTERNATIONAL, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE AGREEMENT, SUCH RIGHTS (AS DEFINED IN THE AGREEMENT) WILL BE EVIDENCED BY SEPARATE
CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. GAMETECH INTERNATIONAL, INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE AGREEMENT WITHOUT CHARGE AFTER RECEIPT
OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON (AS DEFINED IN THE AGREEMENT) WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE AGREEMENT) AND CERTAIN TRANSFEREES THEREOF BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 




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With
respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Shares of the Company represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such certificate (except as otherwise provided herein) shall also constitute the transfer of the Rights associated with the
Common Shares of the Company represented thereby. In the event that the Company purchases or otherwise acquires any Common Shares of the Company after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares of the Company shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common
Shares of the Company which are no longer outstanding. 


        Notwithstanding
this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights. 


        Section 4.
Form of Right Certificates. The Right Certificates (and the forms of election to purchase Preferred Shares and of
assignment to be printed on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights, duties or responsibilities of the
Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any applicable rule or regulation made pursuant thereto
or with any applicable rule or regulation of the National Association of Securities Dealers, Inc. or any stock exchange or interdealer quotation system on which Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of this Agreement, the Right Certificates shall entitle the holders thereof to purchase such number of one one-thousandths of a
Preferred Share as shall be set forth therein at the price per one one-thousandth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-thousandths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein. 


        Section 5.
Countersignature and Registration. The Right Certificates shall be executed on behalf of the Company by its Chief
Executive Officer or its President, either manually or by facsimile signature, shall have affixed thereto the Company's seal or a facsimile thereof, and shall be attested by the Secretary of the
Company, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the individual who signed such
Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any individual who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such individual was not such an officer. 



        Following
the Distribution Date and receipt by the Rights Agent of notice to that effect and all other relevant information referred to in Section 3(a), the Rights Agent will keep
or cause to be kept, at its office or agency designated for such purpose, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates. 


        Section 6.
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, any Right Certificate or Right Certificates
(other 


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than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the registered holder to purchase a like number of one one-thousandths of a
Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights Agent designated for such purpose. The Right Certificates are transferable only on the registry books of the Rights Agent. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate or Certificates until the registered holder thereof
shall have (i) properly completed and signed the certificate contained in the form of assignment set forth on the reverse side of each such Right Certificate and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof and the Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner), and of the
Rights evidenced thereby, as the Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company or the Rights Agent may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates. The Rights Agent shall have no duty or obligation under any Section of this Agreement which requires the payment
by a Rights holder of applicable taxes or governmental charges unless and until it is satisfied that all such taxes and/or governmental charges have been paid. 


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        Subject to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence
satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated. 


        Section 7.
Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Except as otherwise provided herein, the
Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may (subject to Section 11(a)(ii) and except as otherwise provided
herein) exercise the Rights evidenced thereby, in whole or in part, upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed and
properly completed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number
of one one-thousandths of Preferred Shares (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised, at any time which is both after the
Distribution Date and prior to the time (the "Expiration Date") that is the earliest of (i) the Close of Business on March 7, 2013 (the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. 



        (b)  The
Purchase Price for each one one-thousandth of a Preferred Share purchasable pursuant to the exercise of a Right shall initially be $16.00. The Purchase
Price and the number of one one-thousandths of a Preferred Share (or other securities or property) to be acquired upon exercise of a Right shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof, and shall be payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7. 


        (c)  Except
as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed and
properly completed, accompanied by payment of the aggregate Purchase Price for the Preferred Shares to be purchased and an amount equal to any applicable tax or charge required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier's check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares, or make available if the Rights Agent is such transfer agent, certificates for the number of Preferred
Shares to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) requisition from a depositary agent appointed by the Company depositary receipts representing (interests in) such number
of one one-thousandths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer
agent with such depositary agent), and the Company hereby directs such depositary agent to comply with such request; (ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of the issuance of fractional shares in accordance with Section 14 hereof; (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may properly be designated by such holder; and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate. 



8





 




        (d)  In
case the registered holder of any Right Certificate shall exercise less than all of the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the exercisable Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof. 


        (e)  Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported transfer or purported exercise of Rights pursuant to Section 6 hereof or this Section 7 unless such registered holder
shall have (i) properly completed and signed the certificate contained in the form of assignment or form of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such transfer or exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced
thereby as the Company or the Rights Agent may reasonably request. 




        Section 8.  Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to
the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Right Certificates, and, in
such case, shall deliver a certificate of destruction thereof to the Company. 


        Section 9.
Availability of Preferred Shares. The Company covenants and agrees that it will cause to be reserved and kept available
out of its authorized and unissued shares of preferred stock or any Preferred Shares held in its treasury the number of Preferred Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with this Agreement. The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares. 


        So
long as the Preferred Shares issuable upon the exercise of Rights may be listed or admitted to trading on any national securities exchange, or quoted on NASDAQ, the Company shall use
its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on such exchange, or quoted on NASDAQ,
upon official notice of issuance upon such exercise. 


        From
and after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of Preferred Shares upon the exercise of
Rights, to register and qualify such Preferred Shares under the Securities Act and any applicable state securities or "Blue Sky" laws (to the extent exemptions therefrom are not available), cause such
registration statement and qualifications to become effective as soon as practicable after such filing and keep such registration and qualifications effective (with a prospectus at all times meeting
the requirements of the Securities Act) until the earlier of the date as of which the Rights are no longer exercisable for such securities and the Expiration Date. The Company may temporarily suspend,
for a period of time not to exceed 90 days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a 


9





 




public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section and give the
Rights Agent a copy of such announcement. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained and until a registration statement under the Securities Act shall have been declared effective, unless an exemption therefrom is available. 


        The
Company further covenants and agrees that it will pay when due and payable any and all taxes and governmental charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any
such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax or charge is due. 


        Section 10.
Preferred Shares Record Date. Each Person in whose name any certificate for Preferred Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable taxes or charges) was made;  provided, however, that, if the date of such surrender and payment is a date upon which the Preferred
Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding day on which
the Preferred Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein. 


        Section 11.
Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights. The Purchase Price, the number of
Preferred Shares or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this
Section 11. 



        (a)  (i) In
the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of
its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the number and kind of shares of capital stock issuable upon exercise of a Right as of the record date for such dividend or the
effective date of such subdivision, combination or reclassification, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. 



10





 


        (ii)  Subject
to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person (the first occurrence of such event being referred to hereinafter as
the "Flip-In Event"), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect immediately prior to the
Flip-In Event multiplied by the number of one one-thousandths of a Preferred Share for which a Right was exercisable immediately prior to such Flip-In Event,
whether or not such Right was then exercisable, and (B) each holder of a Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof,
shall thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares as shall equal the result obtained by dividing the Purchase Price (as so adjusted) by 50% of the current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided,  however, that the Purchase Price (as so adjusted) and the number of
Common Shares so receivable upon exercise of a Right shall, following the
Flip-In Event, be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary, however, from
and after the Flip-In Event, any and all Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a
transferee of any Acquiring Person (or any such Affiliate or Associate thereof) who becomes a transferee after the Flip-In Event or (z) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip-In Event pursuant to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding the transferred Rights or (II) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees of such Persons, shall be void
without any further action and any holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result
of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the Flip-In Event, no Right Certificate
shall be issued pursuant to Section 3 or Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have become void pursuant to the provisions of this paragraph shall be canceled. From and after the occurrence of an event specified in
Section 13(a) hereof, any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii). The Company shall give the Rights Agent written notice of the identity of any such Acquiring Person, Associate or Affiliate, or the
transferee of any of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not have any knowledge of the identity of any such
Acquiring Person, Associate or Affiliate, or the transferee of any of the foregoing unless and until it shall have received such notice. 


        (iii)  The
Company may at its option substitute for a Common Share issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) a number of
Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one
Common Share. In the event that there shall not be sufficient Common Shares authorized but unissued (or issued but not outstanding) to permit the exercise in full of the Rights in 




11





 






accordance with the foregoing subparagraph (ii), the Board of Directors shall, with respect to such deficiency, to the extent permitted by applicable law and any material agreements then in effect to
which the Company is a party, (A) determine the excess (such excess, the "Spread") of (1) the value of the Common Shares issuable upon the
exercise of a Right in accordance with the foregoing subparagraph (ii) (the "Current Value") over (2) the Purchase Price (as adjusted in
accordance with the foregoing subparagraph (ii)), and (B) with respect to each Right (other than Rights which have become void pursuant to the foregoing subparagraph (ii)), make adequate
provision to substitute for the Common Shares issuable in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the Purchase Price (as adjusted in accordance
therewith), (1) cash, (2) a reduction in such Purchase Price, (3) Preferred Shares or other equity securities of the Company (including, without limitation, shares or fractions of
shares of preferred stock which, by virtue of having dividend, voting, liquidation and other rights substantially comparable to those of the Common Shares, are deemed in good faith by the Board of
Directors to have substantially the same value as the Common Shares (such Preferred Shares and shares or fractions of shares of preferred stock are hereinafter referred to as
"Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having
a value which, when added to the value of the Common Shares
issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase Price), where such aggregate value has been determined
by the Board of Directors upon the advice of a nationally recognized investment banking firm selected in good faith by the Board of Directors; provided,  however, that if the Company shall not make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days
following the Flip-In Event (the date of the Flip-In Event being the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of a Right
and without requiring payment of such Purchase Price, Common Shares (to the extent available), and then, if necessary, such number or fractions of Preferred Shares (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon the occurrence of the Flip-In Event, the Board of Directors shall determine in good faith
that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of the Rights, then, if the Board of Directors so elects, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution
Period"). To the extent that the Company determines that some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the
Rights Agent whenever it makes a public announcement pursuant to this Section and give the Rights Agent a copy of such announcement. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current per share market price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional value
of any "Common Stock Equivalent" shall be deemed to equal the current per share market price 




12





 



of the Common Shares. The Board of Directors of the Company may, but shall not be required to, establish procedures to allocate the right to receive Common Shares upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii). 




        (b)  In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares
("Equivalent Preferred Shares")) or securities convertible into Preferred Shares or Equivalent Preferred Shares at a price per Preferred Share or
Equivalent Preferred Shares (or having a conversion price per share, if a security convertible into Preferred Shares or Equivalent Preferred Shares) less than the then current per share market price
of the Preferred Shares (determined pursuant to Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares and Equivalent Preferred Shares outstanding on such record
date plus the number of Preferred Shares and Equivalent Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or Equivalent Preferred Shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of Preferred Shares and Equivalent Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or
Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible);  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares and Equivalent Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had not been fixed. 



        (c)  In
case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred
Shares (determined pursuant to Section 11(d) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company whose determination
shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to
one Preferred Share, and the denominator of which shall be such current per share market price (determined pursuant to Section 11(d) hereof) of the Preferred Shares;  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is
fixed; and 



13





 





in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 


        (d)  (i) Except
as otherwise provided herein, for the purpose of any computation hereunder, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days immediately prior to but not including such date; provided,  however, that, in the event that the current per
share market price of the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the expiration of 30 Trading Days after but not including the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price
per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in
either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board
of Directors of the Company. The term "Trading Day" shall mean a day on which the principal national securities exchange or quotation system on which
the Security is listed or admitted to trading is open for the transaction of business, or, if the Security is not listed or admitted to trading on any national securities exchange or quotation system,
a Business Day. 



        (ii)  For
the purpose of any computation hereunder, if the Preferred Shares are publicly traded, the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded but the Common Shares are publicly traded, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one thousand (as adjusted in accordance with the Certificate of Designation
for the Preferred Shares). If neither the Common Shares nor the Preferred Shares are publicly traded, "current per share market price" shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. 




        (e)  No
adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price;  provided, however, that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one
one-hundred-thousandth of a Preferred Share or one one-hundredth of a Common Share or of any other share or security as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by 



14





 


this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the Expiration Date. 


        (f)    If,
as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than Preferred Shares, thereafter the Purchase Price and the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h),
11(i) and 11 (m) hereof, as applicable, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares. 


        (g)  All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided
herein. 


        (h)  Unless
the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a Preferred Share (calculated to the nearest one one-hundred-thousandth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-thousandths of a share purchasable upon the exercise of a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment. 


        (i)    The
Company may elect, on or after the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights in
substitution for any adjustment in the number of one one-thousandths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-thousandths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one one-hundredth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement (with
prompt written notice thereof to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. Such record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company may, as promptly
as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein, and shall be registered in the names of
the holders of record of Right Certificates on the record date specified in the public announcement. 



15





 




        (j)    Irrespective
of any adjustment or change in the Purchase Price or in the number of one one-thousandths of a Preferred Share issuable upon the exercise of a
Right, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder. 


        (k)  Before
taking any action that would cause an adjustment reducing the Purchase Price below the then applicable par value, if any, of the fraction of Preferred Shares
issuable upon exercise of a Right, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares, or other capital stock or securities, at such adjusted Purchase Price. 


        (l)    In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such event issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided,  however, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment. 


        (m)  Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the
Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to above in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such stockholders. 


        (n)  Anything
in this Agreement to the contrary notwithstanding, in the event that, at any time after the date of this Agreement and prior to the Distribution Date, the
Company shall (i) declare and pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of a dividend payable in Common Shares) into a greater or lesser number of Common Shares, then, in each such case, (A) the number Rights associated
with each Common Share then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights thereafter associated with each Common Share following any
such event shall equal the result obtained by multiplying the number of Rights associated with each Common Share outstanding immediately prior to such event by a fraction the numerator of which shall
be the total number of Common Shares outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of Common Shares outstanding immediately
following the occurrence of such event. 


        (o)  The
Company agrees that, after the earlier of the Distribution Date or the Shares Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof,
take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or eliminate the benefits intended to
be afforded by the Rights as provided in this Agreement. 



16







   
        Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made or any event affecting the
Rights or their exercisability (including without limitation an event that causes Rights to become void) occurs as provided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment or describing such event, and a brief, reasonably detailed statement of the facts, computations and methodology accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate, and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and
shall have no duty or liability with respect to, and shall not be deemed to have knowledge of any such adjustment or any such event unless and until it shall have received such certificate. 


        Section 13.
Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 



        (a)  In
the event, directly or indirectly, at any time after the Flip-in Event, (i) the Company shall consolidate with, or merge with and into, any other
Person, (ii) any Person shall merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, upon the first occurrence of any such event,
proper provision shall be made so that: (A) each holder of a Right (other than Rights which have become void pursuant to Section 11(a)(ii) hereof) shall thereafter have the right
to receive, upon the exercise thereof at the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof), in accordance with the terms of this Agreement and in
lieu of Preferred Shares or Common Shares of the Company, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable Common Shares of the Principal Party
(as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the current per share market price of the Common Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; provided,  however, that the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the number of Common Shares of
such Principal Party so receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any events occurring in
respect of the Common Shares of such Principal Party after the occurrence of such consolidation, merger, sale or transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to such Principal Party; and (D) such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares thereafter deliverable upon the exercise of the Rights;  provided, however, that, upon the subsequent occurrence of any consolidation, merger, sale or transfer
of assets or other extraordinary transaction in respect of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase
Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive had such holder, at the time of 



17





 


such transaction, owned the Common Shares of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property. 


        (b)  For
purposes of this Agreement, "Principal Party" shall mean: 



        (i)    in
the case of any transaction described in clause (i) or clause (ii) of the first sentence of Section 13(a) hereof: (A) the Person that is
the issuer of the securities into which the Common Shares are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the Common Shares of which have the
greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger,
or, if there is more than one such Person, the Person the Common Shares of which have the greatest aggregate market value of shares outstanding or (y) if the Person that is the other party to
the merger does not survive the merger, the Person that does survive the merger (including the Company, if it survives) or (z) the Person resulting from the consolidation; and 


        (ii)  in
the case of any transaction described in clause (iii) of the first sentence of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares outstanding; 





provided, however, that in any such case described in the foregoing clause (b)(i) or
(b)(ii), if the Common Shares of such Person are not at such time or have not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act,
then (1) if such Person is a direct or indirect Subsidiary of another Person the Common Shares of which are and have been so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Shares of all of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of Common
Shares having the greatest aggregate market value of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person
owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case shall bear the obligations set forth in this Section 13 in the same
ratio as its interest in such Person bears to the total of such interests. 



        (c)  The
Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale or transfer of assets shall not result in a breach or default by the Principal Party of or under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will: 



        (i)    prepare
and file a registration statement under the Securities Act, if necessary, with respect to the Rights and the securities purchasable upon exercise of the
Rights on an 




18





 



appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date and similarly comply with all applicable state securities laws; 


        (ii)  use
its best efforts, if the Common Shares of the Principal Party shall be listed or admitted to trading on the New York Stock Exchange or on another national
securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Shares of the Principal Party shall not be listed or admitted to trading on the New York Stock Exchange or a national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be authorized for quotation on NASDAQ or on such other system then in use; 


        (iii)  deliver
to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act; and 


        (iv)  obtain
waivers of any rights of first refusal or preemptive rights in respect of the Common Shares of the Principal Party subject to purchase upon exercise of
outstanding Rights. 




        (d)  In
case the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument(s)
governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a transaction referred to in this Section 13, Common Shares or Common Stock Equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Shares or Common Stock Equivalents of such Principal
Party at less than the then current market price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Shares of such Principal
Party pursuant to the provisions of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been
canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction. 


        (e)  The
Company covenants and agrees that it shall not, at any time after the Flip-In Event, enter into any transaction of the type described in clauses
(i) through (iii) of Section 13(a) hereof if (i) at the time of or immediately after such consolidation, merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights,
(ii) prior to, simultaneously with or immediately after such consolidation, merger, sale, transfer or other transaction, the stockholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13(b) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates, or (iii) the
form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. 




        Section 14.
Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights
(except, prior to the Distribution Date, in accordance with Section 11(n) hereof) or 


19





 


to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported
in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which
the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used. 



        (b)  The
Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-thousandth of a
Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon the exercise or exchange of Rights. Interests in fractions of Preferred Shares in integral multiples of one one-thousandth of a
Preferred Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it;  provided, however, that such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised or
exchanged as herein provided an amount in cash equal to the same fraction of the current market value of a whole Preferred Share (as determined in accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange. 


        (c)  The
Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares upon the exercise or exchange
of Rights. In lieu of such fractional shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable
an amount in cash equal to the same fraction of the current market value of a whole Common Share (as determined in accordance with Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange. 


        (d)  The
holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or any fractional shares upon exercise or exchange of a
Right (except as expressly provided above). 


        (e)  Whenever
a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights
Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or formulas 



20





 





utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully
protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares under any
Section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies. 




        Section 15.
Rights of Action. (a) All rights of action in respect of this Agreement, excepting the rights of action given to the
Rights Agent hereunder, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), on his own behalf and for his own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate (or, prior to the Distribution Date, of the Common Shares) in the manner provided therein and in this
Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for
any breach by the Company of this Agreement, and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations by the Company of the
obligations of any Person subject to, this Agreement. 



        (b)  Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as
a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory
or final) issued by a court or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided,  however, that the Company must use
all reasonable efforts to have any such injunction, order, judgment, decree or ruling lifted or otherwise overturned
as soon as possible. 




        Section 16.
Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that: 



        (a)  prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; 


        (b)  after
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office or agency of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and 


        (c)  the
Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent (subject to Section 7(e) hereof) shall be affected by any notice to
the contrary. 




        Section 17.
Right Certificate Holder Not Deemed A Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or distributions or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise or
exchange of the Rights represented thereby, nor shall anything contained 


21





 


herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as expressly provided in this Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have
been exercised or exchanged in accordance with the provisions hereof. 


        Section 18.  Concerning the Rights Agent. 



        (a)  The
Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the preparation, negotiation, delivery, amendment, administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel) incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), for any action taken, suffered or omitted by the Rights
Agent in connection with the acceptance, administration, exercise and performance of its duties under this Agreement, including, without limitation, the costs and expenses of defending against and
appealing any claim of liability arising therefrom, directly or indirectly. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. The provisions of
this Section 18 and Section 20 below shall survive the termination of this Agreement, the exercise or expiration of the Rights and the resignation, removal or replacement of the Rights
Agent. 


        (b)  The
Rights Agent shall be authorized and protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its
acceptance and administration of this Agreement and the exercise and performance of its duties hereunder, in reliance upon any Right Certificate or certificate for the Preferred Shares or Common
Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as
set forth in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of which it did not receive notice thereof hereunder, and the Rights Agent shall be fully
protected and shall incur no liability for failing to take any action in connection therewith unless and until it has received such notice. 




        Section 19.
Merger or Consolidation or Change of Name of Rights Agent. 



        (a)  Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto;  provided that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21 hereof In case at the
time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have 



22





 


been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in all
such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. 



        (b)  In
case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and, in all such cases, such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement. 




        Section 20.
Rights and Duties of Rights Agent. The Rights Agent undertakes only the duties and obligations expressly imposed by
this Agreement (and no implied duties) upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 



        (a)  The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee of the Rights Agent), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in accordance
with such advice or opinion. 


        (b)  Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of an Acquiring Person and the determination of the current per share market price of any security) be proved or established by the Company prior to taking, suffering or
omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one
of the Chief Executive Officer, the President or the Chief Financial Officer of the Company, and the Secretary of the Company, and delivered to the Rights Agent; and such certificate shall be full
authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it under the provisions of this Agreement
in reliance upon such certificate. 


        (c)  The
Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct (each as determined by
a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for
special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood
of such loss or damage. Any liability of the Rights Agent under this Rights Agreement will be limited to the annual fees paid by the Company to the Rights Agent. 



23







  



        (d)  The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 



        (e)  The
Rights Agent shall not have any liability or be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights provided for in Sections 3, 11, 13, 23 and 24 hereof, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to
Section 12, describing such change or adjustment, upon which certificate the Rights Agent may rely); nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares or other securities
will, when issued, be validly authorized and issued, fully paid and nonassessable. 


        (f)    The
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 


        (g)  The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person reasonably believed by
the Rights Agent to be one of the Chief Executive Officer, the President, the Chief Financial Officer or the Secretary of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall not be liable for or in respect of any action taken,
suffered or omitted by it in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. The Rights Agent shall be fully authorized and protected
in relying upon the most recent instruction received from any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken, suffered or omitted by the Rights Agent under this Agreement and the date on and/or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such application (which date shall not be less than five Business Days after the date any officer of the Company actually
receives such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking or suffering any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken, suffered or omitted. 


        (h)  The
Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though the
Rights Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder, affiliate, director, officer or employee from acting in any other
capacity for the Company or for any other Person. 



24





 




        (i)    The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through its directors, officers or
employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents
or for any loss to the Company resulting from any such act, omission, default, neglect or misconduct, absent gross negligence or bad faith (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction) in the selection and continued employment thereof. 


        (j)    If,
with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has not been completed in a manner sufficient to certify that the holder is not an Acquiring Person (or an Affiliate or
Associate thereof) or a transferee thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 


        (k)  No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. 




        Section 21.
Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares known to the Rights Agent by registered or
certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (which holder shall, with such
notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a Person organized and doing business under the laws of the United States or of any
State of the United States or the District of Columbia, in good standing, having an office in the State of California or New York, which is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million, or (b) an Affiliate of a Person described in
clause (a). After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares or Preferred Shares, and, following the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be. 


25





 

        Section 22.
Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form(s) as may be approved by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the Expiration Date, the Company may with respect to Common Shares so issued or sold pursuant to
(i) the exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes or debentures issued by the
Company or (iv) a contractual obligation of the Company, in each case existing prior to the Distribution Date, issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale. 


        Section 23.  Redemption. 



        (a)  The
Board of Directors of the Company may, at its option and in its sole discretion, at any time prior to the Flip-In Event, redeem all but not less than all
the then outstanding Rights at a redemption
price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Shares after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"). The redemption of the Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of Directors, in its sole discretion, may establish. The Redemption Price shall be payable, at the option of the Company, in cash, Common
Shares, or such other form of consideration as the Board of Directors shall determine. 


        (b)  Immediately
upon the action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later
time as the Board of Directors may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the
only right of the holders of Rights thereafter shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption (with prompt written notice thereof to the
Rights Agent); provided, however, that the failure to give, or any defect in, any such notice shall not
affect the legality or validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption of the Rights (or such later time as the Board of
Directors may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made. 




        Section 24.
Exchange. 



        (a)  The
Board of Directors of the Company may, at its option and in its sole discretion, at any time after the Flip-In Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11 (a)(ii) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Shares after the date hereof (such amount per
Right being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect
such exchange at any time after an Acquiring Person shall have become the Beneficial Owner of Common Shares aggregating 50% or more of the 



26





 


Common Shares then outstanding. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exchanged pursuant to this
Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange of Rights by the Board of
Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors, in its sole discretion, may establish. 


        (b)  Immediately
upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action
and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange (with prompt written notice thereof to the Rights Agent);  provided,
 however, that the failure to give, or any defect in, such notice shall not affect the legality
or validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of the Rights so exchanged at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected, and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights. 


        (c)  The
Company may at its option substitute and, in the event that there shall not be sufficient Common Shares authorized but unissued (or issued but not outstanding) to
permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall substitute to the extent of such insufficiency, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred Shares or fraction thereof (or Equivalent Preferred Shares, as such term is defined in Section 11(b)) such that the current per share
market price (determined pursuant to Section 11(d) hereof) of one Preferred Share (or Equivalent Preferred Share) multiplied by such number or fraction is equal to the current per share market
price of one Common Share (determined pursuant to Section 11(d) hereof) as of the date of such exchange. 




        Section 25.
Notice of Certain Events. 



        (a)  In
case the Company shall, at any time after the earlier of the Distribution Date or the Shares Acquisition Date, propose (i) to pay any dividend payable in
shares of any class to the holders of the Preferred Shares or to make any other distribution to the holders of the Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of the Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of the Preferred Shares (other than a reclassification involving only the subdivision or combination of outstanding Preferred Shares), (iv) to effect
the liquidation, dissolution or winding up of the Company, or (v) to pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such dividend or distribution or offering of rights
or warrants, or the date on which such liquidation, dissolution, winding up, reclassification, subdivision, combination or consolidation is to take place and the date of participation therein by the
holders of the Common Shares and/or 



27





 


Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Shares for purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier. 


        (b)  In
case any event set forth in Section 11(a)(ii) or Section 13 hereof shall occur, then the Company shall, as soon as practicable thereafter, give
to each holder of a Right Certificate (or, if occurring prior to the Distribution Date, to each holder of Common Shares), in accordance with Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11 (a)(ii) and/or Section 13 hereof. 




        Section 26.
Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights
Agent), or by facsimile transmission as follows: 





GameTech
International, Inc.

900 Sandhill Road

Reno, Nevada 89521

Attn: Chief Executive Officer

Facsimile No.: (775) 850-6198 


with a copy to: 


Greenberg
Traurig, LLP

2375 East Camelback Road

Suite 700

Phoenix, Arizona 85016

Attn: Robert S. Kant

Facsimile No.: (602) 445-8100 






Subject
to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company), or by facsimile transmission, as
follows: 





Mellon
Investor Services LLC

235 Montgomery Street

23rd Floor

San Francisco, California 94104

Attention: Client Service Manager

Facsimile No.: (415) 989-5241 


with a copy to: 


Mellon
Investor Services LLC

85 Challenger Road

Ridgefield Park, New Jersey 07660-2108

Attention: General Counsel

Facsimile No.: (201) 296-4004 






Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class 


28





 


mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 


        Section 27.
Supplements and Amendments. Except as provided in the penultimate sentence of this Section 27, for so long as
the Rights are outstanding and then redeemable, the Company may, in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend this Agreement, and/or
any term, provision or condition of this Agreement, in any respect without the consent or approval of any holder or holders of the Rights. Without limiting the foregoing, the Company may, at any time
prior to the Flip-In Event, amend this Agreement to lower the percentage thresholds set forth in Sections 1(a) and 3(a) hereof to not less than 10% (the "Reduced
Threshold"); provided, however, that no Person who beneficially owns a number of
Common Shares equal to or greater than the Reduced Threshold shall become an Acquiring Person unless such Person shall, after the public announcement of the Reduced Threshold, increase its beneficial
ownership of the then outstanding Common Shares (other than as a result of the purchase or acquisition of Common Shares by the Company) to an amount equal to or greater than the greater of
(x) the Reduced Threshold and (y) the sum of (i) the lowest beneficial ownership of such Person as a percentage of the outstanding Common Shares as of any date on or after the
date of the public announcement of the Reduced Threshold, plus (ii) .001%. At any time when the Rights are no longer redeemable, except as provided in the penultimate sentence of this
Section 27, the Company may, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the consent or approval of any holder or holders of Rights,
provided that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), (b) cause this Agreement again to become amendable other than in accordance with this sentence, or (c) cause the Rights again to become redeemable. Notwithstanding
anything contained in this Agreement to the contrary, (a) no supplement or amendment shall be made to this Agreement which changes the Redemption Price; and (b) the Rights Agent may, but
shall not be
obligated to, enter into any supplement or amendment that affects the Rights Agent's own rights, duties, obligations or immunities under this Agreement
and the Rights Agent shall not be bound by the supplements or amendments not executed by it. Upon the delivery of a certificate from an appropriate officer of the Company and, if requested by the
Rights Agent, an opinion of counsel, which states that the supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. 


        Section 28.
Successors. All the terms, conditions, covenants and provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 


        Section 29.
Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common
Shares). 


        Section 30.
Determinations and Actions by the Board of Directors. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights, to exchange or not to exchange the Rights or
to amend or not amend this Agreement). All such actions, calculations, interpretations and determinations that are effected, done or made by the Board of Directors of the Company in good faith shall
be final, 


29





 




conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other parties. The Rights Agent is entitled always to assume the Company's Board of Directors
acted in good faith and shall be fully protected and incur no liability in reliance thereon. 


        Section 31.
Severability. The parties intend that this Agreement be enforced and interpreted as written. If, however, any term,
provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 



        Section 32.  Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within
such State; provided, however, that all provisions regarding the
rights, duties, obligations and immunities of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. 


        Section 33.  Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 


        Section 34.
Descriptive Headings. Descriptive headings of the several sections, subsections and provisions of this Agreement are
inserted for convenience of reference only and shall not control or affect the meaning, interpretation or construction of any of the terms or provisions hereof. 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 


30





 

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested, all as of the day and year first above
written. 



	Attest:	 	GAMETECH INTERNATIONAL, INC.
	

By:	

/s/  ANDREJS K. BUNKSE          
	
 	

By:	

/s/  CLARENCE H. THIESEN          

	Name:	Andrejs K. Bunkse
	 	Name:  Clarence H. Thiesen
	Title:	Vice President & General Counsel
	 	Title: Chief Executive Officer
	 	 	 	 	 
	

Attest:	
 	

MELLON INVESTOR SERVICES LLC,

as Rights Agent
	

By:	

/s/  JOSEPH W. THATCHER, JR.          
	
 	

By:	

/s/  SHARON MAGIDSON          

	Name:	Joseph W. Thatcher, Jr.
	 	Name: Sharon Magidson
	Title:	Vice President
	 	Title: Vice President
	 	 	 	 	 




31






  



Exhibit A  


 
 

FORM
  OF
  
  
  CERTIFICATE OF DESIGNATION
  
  
  OF
  
  
  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
  
  
  OF
  
  
  GAMETECH INTERNATIONAL, INC.
  


  PURSUANT TO SECTION 151 OF THE
  DELAWARE GENERAL CORPORATION LAW    




        GameTech International, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: 


        That
pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Certificate of Incorporation of the said Corporation, the said Board of Directors
on                , 2003 adopted the following resolution creating a series of    ,000 shares of Preferred Stock designated as "Series A Junior
Participating Preferred
Stock": 


        RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the
Certificate of Incorporation, a series of Preferred Stock, par value $.001 per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof, and the voting
and other powers, preferences and relative, participating,
optional or other rights of the shares of such series, and the qualifications, limitations and restrictions thereof, are as follows: 


Series A Junior Participating Preferred Stock  



        1.    Designation and Amount. There shall be a series of Preferred Stock that shall be designated as "Series A Junior
Participating Preferred Stock," and the number of shares constituting such series shall be    ,000. Such number of shares may be increased or decreased by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the number of shares of Series A Junior Participating Preferred Stock to less than the number of shares then issued and outstanding
plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation. 


        2.    Dividends and Distribution.



        (A)  Subject
to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior to the shares of
Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders of shares of
any class or series of stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December, in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred 



1





 


Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) the Adjustment Number (as defined below) times the aggregate per share amount of all
cash dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $.001 per share, of the Corporation (the "Common
Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. The "Adjustment Number" shall initially be 1000. In the event the Corporation shall at any time after                ,
2003
(i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 


        (B)  The
Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). 


        (C)  Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of
shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior
to the date fixed for the payment thereof. 




        3.    Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following
voting rights: 



        (A)  Each
share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters
submitted to a vote of the stockholders of the Corporation. Except as otherwise provided herein, in any other Certificate of Designation creating a series of Preferred Stock or any similar stock of
the Corporation, or by law, the holders of Series A Junior Participating Preferred Stock and the holders of Common Stock and other capital stock of the Corporation having general voting rights
shall vote together, as one class, on all matters submitted to a vote of stockholders of the Corporation. 



2





 

        (B)  Except
as required by law, by Section 3(C) and by Section 10 hereof, holders of Series A Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 


        (C)  If,
at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on
any share or shares of Series A Junior Participating Preferred Stock are in default, the number of directors constituting the Board of Directors of the Corporation shall be increased by two. In
addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holders of record of the Series A Junior Participating Preferred Stock,
voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all
dividends in arrears on the Series A Junior Participating Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series A Junior Participating Preferred Stock as is
specified in paragraph (A) of this Section 3. Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who shall
have been so elected pursuant to the provisions of this Section 3(C) may be removed at any time, with or without cause, only by the affirmative vote of the holders of the shares of
Series A Junior Participating Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series A Junior
Participating Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the
number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the
holders of the Series A Junior Participating Preferred Stock in this Section 3. 




        4.    Certain Restrictions.



        (A)  Whenever
quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have
been paid in full, the Corporation shall not: 



        (i)    declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; 


        (ii)  declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or 


        (iii)  purchase
or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the
Series A 




3





 



Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series A Junior
Participating Preferred Stock, or to such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or
classes. 




        (B)  The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 




        5.    Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth
herein. 


        6.    Liquidation, Dissolution or Winding Up.



        (A)  Upon
any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of
Series A Junior Participating Preferred Stock shall have received an amount per share (the "Series A Liquidation Preference") equal to the greater of (i) $1.00 plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or (ii) the Adjustment Number times the per share amount of all cash and
other property to be distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the Corporation. 


        (B)  In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation
preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series A Junior Participating Preferred Stock in respect thereof, then the assets
available for such distribution shall be distributed ratably to the holders of the Series A Junior Participating Preferred Stock and the holders of such parity shares in proportion to their
respective liquidation preferences. 


        (C)  Neither
the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or with the Corporation shall
be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6. 




        7.    Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other
transaction in which the outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. 


        8.    No Redemption. Shares of Series A Junior Participating Preferred Stock shall not be subject to redemption by the
Corporation. 


4





 



        9.    Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Preferred
Stock as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall provide otherwise, and shall rank
senior to the Common Stock as to such matters. 


        10.  Amendment. At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the
Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class. 


        11.  Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share that shall
entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders
of Series A Junior Participating Preferred Stock. 


        IN
WITNESS WHEREOF, this Certificate of Designation has been executed on behalf of the Corporation by its Chief Executive Officer, and attested by its Secretary, this    day
of                        , 2003. 



	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	    
 Clarence H. Thiesen
 Chief Executive Officer	 	 
	 	 	 	 	 
	

Attest:	
 	

 	
 	

 
	 	 	 	 	 
	 	 	 	 	 
	    
Secretary	 	 	 	 
	 	 	 	 	 




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Exhibit B  


 
 

FORM OF RIGHT CERTIFICATE    
  


Certificate
No. R- 




NOT
EXERCISABLE AFTER                , 2013 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME VOID AND WILL NO LONGER BE TRANSFERABLE. 




RIGHT CERTIFICATE



GAMETECH INTERNATIONAL, INC.  


        This certifies that                        or registered assigns,
is the registered owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of February    , 2003, as the same may be amended from time to time (the "Rights Agreement"),
between GameTech International, Inc., a Delaware corporation (the "Company"), and Mellon Investor Services LLC, as Rights Agent (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York City time, on March    , 2013 at the office or agency of the Rights
Agent designated for such purpose, or of its successor as Rights Agent, one one-thousandth of a fully paid and non-assessable share of Series A Junior Participating
Preferred Stock, par value $.001 per share
(the "Preferred Stock"), of the Company at a purchase price of $    .00 per one one-thousandth of a share of Preferred Stock (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly executed and properly completed. The number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a share of Preferred Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of
March    , 2003, based on the Preferred Stock as constituted at such date. As provided in the Rights Agreement, the Purchase Price, the number of one one-thousandths of a share
of Preferred Stock (or other securities or property) which may be purchased upon the exercise of the Rights and the number of Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events. 


        This
Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned office or
agency of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. 



        This
Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights Agent designated for such purpose, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right 


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Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. 


        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Right,
(ii) may be exchanged in whole or in part for shares of the Company's Common Stock, par value $.001 per share, or shares of Preferred Stock, and/or (iii) may be amended or supplemented
(but any such amendment or supplement which follows the time that the Rights are no longer redeemable may not adversely affect the interests of holders of Rights (other than those of any Acquiring
Person, whose Rights will have become void)). 


        No
fractional shares of Preferred Stock or Common Stock will be issued upon the exercise or exchange of any Right or Rights evidenced hereby (other than fractions of Preferred Stock
which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depository receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement. 


        No
holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or distributions or be deemed for any purpose the holder of the Preferred Stock or of any
other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement) or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised or exchanged as provided and subject to the conditions in the Rights
Agreement. 


        This
Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 


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        WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal. 



        Dated
as of                            , 2003. 



	Attest:	 	GAMETECH INTERNATIONAL, INC.
	

By:	

    
	
 	

By:	

    

	Name:	    
	 	Name:  Clarence H. Thiesen
	Title:	    
	 	Title: Chief Executive Officer
	 	 	 	 	 
	Countersigned:	 	 	 
	

MELLON INVESTOR SERVICES LLC,

as Rights Agent	

 
	

By:	

    
	
 	

 	

 
	Name:	    
	 	 	 
	Title:	    
	 	 	 
	 	 	 	 	 




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Form of Reverse Side of Right Certificate 


 
 

FORM OF ASSIGNMENT
  
  
  (TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
  HOLDER DESIRES TO TRANSFER THE RIGHT CERTIFICATE)    
  


        FOR VALUE RECEIVED                        hereby sells, assigns
and transfers unto                        
 




(Please print name and address of transferee) 


                    Rights
represented by this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint            
Attorney, to transfer said Rights on the books of the within-named Company, with full power of substitution. 


Dated:            




	 	    
 Signature	 	 





Signature Guarantee:  


        Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion
program. 



	

(To be completed)	
 	

 	

 





        The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned from, and
are not being transferred or assigned to an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 



	 	    
 Signature	 	 




4





 
Form of Reverse Side of Right Certificate—continued 


FORM OF ELECTION TO PURCHASE



(To be executed if holder desires to exercise

Rights represented by the Right Certificate)  


To
GAMETECH INTERNATIONAL, INC.: 



        The
undersigned hereby irrevocably elects to exercise            Rights represented by this Right Certificate to purchase the shares of Preferred Stock (or other securities or
property) issuable upon the exercise of such Rights and requests that certificates for such shares of Preferred Stock (or such other securities) be issued in the name of: 


   

(Please print name and address) 


       




        If
such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name
of and delivered to: 


Please
insert social security

or other identifying number: 


   

(Please print name and address) 


       




Dated:




	    
 Signature	 	 	 
	(Signature must conform to holder specified on Right Certificate)





Signature Guarantee:  


        Signature must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion
program. 


5





 

Form of Reverse Side of Right Certificate—continued 


      



      

(To be completed) 


The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned from, and have not been transferred or assigned
to an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 



	 	    
 Signature	 	 






NOTICE  


        The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change whatsoever. 


        In
the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such Assignment or Election to
Purchase will not be honored. 


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Exhibit C    
  




UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.




 
 

SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
  OF GAMETECH INTERNATIONAL, INC.    
  


Introduction  


        On March    , 2003, the Board of Directors of our Company, GameTech International, Inc., a Delaware corporation, declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of common stock, par value $.001 per share. The dividend is payable on March 17, 2003 to the stockholders of record on
March 17, 2003. Once exercisable, each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $.001 per share, of the Company (the "Preferred Stock"), at a price of $    .00 per one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. 


        Our
Board has adopted this Rights Agreement, and declared the Rights dividend, to protect stockholders from abusive, coercive, or otherwise unfair takeover tactics. In general terms, it
works by imposing a significant penalty upon any person or group that acquires 15% or more of our outstanding common stock without the approval of our Board. The Rights Agreement should not interfere
with any merger or other business combination approved by our Board. 


Rights Agreement  


        For those interested in the specific terms and provisions of the Rights Agreement as entered into between our Company and Mellon Investor Services, LLC, as the
Rights Agent, as of March 7, 2003, we provide the following summary description. Please note, however, that this description is only a summary, and is not complete, and should be read together
with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 8-A dated March 7, 2003.
A copy of the agreement is available free of charge from our Company. 


The Rights; Certificates  


        The Rights will initially trade with, and will be inseparable from, the Common Stock. Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (with certain exceptions provided in the Rights Agreement, an "Acquiring Person") has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock or (ii) 10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the outstanding shares of Common Stock (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificate together with this Summary of Rights. Among other exceptions, any existing Board
member or other stockholder owning (as of specified dates, on or prior to the announcement of the Plan's adoption) 15% or more of the Company's 


2





 




outstanding Common Stock is "grandfathered" (and thus not deemed to be an "Acquiring Person") under the Plan, and would be permitted to acquire up to an additional 1% of the outstanding shares before
becoming an "Acquiring Person", as provided (and subject to the conditions) in the Rights Agreement. 


        The
Rights Agreement provides that, until the Distribution Date (or earlier expiration of the Rights), the Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier expiration of the Rights), the surrender for transfer of any certificates for shares of Common Stock outstanding as of the
Record Date, even without such notation or a copy of this Summary of Rights, will also constitute the transfer of the Rights associated with the shares of Common Stock represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. 


Exercisability; Exercise Price; Adjustments  


        The Rights are not exercisable until the Distribution Date. Until a Right is exercised (or exchanged), the holder thereof, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or to receive dividends. 


        Once
exercisable, each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Preferred Stock, at the Purchase Price of
$    .00 per one one-thousandth of a share of Preferred Stock, subject to adjustment. 



        The
Purchase Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the
then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic
cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). The number of outstanding Rights is subject to adjustment in the
event of a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date. 


        With
certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional
shares of Preferred Stock (or Common Stock) will be issued (other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made based on the current market price of the Preferred Stock or the Common
Stock. 


Preferred Stock Provisions  


        Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of the greater of (a) $1.00 per whole share, and (b) an amount equal to 1,000 times the dividend declared per share of
Common Stock. In the event of liquidation, dissolution, or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential 


3





 




payment of the greater of (a) $1.00 per whole share (plus any accrued but unpaid dividends), and (b) an amount equal to 1,000 times the payment made per share of Common Stock. Each
share of Preferred Stock will have 1,000 votes, voting together with the Common Stock. Finally, in the event of any merger, consolidation, or other transaction in which outstanding shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per share of Common Stock. These rights are protected by customary
antidilution provisions. 


        Because
of the nature of the Preferred Stock's dividend, liquidation, and voting rights, the value of the one one-thousandth interest in a share of Preferred Stock
purchasable upon exercise of each Right should approximate the value of one share of Common Stock. 


Flip-In, Flip-Over Rights  


        In the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right that number of shares of Common Stock having a market value of two
times the exercise price of the Right. This is the so-called "flip-in" provision. 


        In
the event that, after a person or group has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provisions are required to be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive upon the exercise of a Right that number of shares of common stock of the person with whom the Company has engaged in the foregoing transaction
(or its parent) that at the time of such transaction have a market value of two times the exercise price of the Right. This is the so-called "flip-over" provision. 


Exchange Provision  


        At any time after any person or group becomes an Acquiring Person and prior to the earlier of one of the events described in the previous paragraph or the
acquisition by such Acquiring Person of 50% or more of the outstanding shares of Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such Acquiring
Person which will have become void), in whole or in part, for shares of Common Stock or Preferred Stock (or a series of the Company's preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of Common Stock, or a fractional share of Preferred Stock (or other preferred stock) equivalent in value thereto, per Right. 


Redemption  


        At any time prior to the time an Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price
of $.01 per Right (the "Redemption Price") payable, at the option of the Company, in cash, shares of Common Stock or such other form of consideration as the Board of Directors of the Company shall
determine. The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and the only right of any and all holders of Rights will be to receive the Redemption Price. 


4





 



Amendment  


        For so long as the Rights are outstanding and then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any
manner. This includes the ability to lower the ownership threshold which triggers the "flip-in" provision to as low as 10%. After the Rights are no longer redeemable, the Company may,
except with respect to the Redemption Price, amend the Rights Agreement in any manner that does not adversely affect the interests of holders of the Rights (other than those of any Acquiring Person,
whose Rights will have become void). 


Interpretation; Board Approvals  


        The Board of Directors of the Company has the sole authority to administer the Rights Plan and to exercise all rights and powers granted to the Board or to the
Company, or as are advisable in the administration of the Rights Plan, including the power to (i) interpret the provisions of the Rights Plan and (ii) make all determinations appropriate
for the administration of the Rights Plan (including a determination to redeem or not redeem the Rights, to exchange the Rights or to amend the Rights Plan). All such interpretations and
determinations in good faith are final and binding on the parties (including the Rights holders) and do not subject the Board (or the directors) to any liability to the holders of Rights. 



Expiration  


        The Rights will expire on March 7, 2013, unless this date is extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case
as provided in the Rights Agreement. 


Obtaining a Copy of the Rights Agreement  


        A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated March 7, 2003. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, as the same may be amended from time to time, which is hereby incorporated herein by reference. 


5









QuickLinks


RIGHTS AGREEMENT DATED AS OF MARCH 7, 2003 BY AND BETWEEN GAMETECH INTERNATIONAL, INC. AND MELLON INVESTOR SERVICES LLC, AS RIGHTS AGENT



FORM OF CERTIFICATE OF DESIGNATION OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF GAMETECH INTERNATIONAL, INC. PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW


FORM OF RIGHT CERTIFICATE

FORM OF ASSIGNMENT (TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER DESIRES TO TRANSFER THE RIGHT CERTIFICATE)




Exhibit C


SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES OF GAMETECH INTERNATIONAL, INC.