Document:

Exhibit 10.29

 

ASSET PURCHASE AGREEMENT

 

BY AND AMONG

 

MARKET STREET TRUCK PLAZA ACQUISITION CORP, L.L.C.,

 

RICK
PERNICI

 

AND

 

GAMECO HOLDINGS, INC.

 

DATED:  October 4,
2006

 

1

 

STATE OF LOUISIANA

 

PARISH OF
CADDO

 

ASSET
PURCHASE AGREEMENT

 

BE IT KNOWN, that before the undersigned Notaries
Public, and in the presence of the undersigned competent witnesses, personally
came and appeared:

 

MARKET STREET TRUCK PLAZA ACQUISITION CORP, LLC, a Delaware limited liability company (“Market
Street”), domiciled and having its principal place of business in the
Parish of Caddo and whose mailing address is declared to be 1324 N. Market,
Shreveport, Louisiana 71101, herein represented by its duly authorized agent
Rick Pernici;

 

RICK PERNICI, a Louisiana
resident, whose mailing address is declared to be 6910 Gilbert, Shreveport,
Louisiana 71106 (“Operating Member”);

 

 (Market Street
and the Operating Member shall collectively be referred to herein as “Sellers”
and each individually as a “Seller”);

 

and

 

GAMECO HOLDINGS, INC, a Delaware
corporation (the “Purchaser”), domiciled and having a place of business in the
Parish of Lafayette, State of Louisiana and whose mailing address is declared
to be 718 S. Buchanan Street, Suite C, Lafayette, Louisiana 70507, herein
represented by its duly authorized agent Jeffrey P. Jacobs,

 

each of whom did execute this Asset Purchase Agreement
(“Agreement”), to be effective as of this 4th day of October, 2006 (the “Agreement
Date”).

 

INTRODUCTION

 

A.            Sellers
own the assets of a truck stop located at 1324 N. Market, Shreveport, Louisiana
71101 (the “Truck Stop”).

 

B.            The
Truck Stop, inter alia, is currently under
construction and when completed will provide retail motor and diesel fuels,
convenience store and restaurant operations for sale to or use by the general
public as well as the necessary location and other necessary physical
requirements for the operation of video draw poker devices for play by the
general public.

 

C.            Buyer,
for itself and its designees, desires to purchase and Sellers desire to sell
the Truck Stop.

 

NOW, THEREFORE, in consideration of the promises,
obligations, representations and warranties contained herein, the receipt and
sufficiency of which are hereby acknowledged, and upon the terms and subject to
the conditions hereinafter set forth, the parties agree as follows:

 

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Section 1.                                            Definitions
and Related Matters.

 

1.1           Definitions.  For the purposes of this Agreement, the following
terms have the meanings set forth below (such meanings to be applicable to both
the singular and plural forms of the terms defined):

 

“Acquired Assets” shall mean all assets,
accounts receivable, privileges, rights, real and personal property, Intellectual
Property Rights, licenses, interests and claims (whether personal, tangible or
intangible) of every type and description owned by Sellers (subject only to the
leases identified on Schedule 6.9(a) and the Permitted
Encumbrances) and used in the operation of the Business, other than the
Excluded Assets.  Acquired Assets,
include, but are not limited to, each of the following:

 

(a)          leasehold title arising pursuant to
the Property Lease (subject to Permitted Encumbrances hereinafter defined) in
and to certain improved real property located at 1324 N. Market, Shreveport,
Louisiana 71101 (the “Real Property”), consisting of approximately 5.1 acres,
more or less, and all improvements, buildings, structures, issues, profits and
rents, fixtures and all rights pursuant to any leases, recorded or unrecorded,
respecting all or any part of the Real Property; together with, to the extent
legally transferable, all approvals, authorizations, consents, licenses,
permits, privileges, rights, variances and waivers relating to the Real
Property from any Governmental Body having jurisdiction over the Real Property,
if any, including, but not by way of limitation, those with respect to
building, effluent control, environmental protection, fire, foundation,
pollution control, use, utilities and zoning heretofore held by or granted to
Sellers; together with any and all easements, rights and privileges appurtenant
thereto, including all right, title and interest of the Sellers in and to any
land lying in the bed of any street, road or avenue currently adjoining, lying
across or adjacent to or to be opened or proposed in front of or adjoining the
Real Property, and all riparian rights; all of the foregoing being collectively
referred to as the Premises (the “Premises”) and being further described in Exhibit A;

 

(b)          the Sublessor’s interest in and under
the Restaurant Sublease;

 

(c)          those items of machinery, equipment,
chattels and fixtures used in or supporting the Business, as identified on Schedule
1.1(b);

 

(d)          all inventories of any kind related to
or purchased for the operation of the Business, including, but not limited to,
those items identified on Schedule 1.1(c);

 

(e)          all Intellectual Property Rights,
subject to the qualifications in Section 6.10, used in or for the
benefit of the Business, excluding only those owned by the sublessee under the
Restaurant Sublease;

 

(f)           accurate, certified copies of all
books and records relating to the Business in the possession or under the
control of the Sellers, including, without limitation: (i) lists of all
known potential or past customers and suppliers; (ii) records with respect
to all equipment, including warranties and service agreements, inventory and
machinery; (iii) any and all business plans and/or models; (iv) all
financial records and reports; (v) all employee records; and (vi) all
other books and records used by Sellers in the operation of the Business;

 

(g)          all approvals, authorizations,
consents, licenses, permits, registrations, certificates, privileges, rights,
variances and waivers relating to or necessary for the operation of the
Business from any Governmental Body having jurisdiction over the Business, to
the extent the same are transferable;

 

(h)          all fixtures and improvements located
on the Premises, other than those owned by the sublessee under the Restaurant
Sublease and subject to the rights of the Landlord under the Property Lease;

 

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(i)           all goodwill of the Business, subject
to the rights of the sublessee under the Restaurant Sublease; and

 

(j)           those Contracts identified on Schedule
6.9(b), under terms and conditions contained in Schedule 6.9(b).

 

 “Affiliate”
of any particular Person means any other Person directly or indirectly
controlling, controlled by or under common control with such particular
Person.  The term “control” means
the possession, directly or indirectly, of the power to direct the management
and policies of a Person whether through the ownership of securities, by
contract or otherwise.

 

“Annualized EBITDA”
shall mean the sum of all of the monthly EBITDA (as defined below) arising from
or related to the operation of the Business and earned by the Purchaser (not
including the EBITDA earned by any third party under a lease), calculated for
the last full twelve (12) calendar months of that period from the first full
calendar month following the date upon which Devices are legally operating at
the Premises through the end of the eighteenth (18) full calendar month
following the Closing Date (i.e. months 7 through 18, inclusive), after making
appropriate adjustments for any non-recurring transactions and incorporating
the expenses limitations set forth in the Proforma Income Statement as defined
below.

 

“Assumed Contracts” shall mean the contracts
specifically identified in Schedule 6.9(b).

 

“Business” shall mean all of the operations and
business of the Truck Stop located at 1324 N. Market, Shreveport, Louisiana
71101, including, but not limited to, its gaming operations (if any),
convenience store, restaurant facility and its motor and diesel fuel sales.

 

“Business Day” means any day other than a
Saturday, Sunday or public holiday under the laws of the State of Louisiana or
any other day on which banking institutions are obligated to close in
Shreveport, Louisiana.

 

“Capital Expenditures” means all expenditures
for any capital or fixed assets or improvements, or for replacements,
substitutions or additions thereto, which have a useful life of more than one (1) year
(including expenditures with respect to Capitalized Lease Obligations but
excluding expenditures which are fully expensed in the period incurred in
accordance with GAAP consistently applied).

 

“Capitalized Lease” means a lease under which
the obligations of the lessee should, in accordance with GAAP consistently
applied, be included in determining total liabilities as shown on the liability
side of a balance sheet of the lessee.

 

“Capitalized Lease Obligations” means the
amount of the liability reflecting the aggregate discounted amount of future
payments under all Capitalized Leases calculated in accordance with GAAP
consistently applied and Statement of Financial Accounting Standards No. 13.

 

 “Closing”
has the meaning set forth in Section 2.2.

 

“Closing Certificate” has the meaning set forth
in Section 7.1(c).

 

“Closing Date” has the meaning set forth in Section 2.2.

 

“Closing Reports” shall mean: (i) that certain contract, dated May 8,
2006, by and between Market Street and John Philip Sipes for the construction
of the Truck Stop, together with all amendments, 

 

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modifications or changes thereto; (ii) any change orders related to
the foregoing; (iii) all payment applications, evidence of payments and
any other records, instruments or agreements related to the construction of the
Truck Stop; and (iv) the financial reports of the Business, excluding any
portion that shall be leased to a third-party unless any Seller has such
information in their possession or control, setting forth the income, expenses,
assets, liabilities and cashflow of the Business monthly, from its opening to
the general public during the calendar year of 2006 through the Closing Date.

 

“Code” means the Internal Revenue Code of 1986,
as amended, and any reference to any particular Code section shall be
interpreted to include any revision of or successor to that section regardless
of how numbered or classified.

 

“Completed” shall mean, as related to the Truck
Stop, that each of the following have been completed:  (i) the construction of the Truck Stop
has been completed pursuant to the Plans and Specifications, to the Purchaser’s
reasonable satisfaction, and in compliance with any and all building,
construction or zoning laws, rules or regulations of any Governmental
Body, including, but not limited to, the Liquor and Gaming Laws of the State of
Louisiana; (ii) an occupancy certificate or its equivalent has been issued
by the applicable Governmental Body(ies) for the unconditional occupation of
the Truck Stop;  (iii) lien waivers
and reasonable proof of payment has been received from the general contractor
for the construction of the Truck Stop and from any and all other contractors,
sub-contractors, suppliers, material-men or laborers providing labor, materials
or services for the same; and (iv) the Truck Stop, as of the Closing Date,
has all necessary improvements as required for the placement and operation of
fifty (50) Devices.

 

“Contract” has the meaning set forth in Section 6.9(a).

 

“Deposit” shall mean the sum of One Hundred
Fifty Thousand and no/100 Dollars ($150,000.00).

 

“Devices” shall mean “Video Draw Poker Devices”
as defined in the Video Draw Poker Devices Control Law, Louisiana Revised
Statutes, Title 27:301 et seq.,
as amended from time to time.

 

“Earn-Out Payment” shall be the sum that equals 5.0 times Annualized
EBITDA less the Minimum Purchase Price; provided,
however, in no event shall the total Earn-Out Payment hereunder
exceed One Million Five Hundred Thousand and no/100 Dollars ($1,500,000.00).

 

“EBITDA” shall mean for any one (1) calendar month period
the sum of: (i) net income, plus (ii) interest expenses, plus (iii) the
aggregate amount of federal, state and local taxes on or measured by income
(whether or not payable during that period), and plus (iv) depreciation
and amortization, all as shall be computed by the Purchaser’s accountants which
computation shall be made strictly in accordance with GAAP, consistently
applied, and verified by an accountant chosen by the Sellers.  Notwithstanding the past practices of the Sellers,
when calculating EBITDA hereunder, the parties agree to use the accrual method
of accounting, including, but not limited to, accruing for all licenses,
permits, any gaming licenses and occupational fees, insurance costs, vacation
benefits, payments due under the Property Lease and real property taxes if paid
by the lessee under the Property Lease; provided further, however,
that all monthly expenses used to calculate EBITDA will be based upon the
Proforma Income Statement.  Those line
items identified with an “*” on the Proforma Income Statement shall be included
in the calculations of EBITDA in whatever amounts equal the actual expense for
each such line item during any given calendar month.   With regard to all other expense items as
identified on the Proforma Income Statement, if the actual amount of any such
expense shall exceed the amount for that line item identified on the Proforma
Income Statement, any increase must first be approved by both the Purchaser and
the Sellers, and if not approved by the Sellers in their sole and absolute
discretion, such expense amount when calculating EBITDA hereunder shall not
exceed the amount on an annual basis as set forth in the Proforma Income 

 

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Statement, regardless of the
actual amount of such expenses; provided, however,
Purchaser shall have no obligation to spend any amounts within each such
expense category beyond the amount listed on the Proforma Income Statement
regardless of the impact upon EBITDA.

 

“Environmental and Safety Requirements” means
all federal, state, parish and local statutes, regulations, rules, ordinances
and similar provisions having the force or effect of law, all licenses,
permits, authorizations, approvals, covenants or criteria having the force or
effect of law, all guidelines having the force or effect of law, all judicial
and administrative orders and determinations, all contractual obligations and
all common law and equitable doctrines (including, without limitation,
injunctive relief and tort doctrines such as negligence, nuisance, trespass and
strict liability), in each case concerning public health and safety, worker
health and safety and pollution or protection of the environment (including,
without limitation, all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any hazardous or otherwise regulated materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation), each as amended and as now or
hereafter in effect, including, by way of illustration and not limitation, the
Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651, et seq., the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§9601, et seq.,
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901, et seq., the Clean Air Act, 42 U.S.C. §§ 7401, et seq., the Solid Waste Disposal Act, 42 U.S.C. §§ 6901, et seq., the Clean Water Act, 33 U.S.C. §§1251, et seq., and the Toxic Substances Control Act, 15 U.S.C. §§
2601, et seq., and any similar or
corresponding state, local, municipal and/or parish ordinance, rule,
regulation, law or act, (or any successor legislation thereto).

 

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974 (or any successor legislation thereto), as amended
from time to time and any regulations promulgated thereunder.

 

“Escrow Agent” shall mean United Title of
Louisiana having an address at 6452 Youree Drive, Shreveport, Louisiana 71105..

 

“Escrow Hold Back” shall equal Fifty Thousand
and no/100 Dollars ($50,000.00).

 

“Excluded Assets” shall mean the following:

 

(a)                                  All
restaurant equipment, inventory, furniture, fixtures and other items of
personal property owned by the sublessee under the Restaurant Sublease;

 

(b)                                 The
original copies of all books and records of the Sellers and related to the
Truck Stop;

 

(c)                                  Rights
of the Sellers pursuant to or under this Agreement;

 

(d)                                 Any
federal, state or local tax refunds or tax credits of the Sellers;

 

(e)                                  Any
leases, not necessary to or used in the operation of the Business, by Sellers
of any personal property other than the Assumed Contracts;

 

(f)                                    All
notes, bonds, guarantees or other evidence of indebtedness of any Person held
by the Sellers;

 

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(g)                                 All
cash, cash equivalents, investments and all deposits of the Sellers, excepting
there from, all cash, cash equivalents, investments and all deposits arising
from or related to the Business on or after the Closing Date which shall be the
property of the Purchaser;

 

(h)                                 Any
and all insurance policies of the Sellers or any of their Affiliates and all
rights to any refunds in connection therewith; provided,
however, the Purchaser shall have no responsibility for any loss of
prepaid premiums or other costs, expenses or charges arising from or associated
with the foregoing; and

 

(i)                                     All
rights, claims and causes of action relating to any of the property included in
the preceding description of Excluded Assets.

 

“GAAP” means United States generally accepted
accounting principles as promulgated by the Financial Accounting Standards
Board, as in effect from time to time.

 

“Governmental Body” means any federal, state,
parish, municipal or other governmental or quasi-governmental agency, department,
board, commission, bureau or other like entity or instrumentality.

 

“Indebtedness” means any indebtedness in any
form, nature or type whatsoever, including but not limited to: (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money; (ii) any indebtedness evidenced by any
note, bond, debenture or other debt instrument; (iii) any indebtedness for
the deferred purchase price of property or services with respect to which a
Person is liable, contingently or otherwise, as obligor or otherwise; (iv) any
commitment by which a Person assures a creditor against loss (including,
without limitation, contingent reimbursement obligations with respect to
letters of credit); (v) any obligations for which a Person is obligated
pursuant to a guarantee; (vi) any obligations under Capitalized Leases
with respect to which a Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or with respect to which obligations a Person
assures a creditor against loss; (vii) any indebtedness secured by a Lien
on a Person’s assets; and (viii) net obligations under hedging
arrangements (including, without limitation, derivatives) designed to protect a
Person against fluctuations in interest rates, currency exchange rates,
commodity prices or other financial transactions.

 

“Intellectual Property Rights” means all (i) patents,
patent applications, patent disclosures and inventions, (ii) trademarks,
service marks, trade dress, trade names, logos and business names and
registrations and applications for registration thereof, together with all of
the goodwill associated therewith, (iii) copyrights (registered or
unregistered) and copyrightable works and registrations and applications for
registration thereof, (iv) mask works and registrations and applications
for registration thereof, (v) computer software, data, databases and
documentation thereof, (vi) trade secrets and other confidential
information (including, without limitation, ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial and marketing plans
and customer and supplier lists and other information), (vii) other
intellectual property rights and (viii) copies and tangible embodiments
thereof (in whatever form or medium).

 

“Investment” as applied to any Person means (i) any
direct or indirect ownership, purchase or other acquisition by such Person of
any notes, obligations, instruments, stock, securities or ownership interests
(including partnership interests, membership interests and joint venture
interests) of any other Person and (ii) any capital contribution by such
Person to any other Person.

 

7

 

“Knowledge” or any derivation thereof whether
or not capitalized, shall mean, knowledge of a condition or set of facts as has
been obtained from any source, including, regardless of any common law or
statutory definition of the foregoing, information which would cause a
reasonable person to inquire further.

 

“Lien” means any mortgage, deed of trust, pledge,
security interest, encumbrance, lien, claims, charge or other restriction of
any kind whatsoever (including any conditional sale or other title retention
agreement or lease in the nature thereof), any sale of receivables with
recourse against the Business, any filing of or agreement to file a financing
statement as debtor under the Uniform Commercial Code or any similar statute
other than to reflect ownership by a third party of property leased to the
Sellers for use in the Business under a lease which is not in the nature of a
conditional sale or title retention agreement.

 

“Liquor and Gaming Laws of the State of Louisiana”
shall mean the laws promulgated in the Louisiana Revised Statutes Title 27:1 et seq., and Title 26:1 et seq., as amended from time to time and
the Louisiana Administrative Code provisions interpreting the same.

 

“Material Adverse Effect” or “Material
Adverse Change” means any matter or matters which would, alone or in the
aggregate, have an adverse effect on  (i) the
financial condition, operating results, assets, liabilities, operations,
condition (financial or otherwise), business or prospects of the Sellers, the
Business or any Affiliate of the Sellers, (ii) the ability of the Sellers
or the Business to perform any of their obligations related to the operations
of the Business (each, a “Material Adverse Effect”), or (iii) the ability
of the Premises to qualify as a truck stop facility under the Liquor and Gaming
Laws of the State of Louisiana capable of placing and operating not less than
50 Devices.  Material Adverse Effect or
Material Adverse Change specifically includes, but is not limited to: (a) any
violation by the Sellers or the Business, in any form and for any reason, of
the Liquor and Gaming Laws of the State of Louisiana; or (ii) the
revocation or suspension, for any period of time, of any liquor or gaming
license issued by the State of Louisiana to the Sellers or the Business and
used in the operations of the Business, or (iii) the ability of the
Premises to qualify as a truck stop facility under the Liquor and Gaming Laws
of the State of Louisiana.

 

“Minimum Purchase Price”
shall be the sum of Four Million and no/100 Dollars ($4,000,000.00).

 

“Plans and Specifications” shall mean those
plans and specifications for the construction and furnishing of the Truck Stop
as attached hereto as Exhibit B.

 

“Permitted
Encumbrances” means:

 

(a)           real estate and ad valorem taxes
not yet due and payable;

 

(b)           interests or title of a lessor or
lessee under any lease identified in Schedule 6.9(b); and

 

(c)           to the extent existing on the Closing
Date hereof, matters which are described on 
Schedule 1.1(Permitted Encumbrances), and approved of in
writing by the Purchaser prior to the Closing.

 

“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization, a
governmental entity or any department, agency or political subdivision thereof
and any other entity.

 

“Proforma Income Statement:” shall mean the
proforma income statement attached hereto as Exhibit C.

 

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“Property Lease” shall mean that certain Lease
Agreement, dated July 15, 2004, between Earnest Properties, LLC, as Lessor,
and Market Street Truck Plaza, LLC, as Lessee, as amended by those certain
First and Second Addendums to the Lease Agreement, dated May 19, 2006 and August 7,
2006, respectively, correct and complete copies of which are attached hereto as
Exhibit D.  Market Street Truck
Plaza, LLC’s interest in the Property Lease Agreement was assigned to Market
Street Truck Plaza Acquisition Corp., L.L.C., pursuant to that certain Amended
and Restated Memorandum of Understanding, effective as of December 20,
2005, a correct and complete copy of which is also attached hereto as Exhibit D.

 

“Purchaser” means Gameco Holdings, Inc., a
Delaware corporation, its successors, assigns and/or designees, in its sole
discretion.

 

“Restaurant Sublease” shall mean that certain
sublease agreement, dated January 30, 2006, by and between Market Street,
as Sublessor, and D&M, L.L.C., dba Williams Fried Chicken, as Subleasee.

 

 “Settlement
Statement” shall mean a statement, signed by the Sellers and the Purchaser
and to be received by the Escrow Agent at least twenty-four (24) hours prior to
the Closing, identifying all funds to be received by the Escrow Agent as of the
Closing and further identifying how and to whom all such funds are to be paid
by the Escrow Agent, such that all Acquired Assets are transferred to the
Purchaser free and clear of any and all Liens whatsoever, except Permitted
Encumbrances.

 

“Survey” shall have the meaning given it in Section 3.4.

 

“Tax” or “Taxes” means any federal,
state, county, parish, local, foreign or other income, gross receipts, ad
valorem, franchise, profits, sales or use, transfer, registration, excise,
utility, gaming, environmental, communications, real or personal property,
capital stock, membership interest, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or
add-on minimum, estimated and other taxes or fees of any kind whatsoever
(including deficiencies, penalties, additions to tax or fees, and interest
attributable thereto) whether disputed or not.

 

“Tax Return” means any return, information
report or filing with respect to Taxes, including any schedules attached
thereto and including any amendment thereof.

 

“Title Company” shall mean United Title of
Louisiana having an address at 6452 Youree Drive, Shreveport, Louisiana 71105.

 

“Title Evidence” shall mean the Title Policy
and the Survey, as defined in Sections 3.3 and 3.4, respectively.

 

1.2           Accounting
Principles.  The classification,
character and amount of all assets, liabilities, capital accounts and reserves
and of all items of income and expense to be determined, and any consolidation
or other accounting computation to be made, and the interpretation of any
definition containing any financial term, pursuant to this Agreement shall be
determined and made in accordance with GAAP consistently applied.

 

1.3           Other
Interpretive Matters.  In this
Agreement, unless a clear contrary intention appears:  (a) the singular number includes the
plural number and vice versa; (b) reference to any Person includes such
Person’s successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement and reference to a Person in a
particular capacity excludes such Person in any other capacity; (c) reference
to any gender includes each other gender; (d) reference to any agreement
(including this Agreement and the Schedules and Exhibits hereto), document or
instrument means such 

 

9

 

agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof (and without giving effect to any
amendment or modification that would not be permitted in accordance with the
terms hereof); (e) reference to any applicable law means such applicable
law as amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated
thereunder and reference to any particular provision of any applicable law
shall be interpreted to include any revision of or successor to that provision
regardless of how numbered or classified; (f) reference to any Article, Section or
Exhibit means such Article or Section hereof or such Exhibit hereto;
(g) “hereunder,” “hereof,” “hereto” and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular Section or
other provision hereof; and (h) “including” (and with correlative meaning “include”)
means including without limiting the generality of any description preceding
such term.

 

Section 2.               Purchase
of Assets and Closing.

 

2.1           Purchase
and Sale of the Acquired Assets.

 

(a)           At the Closing, subject to the terms
and conditions contained in this Agreement, the Sellers, as applicable, shall
sell, assign, set-over, convey, deliver and transfer to the Purchaser, or its
designee, free and clear of any and all Liens and Indebtedness whatsoever,
excepting only Permitted Encumbrances, and the Purchaser shall purchase from
the Sellers, as applicable, all rights, title and interests in and to the
Acquired Assets for the Minimum Purchase Price, and Purchaser shall pay to the
Sellers the Minimum Purchase Price, in immediately available funds, at the
Closing subject to the Escrow Hold Back and any other prorations described in
this Agreement.

 

(b)           Within ten (10) Business Days
following the execution of this Agreement by all parties hereto, the Purchaser
shall deliver the Deposit to the Escrow Agent. 
In every event, should the transaction contemplated by this Agreement be
consummated, the Deposit shall be applied as a credit toward the Purchase Price
by the Escrow Agent at the Closing.  In
the event Purchaser shall terminate this Agreement for any reason prior to that
date which is sixty-one (61) days after the Agreement Date (“Deposit Forfeit
Date”), upon notice to the Escrow Agent and the Sellers of the Purchaser’s
election to terminate this Agreement, the Escrow Agent shall promptly release
the Deposit to the Purchaser in which event this Agreement shall thereafter be
null and void and no party shall have any further liability or obligation
hereunder.  Promptly following the
Deposit Forfeit Date, and in no event later than 5 days following the same and
provided the Escrow Agent has not received a notice of termination from the
Purchaser prior to the Deposit Forfeit Date, the Escrow Agent shall without
further instruction release the Deposit to the Sellers.  In the event Purchaser shall terminate this
Agreement for any reason on or after the Deposit Forfeit Date, upon notice to
the Escrow Agent and the Sellers of the Purchaser’s election to terminate this
Agreement, this Agreement shall be null and void and no party shall have any
further liability or obligation hereunder and the Sellers shall retain the
Deposit as full and final compensation for any and all damages they may have
incurred hereunder, and not as a penalty. 
Notwithstanding anything contained in this Agreement to the contrary, in
no event shall the Purchaser have any liability for any damages to the Sellers
in excess of the Deposit.

 

(c)           The Closing of the purchase and sale
of the Acquired Assets shall take place at the offices of the Title Company or
at such other place as may be mutually agreeable to the Sellers and the
Purchaser.  At the Closing, upon payment
of the Minimum Purchase Price, the Sellers, as applicable, shall deliver to the
Purchaser the Acquired Assets, together with such bills of sale, powers of
assignment, certificates, deed(s) and other documents and instruments of
conveyance as shall be reasonably satisfactory to the Purchaser and its counsel
to transfer record ownership of the Acquired Assets, including, but not limited
to, those items identified in Section 10 below.

 

10

 

(d)           On that date that is not later than
nineteen (19) full calendar months after Devices are legally operating at the
Premises, the Purchaser shall pay to the Sellers, in immediately available
funds, the Earn-Out Payment.

 

(e)           Sellers hereby instruct the Purchaser
to pay the entire Minimum Purchase Price and the Earn-Out Payment to Market
Street and each of the Sellers acknowledge that payment pursuant to the
foregoing directive shall satisfy any and all of the Purchaser’s obligations
for payment of the Minimum Purchase Price and the Earn Out Payment hereunder to
each of the Sellers.  Notwithstanding the
foregoing, the parties agree that One Hundred Thousand and no/100 Dollars
($100,000.00) of the Purchase Price, allocated equally between the Sellers is
the monetary consideration paid for the “obligation not to do” as contained in Section 11.21.  The parties acknowledge and agree that this
allocation is a reasonable allocation given the entities’ and their relative
abilities and experience in the gaming industry.  The parties each further acknowledge and
agree that payment of the Minimum Purchase Price and the Earn Out Payment to
the Sellers as outlined on the Settlement Statement is appropriate
consideration and reasonably related to the value of the interests each party
is transferring under this Agreement.

 

2.2           Closing.   Subject to any extension under Section 2.5(b) below,
the sale and transfer of the Acquired Assets from the Sellers, as applicable,
to the Purchaser (“Closing”), pursuant to the terms and subject to the
conditions hereof shall take place on January 12, 2007 (“Closing Date”).

 

2.3           Release
of Sellers’ Interest and Claims against the Business and the Acquired Assets.  Sellers agree, concurrently with the Closing,
to release all of their interests in and to and any claims against any of the
Business or the Acquired Assets.  Sellers
shall deliver to the Escrow Agent a fully executed assignment, termination
and/or modification agreement, to be effective as of and only upon the Closing,
in form and substance reasonably acceptable to the Purchaser, terminating all
interests and  claims of the Sellers in
the Business to the Acquired Assets as of the Closing Date.  Nothing contained in the foregoing is
intended to nor shall it operate to release any claims or causes of action the
Sellers’ or any one of them may have arising out of or under this Agreement.

 

2.4           Non-Assumption of Liabilities by
Purchaser.

 

(a)           Except for the Assumed Obligations
(as hereinafter defined), the Purchaser does not assume and shall not be liable
for any of the Indebtedness, debts, obligations, expenses, claims, liabilities
or commitments, of any nature whatsoever (collectively “Obligations”) of the
Sellers, whether arising prior to, on or after the Closing, including, but not
limited to, Obligations arising from or related to the Acquired Assets and/or
the Business.  The Sellers agree,
individually, that all Obligations, other than Obligations under the Assumed
Contracts that accrue after the transfer of the Acquired Assets (collectively,
the “Assumed Obligations”), shall remain the obligations of the Sellers, as
applicable.  The Sellers, jointly and
severally, do hereby indemnify, defend and hold Purchaser harmless from and
against any and all claims, losses, expenses, damages or liabilities asserted
against or suffered by Purchaser arising out of or resulting from the
Obligations (other than the Assumed Obligations), and, provided the Closing
hereunder is consummated by the Purchaser, the Purchaser does hereby indemnify,
defend and hold the Sellers harmless from and against any and all claims,
losses, expenses, damages or liabilities asserted against or suffered by the
Sellers arising out of or resulting from the Assumed Obligations and arising or
related to the period after the Closing Date.

 

(b)           The parties acknowledge that as of
the Agreement Date, the Truck Stop is under construction.  It is the intent and purpose of the parties
hereunder that the Sellers: (i) shall fully Complete the Truck Stop
pursuant to the Plans and Specifications; (ii) all mechanical systems and
other improvements related to the Truck Stop shall be fully operating and in
good condition; and (iii) the 

 

11

 

restaurant, convenience store and fueling operations (but not any
gaming operations) of the Business shall be open to the general public prior to
the Closing hereunder.  Any and all
costs, fees or expenses arising from or related to the Sellers’ obligations
under the foregoing, even if invoiced after the Closing Date, shall remain the
sole obligation of the Sellers.  It is
further acknowledged and agreed by the Purchaser that it has the sole
obligation to obtain appropriate liquor and gaming licenses to sell liquor on
the Premises and permit the operation of the Devices on the Premises.  Purchaser’s failure to obtain any such
licenses after the Closing Date, shall not invalidate this transaction or give
the Purchaser the right to seek reimbursement from the Sellers of the Minimum
Purchase Price unless such failure is a result of a breach by the Sellers of
their other obligations under this Agreement.

 

(c)           The Sellers do hereby indemnify,
defend and shall hold harmless the Purchaser and the Title Company, and shall
execute such affidavits and instruments as shall be necessary to protect both
the Purchaser and the Title Company, from any material-men’s or mechanic’s
liens that may be related to the foregoing construction and filed after the
Closing.  Sellers shall secure and
deliver at the Closing lien releases, in form and substance acceptable to the
Purchaser and the Title Company from the general contractor engaged to
construct the Truck Stop and from any and all other contractors,
sub-contractors or material-men and shall pay all sums due to the same or to any
other person arising from or related to the construction of the Truck Stop at
or prior to the Closing. Sellers shall further deliver to the Purchaser at
Closing an assignment of any enforcement rights under the construction contract
against the general contractor such that the Purchaser may enforce such
contract directly against the general contractor; provided,
however, Sellers shall remain solely obligated to the general
contractor for any performance under the same.

 

2.5           Release of Funds.

 

(a)           Upon completion of the transfers and
deliveries described in Sections 2.1, 2.2, 2.3 and 2.4 above and the
discharge of all Liens and Indebtedness, the Escrow Agent shall release,
pursuant to the Settlement Statement, any and all funds then on deposit
hereunder.  Any fees charged by the
Escrow Agent for its services hereunder shall be shared equally with the
Purchaser responsible for one-half (1/2) of such costs and the Seller
responsible for the remaining one-half (1/2).

 

(b)           Notwithstanding the foregoing, the
parties agree that this Agreement and the Closing Date shall be subject to the
issuance to or receipt by the Purchaser of the Consents (as defined on Schedule
6.13 below) and the receipt by the Purchaser of the funds from any
financing source(s) being utilized by the Purchaser for the acquisitions
contemplated herein (collectively, the “Funds”).  If the Consents or any portion of the Funds
have not been received or issued as of the Closing Date, the Closing Date shall
be extended from day to day for no more than nineteen (19) days until the third
(3rd) day following the date each such Consent and all Funds are
received, satisfied or waived. 
Notwithstanding the foregoing, nothing contained in this paragraph shall
delay the Closing for more than nineteen (19) days.  After the expiration of such nineteen (19)
day  period, any party may upon written
notice terminate this Agreement, and thereafter this Agreement shall be null
and void and of no further force and effect and the Deposit shall be released
pursuant to the terms and conditions of Section 2.1(b) above.

 

Section 3.               Due
Diligence.  Beginning on the
Agreement Date and continuing to and including the Closing Date (the “Due
Diligence Period”), Purchaser shall have the right to perform the following due
diligence pursuant to the terms and conditions hereof.

 

3.1           General Testing and Inspections.

 

(a)           During the Due Diligence Period,
Purchaser shall (subject to the provisions of the Property Lease) have the
right to conduct such engineering, environmental, general business and 

 

12

 

feasibility studies, inspections, testing, audits and/or reviews of the
Acquired Assets, the Premises and the Business and its assets, liabilities,
operations (including operations and records), financial performance and
affairs as Purchaser deems necessary, including soil tests, borings, drainage
tests and similar tests on any land or improvement owned by the Sellers and
used in the Business, and audits and reviews of all of the Business’s financial
and business records, operations, documents and instruments, including a
financial and tax audit of the Business held by or under the control of the
Sellers.  Such studies shall be conducted
by Purchaser and its agents at the Purchaser’s sole cost and expense.

 

(b)           Subject to reasonable advance notice,
the Sellers agree to allow Purchaser and/or its agents access to all assets,
records, documents and instruments of the Business or the Acquired Assets to
conduct such studies, tests, inspections, reviews and audits, provided such
access shall not unreasonably interfere with the activities of the
Sellers.  Purchaser shall save, defend,
indemnify and hold the Sellers and the landlord under the Property Lease harmless
from and against all claims, lawsuits, judgments, losses, liabilities or
expenses of any kind or nature which may be asserted against or incurred by the
Sellers as the result of the examination, tests, inspections, reviews, audits
or studies of the Acquired Assets, the Premises or the Business by the
Purchaser or any of its manager’s, employees, agents, contractors or designees
(excluding the discovery of any preexisting condition on the Premises and any
consequential damages arising from the foregoing).  Notwithstanding anything contained herein to
the contrary, Purchaser’s indemnity obligations set forth in this Section 3.1(b) shall
survive any termination of this Agreement.

 

3.2           Zoning.  Prior to Closing, Purchaser shall have
confirmed that the Premises and the current and intended uses thereof will be
in compliance, as of the Closing Date, with all applicable building and zoning
codes and any restrictions unique thereto.

 

3.3           Title
Commitment; Defects.

 

(a)           Within
thirty (30) days following the Agreement Date, the Purchaser shall cause the
Title Company to issue and deliver its commitment (the “Commitment”) for
issuance of an ALTA Owners Policy (Form B - revised 10-17-92) of title
insurance covering the Premises in the full amount of the Purchase Price, which
Commitment shall show leasehold title to the Premises to be vested in the
Sellers, subject only to the Permitted Encumbrances.  Copies of the Commitment together with copies
of each document affecting title to the Premises referenced therein, except for
monetary encumbrances which are to be released at Closing, shall be delivered
to Purchaser and the Sellers.

 

(b)           Purchaser
shall notify Sellers of Purchaser’s disapproval of any matter contained in the
Title Evidence within five (5) days after Purchaser’s receipt of all of
the Title Evidence and copies of the documents referred to in the Title
Evidence as exceptions or exclusions from coverage.  If the Title Evidence is not satisfactory to
Purchaser (collectively, “Defects”), those Defects shall, as a condition to
Purchaser’s obligations under this Agreement, be cured or removed from the
Title Evidence at or prior to  the
Closing Date.  If Sellers elect not to or
are otherwise unable to cure and remove all Defects at or prior to the Closing
Date (or any extension thereof), this Agreement may be terminated, at Purchaser’s
sole election, by written notice given to Sellers within five (5) days
after expiration of the period allowed for cure and the Deposit, if not already
released, shall be promptly released by the Escrow Agent pursuant to Section 2.1(b) above,
or Purchaser may, at Purchaser’s sole election, waive such uncured Defects and
proceed to close this transaction with no diminution of the Purchase Price.

 

(c)           Notwithstanding
any provision of this Section 3.3 to the contrary, Sellers shall
have the obligation, on or prior to the Closing Date, to secure releases,
discharges or satisfactions, or otherwise cure at no cost to Purchaser, any
Defect which is a Lien for the payment of money only which arises by or through
the Sellers (except real estate and ad valorem
taxes and assessments which shall be prorated in 

 

13

 

accordance with Section 10), including,
without limitation, all construction mortgages, any Lien or encumbrance which
may be released or discharged by the payment of a definite sum of money or any
exception to title which arose as the result of the act or violation of Sellers
or anyone claiming by, from, through or under Sellers.

 

(d)           It
shall be a condition precedent to Purchaser’s obligation to consummate the
transaction contemplated hereby that the Title Company will, upon filing the
instruments for conveyance of record, issue its ALTA Owner’s Leasehold Policy (Form B
revised 10-17-92) of title insurance (the “Title Policy”) in the full amount of
the Purchase Price, at standard rates, insuring Purchaser in leasehold title to
the Premises subject only to the Permitted Encumbrances, and without the
exception for certain of the standard printed exceptions (encroachments,
overlaps, boundary line dispute, or any other matters which would be disclosed
by an accurate survey or inspection of the Premises, easements or claims of
easements not shown by the public records, or any lien or right to a lien for
services, labor or materials furnished to the Premises, imposed by law, and not
shown by the public records), unless and except to the extent that any such
matters included in the so-called standard printed exceptions have been
approved or waived by Purchaser.  The
Title Policy shall also affirmatively insure: 
(i) Purchaser’s right to use any appurtenant easements in
accordance with their terms and conditions; (ii) contiguity of the parcels
described in Exhibit A (if more than one parcel); (iii) that
the Premises have the benefit of full and free ingress and egress, both
pedestrian and vehicular, directly to and from a public highway; and (iv) such
other and additional endorsements or conditions as the Purchaser may require.
Sellers agree to execute and deliver to the Title Company such affidavits and
instruments as may be reasonably required to permit the Title Company to issue
Purchaser’s Title Evidence in the form required by this subsection and to
provide a copy of such affidavits and instruments to Purchaser.  The cost and expense of such Owner’s Policy
shall be borne solely by the Purchaser.

 

3.4  Survey.  Within ten (10) days of the Agreement
Date, Sellers shall deliver to the Purchaser any surveys of the Premises in
Sellers’ possession, together with a copy of any reports, leases, documents,
notices, citations or records of any type or form in the possession of the
Sellers relating to or identifying: (i) a physical deficiency in the
Premises; (ii) an adverse effect on the Premises, including, but not
limited to, any records, notices or citations relating to or concerning any
aspect of the environmental condition of the Premises; or (iii) a change
in the current, zoning, accessibility, physical characteristics, insurability,
damage, condemnation, takings of or to any portion of the Premises.  Following the Agreement Date, Purchaser shall
have the right, at its sole election, to cause a registered surveyor or
professional engineer to prepare a survey (the “Survey”) in form sufficient to
enable the Title Company to delete from the Title Policy the so-called standard
exception for matters disclosed by an accurate Survey.  A perimeter legal description of the Premises
as prepared by such surveyor or engineer shall be used to describe the Premises
in Exhibit A.  The cost and
expense of such Survey shall be borne by the Purchaser.  A copy of the Survey shall be furnished to
the Sellers.  In the event the Survey
discloses any encroachments, overlaps, boundary line disputes or any other
matter affecting the Premises or which violates any law, rule or
regulation or is otherwise unacceptable to the Purchaser, such matter(s) shall
be considered to be a Defect(s) and the relative rights and obligations of
the parties with respect thereto shall be governed by the provisions of Section 3.3
hereof.

 

3.5           Environmental
Matters.

 

Purchaser, at its sole election (subject to the
landlord’s consent under the Property Lease and Purchaser’s agreement to repair
any damage caused thereby), may cause an environmental evaluation and/or
consulting firm (the “Consultant”) selected by Purchaser to conduct an
environmental inspection and audit of the Premises (the “Audit”), including,
without limitation, a Phase I, II or III site assessment study.  The cost and expense of such Audit shall be
borne by the Purchaser.  To the extent
environmental audits for the Premises have been previously obtained by Sellers;
Sellers, as applicable, shall deliver 

 

14

 

copies of same to Purchaser within fifteen (15) days
of the Agreement Date.  Purchaser and
Sellers shall cooperate in an attempt to achieve the result that the Audit is
performed as soon as practicable and is completed no later than the Deposit
Forfeit Date.  In addition to providing
any information reasonably requested by the Consultant, Sellers shall cooperate
with Purchaser and the Consultant throughout the course of the Audit and shall
cooperate in any other way reasonably requested by Purchaser or the Consultant.

 

3.6           Other
Records and Documents.

 

(a)           In
addition to the foregoing and to the extent the below-listed documents are in
the possession of the Sellers, the Sellers agree to deliver to the Purchaser,
within fifteen (15) days of the Agreement Date, a full and accurate list and
reasonably complete details concerning each item described below and a copy of
each document to the extent such copies are in the possession or control of the
Sellers:

 

(i)            copies
of any and all certificates of title, liens, encumbrances, leases, deeds of
trust, mortgages, judgments, rights-of-way, easements, covenants, conditions or
restrictions, other exceptions or matters of record relating to or affecting
any real or personal property used in the Business;

 

(ii)           copies
of all certificates of occupancy, zoning variances, licenses, permits,
authorizations and approvals relating to the Premises or the Business from any
Governmental Body having jurisdiction over the Premises or the Business,
together with any other notices and agreements related thereto, including, but
not limited to, any and all gaming and liquor licenses and permits and renewals
of the same or applications therefore;

 

(iii)          to
the extent not already required above, copies of any and all environmental
permits, notices, demands, action letters, reports, assessments, audits,
directives from any Governmental Body, documentation of any environmental
matter related to the Premises; identification of which portion of the Premises
has ever been or is now being used for the storage, generation, treatment,
manufacture, disposal or release of any “hazardous substance” as defined by any
Environmental and Safety Requirements, identification of all waste disposal
sites and the location of all underground storage tanks or lines, whether in
use or abandoned; a summary of all environmental testing done by the Sellers;
and identification of any event of non-compliance with an Environmental and
Safety Requirement;

 

(iv)          copies
of all real estate, personal property, fuel and ad valorem
taxes, assessments, general and special, bills and returns, gaming and liquor
license fees and renewals and any and all notices of violations, delinquencies
and/or assessments of the same received by the Sellers within twenty-four (24)
months preceding the Agreement Date;

 

(v)           copies
of any and all leases affecting the Premises or the Business in any manner,
including, but not limited to, the Property Lease and the Restaurant Sublease
and any and all amendments or addendums thereto;

 

(vi)          copies
of monthly financial statements, including an income and balance sheet
statement for each month of the Business’s operation if in the possession or
control of the Sellers (and will continue to provide Purchaser this information
within fifteen (15) days of the end of each calendar month during the term of
this Agreement during which the Business is open to the general public, if the
same is in the possession or under the control of the Sellers);

 

(vii)         copies
of any and all Contracts (as defined hereinafter) affecting the Premises or the
Business in any manner;

 

15

 

(viii)        copies
of any and all invoices, bills, contracts, agreements, payment applications,
records and evidence of actual payments, retainage statements, lien waivers,
notices, etc., relating to the construction of the Truck Stop and/or any other
improvements on the Premises; and

 

(ix)           any
other documents and information reasonably requested by the Purchaser.

 

Section 4.               Termination.  Notwithstanding anything contained in this
Agreement to the contrary and in addition to any other rights of termination of
the Purchaser under this Agreement, if at any time prior to the Closing Date,
any of the studies, Title Evidence, Survey, audits, inspections, testing,
reviews or other activities performed pursuant to Sections 3.1, 3.2, 3.3,
3.4, 3.5 or 3.6, or any other information (including information related to
the Purchaser’s financing), however gathered or obtained, shall reveal
information or conditions unacceptable to the Purchaser, in its sole
discretion, then Purchaser shall have the option to terminate this
Agreement.  Upon receipt of such notice,
this Agreement shall terminate and thereafter be null and void and of no
further force and effect, and the Escrow Agent shall promptly return the
Deposit to the appropriate party as identified in Section 2.1(b) above.

 

Section 5.               Leases.

 

(a)           Within ten (10) Business Days of
the Completion of the Truck Stop, Sellers and Purchaser shall enter into a
mutually agreeable Lease Agreement for the lease of the fueling  and convenience store operations of the Truck
Stop by the Purchaser.

 

(b)           Prior to the Deposit Forfeit Date,
Purchaser shall have entered into an amendment to the Property Lease to be
effective upon the Closing hereunder, containing such terms and conditions as
shall be acceptable to the Purchaser in its sole discretion.

 

Section 6.               Representations
and Warranties of the Sellers.  As a
material inducement to the Purchaser to enter into this Agreement and purchase
the Acquired Assets hereunder, the Sellers each hereby, jointly and severally,
represent and warrant to the Purchaser as follows:

 

6.1           Organization, Power and Licenses.

 

(a)           Market
Street is duly formed, validly existing and in full force and effect under the
laws of the State of Delaware and is qualified to do business in Louisiana and
every other jurisdiction in which its ownership of property or the conduct of
business requires it to qualify.  Market
Street possesses all requisite power and authority, and all licenses, permits
and authorizations necessary, to own and operate its properties, to carry on
its businesses as now conducted and to carry out the transactions contemplated
by this Agreement.  Market Street is not
in violation of any of the provisions of its Articles of Organization or Operating
Agreements.

 

(b)           All consents and any other necessary
limited liability company action required to permit Market Street to legally
enter into this Agreement and consummate the transactions described herein have
been or will be completed and copies of the same shall be provided to the Purchaser
not later than ten (10) days prior to the Closing hereunder..

 

(c)           Sellers, as applicable, own one
hundred percent (100%) of all rights, title and interests in and to the
Acquired Assets, free and clear of any Liens or Indebtedness, excepting only
the Permitted Encumbrances, with full, valid, unencumbered power and authority
to convey the same, excluding only those assets identified on Schedule
6.9(a).  There are no preemptive
rights, warrants, options, or rights of first refusal with respect to the transfer
of the Acquired Assets hereunder.  The
Acquired Assets are all of the assets used in or necessary to the operation of
the Business, excluding only those liquor or gaming 

 

16

 

licenses which are to be acquired
by the Purchaser following the Closing hereunder to permit the operation of
Devices at the Premises.

 

(d)           Any individuals who have any spousal
or dower rights in any of the Acquired Assets, the Premises or the Business,
under any federal, state or local law have joined in the execution of this
Agreement and have consented to the transfers contemplated herein and upon such
transfers shall have waived any and all interests, rights or titles they may
have in and to the Acquired Assets or the Business.

 

6.2           Affiliates;
Subsidiaries; Investments.  There are
no Affiliates or other Persons in which the Sellers own, of record or
beneficially, any direct or indirect equity, Investment or other interest or
any right (contingent or otherwise) to acquire the same, or in which the
Sellers otherwise participate, which would have or has any interest in the
Business or the Acquired Assets.

 

6.3           Authorization;
No Breach.  The execution, delivery
and performance of this Agreement and all other agreements, instruments and
transactions contemplated hereby and thereby to which any Seller is a party
have been duly authorized by all requisite organizational approvals.  This Agreement and all other agreements and
instruments contemplated hereby to which any Seller is a party each constitutes
a valid and binding obligation of the Sellers, as applicable, enforceable in
accordance with its terms.  Assuming the
payment of all Liens by the Sellers at the Closing, the execution and delivery
by the Sellers of this Agreement and all other agreements and instruments
contemplated hereby to which the Sellers are a party, the offering and sale of
the Acquired Assets hereunder and the fulfillment of and compliance with the
respective terms hereof by the Sellers, does not and shall not: (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in the creation of any Lien upon the
Acquired Assets pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any
court or Governmental Body or third-party pursuant to, the Articles of
Organization or Operating Agreements of the applicable Sellers or any law,
statute, rule or regulation to which the Sellers are subject or any
agreement, instrument, order, judgment or decree to which the Sellers or their
assets are subject.

 

6.4           Absence
of Liabilities.

 

(a)           The Closing Reports, certified,
individually, by the Sellers and attached hereto as Schedule 6.4(a), are
true, accurate and complete copies of the agreements and contracts presented
therein.  After giving effect to the
transactions to occur at the Closing, neither the Business nor the Sellers will
have any liabilities or Indebtedness, including, but not limited to, income tax
liabilities, contingent or otherwise, other than as described on Schedule
6.4(a).  The Closing Reports shall be
updated on the Closing Date and shall be true, accurate and complete and
consistent with any and all filings with any federal, state or local
authorities or agencies as of the most recent reporting date prior to the
Closing Date.

 

(b)           Except
as described on Schedule 6.4(b), none of the Sellers has:

 

(i)            any
liabilities or Indebtedness (whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due, whether known or
unknown, and regardless of when asserted) which will remain a Lien upon the
Business or the Acquired Assets following the Closing hereof, nor which will
become a liability, Indebtedness or obligation of the Purchaser on or after the
Closing, other than the Assumed Contracts;

 

(ii)           as
relates to the Business, made any Capital Expenditures for which liability, in
any form, will remain after the Closing Date; or

 

17

 

(iii)          issued:
(a) any notes, bonds or other debt securities which will remain or become
an obligation of the Acquired Assets, the Business or the Purchaser on or after
the Closing Date, or (b) any shareholder/owner interests or other equity
securities, membership interests or any securities convertible, exchangeable or
exercisable into any ownership interests in the Business or Acquired Assets; or

 

(iv)          sold,
assigned or transferred any of the Business’s Intellectual Property Rights or
other intangible assets, or disclosed any of the Business’s proprietary
confidential information to any Person; or

 

(v)           made
any loans or advances to, guarantees for the benefit of, or any Investments in
the Business or the Acquired Assets, that will not have been completely repaid
and/or terminated as of the Closing Date; or

 

(vi)          knowledge
of, or have caused the Business or any Acquired Asset to suffer any, damage,
destruction or casualty loss which has had or may in the future have a Material
Adverse Effect on the Business, whether or not covered by insurance; or

 

(vii)         as
relates to the Business, borrowed any amount of, incurred or become subject to,
any liabilities, except current liabilities consisting solely of accounts
payable and trade payables incurred in the ordinary course of business and
liabilities under leases identified elsewhere in this Agreement; or

 

(viii)        as relates
to the Business, discharged or satisfied any Lien or paid any obligation or
liability, other than current liabilities paid in the ordinary course of
business; or

 

(ix)           as
relates to the Business, mortgaged or pledged any of its properties or assets
or subjected them to any Lien, except Permitted Encumbrances; or

 

(x)            as
relates to the Business, sold, assigned or transferred any of its tangible
assets, except in the ordinary course of business, or cancelled any debts or
claims; or

 

(xi)           as
relates to the Business, suffered any extraordinary losses or waived any rights
of value, whether or not in the ordinary course of business or consistent with
past practice; or

 

(xii)          as
relates to the Business, made any commitments for Capital Expenditures that have
not expired as of the Agreement Date; or

 

(xiii)         agreed
to do any of the foregoing.

 

6.5           No
Adverse Change.  From the Agreement
Date to and through the Closing Date, there has not been nor shall there be any
adverse change in the operating results, operations, condition (financial or
otherwise), prospects, employee relations or customer or supplier relations of
the Business or the Acquired Assets, as applicable.  From the Agreement Date to and through the
Closing Date, Sellers shall promptly give Purchaser notice of any adverse
change in the operating results, operations, condition (financial or
otherwise), prospects, employee relations or customer or supplier relations of
the Business or the Acquired Assets, as applicable, of which they have
knowledge.

 

6.6           Absence
of Undisclosed Liabilities.  No
Seller nor any Affiliate has any obligation or liability (whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due
and regardless of when asserted) related or attaching to or affecting in any
manner the Business or the 

 

18

 

Acquired Assets and arising out of transactions
entered into at or prior to the Closing, or any action or inaction at or prior
to the Closing, or any state of facts existing at or prior to the Closing,
other than (a) liabilities set forth on the Closing Reports, and (b) other
liabilities and obligations expressly disclosed on Schedule 6.6.

 

6.7           Business
Property.  The Sellers, as
applicable, have good, valid and one hundred percent (100%) complete title to
all of the Acquired Assets, free and clear of any Lien other than Permitted
Encumbrances, and have full power and authority to convey and transfer the same
free and clear of any and all claims by any Person whatsoever.  The Acquired Assets constitute all of the
assets and real property and improvements used by any of the Sellers in or
necessary for the operation of the Business as of the Closing Date, other than
liquor and gaming licenses to be acquired by the Purchaser following the
Closing as necessary for the operation of Devices at the Premises.  The Sellers have secured the written consents
in form and substance reasonably acceptable to the Purchaser of all other members
or owners of Market Street to the sale hereunder, and as a condition precedent
to the Closing shall deliver such written consent to the Purchaser.

 

6.8           Tax Matters.  The Purchaser shall have no liability for or
exposure to any Taxes arising from the operation(s) of the Business prior
to the Closing Date.  All necessary and
required Tax Returns have been timely filed and are correct in all material
respects as to the amount of tax owed and have been prepared in compliance with
all applicable laws and regulations in all respects; the Sellers have paid all
Taxes due and owing by any of them (whether or not such Taxes are required to
be shown on a Tax Return) and have withheld and paid over to the appropriate
taxing authority all Taxes which it or they are required to withhold from
amounts paid or owing to any employee, member, creditor or other third party;
no Seller has waived any statute of limitations with respect to any Taxes or
agreed to any extension of time with respect to any material Tax assessment or
deficiency; as of the Agreement Date, no foreign, federal, state, parish or
local tax audits or administrative or judicial proceedings are pending or being
conducted with respect to the Business or any of the Acquired Assets; no
information related to Tax matters has been requested by any foreign, federal,
state or local taxing authority and no written notice indicating an intent to
open an audit or other review has been received by Sellers from any foreign,
federal, state, parish or local taxing authority.

 

6.9           Contracts
and Commitments.

 

(a)           Except
as listed on Schedule 6.9(a), there are no agreements, contracts,
leases, licenses, commitments or instruments (including any and all amendments
thereto) (collectively, the “Contracts”) to which the Business is a party or by
which the Business or any of the Acquired Assets are bound or subject.  There are no commitments or agreements with
any third-party or Governmental Body affecting the Business or the Acquired
Assets which are not listed on Schedule 6.9(a).  Except as otherwise expressly noted on Schedule
6.9(a), each agreement listed on Schedule 6.9(a) is in full
force and effect and constitutes a legal, valid and binding obligation of
Business, assignable to the Purchaser hereunder, upon Purchaser’s written
consent to assume the same.   Except as
otherwise expressly noted on Schedule 6.9(a), no such Contract is in
default or breach (with or without the giving of notice or the passage of time
or both) and no other party is in default or breach of any such Contracts and
the Sellers under each such Contract are or will be as of the Closing Date
timely in their payments of any and all sums or any performance obligations
under each such Contract.

 

19

 

(b)          Sellers agree to execute and deliver on the Closing Date such
documents, estoppels and instruments as are necessary and reasonably acceptable
to the Purchaser and Purchaser’s counsel to completely transfer, set-over and
assign to the Purchaser those contracts and only those contracts listed on Schedule
6.9(b).

 

6.10        Intellectual Property Rights.

 

(a)           Schedule 6.10 contains a complete and accurate list of all
Intellectual Property Rights, if any, owned or used by Sellers in the Business,
other than rights under licenses of any original equipment manufacturers (“OEM”),
i.e Windows, etc., or off-the-shelf software, such as word processing programs,
etc.; provided, however, all of
the Sellers’ ownership rights, if any, in and to any of the foregoing, shall constitute
Acquired Assets and shall be transferred to the Purchaser hereunder.

 

(b)          The Sellers own all right, title and interest in and to all of the
Intellectual Property Rights listed on Schedule 6.10, free and clear of
all Liens and there have been no claims made against Sellers asserting the
invalidity, misuse or unenforceability of any of such Intellectual Property
Rights and the Sellers shall transfer at the Closing hereunder any and all
rights, title or interests, if any, they may have to the name “Market Street
Truck Plaza” or any variation thereof.

 

(c)           All Intellectual Property Rights used in or for the Business, whether
listed or not listed on Schedule 6.10, shall be considered Acquired
Assets hereunder and shall be transferred to the Purchaser for the Minimum
Purchase Price on the Closing Date. 
Sellers agree to execute and deliver on the Closing Date such documents
and instruments as are necessary and acceptable to the Purchaser and Purchaser’s
counsel to completely transfer, set-over and assign each and every Intellectual
Property Right to the Purchaser.

 

6.11        Litigation, etc.

 

(a)           Except as set forth on Schedule 6.11, there are no actions,
suits, complaints, proceedings, orders, investigations or claims pending or, to
the Sellers’ knowledge, threatened against or affecting the Sellers, the
Business, the Acquired Assets or pending or threatened by the Sellers against
any third party, at law or in equity, and affecting in any manner the Business
or the Acquired Assets or the prospects thereof, before or by any federal,
foreign, state, parish or local court, or Governmental Body (including any
actions, suits, complaints, proceedings or investigations with respect to or
threatening the transactions contemplated by this Agreement); nor has there been
any such actions, suits, complaints, proceedings, orders, investigations or
claims pending against or affecting the Business or the Acquired Assets during
the two (2) years preceding the Agreement Date.  None of the Sellers, or any of their
Affiliates involved in the operation of the Business, are subject to any
arbitration proceedings or any governmental investigations or inquiries
(including inquiries as to the qualification to hold or receive any license or
permit, including, but not limited to, the right to have Devices or sell liquor
and sell or store petroleum products or byproducts); and, to the Sellers’
knowledge, there is no basis for any of the foregoing.  None of the Sellers nor any of their
Affiliates is subject to any judgment, order or decree of any court or other
Governmental Body, and has not received any written opinion or memorandum from
legal counsel to the effect that it or they are exposed, from a legal
standpoint, to any liability which may involve or be related, in any manner, to
the Business or the Acquired Assets.

 

(b)          The Sellers do, jointly and severally, hereby indemnify, defend and
hold harmless the Purchaser, and its owners, shareholders, members, directors,
managers, officers, employees, agents, successors and assigns, from and against
any and all expenses, claims, fees, fines, damages or losses, including
reasonable attorney’s fees, which the Purchaser may suffer as a result of any
litigation matter, claim, arbitration, investigation or choses in action
existing or accruing as of the Closing Date (whether or not set forth on Schedule
6.11) or arising or filed at anytime and related, in any manner, to the
operation 

 

20

 

or
construction of the Business or ownership of the Acquired Assets by the Sellers
(each, a “Litigation Matter”).  Purchaser
shall have the right, at its sole election, to participate in the defense of
any Litigation Matter, including, but not limited to, requiring the defense to
be conducted by legal counsel of its choice.

 

6.12        Brokerage.  There are no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement binding upon Sellers.

 

6.13        Required Consents.  Except as listed on Schedule 6.13 (the
“Consents”), no consents, approvals or other like permission are required or
necessary from any Governmental Body or from any third party for the
consummation of the transactions contemplated by this Agreement.

 

6.14        Insurance.

 

(a)           All assets, properties
and risks of the Business or the Acquired Assets are, and for the period of
their operation and/ownership by the Sellers have been, covered by valid and
currently effective insurance policies or binders of insurance (including
general liability and property insurance) issued in favor of the Sellers, in
each case with responsible insurance companies, in such types and amounts and
covering such risks as are consistent with customary practices and standards of
companies engaged in businesses and operations similar to those of the Business
and such coverage shall continue through midnight of the Closing Date.  All refunds or costs associated with the
cancellation of such policies shall be the sole asset of and responsibility of
the Sellers.

 

(b)          In the event that any of
the Acquired Assets or any portion of the Business is damaged or otherwise the
subject of a casualty or condemnation on or prior to the Closing Date, and the
reduction in the fair market value of the Acquired Assets or the Business as a
result of the casualty or condemnation reasonably exceeds One Million Dollars
($1,000,000.00), then either the Purchaser or Sellers shall have, in their
sole, independent discretion, the right to terminate this Agreement.  If the reduction in the fair market value as
a result of any casualty or condemnation is less than One Million Dollars
($1,000,000.00), only the Purchaser shall have the right to elect to terminate
this Agreement.  If following a
condemnation or casualty that occurs on or prior to the Closing Date, neither
party elects to terminate this Agreement, then Purchaser shall proceed to close
without any reduction in the Purchase Price and any and all insurance proceeds
and the right to contest or make a claim for the same shall become the property
of the Purchaser after the Closing Date and no Seller shall have any right,
title or interest in or to the same and each does hereby relinquish any and all
interest therein; provided, however, each
of the foregoing shall fully cooperate in assigning and securing any and all
insurance proceeds on behalf of the Purchaser. 
In the event Purchaser or Sellers shall elect to terminate this
Agreement pursuant to this Section 6.14(b) with the exception
of the Purchaser’s indemnity set forth at Section 3.1(b), this Agreement
shall thereafter be null and void and of no further force and effect and no
party hereto shall have any further obligation or liability hereunder, and the
Escrow Agent shall promptly thereafter return the Deposit to the Purchaser.

 

6.15        Transactions with
Affiliates.  Except as disclosed on Schedule
6.15 or as otherwise provided for herein, the Business has no outstanding
contracts, agreements, loans, obligations, debts or other legally binding
arrangement with the Sellers or any of their Affiliates that will survive the
Closing.

 

6.16        Employees, Officer and
Directors.

 

(a)           No Seller, on behalf of
the Business, has ever maintained or contributed to, any employee benefit plan
(as defined in Section 3(3) of ERISA) or any bonus, incentive,
retirement, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, or any employment, termination, severance or other contracts or
agreements, 

 

21

 

and, except as set forth
on Schedule 6.16(a), there exists no employee benefit plan for which the
Sellers could incur liability on behalf of the Business under Section 4069
of ERISA in the event such plan has been or were to be terminated.  Any employee of the Business may be
terminated without cause at any time for any lawful reason without obligation
on the part of the Sellers to make any payment therefore.

 

(b)          The Sellers, as
appropriate, agree to terminate and dismiss, for any lawful reason, without
creating any financial or other obligation to the Business or the Purchaser any
employee or agent of the Business, as may be requested by the Purchaser, which
termination shall be effective not later than midnight on the Closing Date.

 

(c)           Notwithstanding the
foregoing, nothing contained in this Agreement shall prohibit the Purchaser, or
its designee, from entering into an employment relationship under such terms
and conditions as are acceptable to the Purchaser, with any employee, manager
or agent of the Business.

 

6.17        Labor Matters.  As of the Agreement Date and the Closing
Date, Sellers shall have no employees and accordingly, no Seller is a party to
any collective bargaining or other labor union contract applicable to persons
employed for the benefit of the Business, no collective bargaining agreement is
being negotiated by the Sellers and none of the Sellers has knowledge of any
activities or proceedings (a) involving any unorganized employees of the
Business seeking to certify a collective bargaining unit or (b) of any
labor union to organize any of the employees of the Business.  There is no labor dispute, strike or work
stoppage against the Sellers affecting or threatening to affect the
Business pending or threatened which may interfere with the operation of the
Premises or the Business.

 

6.18        Compliance with Laws.

 

(a)           Each Seller and the
Business is now and at all times has been in material compliance (provided the
lack of any compliance will not have or have had a Material Adverse Effect on
the Business or the Acquired Assets) with all applicable federal, state and
local statutes, ordinances, rules, regulations, permits, consents, licenses,
orders or other authorizations governing or related to the Acquired Assets or
the Business and the Business’s liquor and gaming related activities,
including, but not limited to, the Liquor and Gaming Laws of the State of
Louisiana, as amended, and the rules and regulations promulgated
thereunder, and no Seller nor any Affiliates thereof, have received any notice,
demand, complaint or order from any Governmental Body asserting that a license
of or related to the Business should be revoked, suspended, not issued or
issued with qualifications, or that they or the Business are not in full
compliance with the same.

 

(b)          Except as set forth in Section 6.18(a),
to each of the Sellers’ or their Affiliates’ knowledge, there is no
investigation or review of the Acquired Assets or the Business now underway or
threatened by any Governmental Body, including, without limitation, any
investigation or review by any gaming authority, nor has any of the foregoing
indicated an intention to conduct the same.

 

6.19        Environmental and
Safety Matters.  Except as set forth
on Schedule 6.19, with respect to the Business, the Premises and the
Acquired Assets:

 

(a)           the Sellers and their
Affiliates, as applicable, have complied and are in compliance, in all
respects, with all Environmental and Safety Requirements;

 

(b)           without limiting the generality
of the foregoing, each of the Sellers and any of their Affiliates have obtained
and complied with, and are in compliance, in all respects, with all permits,
licenses and other authorizations that may be required pursuant to
Environmental and Safety Requirements for the occupation of the Premises and
the operation of the Business, including, but not 

 

22

 

limited to, the sale and
storage of fuel and fuel oil and the disposal of the Business’s waste water, a
list of all such permits, licenses and other authorizations is set forth on Schedule
6.19(b);

 

(c)           none of the Sellers nor
any of their Affiliates have received any written or oral notice, report or
other information or has any knowledge regarding any actual or alleged
violation of Environmental and Safety Requirements, including any
investigatory, remedial or corrective obligations, relating to the Business,
the Premises or any Acquired Asset arising under Environmental and Safety
Requirements;

 

(d)          to each of the Seller’s
knowledge, none of the following exists at the Premises:  (i) asbestos-containing material in any
form or condition; (ii) materials or equipment containing polychlorinated
biphenyls; or (iii) landfills, surface impoundments (i.e. ground disposals
areas, covered or uncovered, in which trash or any other materials are stored
or disposed of) or similar disposal areas;

 

(e)           none of the Sellers nor
any of their Affiliates have caused, will not knowingly cause, and there has
not occurred during the time the Sellers have leased or operated the Premises,
any of the Acquired Assets or the Business, the release of any “hazardous
substance” on the Premises in violation of any Environmental and Safety
Requirements;

 

(f)           none of the Sellers or
any of their Affiliates has, either expressly or by operation of law, assumed
or undertaken any liability, including any obligation for corrective or
remedial action, of any other Person relating to Environmental and Safety
Requirements; and

 

(g)          to each of the Seller’s
knowledge, Schedule 6.19(g) is a full, complete and accurate list
of all Underground Storage and Aboveground Storage Tanks (UST’s and AST’s,
respectively) on the Premises, each of which is now and has at all times prior
hereto been operated and maintained in full compliance with all applicable
Environmental and Safety Requirements.

 

6.20        Governmental
Authorizations.  Any registration,
declaration or filing with, or consent, approval, license, permit or other
authorization or order by, any Governmental Body, domestic or foreign, that is
required in connection with the valid execution, delivery, acceptance and
performance by the Sellers under this Agreement or the consummation by the
Sellers of any transaction contemplated hereby or as otherwise necessary for
the operation of the Business by the Sellers 
has been or will be completed, made or obtained on or before the Closing
Date, except: (a) any such filings or approvals that may be required of
the transfer contemplated hereunder by the Louisiana State Police and the
Louisiana Gaming Control Board; and (b) gaming and liquor licenses to be
obtained by the Purchaser following the Closing hereunder.

 

6.21        Premises.  To the best of the Sellers’ knowledge,
information and belief, there is not now pending nor threatened: (a) any
litigation or proceeding to take all or any portion of the Premises by eminent
domain or other condemnation proceeding; (b) any street widening or
changes in any highway or traffic lanes or patterns in the immediate vicinity
of the Premises; or (c) other change or modification by a Governmental
Body which would adversely affect the Premises, the Business or any of the
Acquired Assets.  Further, (i) the
Premises are connected to and serviced by adequate water, gas, sewage disposal
and electric facilities; (ii) all material systems of the Premises,
including, but not limited to, heating, ventilation, air conditioning,
electrical, plumbing, roof, fuel pumps and lines, etc., are new and in good
operating condition; and (iii) the Premises and all improvements located
thereon are in full compliance with current building and zoning laws.  Sellers have no information or knowledge that
any portion of the Premises are being condemned or otherwise taken for use as
part of any street widening process.

 

23

 

6.22        Disclosure.  To the best of the Sellers’ knowledge,
information and belief, neither this Agreement, nor any of the exhibits,
schedules, attachments, written statements, documents, certificates, reports or
other items prepared or supplied to the Purchaser by or on behalf of the
Sellers or any of their Affiliates with respect to the transactions
contemplated hereby contain any untrue statement of a material fact or omit a material fact necessary to
make each statement contained herein or therein not misleading.

 

6.23        Operations.  There will be no Devices
located on the Premises at the Closing. 
All Restaurant and convenience store operations shall be conducted
pursuant to the Restaurant Sublease and all fueling operations shall be
conducted by the Purchaser pursuant to the lease referred to in Section 5(a) above.

 

6.24        Certain Payments.  No
officer, director, employee or agent of the Business, the Sellers or any of
their Affiliates, nor any other person acting with or on behalf of the Business
has directly or indirectly offered, agreed to make or made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback or other payment to
any Person, private or public, regardless of form, whether in money, property
or services (i) to obtain favorable treatment in securing business,
permits or licenses, (ii) to pay for favorable treatment for business,
permits or licenses secured, (iii) to obtain any special concessions
or for special concessions already obtained or (iv) in violation of any
legal requirement.

 

6.25        Interest in
Competitors, Suppliers and Customers. 
Except as set forth on Schedule 6.25, none of the Sellers
nor any Affiliates of the foregoing, have any ownership interest in any competitor,
supplier or customer of the Business.

 

6.26        No-Shop.  Sellers,
for themselves and for any Affiliates, agree that until the termination or
expiration of this Agreement, neither they nor any of their Affiliates shall
enter into any agreements nor have discussions with any third parties for the
sale of the Acquired Assets nor grant any rights of first refusal or options to
acquire the same in any form whatsoever. 
Sellers acknowledge for themselves and for their Affiliates during the
term of this Agreement, Purchaser shall have the sole and exclusive right to
purchase the Acquired Assets.

 

6.27        Representations and
Warranties of the Purchaser.  As a
material inducement to the Sellers to enter into this Agreement and sell the
Acquired Assets hereunder, the Purchaser represents and warrants to each of the
Sellers as follows:

 

(a)           Purchaser is duly
formed, validly existing and in good standing under the laws of the State of
Delaware. Purchaser possesses all requisite power and authority, and all
licenses, permits and authorizations necessary, to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted and to carry out the transactions contemplated by this
Agreement.  Purchaser is not in violation
of any of the provisions of its Articles of Incorporation or By-Laws.

 

(b)          The execution, delivery
and performance of this Agreement and all other agreements, instruments and
transactions contemplated hereby and thereby to which the Purchaser is a party
have been duly authorized by all requisite company approvals.  This Agreement and all other agreements and
instruments contemplated hereby to which the Purchaser is a party each
constitutes a valid and binding obligation of the Purchaser enforceable in
accordance with its terms.  The execution
and delivery by the Purchaser of this Agreement and all other agreements and
instruments contemplated hereby to which the Purchaser is a party, the purchase
of the Acquired Assets hereunder and the fulfillment of and compliance with the
respective terms hereof by the Purchaser, does not and shall not: (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in a violation of, the Articles of Incorporation
or By-Laws of the Purchaser, or any law, statute, rule or regulation to
which the Purchaser is subject.

 

24

 

Section 7.               Conditions
Precedent.

 

7.1          Conditions to the
Purchaser’s Obligations.  The
obligation of the Purchaser to purchase the Acquired Assets shall be expressly
subject to the satisfaction and fulfillment, at or before the Closing, of each
of the following conditions precedent and any other such conditions stated
elsewhere in this Agreement.

 

(a)           Prohibition.  There shall have been no lawsuit, judgment,
order, suit, complaint or preliminary or permanent injunction entered, pending
or threatened in any action or proceeding before any United States federal,
state, parish or local court, or any foreign court, of competent jurisdiction
or Governmental Body threatening or enjoining, in whole or in part, the
Business’s current operations, making illegal or prohibiting the consummation
of the transactions hereunder, including the transfer of the Acquired Assets
and the operation of Devices on the Premises.

 

(b)          Related Agreements.  Purchaser shall have received the leases and
any amendments referred to in Section 5 above and any other
agreements referred to elsewhere in this Agreement.

 

(c)           Representations True.  The representations and warranties of the
Sellers set forth in this Agreement and the exhibits, schedules, attachments,
written statements, documents, certificates, Closing Reports, financial
statements or other items prepared or supplied to the Purchaser by or on behalf
of the Sellers, shall be true and correct in all material respects on the
Closing Date with the same effect as though all such items had been made on and
as of such date, and the Sellers shall each deliver to the Purchaser a certificate
certified by an officer of Market Street and each Seller, individually,
certifying such or identifying any changes as of the Closing Date (the “Closing
Certificate”).

 

(d)          Good Standing
Certificate.  The Purchaser shall
have received a good standing certificate for Market Street dated within
fifteen (15) days prior to the Closing Date.

 

(e)           Condition of Assets.  The Acquired Assets shall be in good physical
and operating condition, excepting normal wear and tear only.  No damage or casualty shall have occurred to
the Acquired Assets or operations of the Business prior to the Closing Date,
excluding only ordinary non-material wear and tear.

 

(f)           Legal Opinion.  Purchaser shall have received a legal
opinion, substantially in the form of Exhibit G attached hereto,
from legal counsel for the Sellers.

 

(g)          No Adverse Change.  As of the Closing Date, there shall be no
material adverse change in the condition of the Acquired Assets.

 

(h)          Estoppel.  An estoppel certificate in form and substance
acceptable to the Purchaser in its sole discretion from Market Street and the
lessor/landlord under the contracts identified on Schedule 6.9(b), a copy of
which shall be provided to the Sellers prior to the Deposit Forfeit Date.

 

(i)            Additional
Documents.  The Purchaser shall have
received from the Sellers, as appropriate, each of the instruments and other
documents referred to elsewhere in this Agreement.

 

(j)            Assumed Contract
Consents.  The Purchaser shall have
received the consent(s) of the lessors under the leases and/or contracts
identified on Schedule 6.9(b).

 

(k)           Title Policy.  The Title Company shall be unconditionally
prepared to issue the Title Policy in the name of the Purchaser or its
designee, in the amount of the Purchase Price.

 

25

 

(l)            Financing.  The Purchaser shall have received the funds
from any financing for the contemplated purchase of the Acquired Assets.

 

(m)          Certificate of
Occupancy.  A final certificate of
occupancy or its equivalent has been issued by the appropriate Governmental
Body permitting the unconditional occupation and operation of the Truck Stop.

 

7.2          Conditions to the
Sellers’ Obligations.  The obligation
of the Sellers to sell the Acquired Assets to the Purchaser shall be subject to
the satisfaction and fulfillment, at or before the Closing, of the following
conditions precedent:

 

(a)           There shall have been
no lawsuit, judgment, order, suit, complaint or preliminary or permanent
injunction entered, pending or threatened in any action or proceeding before
any United States federal, state, Parish or local court, or any foreign court,
of competent jurisdiction or Governmental Body (which has jurisdiction over the
enforcement of any applicable laws) making illegal or prohibiting the
consummation of the transactions hereunder, including the transfer of the
Acquired Assets or the operation of Devices on the Premises;

 

(b)          Purchaser has timely
delivered or caused to be delivered the Minimum Purchase Price, plus or minus
any applicable prorations and the Deposit hereunder, to the Escrow Agent;

 

(c)           Purchaser shall have
performed all obligations and complied with all agreements and covenants
required hereunder to be performed by Purchaser on or before the Closing Date;

 

(d)          Purchaser’s
representations and warranties contained herein and in any documents furnished
to the Sellers on or prior to the Closing Date shall be true and correct in all
respects as of the Closing Date;

 

(e)           The Title Company has
confirmed to Sellers that the Title Company is unconditionally prepared to
disburse the Minimum Purchase Price (plus or minus all applicable prorations
and less the Escrow Hold Back) to the Sellers or its designees subject only to
the performance by the Sellers of their respective obligations under this Agreement;

 

(f)           Sellers shall have
received the Agreements referred to in Section 7.1(b).

 

(g)          The Sellers shall have
received the consent(s) of the lessors under the leases and/or contracts
identified on Schedule 6.9(b).

 

(h)          Except for the consents
under item (g) above, if any of the foregoing conditions are not satisfied
on or prior to the Closing Date for a reason other than a default under this
Agreement by the Sellers, Sellers shall give the Purchaser written notice of
the foregoing conditions not satisfied and Purchaser shall have ten (10) Business
Days during which to cure the same.  In
the event the Purchaser is unable to cure the conditions within such period,
the Sellers may terminate this Agreement and the Escrow Agent shall promptly
release the Deposit to the Seller as their liquidated damages and no as a
penalty.  Acceptance by any of the
Sellers of any portion of the Minimum Purchase Price shall be evidence of the
waiver by each of the Sellers of the foregoing conditions precedent.

 

Section 8.               Omitted.

 

26

 

Section 9.               Non-Solicitation.

 

9.1          Notwithstanding anything
contained in this Agreement to the contrary, each of the Sellers, for
themselves and their Affiliates, agrees for a period of two (2) years following
the Closing and as partial consideration for the Purchase Price, that neither
they, nor their Affiliates, shall knowingly employ, solicit for employment or
induce to leave their employment or other relationship, any employee, customer,
vendor or supplier of the Purchaser, its Affiliates or the Business, nor any
employee who may be permanently hired by the Purchaser or Southern Trading
Corporation.

 

9.2          Nothing contained in
this Section is intended nor shall it be construed as prohibiting any
party from running “help wanted” ads or other general solicitations for
employees or from hiring respondents to such general solicitations, regardless
of whether such respondents are or have been employed by one of the parties to
this Agreement.

 

Section 10.             Assignment,
Adjustments and Prorations, Closing.

 

10.1        Assignment.       Subject to Purchaser’s
review and acceptance of Title Evidence, Sellers shall convey the Premises to
Purchaser by an Assignment (the “Assignment”), attached hereto as Exhibit H,
conveying good, marketable and indefeasible leasehold title to the Premises
subject only to the following:

 

(a)           Zoning laws;

 

(b)          Current
real estate and ad valorem taxes and assessments,
if any, not yet due and payable; and

 

(c)           Permitted
Encumbrances.

 

10.2        Taxes and Assessments:
Closing Costs.

 

(a)           All amounts payable
under the Property Lease or the Restaurant Sublease,  utilities, costs, charges and expenses
generated by the operations of the Acquired Assets and paid by the Sellers and
other similar charges, as well as revenues generated by the Acquired Assets
that accrued to the Sellers, shall be prorated between the Sellers and the
Purchaser as of the Closing Date, such that credits, charges, costs, expenses
and revenues up to noon local time on the Closing Date and all days preceding
the Closing Date shall be allocated to Sellers, as applicable, and credits,
charges, costs, expenses and revenues after noon local time on the Closing Date
shall be allocated to Purchaser.  The Purchase
Price shall be adjusted at the Closing to reflect the prorations, in accordance
with the Settlement Statement.

 

(b)          If the actual amount of
Real Estate Taxes is not known on the Closing Date, Real Estate Taxes shall be
prorated on the basis of the rate shown for the Premises on the last available
tax bill; provided, that there shall be deducted therefrom all applicable
credits.  Sellers represent and warrant
that there are no special assessments with regard to the Premises.  Upon receipt of the final tax bill for the
period encompassing the Closing Date, the parties shall adjust, outside of the
escrow, the proration of Real Estate Taxes based upon the actual tax bill.

 

(c)           If any errors or
omissions are made regarding adjustments and prorations as aforesaid, the
parties shall make the appropriate corrections promptly upon the discovery
thereof. Any corrected adjustment or proration shall be paid in cash to the
party entitled thereto.

 

(d)          Sellers shall not assign
any policies of liability or property damage insurance covering the Premises. No
insurance premiums shall be prorated. 
Purchaser shall pay for recording fees. 
Purchaser shall pay any Louisiana transfer taxes and conveyance fees
associated with the conveyance of 

 

27

 

the Sellers’ interests in
the Real Property.  Escrow fees shall be
paid by the Purchaser.  Each party shall
pay its own attorneys’ fees and all expenses incurred by it other than expenses
specifically addressed elsewhere in this Agreement.  All revenues and expenses arising from the
ownership or operation of the Acquired Assets, or the Business (collectively,
the “Operating Charges”) accruing, earned or incurred on or prior to the
Closing Date shall be the sole responsibility of the Sellers (regardless of
when an invoice is issued or payment for such charges and expenses is due),
including but not limited, to any salaries, utilities, taxes or other costs
(together with all costs, expenses or fees related to the construction of the
Truck Stop).  All Operating Charges
arising from the ownership or operation of the Acquired Assets and the Business
and incurred after the Closing Date shall be the sole responsibility of the
Purchaser.  The parties shall make a
reasonable proration of the Operating Charges at Closing based upon the most
recent invoice for each Operating Charges and shall adjust such proration upon
receipt of the final invoice encompassing the Closing Date for each such
Operating Charges.

 

(e)           Closing.  This transaction shall be closed through an
escrow that is to be held by the Title Company, in accordance with the general
provisions of the usual form of escrow agreement then in use by such Title
Company for transactions similar to this with such special provisions inserted
as may be required to conform with this Agreement.  Each party shall execute and deliver on a
timely basis all escrow instructions, deeds, funds, the Settlement Statement
and other documents reasonably necessary to accomplish Closing.  In addition to, and not in limitation of, the
foregoing:

 

(i)            On or before the
Closing Date, Sellers shall execute, deliver or cause to be delivered to the
Title Company all of the items listed below:

 

(a)           The
Assignment;

 

(b)           Any
other instruments then required pursuant to any other sections of this
Agreement;

 

(c)           Mechanics
Lien Affidavit required by the Title Company; and

 

(d)           Each
Seller’s affidavit of non-foreign status, as contemplated by Section 1445
of the Code attached hereto as Exhibit E.

 

(ii)           On or before the
Closing Date, Purchaser shall deliver or cause to be delivered to Title Company
the Minimum Purchase Price, subject to the prorations and credits as herein
provided, and execute and deliver to the Sellers an assumption agreement in
form and substance reasonably satisfactory to Sellers and their counsel under
which the Purchaser, or its designee, assumes and agrees to perform all
obligations under the Assumed Contracts that accrue after the Closing Date.

 

(iii)          The transactions
provided for in this Agreement shall be completed by the Title Company on the
Closing Date by doing each of the following:

 

(a)           by
filing the Assignment for record in the Records of Caddo Parish, Louisiana;

 

(b)           by
causing the issuance of the Title Policy, subject only to the Permitted
Encumbrances, and forwarding the Title Policy to Purchaser with a copy to
Sellers;

 

(c)           by
prorating taxes, assessments and other amounts, in accordance with this
Agreement and the Settlement Statement with respect to the 

 

28

 

Premises, and
paying and charging Purchaser or Sellers for those costs and expenses to be
paid by Sellers or Purchaser pursuant hereto;

 

(d)           by
delivering to Purchaser: (i) the Seller’s/Owner’s Affidavit and Indemnity,
fully executed by the applicable Sellers, and attached hereto as Exhibit I;
and (ii) the FIRPTA Affidavit attached hereto as Exhibit E;  and

 

(e)           by
preparing and forwarding to Purchaser and Sellers four (4) signed copies
of the Settlement Statement setting forth all receipts and disbursements
provided for herein.

 

In addition to the
obligations required to be performed hereunder by Sellers at the Closing,
Sellers agree to perform such other acts, and/or to execute and deliver to
Purchaser such further instruments, documents and other materials, as are
reasonably requested by Purchaser at or subsequent to Closing in order to
effect the consummation of the transaction contemplated herein and to vest
title to the Premises and the Acquired Assets in Purchaser, including, without
limitation, the assignment of all rights of Sellers in and to any easements for
the benefit of the Premises; provided,
however, that the foregoing instruments and other materials, if any,
shall not enlarge the scope of Sellers’ obligations hereunder.

 

(f)           In the event the Title
Company is unable to simultaneously perform all instructions set forth in Section 10(f)(iii)(a) through
(e) on the Closing Date, the Title Company shall so notify Sellers and
Purchaser, and shall retain, unless otherwise instructed by the party
depositing the same, all documents and funds deposited with the Title Company
until receipt by the Title Company of written instructions executed by Sellers
and Purchaser or by a Court of competent jurisdiction.

 

(g)          If the Purchaser (i) disapproves
any condition referred to in this Agreement within the applicable time period
and in the manner set forth in the Agreement, or (ii) is otherwise allowed
to terminate this Agreement and cancel the Escrow, without thereby committing
an act of default under this Agreement or the Escrow and does so, all
obligations of the parties under this Agreement shall, except as otherwise set
forth, terminate and none of the parties hereto shall have any further
obligation to the other under this Agreement. 
In such event, Escrow Agent shall return all funds (after deducting its
charges, if its charges are to be borne by the party depositing such funds) and
documents then in Escrow to the party depositing same unless otherwise set
forth in Section 2.1(b) above which Section in the event of any
conflict shall be controlling, and each party shall promptly return all
documents in the possession of such party to the other party.

 

(h)          Possession.  At noon local time on the
Closing Date, subject in all events to the payment by the Purchaser of the
Minimum Purchase Price, Sellers shall cease operation of the Acquired Assets
and shall deliver possession thereof to the Purchaser, and all risk of loss
with respect thereto shall pass to the Purchaser or its designee.

 

(i)            Inventory Count.  The Sellers and Purchaser agree that at 7:00 a.m.
local time on the Closing Date, a representative from each of them (the “Representatives”)
shall meet at the Truck Stop and shall cooperate to turn over, at noon local
time, subject in all events to the payment of the Minimum Purchase Price by the
Purchaser, all keys, passwords, accounts, and copies of all records, documents,
instruments and any other items necessary for the immediate and complete
operation of the Acquired Assets.

 

(j)            Escrow Hold Back.  From and after the Closing Date, Escrow Agent
shall withhold the Escrow Hold Back from the Sellers’ proceeds hereunder and
shall hold such funds in escrow.  In the
event: (i) the Purchaser shall receive any invoice, bill or letter
demanding payment for any Operating 

 

29

 

Charges that accrued or
relate to any period of time on or prior to the Closing Date; or (ii) any
expenses, charges, costs, fees or obligations related to the construction of
the Truck Stop, Purchaser shall send evidence of such Operating Charges to the
Escrow Agent and to the Sellers (“Hold Back Notice”).

 

(i)            Sellers shall have ten
(10) Business Days following their receipt of the Hold Back Notice to
serve, in writing to both the Escrow Agent and the Purchaser, any objections they
may have to the same.  If no objection is
timely served by the Sellers, Escrow Agent is herewith authorized, without
further action by any party, to promptly pay such Operating Charges out of the
Escrow Hold Back.

 

(a)           If Sellers shall timely
object to any payment out of the Escrow Hold Back and the basis for an
objection is that the Operating Charges that are the subject of the Hold Back
Notice arose after the Closing Date, then the Escrow Agent shall hold such
amount as is identified in the Hold Back Notice until such time as it receives
written instructions from all parties to disburse the same; or

 

(b)           If Sellers shall timely
object to any payment out of the Escrow Hold Back and the basis for an
objection is anything other than an objection based upon Section 10(j)(i)(a) above,
the Escrow Agent shall hold the funds identified in the Hold Back Notice for an
additional thirty (30) calendar days, after which it shall disburse such funds
as directed by the Purchaser.

 

(ii)           Promptly after that
date which is ninety (90) days after the Closing Date (“Hold Back Expiration
Date”), Escrow Agent shall release any funds then remaining in the Escrow Hold
Back to the Sellers, unless such funds have been the subject of a Hold Back
Notice and subsequent objection in which event such funds shall remain in
escrow until the Escrow Agent has received written instructions from both the
Purchaser and the Sellers.

 

Section 11.             Miscellaneous.

 

11.1        Expenses.  Unless specifically allocated by this
Agreement, each of the parties shall be obligated to pay its own expenses
(including all fees and expenses of legal counsel, environmental consultants
and accountants).

 

11.2        Sellers’ Resignation.    Sellers shall and shall cause their owners,
shareholders, members, managers, officers, employees and agents to, resign
effective as of the Closing Date, any positions they may hold within the
Business, including, but not limited to, the positions of agent or employee.

 

11.3        Update to Schedules and
Exhibits.  The Sellers, as
appropriate, shall promptly notify the Purchaser, prior to the Closing Date, of
any changes or modifications to the information contained on the schedules or
exhibits attached to this Agreement or in any document, record or instrument
supplied to the Purchaser or any of its agents as a part of the transactions
contemplated herein and provide in written form an amended schedule, exhibit,
document, record or instrument, as the case may be.  Notwithstanding anything contained herein to the
contrary, Sellers shall update the attached Schedules within thirty (30) days
of the Closing Date.  Notwithstanding the
foregoing, upon receipt of any change or modification to any schedule or
exhibit or in any record, document or instrument described above which shall
have or identify a Material Adverse Effect, Purchaser shall have the right, in
its sole discretion, to terminate this Agreement and upon such termination this
Agreement shall be null and void and of no further force and effect and no
party hereto shall have any further liability or obligation hereunder.  If at the time of the foregoing termination,
the Deposit remains with the Escrow Agent, it shall be released pursuant to the
terms and conditions of Section 2.1(b).

 

30

 

11.4        Remedies.

 

(a)           In the event of any
actual or alleged default by any party hereto (the “Defaulting Party”), the
non-defaulting party (the “Non-Defaulting Party”) shall provide written notice
to the Defaulting Party (“Default Notice”) specifying the default; setting
forth the Non-Defaulting Party’s claim that the matter constitutes a default;
and identifying the steps or actions that the Non-Defaulting Party believes
should be taken in order to cure the alleged default.  The Defaulting Party shall have a period of
seven (7) days, or such additional time as may be reasonably required, to
cure the alleged default (the “Cure Period”), excepting only as to the payment
of the Minimum Purchase Price or the Earn Out Payment for which there is no
additional time granted to the Purchaser. 
The Defaulting Party shall have no liability for any actual or alleged
default that is cured within the Cure Period.

 

(b)          Each
of the parties hereto shall have all rights and remedies set forth in this
Agreement and any other documents or instruments relating to the consummation
of the transactions contemplated under this Agreement, and all rights and
remedies which such parties have been granted at any time under any other
agreement or contract and all of the rights which such parties have under any
law.  No remedy hereunder or thereunder
conferred is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or thereunder or now or hereafter existing at law or in equity
or by statute or otherwise.  The Sellers
and Purchaser having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.

 

11.5        Amendments and Waivers.  No oral modification hereof shall be binding
upon the parties; all modifications and amendments shall be in writing and
signed by the parties.  Failure by any
party to insist upon or enforce any of its respective rights, benefits or
remedies shall not constitute a waiver thereof. 
Any party hereto may waive the benefit of any provision or condition for
such party’s benefit contained in this Agreement; provided, however, such a waiver must be specifically
expressed in writing.

 

11.6        Survival of Agreement.  All covenants, representations and warranties
contained in this Agreement or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.

 

11.7        Successors and Assigns.  All covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective heirs, personal representatives,
executors, administrators, successors and assigns of the parties hereto whether
or not so expressed; provided that none of the Sellers shall be permitted to
assign their rights or obligations under this Agreement.  Except as otherwise expressly provided
herein, nothing expressed in or implied from this Agreement is intended to
give, or shall be construed to give, any Person, other than the parties hereto
and their permitted successors and assigns, any benefit or legal or equitable
right, remedy or claim under or by virtue of this Agreement or any such other
document.

 

11.8        Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

 

11.9        Counterparts.  This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same Agreement.

 

31

 

11.10      Descriptive Headings;
Interpretation.  The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement.

 

11.11      Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana, without regard
to principles of conflict of laws.

 

11.12      Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when
delivered personally to the recipient, (b) one (1) Business Day after
being sent to the recipient by nationally recognized overnight courier service
(charges prepaid), (c) three (3) Business Days after posting in the
United States mail having been mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, or (d) when
sent via facsimile if a copy is delivered personally, couriered or mailed to
the recipient as set forth above.  Such
notices, demands and other communications shall be sent to the parties at the
addresses indicated below:

 

If to any of the
Sellers, to:

 

Market Street
Truck Plaza Acquisition Corp., LLC

150 S. Los Robles Avenue, Suite 665

Pasadena, CA 91101

Attn: Loren Ostrow

Facsimile: 626-356-1164

 

If to the Purchaser, to:

 

Gameco Holdings, Inc.

718 S. Buchanan, Suite C

Lafayette, Louisiana 70517

Attn: Stan Guidroz

Facsimile: 337-233-7293

 

with a required
copy to:

 

Hahn Loeser &
Parks LLP

3300 BP Tower

200 Public Square

Cleveland, Ohio
44114

Attn: Stanley R.
Gorom III, Esq.

Facsimile:
216-274-2460

 

or to such other address
or to the attention of such other person as the recipient party has specified
by prior written notice to the sending party.

 

11.13      Construction.  The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement. 
The parties intend that each representation, warranty and covenant
contained herein shall have independent significance.  If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which such
party has 

 

32

 

not breached shall not
detract from or mitigate the fact that such party is in breach of the first
representation, warranty
or covenant.

 

11.14      Complete Agreement.  This Agreement, those documents expressly
referred to herein, and the other documents of even date herewith, or dated as
of the Closing Date, delivered or executed in connection with the transactions
contemplated hereby embody the complete agreement and understanding among the
parties and supersede any prior agreements or representations by or among the
parties, written or oral that may have related to the subject matter hereof in
any way.

 

11.15      Indemnification.

 

(a)           In consideration of the Purchaser’s execution and delivery of this
Agreement and purchase of the Acquired Assets hereunder, and in addition to all
of each of Sellers’ other obligations under this Agreement and in addition to
all other rights and remedies available at law or in equity, each of the
Sellers agree, jointly and severally, to defend, protect and indemnify the
Purchaser and all of its officers, directors, shareholders, members, managers,
partners, Affiliates, employees, agents, representatives, successors and
assigns (including those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Purchaser Indemnitees”), and save and hold each of them
harmless from and against, and pay on behalf of or reimburse such party on
demand as and when incurred, any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, obligations, liabilities, damages and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party
to the action for which indemnification hereunder is sought), including
reasonable attorneys’ fees and disbursements, interest and penalties and all
amounts paid in investigation, defense or settlement of any of the foregoing
and claims relating to any of the foregoing (the “Purchaser Liabilities”), incurred by the Purchaser
Indemnitees or any one of them as a result of, arising out of, or relating to: (a) the
breach by any Seller of any representation, warranty, covenant, obligation or
term contained herein; (b) any claim, debt, fee, cause of action, expense,
obligation or liability arising from or related in any manner to the operation
of the Business and/or the Acquired Assets by the Sellers; or (c) any
breach or default by any Seller arising out of the execution, delivery,
performance or enforcement of this Agreement and any other instrument, document
or agreement executed pursuant hereto, except to the extent any such Purchaser
Liabilities are caused by the particular Purchaser Indemnitee’s own acts or
omissions.

 

(b)          In consideration of each Sellers’ execution and delivery of this
Agreement and sale of the Acquired Assets hereunder, and in addition to all of
the Purchaser’s other obligations under this Agreement and in addition to all
other rights and remedies available at law or in equity,  the Purchaser agrees to defend, protect and
indemnify each Seller and all of their officers, directors, shareholders,
members, partners, Affiliates, employees, managers, agents, representatives,
successors and assigns (including those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Seller
Indemnitees”), and save and hold each of them harmless from and against,
and pay on behalf of or reimburse such party on demand as and when incurred,
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, obligations, liabilities, damages and expenses in connection therewith
(irrespective of whether any such Seller Indemnitee is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys’
fees and disbursements, interest and penalties and all amounts paid in
investigation, defense or settlement of any of the foregoing and claims
relating to any of the foregoing (the “Seller Liabilities”), incurred by
the Seller Indemnitees or any of them as a result of, arising out of, or
relating to: (a) the breach by the Purchaser of any representation,
warranty, covenant, obligation or term contained herein; or (b) any claim,
debt, fee, cause of action, expense or liability arising after the Closing Date
and related in any manner to the operation of the Business and/or the Acquired
Assets by the Purchaser; or (c) any breach or default  by the Purchaser arising out of the
execution, delivery, performance or enforcement of this Agreement and any other

 

33

 

instrument,
document or agreement executed pursuant hereto, except to the extent any such
Seller Liabilities are caused by the particular Seller Indemnitee’s own acts or
omissions.

 

(c)           No claims for indemnification under Sections 11.15(a) and (b) above
shall be asserted until the aggregate of such claims suffered or incurred by
the respective party are equal to or greater than $5,000, excluding only
reimbursement for invoices, costs and expenses presented to the Purchaser by
third-parties and related to or arising at any time prior to the Closing Date.

 

11.16      Prevailing Party Fees.  In the event of a default of any condition or
obligation of this Agreement on the part of any party hereto which
results in any legal proceeding, the non-prevailing party shall pay to the
prevailing party of the litigation all reasonable costs and expenses of the
legal proceeding and any appeal therefrom, including reasonable attorney’s
fees.

 

11.17      Incorporation.  Any and all
Schedules, Exhibits or other documents referred to herein or attached hereto
are incorporated herein as if fully rewritten in this Agreement.

 

11.18      Tax Treatment Election.  The parties agree that this Agreement is for
the purchase and sale of assets and that Minimum Purchase Price and Earn-Out
Payment shall be allocated among the Acquired Assets in accordance with Section 1060
of the Code.  Purchaser and Sellers agree
that as a condition to the Closing they shall, by mutual agreement, allocate
the value of the Acquired Assets pursuant to the Code.  On or before the Deposit Forfeit Date, the
Purchaser and Sellers, as applicable, shall complete and sign three (3) copies
of form 8594, and each agrees to act in accordance with the allocation
contained therein in the course of any Tax audit, tax review, the filing and
preparation of any Tax Returns or tax litigation.  Neither Purchaser nor Sellers shall assert
that the allocation as agreed upon was not separately bargained for at arm’s
length and in good faith.

 

11.19      Additional Instruments
and Information.  All parties agree and do hereby obligate
themselves to promptly execute any additional documents and instruments and
take any other actions necessary and proper for the complete and expeditious
implementation and satisfaction of the provisions and intent of this
Agreement.  In addition, Sellers agree
that during and subsequent to the sale transaction, Sellers shall have a
continuing duty to supply such information and documentation and to perform
such acts as may be required by any Governmental Body or under the Liquor and
Gaming Laws of the State of Louisiana.

 

11.20      Monthly Financial
Statements.  Purchaser agrees to
provide, from and after the Closing Date through the 18th full
calendar month following the month during which Devices are legally operating
at the Premises, within thirty (30) days following the close of each calendar
month, financial statements, including a statement of income and expenses and a
balance sheet prepared in manner consistent with the internal accounting and
reporting practices used by the Purchaser, reflecting the operations and results
of the Business for the prior month.

 

11.21      Future Development.

 

(a)           In further
consideration of the purchase of the Acquired Assets and the Business, each of
the Sellers (“Selling Parties”) obligate themselves and their Affiliates not to
directly or indirectly, within: (Y) a fifteen (15) mile radius (“Exclusion
Zone”) of the Truck Stop commencing on the Closing Date and continuing
thereafter uninterrupted for a period of ten (10) years; or (Z) within
a fifteen (15) mile radius of any of the Purchaser’s other truck stops located
within the State of Louisiana and identified on Schedule 11.21(a)(collectively,
the “Purchaser’s Locations”) commencing on the Closing Date and continuing
thereafter uninterrupted for a period of five (5) years: (i) own,
manage, operate, control, be employed by, participate in or be connected with
any aspect of a video poker truck stop facility or other 

 

34

 

business which derives
any portion of its revenues from legal or illegal gaming (other than any of the
fifteen (15) riverboat casino licenses currently authorized or any new
riverboat casinos, or any successor enterprises thereto including wholly-land
based successors to the current form of riverboat casinos, subsequently authorized
by the Louisiana legislature, all of which are hereby excluded from the
obligation not to do as set forth herein (collectively, the “Exclusion”)),
whether as a sole proprietor, owner, partner, stockholder, member, director,
officer, employee, agent, consultant, joint venturer, contractor, investor or
other participant; or (ii) subject to the Exclusion, be otherwise involved
or connected in any manner with the ownership, management, operation,
promotion, advertisement, solicitation of customers, marketing or sales efforts
or control of any enterprise that carries on or engages in a business directly
or indirectly similar to the gaming, fueling (diesel and motor fuel),
restaurant or convenience-store activities of the Business or the Purchaser’s
Locations.  Schedule 11.21(a) shall
be delivered to the Sellers on the Agreement Date.

 

(b)          The foregoing obligation
is an obligation not to do an act or take an action.  The Selling Parties, each for themselves and
their Affiliates, acknowledge that the foregoing obligation not to do an act is
a material inducement for the Purchaser to enter into this Agreement and is a
necessary, reasonable and appropriate obligation.

 

(c)           Given the unique nature
of the video poker industry and the operation of truck stop facilities, the
parties hereto acknowledge and agree that the obligations contained in this Section 11.21
are reasonable and necessary to protect the Business from activities for which
it otherwise has little or no ability to defend itself.  The parties hereto further acknowledge and
agree that the obligations contained herein do not impose a burden upon one
party which is not commensurate with the risk to any other party.

 

(d)          If a court of competent
jurisdiction determines that the obligations contained herein are too
restrictive to be enforced, in whole or in part, this provision shall not be
invalid, and all parties agree that the court shall modify the obligations
contained herein to the extent necessary to permit their enforcement.

 

(e)           In the event of a breach
or threatened breach of the provisions of this section, the Purchaser shall be
entitled to an injunction restraining each of the Selling Parties from
breaching the provisions of this Agreement or from rendering any such services
to any person, firm, corporation, association, partnership or other entity
which would result in a breach of this Agreement.  Nothing contained in this section shall be
construed as prohibiting the Purchaser from pursuing any other remedies available
for a breach or threatened breach of the obligations contained in this section,
including the recovery of damages from the any of the Selling Parties.

 

(f)           One Hundred Thousand
and no/100 Dollars ($100,000.00) of the Purchase Price is specifically
allocated as payment to the foregoing entities and individuals as consideration
for their obligations and covenants under this Section 11.21.

 

11.22      Time of the Essence.  TIME IS OF THE ESSENCE WITH RESPECT TO EACH
PROVISION OF THIS AGREEMENT.  The parties
acknowledge and agree that the preceding sentence is a central, indispensable
element of this Agreement.

 

11.23      Force Majure.  Any time period or obligation to timely
perform imposed upon any party hereunder shall be extended as necessary when
performance of such obligation(s) is rendered impossible or unreasonably
difficult as a result of any acts of God, war, labor strikes or unrest,
weather, acts of terrorism, general disruptions to the economy or day-to-day
operations of the government of the Parish of Caddo, the State of Louisiana or
the United States of America which make conducting business unreasonably
difficult or impossible.

 

35

 

11.24      SUBMISSION TO JURISDICTION AND VENUE, CONSENT TO
SERVICE OF PROCESS, ETC. 
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PURCHASER AND EACH
OF THE SELLERS HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(A)         AGREES THAT ANY ACTION,
SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT,
THE TRANSFER CONTEMPLATED HEREIN OR ANY STATEMENT, COURSE OF CONDUCT, ACT,
OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING (COLLECTIVELY, “RELATED
LITIGATION”) TO WHICH EITHER IS OR MAY BE A PARTY MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN SHREVEPORT,
LOUISIANA, AND SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND AGREES NOT TO
BRING ANY RELATED LITIGATION IN ANY OTHER FORUM;

 

(B)          ACKNOWLEDGES THAT SUCH
COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY RELATED LITIGATION, WAIVES ANY
OBJECTION TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH
COURT, WAIVES ANY CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH
RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE JURISDICTION
OVER IT; AND

 

(C)          CONSENTS AND AGREES TO
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED
LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO IT AT THE
ADDRESS FOR NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT
NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN
ANY OTHER MANNER PERMITTED BY LAW).

 

11.25      JURY WAIVER  TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
OF THE PURCHASER AND EACH OF THE SELLERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES THEIR RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS, CAUSES OF ACTION
OR SUITS ARISING FROM OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

[The remainder of
this page is left intentionally blank.]

 

36

 

THUS DONE AND PASSED on
the 4th day of October, 2006, at the City of Pasadena, State of Louisiana, the
undersigned party having affixed its signature in the presence of me, Notary,
and the undersigned competent witnesses, after due reading of the whole.

 

	
  WITNESSES:

  	
  SELLERS:

  	
   

  
	
   

  	
  MARKET STREET TRUCK
  PLAZA ACQUISITION

  CORP, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Allison Alanis

  	
   

  	
  By:

  	
     /s/ Paul
  Alanis

  
	
  Printed Name:

  	
  Allison Alanis

  	
   

  	
  Printed Name:

  	
  Paul Alanis

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  
	
  /s/ Andrew Yu

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Andrew Yu

  	
   

  	
   

  	
   

  
								

 

	
   

  	
          /s/
  Suzanne Nordberg

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
        Suzanne
  R. Nordberg – Commission #152529

  	
   

  
	
   

  	
  Printed Name and Notary Number

  	
   

  

 

And now
to these presents came and appeared, PAUL ALANIS, to
make, join in and confirm all of the representations, warranties and
indemnifications contained in the above Agreement himself, personally, as if a
Seller hereunder, and to be personally liable under all such representation,
warranty and indemnification provisions of the Agreement, jointly and severally
with all other Sellers, his being domiciled and having his principal place of
business in the State of California and whose mailing address is declared to be
150 S. Los Robles Avenue, Suite 665, Pasadena, CA 91101;

 

THUS DONE AND
PASSED on the 4th day of October, 2006, at the City of Pasadena, State of
California, the undersigned party having affixed its signature in the presence
of me, Notary, and the undersigned competent witnesses, after due reading of
the whole.

 

	
  WITNESSES:

  	
  SELLERS:

  	
   

  
	
   

  	
  PAUL ALANIS

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Allison Alanis

  	
   

  	
  /s/ Paul Alanis

  
	
  Printed Name:

  	
    Allison Alanis

  	
   

  	
  Paul Alanis, individually

  
	
   

  	
   

  	
   

  
	
  /s/ Andrew Yu

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
    Andrew Yu

  	
   

  	
   

  	
   

  
								

 

	
   

  	
          /s/
  Suzanne Nordberg

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
        Suzanne
  R. Nordberg – Commission #152529

  	
   

  
	
   

  	
  Printed Name and Notary Number

  	
   

  

 

37

 

THUS DONE AND
PASSED on the 9 day of October, 2006, at the City of Shreveport, State of
Louisiana, the undersigned party having affixed its signature in the presence
of me, Notary, and the undersigned competent witnesses, after due reading of
the whole.

 

	
  WITNESSES:

  	
  SELLERS:

  	
   

  
	
   

  	
  RICK PERNICI

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  _/s/ Janet McDonald

  	
   

  	
  _/s/ Rick Pernici

  
	
  Printed Name:

  	
  Janet McDonald

  	
   

  	
  Rick Pernici,
  individually

  
	
   

  	
   

  	
   

  
	
  _/s/ Patti Pernici

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Patti Pernici

  	
   

  	
   

  	
   

  
								

 

	
   

  	
            /s/
  Terri G. Porter

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
            Terri
  G. Porter #65109

  	
   

  
	
   

  	
  Printed Name and Notary Number

  	
   

  

 

 

THUS DONE AND
PASSED on the 9 day of September, 2006, at the City of Shreveport, State of
Louisiana, the undersigned party having affixed its signature in the presence
of me, Notary, and the undersigned competent witnesses, after due reading of
the whole.

 

 

	
  WITNESSES:

  	
  SELLERS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    /s/ Janet
  McDonald

  	
   

  	
     /s/
  Sheree Pernici

  
	
  Printed Name:

  	
  Janet McDonald

  	
   

  	
  Sheree Pernici,
  Individually and as the spouse of Rick

  
	
   

  	
  Pernici

  
	
    /s/ Patti Pernici

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Patti Pernici

  	
   

  	
   

  	
   

  
							

 

	
   

  	
            /s/
  Terri G. Porter

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
            Terri
  G. Porter #65109

  	
   

  
	
   

  	
  Printed Name and Notary Number

  	
   

  

 

38

 

THUS DONE AND PASSED on
the 6 day of October, 2006, at the City of West Palm Beach, State of Florida,
the undersigned party having affixed its signature in the presence of me,
Notary, and the undersigned competent witnesses, after due reading of the
whole.

 

	
  WITNESSES:

  	
  PURCHASER:

  	
   

  
	
   

  	
  Gameco Holdings, Inc.,
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  _/s/ Chrissy A. DeNitto

  	
   

  	
  By:

  	
      /s/
  Jeffrey P. Jacobs

  
	
  Printed Name:

  	
      Chrissy
  A. DeNitto

  	
   

  	
   

  	
  Jeffrey P. Jacobs, CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
   

  	
   

  
										

 

	
   

  	
            /s/
  Chrissy A. DeNitto

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
          /s/
  Chrissy A. DeNitto #DD166299

  	
   

  
	
   

  	
  Printed Name and Notary Number

  	
   

  

 

39Exhibit 4.1

 

TAKE-TWO INTERACTIVE SOFTWARE, INC.

 

and

 

AMERICAN STOCK TRANSFER & TRUST
COMPANY

 

as Rights Agent

 

 

STOCKHOLDERS

RIGHTS AGREEMENT

 

 

Dated as of

March 24, 2008

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  Certain
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Appointment of Rights Agent

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Issue of Rights Certificates

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Form of Rights Certificate

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Countersignature and
  Registration

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Transfer, Split Up, Combination,
  and Exchange of Rights Certificates; Mutilated, Destroyed, Lost, or Stolen
  Rights Certificates

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Exercise of Rights; Purchase
  Price; Expiration Date of Rights

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Cancellation and Destruction of
  Rights Certificates

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Reservation and Availability of
  Capital Stock

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Series B Preferred Stock
  Record Date

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Adjustment of Purchase Price,
  Number and Kind of Shares or Number of Rights

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.

  	
   

  	
  Certificate of Adjusted Purchase
  Price or Number of Shares

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 13.

  	
   

  	
  Consolidation, Merger or Sale or
  Transfer of Assets or Earning Power

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 14.

  	
   

  	
  Fractional Rights; Fractional
  Shares; Waiver

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 15.

  	
   

  	
  Rights of Action

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 16.

  	
   

  	
  Agreement of Rights Holders

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 17.

  	
   

  	
  Rights Certificate Holder Not
  Deemed a Stockholder

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 18.

  	
   

  	
  Concerning the Rights Agent

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 19.

  	
   

  	
  Merger or Consolidation or
  Change of Name of Rights Agent

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 20.

  	
   

  	
  Duties of Rights Agent

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 21.

  	
   

  	
  Change of Rights Agent

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 22.

  	
   

  	
  Issuance of New Rights
  Certificates

  	
  32

  

 

i

 

	
  Section 23.

  	
   

  	
  Redemption and Termination

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 24.

  	
   

  	
  Exchange

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 25.

  	
   

  	
  Notice of Certain Events

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 26.

  	
   

  	
  Notices

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 27.

  	
   

  	
  Supplements and Amendments

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 28.

  	
   

  	
  Successors

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 29.

  	
   

  	
  Determinations and Actions by
  the Board of Directors

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 30.

  	
   

  	
  Benefits of this Agreement

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 31.

  	
   

  	
  Severability

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 32.

  	
   

  	
  Governing Law

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 33.

  	
   

  	
  Counterparts

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 34.

  	
   

  	
  Descriptive Headings

  	
  37

  

 

ii

 

This STOCKHOLDERS RIGHTS AGREEMENT,
dated as of March 24, 2008 (the “Effective Date”) by and between Take-Two
Interactive Software, Inc., a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company, a New York corporation (the “Rights
Agent”).

 

WHEREAS, effective March 24,
2008 (the “Rights Dividend Declaration Date”), the Board of Directors of
the Company authorized and declared a distribution of one right for each share
of Common Stock, par value $0.01 per share, of the Company (the “Common
Stock”) outstanding at the Close of Business (as such term is defined
herein) on April 7, 2008 (the “Record Date”), and has authorized
the issuance of one such right (as such number may hereafter be adjusted
pursuant hereto) for each share of Common Stock that shall become outstanding
(whether originally issued or delivered from the Company’s treasury) between
the Record Date and, except as otherwise provided in Section 23 herein,
the Distribution Date, each such right initially representing the right to
purchase, upon the terms and subject to the conditions hereinafter set forth,
one Unit of Series B Preferred Stock (each a “Right” and together
with all other such rights distributed or issued pursuant hereto, the “Rights”).

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the
parties hereby agree as follows:

 

Section 1.                                            Certain
Definitions.  For purposes of this
Agreement, the following terms have the meanings indicated:

 

(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 shares of
Voting Stock representing 20% or more of the total Voting Power of the
aggregate of all shares of Voting Stock then outstanding, but shall not include
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any trustee or fiduciary holding
Voting Stock for, or pursuant to the terms of, any such plan, acting in such
capacity.  Notwithstanding the foregoing:

 

(i)                                     No Person shall
become an “Acquiring Person” as the result of an acquisition of Voting Stock by
the Company, which, by reducing the number of shares of Voting Stock
outstanding, increases the proportionate percentage of the total Voting Power
represented by all shares of Voting Stock Beneficially Owned by such Person,
together with all Affiliates and Associates of such Person, to 20% or more of
the total Voting Power of the aggregate of all shares of Voting Stock then
outstanding; provided, however, that if a Person, together with
all Affiliates and Associates of such Person, shall become the Beneficial Owner
of shares of Voting Stock representing 20% or more of total Voting Power of the
aggregate of all shares of Voting Stock then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares of Voting Stock (other
than shares issued by the Company as a dividend or distribution made pro rata to
all holders of Common Stock), then, subject to Section 1(a)(ii), such
Person shall be deemed to be an “Acquiring Person;”

 

 

(ii)                                  If the Board of
Directors determines in good faith that a Person who would otherwise be an “Acquiring
Person,” as defined pursuant to this Section 1(a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Voting Stock so that such Person would no longer be an “Acquiring
Person,” as defined pursuant to the this Section 1(a), then such Person
shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement; and

 

(iii)                               If a Person would
otherwise be deemed an “Acquiring Person” upon the adoption of this Agreement,
such Person (herein referred to as a “Grandfathered Stockholder”) will
not be deemed an “Acquiring Person” for purposes of this Agreement unless and
until, subject to Section 1(a)(ii), such Grandfathered Stockholder, or any
Affiliate or Associate of such Grandfathered Stockholder, acquires Beneficial
Ownership of additional shares of Voting Stock after adoption of this Agreement
in excess of two percent (2%) of the number of shares of Common Stock
outstanding as of the Rights Dividend Declaration Date, in which case, such
Person shall no longer be deemed a Grandfathered Stockholder and shall be
deemed an “Acquiring Person.”

 

(b)                                 “Affiliate”
and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the Exchange Act Regulations, as in effect on the
date of this Agreement; provided, however, that no director or
officer of the Company shall be deemed an Affiliate or Associate of any other
director or officer of the Company solely as a result of his or her being a
director or officer of the Company.

 

(c)                                  A
Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially
Own” and to have “Beneficial Ownership” of any securities:

 

(i)                                     that such Person
or any of such Person’s Affiliates or Associates beneficially owns, directly or
indirectly (as determined pursuant to Rule 13d-3 of the Exchange Act
Regulations as in effect on the date of this Agreement); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to Beneficially
Own or to have Beneficial Ownership of, any security if the agreement,
arrangement, or understanding to vote such security that would otherwise render
such Person the Beneficial Owner of 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 provisions of the Exchange Act and the Exchange Act Regulations, and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report);

 

(ii)                                  that 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, whether or not
in writing (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants, or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own or to have Beneficial Ownership of securities tendered
pursuant to a tender or exchange offer made in accordance with the 

 

2

 

Exchange Act Regulations 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; or (B) the right to vote pursuant to any
agreement, arrangement, or understanding (except to the extent contemplated by
the proviso to subparagraph (i) of this paragraph (c)); or

 

(iii)                               that are Beneficially
Owned, directly or indirectly, by any other Person (or any Affiliate or
Associate of such Person) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement, or understanding,
whether or not in writing (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 subparagraph (i) of this
paragraph (c)), or disposing of any such securities.

 

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 that such Person would be deemed to Beneficially Own
hereunder.

 

(d)                                 “Board
of Directors” shall mean the Board of Directors of the Company or any duly
authorized committee thereof.

 

(e)                                  “Business
Day” shall mean any day other than a Saturday, Sunday, or a day on which
banking institutions in New York City, New York are authorized or obligated by
law or executive order to close.

 

(f)                                    “Certificate
of Incorporation” shall mean the Restated Certificate of Incorporation of
the Company, as amended, as filed with the Office of the Secretary of State of
the State of Delaware, together with the Certificate of Designation of the Series B
Preferred Stock of the Company adopted contemporaneously with the approval of
this Agreement, as the same may hereafter be amended or restated.

 

(g)                                 “Close
of Business” on any given date shall mean 5:00 P.M., New York City
time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.

 

(h)                                 “Common
Stock” shall have the meaning set forth in the Preamble to this Agreement.

 

(i)                                     “Common
Equity Interest” when used with reference to any Person other than the
Company shall mean the class or series of capital stock (or equity interest)
with the greatest voting power (in relation to any other classes or series of
capital stock (or equity interest)) of such other Person.

 

(j)                                     “Distribution
Date” shall have the meaning set forth in Section 3(a).

 

3

 

(k)                                  “Equivalent
Preferred Stock” shall have the meaning set forth in Section 11(b).

 

(l)                                     “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(m)                               “Exchange
Act Regulations” shall mean the General Rules and Regulations under
the Exchange Act.

 

(n)                                 “Expiration
Date” has the meaning set forth in Section 7(a).

 

(o)                                 “Final
Expiration Date” has the meaning set forth in Section 7(a).

 

(p)                                 “Grandfathered
Stockholder” has the meaning set forth in Section 1(a)(iii).

 

(q)                                 “Person”
shall mean any individual, partnership (general or limited), limited liability
company, firm, corporation, association, trust, unincorporated organization, or
other entity, as well as any syndicate or group deemed to be a Person under Section 14(d)(2) of
the Exchange Act.

 

(r)                                    “Principal
Party” shall have the meaning set forth in Section 13(b).

 

(s)                                  “Purchase
Price” shall have the meaning set forth in Section 7(b).

 

(t)                                    “Record
Date” shall have the meaning set forth in the Preamble to this Agreement.

 

(u)                                 “Right”
and “Rights” shall have the meaning set forth in the Preamble to this
Agreement.

 

(v)                                 “Rights
Certificates” shall have the meaning set forth in Section 3(a).

 

(w)                               “Rights
Dividend Declaration Date” shall have the meaning set forth in the Preamble
to this Agreement.

 

(x)                                   “Section 11(a)(ii) Event”
shall mean the event described in Section 11(a)(ii) hereof that
triggers the adjustment provided in Section 11(a)(ii).

 

(y)                                 “Section 13
Event” shall mean any event described in clause (x), (y), or (z) of Section 13(a) hereof.

 

(z)                                   “Securities
Act” shall mean the Securities Act of 1933, as amended.

 

(aa)                            “Series B
Preferred Stock” shall mean the Series B Preferred Stock of the
Company, par value $0.01 per share, having the voting rights, powers,
designations, preferences, and relative, participating, optional, or other
special rights and qualifications, limitations, and restrictions set forth in Exhibit C
hereof.

 

(bb)                          “Stock
Acquisition Date” shall mean the first date of public announcement
(including, without limitation, the filing of any report pursuant to Section 13(d) of
the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.

 

4

 

(cc)                            “Subsidiary”
shall mean, with reference to any Person, any other Person of which (1) a
majority of the Voting Power of the voting securities or equity interests is
Beneficially Owned, directly or indirectly, by such first-mentioned Person or
otherwise controlled by such first-mentioned Person, or (2) an amount of
voting securities or equity interests sufficient to elect at least a majority
of the directors or equivalent governing body of such other Person is Beneficially
Owned, directly or indirectly, by such first-mentioned Person, or otherwise
controlled by such first-mentioned Person.

 

(dd)                          “Triggering
Event” shall mean any Section 11(a)(ii) Event or any Section 13
Event.

 

(ee)                            “Unit”
has the meaning set forth in Section 7(b).

 

(ff)                                “Voting
Power” when used with reference to the Voting Securities of any Person
shall mean the number of votes (whether cast in person, by proxy, or by written
consent) entitled (1) to be cast generally in the election of directors or
members of the governing body of such Person (if such person is a corporation
or is managed by or under the direction of a governing body performing
functions and having obligations similar to those of a corporate board of
directors) or (2) to participate in the management and control of such
Person (if such Person is not a corporation and is not managed by or under the
direction of a governing body performing functions and having obligations
similar to those of a corporate board of directors).

 

(gg)                          “Voting
Securities” when used in reference to any Person, shall mean the
outstanding capital stock, equity interest, or other voting securities of such
Person, in each case entitling the holder thereof (1) to cast votes, in
person or by proxy, or to act by written consent, in the election of directors
or members of the governing body of such Person (if such person is a
corporation or is managed by or under the direction of a governing body
performing functions and having obligations similar to those of a corporate
board of directors) or (2) to participate in the management and control of
such Person (if such Person is not a corporation and is not managed by or under
the direction of a governing body performing functions and having obligations
similar to those of a corporate board of directors).

 

(hh)                          “Voting
Stock” shall mean the Common Stock, the Series B Preferred Stock, and
any other class or series of securities of the Company entitled to vote
generally, together with the Common Stock, in the election of directors of the
Company.

 

Section 2.                                            Appointment
of Rights Agent.  The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 4 hereof, shall prior to the
Distribution Date also be holders of Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment.  With the consent of the
Rights Agent, 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
it be liable for, the acts or omissions of any such co-Rights Agent.

 

Section 3.                                            Issue
of Rights Certificates.  (a)  (a) Until
the earlier of (i) the Close of Business on the tenth Business Day after
the Stock Acquisition Date and (ii) either (x) with 

 

5

 

respect to any tender or exchange offer not
pending on the Effective Date, the Close of Business on the tenth Business Day
(or such later date as may be determined by action of a majority of the Board
of Directors prior to such time as any Person becomes an Acquiring Person and
of which later date the Company will give the Rights Agent prompt written
notice) after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary holding Voting Stock for, or pursuant to the terms of, any such plan,
acting in such capacity) is first published or sent or given within the meaning
of Rule 14d-4 (a) of the Exchange Act Regulations or any successor rule or
(y) with respect to any tender or exchange offer pending on the Effective
Date, simultaneously with the acceptance for payment of the shares tendered
pursuant to such tender offer, if upon consummation thereof such Person would
be the Beneficial Owner of shares of Voting Stock representing 20% or more of
the total Voting Power of the aggregate of all shares of Voting Stock then
outstanding (including any such date that is after the date of this Agreement
and prior to the issuance of the Rights) (the earlier of (i) and (ii) above
being the “Distribution Date”):

 

(x)                       the
Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for shares of Common Stock registered
in the names of the holders of shares of Common Stock as of and subsequent to
the Record Date (which certificates for shares of Common Stock shall be deemed
also to be certificates for Rights) and not by separate rights certificates;
and

 

(y)                     the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to 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, if so
requested, will send) by first-class, insured, postage prepaid mail, to each
record holder of shares of Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit A
(the “Rights Certificates”), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein.  In the event that an adjustment in the number
of Rights per share of Common Stock has been made pursuant to Section 11(i) or
Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company may make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. 
As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.

 

(b)                                 As
promptly as practicable following the Record Date, the Company will send a copy
of a Summary of Rights to Purchase Series B Preferred Stock in
substantially the form attached hereto as Exhibit B and which may
be appended to certificates that represent shares of Common Stock (hereinafter
referred to as the “Summary of Rights”), by first-class, postage prepaid
mail, to each record holder of Common Stock as of the Close of Business on the
Record 

 

6

 

Date, at the
address of such holder shown on the records of the Company.  With respect to certificates for Common Stock
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 attached thereto.  Until the earlier of the Distribution Date or
the Expiration Date, the surrender for transfer of any certificate for Common
Stock outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.

 

(c)                                  Rights
shall, without any further action, be issued in respect of all shares of Common
Stock that become outstanding (whether originally issued or delivered from the
Company’s treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. 
Certificates, representing such shares of Common Stock, issued after the
Record Date shall bear the following legend:

 

“This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Stockholders Rights Agreement between
Take-Two Interactive Software, Inc. (the “Company”) and American
Stock Transfer & Trust Company (the “Rights Agent”) dated as of
March 24, 2008  (the “Rights
Agreement”), the terms of which are incorporated herein by reference and a
copy of which is on file at the principal office of the Company.  Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.  The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of mailing,
without charge after receipt of a written request therefor.  Under certain circumstances, as set forth in
the Rights Agreement, Rights that are Beneficially Owned by any Person who is,
was, or becomes an Acquiring Person or any Affiliate or Associate thereof (as
such capitalized terms are defined in the Rights Agreement), or specified
transferees of such Acquiring Person (or Affiliate or Associate thereof) may
become null and void.”

 

After the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date, if new certificate(s) representing
shares of Common Stock are issued in connection with the transfer, split up,
combination, or exchange of certificate(s) representing shares of Common
Stock or if new certificate(s) representing shares of Common Stock are
issued to replace any certificate(s) that have been mutilated, destroyed,
lost, or stolen, then such new certificate(s) shall bear the foregoing
legend.  With respect to all certificates
containing the foregoing legend, until the earlier of the Distribution Date or
the Expiration Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of the shares of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Common Stock represented by such certificates.  In the event that the Company purchases or
acquires any shares of Common Stock 

 

7

 

after the Record Date but prior to the
Distribution Date, any Rights associated with such shares of Common Stock shall
be deemed cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock that are no
longer outstanding.

 

Section 4.                                            Form of
Rights Certificate.  (a)  The
Rights Certificates (and the forms of election to purchase and of assignment
and the certificate to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit A 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 any rule or regulation
thereunder or with any rule or regulation of any stock exchange upon which
the Rights may from time to time be listed, or to conform to usage.  Subject to the provisions of Sections 7, 11,
13, 22, 23, 24, and 27 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Distribution Date and on their face shall entitle the
holders thereof to purchase such number of Units of Series B Preferred
Stock as shall be set forth therein at the price set forth therein, but the
amount and type of securities, cash, or other assets that may be acquired upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.

 

(b)                                 Any
Rights Certificate issued pursuant hereto that represents Rights Beneficially
Owned by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and that receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing written or oral agreement, arrangement, or understanding regarding
either the transferred Rights, shares of Common Stock, or the Company, or (B) a
transfer that the Board of Directors has determined in good faith to be part of
a plan, agreement, arrangement, or understanding that has as a primary purpose
or effect the avoidance of Section 7(e) hereof shall, upon the
written direction of the Board of Directors, contain (to the extent feasible),
the following legend:

 

“The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such capitalized terms are
defined in the Stockholders Rights Agreement, dated as of March 24, 2008
(the “Rights Agreement”), by and between Take-Two Interactive Software, Inc.
and American Stock Transfer & Trust Company, as Rights Agent).  Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement.”

 

8

 

Section 5.                                            Countersignature
and Registration.  (a)  Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, its Vice Chairman of the
Board, or its Treasurer, shall have affixed thereto the Company’s corporate
seal (or a facsimile thereof), and shall be attested by the Company’s Secretary
or one of its Assistant Secretaries.  The
signature of any of these officers on the Rights Certificates may be manual or
by facsimile.  Rights Certificates
bearing the manual or facsimile signatures of the individuals who were at any
time the proper officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the countersigning of such Rights Certificates by the Rights Agent or did not
hold such offices at the date of such Rights Certificates.  No Rights Certificate shall be entitled to
any benefit under this Agreement or be valid for any purpose unless there appears
on such Rights Certificate a countersignature duly executed by the Rights Agent
by manual or facsimile signature of an authorized officer, and such
countersignature upon any Rights Certificate shall be conclusive evidence, and
the only evidence, that such Rights Certificate has been duly countersigned as
required hereunder.

 

(b)                                 Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
office designated for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the name and address of each holder of the
Rights Certificates, the number of Rights evidenced on its face by each Rights
Certificate, and the date of each Rights Certificate.

 

Section 6.                                            Transfer,
Split Up, Combination, and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost, or Stolen Rights Certificates.  (a)  Subject to the provisions of
Sections 4(b), 7(e), and 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights
Certificates representing Rights that have become null and void pursuant to Section 7(e) hereof,
that have been redeemed pursuant to Section 23 hereof, or that have been
exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined, or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of Units of Series B
Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine, or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined, or exchanged at the office of the Rights Agent designated
for such purpose.  Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and executed the certificate set forth
in the form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of the Rights represented by such Rights
Certificate or Affiliates or Associates thereof as the Company shall reasonably
request; whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be 

 

9

 

imposed in connection with any transfer, split up, combination, or
exchange of Rights Certificates.

 

(b)                                 If
a Rights Certificate shall be mutilated, lost, stolen, or destroyed, upon
request by the registered holder of the Rights represented thereby and upon
payment to the Company and the Rights Agent of all reasonable expenses incident
thereto, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen, or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and representing the
equivalent number of Rights, but, in the case of loss, theft, or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.

 

Section 7.                                            Exercise
of Rights; Purchase Price; Expiration Date of Rights.  (a)  Prior to the earlier of (i) the
Close of Business on March 24, 2011 (the “Final Expiration Date”),
or (ii) the time at which the Rights are redeemed as provided in Section 23
hereof or (iii) the time at which the Rights are exchanged as provided in Section 24
hereof (the earlier of (i), (ii), and (iii) being the “Expiration Date”),
the registered holder of any Rights Certificate may, subject to the provisions
of Sections 7(e), 9(c), and 9(f) hereof, exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price (as
hereinafter defined) for the number of Units of Series B Preferred Stock
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) for which such surrendered Rights are then exercisable.

 

(b)                                 The
purchase price for each one one-thousandth of a share of Series B
Preferred Stock purchasable upon exercise of a Right shall be $42.50 (as
adjusted from time to time as provided in Sections 11 and 13(a) hereof)
(the “Purchase Price”).  The
Purchase Price shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c)(2) below.  Each one one-thousandth of a share of Series B
Preferred Stock shall be referred to herein as a “Unit” of Series B
Preferred Stock.

 

(c)                                  (1)                                  Subject
to Section 14(b) hereof, following the Distribution Date, the Company
may (at the direction of the Board of Directors) deposit with a corporation in
good standing organized under the laws of the United States or any State of the
United States, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by
federal or state authority (the “Depositary Agent”) certificates
representing the shares of Series B Preferred Stock that may be acquired
upon exercise of the Rights and may cause such Depositary Agent to enter into
an agreement pursuant to which the Depositary Agent shall issue receipts
representing interests in the shares of Series B Preferred Stock so
deposited.

 

(2)                                  Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate duly executed, accompanied by 

 

10

 

payment, with
respect to each Right so exercised, of the Purchase Price for the Units of Series B
Preferred Stock (or, following a Triggering Event, other securities, cash, or
other assets, as the case may be) to be purchased thereby as set forth below
and an amount equal to any applicable tax or charge required to be paid by the
holder of such Rights Certificate in accordance with Section 9 hereof, or
evidence satisfactory to the Company of payment of such tax or charge, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the Series B
Preferred Stock certificates representing such number of shares of Series B
Preferred Stock (or fractions of shares that are integral multiples of one
one-thousandth of a share of Series B Preferred Stock) as are to be
purchased and the Company will direct its transfer agent to comply with all
such requests, and/or (B) requisition from the Depositary Agent depositary
receipts representing such number of Units of Series B Preferred Stock as
are to be purchased and the Company will direct the Depositary Agent to comply
with all such requests, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or such depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such Rights
Certificate.  In the event that the
Company is obligated to issue Common Stock or other securities of the Company,
pay cash, and/or distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such Common Stock,
other securities, cash, and/or other property is available for distribution by
the Rights Agent, if and when necessary to comply with this Agreement.  The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) may be
made in cash or by certified or bank check or money order payable to the order
of the Company.

 

(d)                                 In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing the
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to, or upon the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, subject
to the provisions of Sections 6 and 14 hereof.

 

(e)                                  Notwithstanding
anything in this Agreement to the contrary, from and after the time that any
Person becomes an Acquiring Person, any Rights Beneficially Owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and who receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or any
such Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or such Associate or Affiliate) has any continuing written or
oral agreement, arrangement, or understanding regarding the transferred Rights,
shares of Common Stock, or the Company or (B) a transfer that the Board of
Directors has determined in good faith to be part of a plan, agreement,
arrangement, or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall be null and void without any further

 

11

 

action, and any holder of such Rights
thereafter shall have no rights or preferences whatsoever with respect to such
Rights, whether under any provision of this Agreement, the Rights Certificates,
or otherwise (including, without limitation, rights and preferences pursuant to
Sections 7, 11, 13, 23, and 24 hereof). 
The Company shall use reasonable efforts to ensure compliance with the
provisions of this Section 7(e) and Section 4(b), but neither
the Company nor the Rights Agent shall have any liability to any holder of
Rights or any other Person as a result of the Company’s failure to make any determination
under this Section 7(e) or such Section 4(b) with respect
to an Acquiring Person or its Affiliates, Associates, or transferees.

 

(f)                                    Notwithstanding
anything in this Agreement or any Rights Certificate to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 by such registered holder unless
such registered holder shall have (i) completed and executed the
certificate following the form of election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.

 

Section 8.                                            Cancellation
and Destruction of Rights Certificates. 
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or 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 Rights Certificates shall be issued in lieu thereof
except as expressly permitted by this Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Rights Certificates acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

 

Section 9.                                            Reservation
and Availability of Capital Stock.  (a)  The
Company shall at all times prior to the Expiration Date cause to be reserved
and kept available out of its authorized but unissued shares of Series B
Preferred Stock and/or out of any shares of Series B Preferred Stock held
in its treasury (and following the occurrence of a Triggering Event, out of the
authorized but unissued shares of such other equity securities of the Company
as may be issuable upon exercise of the Rights and/or out of any shares of such
securities held in its treasury), the number of shares of Series B
Preferred Stock (and following the occurrence of a Triggering Event, the number
of shares of such other equity securities of the Company) that, as provided in
this Agreement, will be sufficient to permit the full exercise of all
outstanding Rights.  Upon the occurrence
of any events resulting in an increase in the aggregate number of shares of Series B
Preferred Stock (or other equity securities of the Company) issuable upon
exercise of all outstanding Rights above the number then reserved, the Company
shall make appropriate increases in the number of shares so reserved.

 

(b)                                 So
long as the shares of Series B Preferred Stock (and following the
occurrence of a Triggering Event, any other equity securities of the Company)
to be issued and delivered upon 

 

12

 

the exercise of the Rights may be listed on
any stock exchange, the Company shall during the period from the Distribution
Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.

 

(c)                                  The
Company shall use its reasonable best efforts (i) either (A) as soon
as practicable following the first occurrence of a Section 11(a)(ii) Event
and a determination by the Company in accordance with Section 11(a)(iii) hereof,
if applicable, of the consideration to be delivered by the Company upon
exercise of the Rights, or (B) if so required by law, as soon as required
following the Distribution Date (the earliest of (A) and (B) being
the “Registration Date”), to file a registration statement on an
appropriate form under the Securities Act, with respect to the securities that
may be acquired upon exercise of the Rights (the “Registration Statement”);
(ii) to cause the Registration Statement to become effective as soon as
practicable after such filing; (iii) to cause the Registration Statement
to remain effective (and to include a prospectus at all times complying with
the requirements of the Securities Act) until the earlier of (A) the date
as of which the Rights are no longer exercisable for the securities covered by
the Registration Statement and (B) the Expiration Date; and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or “Blue Sky” laws.  The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to
become effective.  Upon any such
suspension, the Company shall notify the Rights Agent thereof in writing and
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement (with written
notice thereof to the Rights Agent) at such time as the suspension is no longer
in effect, stating that the suspension on the exercisability of the Rights is
no longer in effect.  Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction (x) if the requisite qualification in such
jurisdiction shall not have been obtained and until a registration statement
has been declared effective or (y) if the exercise thereof shall not be
permitted under applicable law.

 

(d)                                 The
Company shall take such action as may be necessary to ensure that all shares of
Series B Preferred Stock (and, following the occurrence of a Triggering
Event, any other securities that may be delivered upon exercise of Rights)
shall be, at the time of delivery of the certificates or depositary receipts
for such securities (subject to payment of the Purchase Price), duly and
validly authorized and issued, fully paid and non-assessable.

 

(e)                                  The
Company shall pay when due and payable any and all documentary, stamp, or
transfer tax, or other tax or charge, that is payable in respect of the
issuance and delivery of the Rights Certificates or the issuance and delivery
of any certificates or depository receipts for Series B Preferred Stock
(or other equity securities of the Company that may be delivered upon exercise
of the Rights) upon the exercise of Rights; provided, however,
the Company shall not be required to pay any such tax or charge that may be
payable in connection with the issuance or delivery of Units of Series B
Preferred Stock, or any certificates or depositary receipts for such Units of Series B
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or other assets, as the case may be) to any Person other than
the registered holder 

 

13

 

of the Rights Certificates evidencing the
Rights surrendered for exercise.  The
Company shall not be required to issue or deliver any certificates or
depositary receipts for Units of Series B Preferred Stock (or, following
the occurrence of a Triggering Event, any other securities, cash or other
assets, as the case may be) to, or in a name other than that of, the registered
holder 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 Rights
Certificate at the time of surrender) or until it has been established to the
Company’s satisfaction that no such tax or charge is due.

 

(f)                                    The
Company shall use its reasonable best efforts, on or prior to the date that is
either (A) as soon as practicable following the first occurrence of a Section 11(a)(ii) Event
and a determination by the Company in accordance with Section 11(a)(iii) hereof,
if applicable, of the consideration to be delivered by the Company upon
exercise of the Rights, or (B) if so required by law, as soon as required
following the Distribution Date, to obtain any and all regulatory approvals
that may be required with respect to the securities purchasable upon exercise
of the Rights.  The Company may
temporarily suspend, for a period of time not to exceed 90 days after the date
set forth in the first sentence of this Section 9(f), the exercise of the
Rights in order to permit the Company to obtain the necessary regulatory
approvals.  Upon any such suspension, the
Company shall notify the Rights Agent thereof in writing and issue a public
announcement stating that the exercise of the Rights has been temporarily
suspended, as well as a public announcement (with written notice thereof to the
Rights Agent) at such time as the suspension is no longer in effect stating
that the suspension on the exercise of the Rights is no longer in effect.  Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable unless and until
all required regulatory approvals have been obtained with respect to the
securities purchasable upon exercise of the Rights.

 

Section 10.                                      Series B
Preferred Stock Record Date.  Each
Person in whose name any certificate for Units of Series B Preferred Stock
(or, following the occurrence of a Triggering Event, other securities) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Units of Series B Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the Series B Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such securities
on, and such certificate shall be dated, the next succeeding Business Day on
which the Series B Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) transfer books of the Company are open and,
provided further, that if delivery of Units of Series B Preferred
Stock is delayed pursuant to Section 9(c) hereof, such Persons shall
be deemed to have become the record holders of such Units of Series B
Preferred Stock only when such Units first become deliverable. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with
respect to securities for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.

 

14

 

Section 11.                                      Adjustment
of Purchase Price, Number and Kind of Shares or Number of Rights.  The Purchase Price, the number and kind of
securities covered by each Right, and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.

 

(a)                                  (1)                                  In
the event the Company shall at any time after the Rights Dividend Declaration
Date (A) declare a dividend on the Series B Preferred Stock payable
in shares of Series B Preferred Stock, (B) subdivide the outstanding Series B
Preferred Stock, (C) combine the outstanding Series B Preferred Stock
into a smaller number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Series B Preferred Stock (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 Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
(or fractions thereof) of Series B Preferred Stock or capital stock, as
the case may be, issuable on such date upon exercise of the Rights, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares (or fractions thereof) of Series B
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; 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 (or fractions thereof)
of capital stock of the Company issuable upon exercise of one Right.  If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

 

(ii)                                  In the event any
Person becomes an Acquiring Person, provision shall be made so that each holder
of a Right (except as provided below in Section 11(a)(iii) and in
Sections 7(e), 13, and 24 hereof) shall thereafter have the right to receive,
upon exercise thereof, at a price equal to the then current Purchase Price
multiplied by the number of Units of Series B Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event
(such product thereafter being, for all purposes of this Agreement other than Section 13
hereof, the “Purchase Price”), in accordance with the terms of this
Agreement, in lieu of the number of Units of Series B Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event,
such number of shares of Common Stock as shall equal the result obtained by
dividing (x) the Purchase Price (as the same has been adjusted pursuant to
the foregoing provisions of this Section 11(a)(ii)), by (y) 50% of
the then current market price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such first occurrence (such shares of
Common Stock being the “Adjustment Shares”).

 

15

 

(iii)                               In the event that the
number of shares of Common Stock that are authorized by the Company’s
Certificate of Incorporation but are not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights is insufficient to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall take all
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exercise of the Rights. 
In the event that the Company shall, after good faith effort, be unable
to take all such actions as may be necessary to authorize such additional
shares of Common Stock, then the Company shall issue Common Stock to the extent
shares thereof are available in connection with exercise of the Rights and to
the extent sufficient shares of Common Stock are not available therefor shall
substitute, for each share of Common Stock that would otherwise be issuable
upon exercise of a Right, a number of Units of Series B Preferred Shares
such that the current per share market price of one Unit of Series B
Preferred Stock multiplied by such number of Units is equal (as nearly as
possible) to the current per share market price of one share of Common Stock as
of the date of issuance of such Units of Series B Preferred Stock.  In the event that the number of shares of
Common Stock, together with the number of Units of Series B Preferred
Stock, that are authorized by the Company’s Certificate of Incorporation but
are not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is insufficient to permit the exercise in full of the
Rights in accordance with the foregoing provisions of this subparagraph (iii) and
subparagraph (ii) of this Section 11(a), then the Company shall take
all such action as may be necessary to authorize additional shares of Series B
Preferred Stock for issuance upon exercise of the Rights.  In the event that the Company shall, after
good faith effort, be unable to take all such actions as may be necessary to
authorize such additional shares of Common Stock and/or Units of Series B
Preferred Stock, then the Company, by the vote of a majority of the Board of
Directors, shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of each such Right (the “Current
Value”) over (2) the Purchase Price (such excess being the “Spread”),
and (B) with respect to each such Right, make adequate provision to
substitute for such Adjustment Shares, upon exercise of such Rights and payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock, Units of Series B Preferred Stock,
and/or other equity securities of the Company, each to the extent permitted by
the Company’s Certificate of Incorporation (including, without limitation,
shares, or units of shares, of preferred stock that the Board of Directors has
deemed to have the same value as shares of Common Stock (the “Preferred
Stock Equivalents”)), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by a
majority of the Board of Directors, after receiving advice from a nationally
recognized investment banking firm; provided, however, that if
the Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty days following the first occurrence of a Section 11(a)(ii) Event
(for purposes hereof, the “Section 11(a)(iii) Trigger Date”),
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary, Units of Series B
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares of Common Stock, Units of Series B 

 

16

 

Preferred Stock and/or cash shall have an aggregate value equal to the
Spread.  To the extent that the Company
determines that some action need be taken 
pursuant to this Section 11(a)(iii), the Company shall provide,
subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights.  For
purposes of this Section 11(a)(iii), the value of a share of Common Stock
shall be the current market price (as determined pursuant to Section 11(d) hereof)
per share of Common Stock on the Section 11(a)(iii) Trigger Date, the
value of a Unit of Series B Preferred Stock shall be the current market
price (as determined pursuant to Section 11(d) hereof) per Unit of Series B
Preferred Stock on the Section 11(a)(iii) Trigger Date, and the value
of a unit or share, as applicable, of any Preferred Stock Equivalent shall be
deemed to have the same value as the Common Stock on such date.

 

(b)                                 In
case the Company shall fix a record date for the issuance of rights, options,
or warrants to all holders of any Series B Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five calendar
days after such record date) shares of Series B Preferred Stock (or shares
having substantially the same rights, privileges, and preferences as shares of Series B
Preferred Stock (“Equivalent Preferred Stock”)) or securities
convertible into Series B Preferred Stock or Equivalent Preferred Stock at
a price per share of Series B Preferred Stock or per share of Equivalent
Preferred Stock (or having a conversion price per share, if a security convertible
into Series B Preferred Stock or Equivalent Preferred Stock) less than the
current market price (as determined pursuant to Section 11(d) hereof)
per share of Series B Preferred Stock on such record date, then the
Purchase Price with respect to the Series B Preferred Stock 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 sum of the number of shares of Series B
Preferred Stock outstanding on such record date plus the number of shares of Series B
Preferred Stock that the aggregate offering price of the total number of shares
of Series B Preferred Stock and/or Equivalent Preferred Stock 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 shares of Series B
Preferred Stock outstanding on such record date plus the number of additional
shares of Series B Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). 
In case such subscription price may be paid by delivery of consideration
all or part of which may be in a form other than cash, the value of such
consideration shall be as determined by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.  Shares of Series B Preferred Stock owned
by or held for the account of the Company or any Subsidiary shall not be deemed
outstanding for the purpose of such computation.  Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had not been
fixed.

 

(c)                                  In
case the Company shall fix a record date for a distribution to all holders of
shares of Series B Preferred Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing corporation), evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Series B
Preferred 

 

17

 

Stock, but including any dividend payable in
stock other than Series B Preferred Stock), or subscription rights,
options, or warrants (excluding those referred to in Section 11(b) hereof),
then, in each case, 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
current market price (as determined pursuant to Section 11(d) hereof)
per share of Series B Preferred Stock on such record date minus the fair
market value (as determined in good faith by a majority of the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding and conclusive for all purposes on the Rights
Agent and the holder of the Rights) of the cash, assets, or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
distributable in respect of a share of Series B Preferred Stock and the
denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of Series B Preferred Stock
on such record date.  Such adjustments
shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price that would have been in effect if such record
date had not been fixed.

 

(d)                                 (1)                                  For
the purpose of any computation hereunder, the “current market price” per share
of any security, including the Common Stock or any Common Equity Interest, on
any date shall be deemed to be the average of the daily closing prices per
share of such security for the ten consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however,
if prior to the expiration of such requisite ten Trading Day period, the issuer
announces either (A) a dividend or distribution on such security payable
in shares of such security or securities convertible into such shares (other
than the Rights), or (B) any subdivision, combination, or reclassification
of such shares, then, following the ex-dividend date for such dividend or the
record date for such subdivision, as the case may be, the “current market price”
for such security shall be properly adjusted to take into account such
event.  The closing price for each day
shall be, if the shares of such security are listed and admitted to trading on
a national securities exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such shares of such security are listed
or admitted to trading or, if such shares 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 the National Association of Securities
Dealers, Inc. Automated Quotation System (“NASDAQ”) or such other
system then in use, or, if on any such date such shares 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 such shares selected by a
majority of the Board of Directors.  If
on any such date no market maker is making a market in such shares, the fair
value of such shares on such date as determined in good faith by a majority of
the Board of Directors shall be used.  If
such shares are not publicly held or not so listed or traded, “current market
price” per share shall mean the fair value per share as determined in good
faith by a majority of the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.  The term “Trading
Day” shall mean, if such shares of such security are listed or admitted to
trading on any national securities exchange, a day on which the principal
national securities 

 

18

 

exchange on which such shares
are listed or admitted to trading is open for the transaction of business or,
if such shares are not so listed or admitted, a Business Day.

 

(ii)                                  For the purpose of
any computation hereunder, the “current market price” per share of Series B
Preferred Stock shall be determined in the same manner as set forth above for
Common Stock in clause (i) of this Section 11(d) (other than the
fourth sentence thereof). If the current market price per share of Series B
Preferred Stock cannot be determined in the manner provided above or if the Series B
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the “current market price” per
share of Series B Preferred Stock shall be conclusively deemed to be the “current
market price” per share of the Common Stock multiplied by 1,000 (as such amount
may be appropriately adjusted to reflect any stock split, reverse stock split,
stock dividend, or any similar transaction with respect to Common Stock
occurring after the date of this Agreement. 
If neither the Common Stock nor the Series B Preferred Stock is
publicly held or so listed or traded, “current market price” per share of Series B
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights.  For all
purposes of this Agreement, the “current market price” of a Unit of Series B
Preferred Stock shall be equal to the “current market price” of one share of Series B
Preferred Stock divided by 1,000.

 

(e)                                  Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent in the Purchase Price; provided, however,
that any adjustments that 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
ten-thousandth of a share of Common Stock or Common Equity Interest or other
share or one-millionth of a share of Series B Preferred Stock, as the case
may be.  Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date
of the transaction that mandates such adjustment or (ii) the Expiration
Date.

 

(f)                                    If,
as a result of an adjustment made pursuant to Sections 11(a)(ii) or 13(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Series B Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of any Right and
the Purchase Price thereof 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 Series B Preferred Stock contained in Sections 11(a),
(b), (c), (d), (e), (g), (h), (i), (j), (k), (1), and (m), and the provisions
of Sections 7, 9, 10, 13, and 14 hereof with respect to the Series B
Preferred Stock 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 Units of Series B Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.

 

19

 

(h)                                 Unless
the Company shall have exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made
in Sections 11(b) and (c), 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 Units of Series B Preferred
Stock (calculated to the nearest one ten-thousandth of a Unit) obtained by (i) multiplying
(x) the number of Units of Series B Preferred Stock covered by 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 of the Purchase Price.

 

(i)                                     The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in lieu of any adjustment in the number of
Units of Series B Preferred Stock that may be acquired upon the exercise
of a Right.  Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable
for the number of Units of Series B Preferred Stock 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 ten-thousandth of a Right) 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, and notify the Rights Agent in writing, 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.  This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later than the date
of such public announcement.  If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights 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
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment.  Rights Certificates to be so
distributed shall be issued, executed, and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.

 

(j)                                     Irrespective
of any adjustment or change in the Purchase Price or the number of Units of Series B
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Unit and the number of Units of Series B Preferred
Stock that was expressed in the initial Rights Certificates issued hereunder.

 

(k)                                  Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then par value of the number of Units of Series B Preferred
Stock issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of 

 

20

 

its counsel, be necessary in order that the
Company may validly and legally issue such fully paid and non-assessable number
of Units of Series B Preferred Stock 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 (and shall notify the Rights Agent in writing of any
such election) until the occurrence of such event the issuance to the holder of
any Right exercised after such record date of that number of Units of Series B
Preferred Stock and shares of other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of Units of Series B
Preferred Stock and shares of 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 (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.

 

(m)                               Anything
in this Section 11 to the contrary notwithstanding, prior to the
Distribution Date, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that the Board of Directors shall determine that any (i) consolidation
or subdivision of the Series B Preferred Stock, (ii) issuance wholly
for cash of any shares of Series B Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of Series B
Preferred Stock or securities that by their terms are convertible into or
exchangeable for shares of Series B Preferred Stock, (iv) stock
dividends, or (v) issuance of rights, options, or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Series B
Preferred Stock, shall not be taxable to such holders or shall reduce the taxes
payable by such holders.

 

(n)                                 The
Company shall not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a direct or indirect, wholly-owned Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof),
(ii) merge with or into any other Person (other than a direct or indirect,
wholly-owned Subsidiary of the Company in a transaction that complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction, or a series of transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its direct or indirect, wholly-owned Subsidiaries in one
or more transactions, each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger, or
sale there are any rights, warrants, or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with, or immediately after such consolidation, merger, or
sale, the Person that constitutes, or would constitute, the “Principal Party”
for purposes of Section 13(a) hereof shall have distributed or
otherwise transferred to its shareholders or other persons holding an equity
interest in such Person Rights previously owned by such Person or any of its
Affiliates and Associates; provided, however, this Section 11(n) shall
not affect the ability of any Subsidiary of the Company to consolidate with,
merge with or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company.

 

21

 

(o)                                 After
the Distribution Date and so long as any Rights shall then be outstanding
(other than Rights that have become null and void pursuant to Section 7(e) hereof),
the Company shall not, except as permitted by Sections 23, 24, and 27 hereof,
take (or permit any Subsidiary of the Company to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.

 

(p)                                 Anything
in this Agreement to the contrary notwithstanding, in the event that the
Company shall at any time after the Effective Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide any
outstanding shares of Common Stock, (iii) combine any of the outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Common Stock then outstanding,
or issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event. The adjustments provided for in this Section 11(p) shall
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination, or reclassification is effected.  If an event occurs that would require an
adjustment under Section 11(a)(ii) and this Section 11(p), the
adjustments provided for in this Section 11(p) shall be in addition
and prior to any adjustment required pursuant to Section 11(a)(ii).

 

Section 12.                                    Certificate
of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of
the facts and computations accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Series B
Preferred Stock and the Common Stock, a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment or
statement therein contained and shall have no duty or liability with respect
to, and shall not be deemed to have knowledge of, any adjustment or any such
event unless and until it shall have received such a certificate.

 

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

 

(a)                                 at
any time after a Person has become an Acquiring Person, in the event that,
directly or indirectly, either (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a direct or indirect,
wholly-owned Subsidiary of the Company in a transaction that complies with Section 11(o) hereof),
and the Company shall not be the continuing or surviving entity of such
consolidation or merger, (y) any Person (other than a 

 

22

 

direct or indirect, wholly-owned Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving entity of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be converted into or exchanged for stock
or other securities of any other Person (or the Company) or cash or any other
property or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer) to any Person or
Persons (other than the Company or any of its direct or indirect, wholly-owned
Subsidiaries in one or more transactions, each of which complies with Section 11(o) hereof),
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) (any such event described in (x), (y), or (z) being herein referred
to as a “Section 13 Event”); then, and in each such case, proper
provision shall be made so that:

 

(i)                                     each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price multiplied by the number of Units of Series B Preferred
Stock for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Units of Series B Preferred Stock, such
number of validly authorized and issued, fully paid, and non-assessable shares
of Common Equity Interest of the Principal Party (which shares shall not be
subject to any liens, encumbrances, rights of first refusal, transfer
restrictions, or other adverse claims) as shall be equal to the result obtained
by (1) multiplying such then current Purchase Price by the number of Units
of Series B Preferred Stock for which such Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such Units of Series B Preferred Stock for which
a Right would be exercisable hereunder but for the occurrence of such Section 11(a)(ii) Event
by the Purchase Price that would be in effect hereunder but for such first
occurrence) and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the “Purchase Price” for
all purposes of this Agreement) by 50% of the then current market price
(determined pursuant to Section 11(d) hereof) per share of the Common
Equity Interest of such Principal Party on the date of consummation of such Section 13
Event;

 

(ii)                                  such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement;

 

(iii)                               the term “Company”
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event;

 

(iv)                              such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Equity Interest) in connection with
the consummation of any such transaction as may be necessary to ensure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be possible, 

 

23

 

to its shares of Common Equity Interest
thereafter deliverable upon the exercise of the Rights; and

 

(v)                                 the provisions of Section 11(a)(ii) hereof
shall be of no further effect following the first occurrence of any Section 13
Event, and the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in this Section 13.

 

(b)                                 “Principal
Party” shall mean:

 

(i)                                     in the case of any
transaction described in clause (x) or (y) of the first sentence of Section 13(a),
(A) the Person (including the Company as successor thereto or as the
surviving entity) that is the issuer of any securities or other equity interests
into which shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer of Common
Equity Interest that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no securities or
other equity interests are so issued, the Person (including the Company as
successor thereto or as the surviving entity) that is the other constituent
party to such merger or consolidation, or, if there is more than one such
Person, the Person that is a constituent party to such merger or consolidation,
the Common Equity Interest of which has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof); and

 

(ii)                                  in the case of any
transaction described in clause (z) of the first sentence of Section 13(a),
the Person that is the party receiving the largest 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 transferred pursuant to such
transaction or transactions or if the Person receiving the largest portion of
the assets or earning power cannot be determined, whichever Person that has
received assets or earning power pursuant to such transaction or transactions,
the Common Equity Interest of which has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof);

 

provided, however,
that in any such case, (1) if the Common Equity Interest of such Person is
not at such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act (“Registered
Common Equity Interest”), and such Person is a direct or indirect
Subsidiary of another Person that has Registered Common Equity Interest
outstanding, “Principal Party” shall refer to such other Person; (2) if
the Common Equity Interest of such Person is not Registered Common Equity
Interest, and such Person is a direct or indirect Subsidiary of another Person
(other than an individual), but is not a direct or indirect Subsidiary of
another Person that has Registered Common Equity Interest outstanding, “Principal
Party” shall refer to the ultimate parent entity of such first-mentioned
Person; (3) if the Common Equity Interest of such Person is not Registered
Common Equity Interest, and such Person is directly or indirectly controlled by
more than one Person, and one or more of such other Persons has Registered
Common Equity Interest outstanding, “Principal Party” shall refer to whichever
of such other Persons is the issuer of the Registered Common Equity Interest
having the highest aggregate current market price (determined pursuant to Section 11(d) hereof);
and (4) if the 

 

24

 

Common Equity Interest of such Person is not
Registered Common Equity Interest, and such Person is directly or indirectly
controlled by more than one Person (one or more of which is a Person other than
an individual), and none of such other Persons has Registered Common Equity
Interest outstanding, “Principal Party” shall refer to whichever ultimate
parent entity is the corporation having the greatest stockholders’ equity or,
if no such ultimate parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net assets.

 

(c)                                  The
Company shall not consummate any Section 13 Event unless the Principal
Party shall have a sufficient number of authorized shares of its Common Equity
Interest that have not been issued (or reserved for issuance) or that are held
in its treasury to permit the exercise in full of the Rights in accordance with
this Section 13, and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of
this Section 13 and further providing that the Principal Party shall use
its best efforts to:

 

(i)                                     (A) prepare
and file on an appropriate form, as soon as practicable following the execution
of such agreement, a registration statement under the Securities Act with
respect to the shares of Common Equity Interest that may be acquired upon
exercise of the Rights, (B) cause such registration statement to remain
effective (and to include a prospectus at all times complying with the
requirements of the Securities Act) until the Expiration Date, and (C) take
such action as may be required to ensure that any acquisition of such shares of
Common Equity Interest upon the exercise of the Rights complies with any
applicable state security or “Blue Sky” laws as soon as practicable following
the execution of such agreement;

 

(ii)                                  as soon as
practicable after the execution of such agreement, deliver to holders of the
Rights historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for registration
on Form 10 (or any successor form) under the Exchange Act; and

 

(iii)                               obtain any and all
regulatory approvals as may be required with respect to the shares of Common
Equity Interest securities that may be acquired upon exercise of the Rights.

 

(d)                                 In
case the Principal Party that is to be a party to a transaction referred to in
this Section 13 has at the time of such transaction, or immediately
following such transaction will have, a provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, or any other agreements or arrangements,
which provision would have the effect of (i) causing such Principal Party
to issue, in connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of Common Equity
Interest of such Principal Party at less than the then current market price per
share (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Equity Interest of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13); (ii) providing for any special
payment, tax, or similar provisions in connection with the issuance of the
Common Equity Interest of such Principal Party pursuant to the provisions of Section 13;
or (iii) otherwise 

 

25

 

eliminating or substantially diminishing the
benefits intended to be afforded by the Rights in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section 13;
then, in such event, the Company 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 cancelled,
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
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. 
In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).

 

Section 14.                                    Fractional
Rights; Fractional Shares; Waiver.  (a)  The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates that evidence fractional Rights.  In lieu of such fractional Rights, there
shall be paid to the Persons to which such fractional Rights would otherwise be
issuable, an amount in cash equal to such fraction of the market value of a
whole Right.  For purposes of this Section 14(a),
the market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date that such fractional Rights would
have been otherwise issuable.  The
closing price of the Rights for any day shall be, if the Rights are listed or
admitted to trading on a national securities 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.  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 shall be used
and such determination shall be described in a statement filed with the Rights
Agent and delivered to the holders of the Rights, which shall be conclusive for
all purposes.

 

(b)                                 The
Company shall not be required to issue fractions of shares of Series B
Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share of Series B Preferred Stock) upon exercise of
the Rights or to distribute certificates that evidence such fractional shares
of Series B Preferred Stock (other than fractions that are integral
multiples of one one-thousandth of a share of Series B Preferred
Stock).  Subject to Section 7(c)(1) hereof,
fractions of shares of Series B Preferred Stock in integral multiples of
one one-thousandth of a share of Series B Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a Depositary Agent 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 shares of Series B
Preferred Stock represented by such depositary receipts.  In lieu of such fractional shares of Series B
Preferred Stock that are not 

 

26

 

integral multiples of one one-thousandth of a
share, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the then current market price of a share of Series B
Preferred Stock on the day of exercise, determined in accordance with Section 11(d) hereof.

 

(c)                                  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 of a
Right, except as permitted by this Section 14.

 

Section 15.                                    Rights
of Action.  All rights of action in
respect of this Agreement, other than rights of action vested in the Rights
Agent pursuant to Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of certificates representing shares of Common
Stock); and any registered holder of a Rights Certificate (or, prior to the
Distribution Date, of a certificate representing shares of Common Stock),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of a certificate representing
shares of Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate 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 of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement.

 

Section 16.                                    Agreement
of Rights 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 Common Stock;

 

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

 

(c)                                  subject
to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock 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 the last sentence of Section 7(e) hereof,
shall be affected by any notice to the contrary; and

 

27

 

(d)                                 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 any 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,
decree, judgment, or ruling issued by a court of competent jurisdiction or by a
governmental, 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, the Company must use its best
efforts to have any such order, decree, judgment, or ruling lifted or otherwise
overturned as promptly as practicable.

 

Section 17.                                    Rights
Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Rights Certificate
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the number of shares of Series B Preferred Stock or any other
securities of the Company that may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
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, except as provided in Section 25 hereof, to receive
notice of meetings or other actions affecting shareholders, or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised 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, including reasonable fees and
disbursements of counsel and other reasonable disbursements, incurred in the
preparation, delivery, amendment, administration, or execution of this
Agreement and the acceptance, administration, 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 disbursements of counsel), incurred without
negligence, bad faith, or willful misconduct on the part of the Rights Agent,
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 the costs and expenses of defending against any
claim of liability hereunder.

 

(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 Rights
Certificate or certificate for shares of Series B Preferred Stock or for
other capital stock or 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 have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.

 

28

 

(c)                                  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, replacement, or removal of the Rights Agent.

 

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 corporate trust or shareholder services businesses 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
document or any further act on the part of any of the parties hereto; provided,
however, 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 Rights
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights 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 Rights Certificates shall have the full force
provided in the Rights 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 Rights Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and
deliver Rights Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.

 

Section 20.                                    Duties
of Rights Agent.  The Rights Agent
undertakes to perform only the duties and obligations imposed by this
Agreement, upon the following terms and conditions, by all of which the Company
and the holders of Rights 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 as to, and the Rights Agent shall incur no liability for or in respect
of, any action taken, suffered, or omitted by the Rights Agent in good faith
and 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 “current
market price”) be proved or established by the Company prior to the Rights
Agent taking, suffering, or omitting to take any action hereunder, such fact or
matter (unless other evidence in respect thereof be specified herein) may be
deemed to be conclusively proved and established by a certificate signed by any

 

29

 

one of the Chairman of the Board, the Chief
Executive Officer, the President, the Vice-Chairman of the Board, the
Treasurer, any Assistant Treasurer, the Secretary, or any Assistant Secretary
of the Company and delivered to the Rights Agent, and such certificate 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 in good faith by it under the provisions of this Agreement
in reliance upon such certificate.

 

(c)                                  The
Rights Agent shall be liable hereunder to the Company or any other Person only
for its own negligence, bad faith, or willful misconduct.  Anything herein 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).

 

(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 Rights Certificates or
be required to verify the same (except as to its countersignature on such
Rights Certificates), 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 responsibility for the validity of this
Agreement or the execution and delivery hereof (except the due execution and
delivery hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereon); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including Rights becoming void pursuant to Section 7(e) hereof) or
any adjustment in the terms of the Rights required under the provisions of
Sections 11, 13, 23, or 24 hereof or for the manner, method, or amount of any
such change or adjustment 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 Rights Certificates after receipt by the Rights
Agent of the certificate describing any such adjustment contemplated by Section 12);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Series B
Preferred Stock or any other securities to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any shares of Series B
Preferred Stock or any other securities will, when so issued, be validly
authorized and issued, fully paid and non-assessable.

 

(f)                                   The
Company shall perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further acts,
instruments, and assurances as may reasonably be required by the Rights Agent
for the performance by the Rights Agent of its duties under 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 one of the Chairman
of the Board, the Chief Executive Officer, the President, the Vice-Chairman of
the Board, the Secretary, any Assistant Secretary, the Treasurer, or any
Assistant Treasurer 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 

 

30

 

for or in respect of any action taken,
suffered, or omitted by it in good faith in accordance with instructions of any
such officer.

 

(h)                                 The
Rights Agent and any shareholder, 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.

 

(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, and employees) or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default,
neglect, or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect, or
misconduct, absent gross negligence, bad faith, or willful misconduct of the
Rights Agent in the selection and continued employment thereof.

 

(j)                                    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 hereunder if the
Rights Agent shall have reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.

 

(k)                                 If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has not been completed, has not been
signed, or indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company. If such
certificate has been completed and signed and shows a negative response to
clauses 1 and 2 of such certificate, unless previously instructed otherwise in
writing by the Company (which instructions may impose on the Rights Agent
additional ministerial responsibilities, but no discretionary
responsibilities), the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section 7(e) hereof
and shall not be charged with any knowledge to the contrary.

 

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 thirty days’ prior notice in writing mailed to the Company,
and to each transfer agent of the Series B Preferred Stock and the Common
Stock, by registered or certified mail, in which case the Company shall give or
cause to be given written notice to the registered holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon thirty days’ prior notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Series B Preferred Stock and the Common Stock, by
registered or certified mail, and to the registered holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of 

 

31

 

acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of thirty 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 Rights Certificate (who shall, with such notice, submit
his Rights Certificate for inspection by the Company), then any registered
holder of any Rights 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 any state of the United
States, in good standing, shall be authorized under such laws to exercise
corporate trust, stock transfer, or shareholder services powers, shall be
subject to supervision or examination by federal or state authorities, and
shall have at the time of its appointment as Rights Agent a combined capital
and surplus of at least $50,000,000 or (b) an Affiliate of a Person
described in clause (a) of this sentence. 
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 Series B Preferred
Stock and the Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates by first-class mail.  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.

 

Section 22.                                    Issuance
of New Rights Certificates. 
Notwithstanding any of the provisions of this Agreement or the Rights
Certificates to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by a majority of
the Board of Directors to reflect any adjustment or change made in accordance
with the provisions of this Agreement in the Purchase Price or the number or
kind or class of shares or other securities or property that may be acquired
under the Rights Certificates. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to shares of Common
Stock so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.

 

Section 23.                                    Redemption
and Termination.  (a)  The
Board of Directors may, within its sole discretion, at any time prior to the
earlier of (i) such time as any Person becomes an Acquiring Person and (ii) the
Final Expiration Date, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $0.0001 per Right, rounded up to
the nearest whole 

 

32

 

cent, appropriately adjusted to reflect any stock split, reverse stock
split, stock dividend, or similar transaction occurring after the date hereof
(such redemption price, as adjusted, being hereinafter referred to as the “Redemption
Price”).  The redemption of the
Rights by the Board of Directors pursuant to this paragraph (a) 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 Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the current market
price (determined pursuant to Section 11(d) hereof) of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.

 

(b)                                 Immediately
upon the action of the Board of Directors ordering the redemption of Rights
pursuant to paragraph (a) of this Section 23, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. 
The Company shall promptly give (i) written notice to the Rights
Agent of any such redemption and (ii) public notice of any such redemption;
provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption.  Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights, 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 Stock.  Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.  Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made.  Neither
the Company nor any of its Affiliates or Associates may redeem, acquire, or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, or
other than in connection with the purchase of shares of Common Stock or the
conversion or redemption of shares of Common Stock in accordance with the
applicable provisions of the Certificate of Incorporation prior to the
Distribution Date.

 

Section 24.                                    Exchange.  (a)  The Board of Directors may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of Section 7(e) hereof)
for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (such exchange ratio 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 any
Acquiring Person, together with all Affiliates and Associates of such Acquiring
Person, becomes the Beneficial Owner of shares of Voting Stock representing 50%
or more of the total Voting Power of the aggregate of all shares of Voting
Stock then outstanding.

 

(b)                                 Immediately
upon the action of the Board of Directors 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 shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.  The Company shall promptly give (i) written
notice to the Rights Agent of any such exchange and (ii) public 

 

33

 

notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. 
The Company promptly shall mail a notice of any such exchange to all of
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent.  Any
notice that 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 shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights that will be exchanged.  Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.

 

(c)                                  In
the event that there are not sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take
all such action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights. 
In the event the Company, after good faith effort, is unable to take all
such action as may be necessary to authorize such additional shares of Common
Stock, the Company shall substitute Units of Series B Preferred Stock (or
Equivalent Preferred Stock) for Common Stock exchangeable for Rights, at the initial
rate of one Unit of Series B Preferred Stock (or Equivalent Preferred
Stock) for each share of Common Stock, as appropriately adjusted to reflect
stock splits, stock dividends, and other similar transactions after the date
hereof.

 

Section 25.                                    Notice
of Certain Events.  (a)  
In case the Company shall propose, at any time after the Distribution Date, (i) to
pay any dividend payable in stock of any class or series  to the holders of Series B Preferred
Stock or to make any other distribution to the holders of Series B
Preferred Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company); (ii) to offer to the holders of Series B
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Series B Preferred Stock or shares of stock of any
class or any other securities, rights or options; (iii) to effect any
reclassification of Series B Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of Series B
Preferred Stock); (iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof);
or (v) to effect the liquidation, dissolution or winding up of the
Company; then, in each such case, the Company shall give to each registered
holder of a Rights Certificate, to the extent feasible, and to the Rights Agent
in accordance with Section 26 hereof, a written notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Series B Preferred Stock 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 ten (10) days
prior to the record date for determining holders of the shares of Series B
Preferred Stock for purposes of such action, and in the case of any such other
action, at least ten (10) days prior to 

 

34

 

the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Series B Preferred
Stock whichever shall be the earlier; provided, however, that no
such action shall be taken pursuant to this Section 25(a) that will
or would conflict with any provision of the Certificate of Incorporation; provided
further, that no such notice shall be required pursuant to this Section 25,
if any Subsidiary of the Company effects a consolidation or merger with or
into, or effects a sale or other transfer of assets or earnings power to, any
other Subsidiary of the Company.

 

(b)                                 In
case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then, in any such case, (i) the Company shall, as soon as
practicable thereafter, give to each holder of a Rights Certificate, to the
extent feasible, and to the Rights Agent in accordance with Section 26
hereof, a written notice of the occurrence of such event, which notice shall
describe such event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the
preceding Section 25(a) to Series B Preferred Stock shall be
deemed to refer, if appropriate, to any other securities that may be acquired
upon exercise of a Right.

 

(c)                                  In
case any Section 13 Event shall occur, then the Company shall, as soon as
practicable thereafter, give to each registered holder of a Rights Certificate,
to the extent feasible, and to the Rights Agent in accordance with Section 26
hereof, a written 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 13(a) hereof.

 

Section 26.                                    Notices.  All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
by facsimile, telegram or cable) and mailed or sent or delivered, if to the
Company, at its address at:

 

Take-Two Interactive Software, Inc.

622 Broadway

New York, New York  10012

Attention: 
General Counsel

 

And if to the Rights Agent, at its address
at:

 

American Stock Transfer & Trust
Company

59 Maiden Lane

New York, NY 10038

 

Notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder
of any Rights Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company or the Rights Agent, as the case may be.

 

Section 27.                                    Supplements
and Amendments.  Subject to the
penultimate sentence of this Section 27, the Company, by action of the
Board of Directors, may from time to time supplement or amend this Agreement
without the approval of any holders of Rights in order to cure any ambiguity,
to correct or supplement any provision contained herein that may be defective
or inconsistent with any other provisions herein, to shorten or lengthen any
time period hereunder, 

 

35

 

or to make any other provisions with respect to the Rights that the
Company may deem necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner that would
adversely affect the interests of the holders of Rights (other than Rights that
have become null and void pursuant to Section 7(e) hereof).  Without limiting the foregoing, the Company,
by action of the Board of Directors, may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement (A) to make the
provisions of this Agreement inapplicable to a particular transaction by which
a Person would otherwise become an Acquiring Person or to otherwise alter the
terms and conditions of this Agreement as they may apply with respect to any
such transaction; and (B) to lower the thresholds set forth in Sections 1(a) and
3(a) to not less than the greater of (i) the sum of .001% and the
largest percentage of Voting Power represented by the then outstanding shares
of Voting Stock then known by the Company to be Beneficially Owned by any
Person (other than a Grandfathered Stockholder, the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any trustee or fiduciary holding shares of Voting Stock for, or
pursuant to the terms of, any such plan, acting in such capacity), and (ii) 10%.  Upon delivery of a certificate from an
appropriate officer of the Company that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment; provided, however,
that no supplement or amendment may be made to Sections 18, 19, 20, or 21
hereof without the consent of the Rights Agent. 
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock.

 

Section 28.                                    Successors.  All the 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.                                    Determinations
and Actions by the Board of Directors. 
For all purposes of this Agreement, any calculation of the number of
shares of any class or series of Voting Stock outstanding at any particular
time, including for purposes of determining the particular percentage of
outstanding shares of Voting Stock of which any Person is the Beneficial Owner
(or the particular percentage of total Voting Power of such outstanding shares
of Voting Stock represented by shares of Voting Stock of which any Person is the
Beneficial Owner), shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the Exchange Act Regulations as in effect on the date hereof.  Except as otherwise specifically provided
herein, the Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company hereunder, or as may be
necessary or advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or
advisable for the administration of this Agreement.  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the
Board of Directors shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board of Directors or any member thereof to any
liability to the holders of the Rights.

 

36

 

Section 30.                                    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 Rights Certificates (and, prior
to the Distribution Date, registered holders of shares of Common Stock) 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 Rights Certificates (and, prior
to the Distribution Date, registered holders of shares of Common Stock).

 

Section 31.                                    Severability.  If 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, each Right, and
each Rights 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.

 

Section 33.                                    Counterparts.
 This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original,
but all of which taken together shall constitute one and the same instrument.

 

Section 34.                                    Descriptive
Headings.  The headings contained in
this Agreement are for descriptive purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.

 

[Signature Page To Follow On Next Page]

 

37

 

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

 

 

	
   

  	
  TAKE-TWO INTERACTIVE SOFTWARE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER & TRUST

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

 

	
  Certificate
  No.

  	
   

  	
  Rights

  

 

NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS
DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW).  THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
RIGHTS AGREEMENT), RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR BY THEIR AFFILIATES OR
ASSOCIATES (AS DEFINED IN THE RIGHTS AGREEMENT) OR, IN CERTAIN CIRCUMSTANCES,
BY TRANSFERREES OF SUCH ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES MAY BECOME
NULL AND VOID.

 

RIGHTS CERTIFICATE

 

TAKE-TWO INTERACTIVE SOFTWARE, INC.

 

This certifies that                             ,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to
the terms and conditions of the Rights Agreement dated as of March 24, 2008
(the “Rights Agreement”) between Take-Two Interactive Software, Inc.,
a Delaware corporation (the “Company”), and American Stock Transfer &
Trust Company, a New York corporation, as Rights Agent (which term shall
include any successor Rights Agent under the Rights Agreement), to purchase
from the Company at any time after the Distribution Date and prior to the
Expiration Date at the office of the Rights Agent, one one-thousandth of a
fully paid and non-assessable share of Series B Preferred Stock, par value
$.01 per share, of the Company (the “Series B Preferred Stock”), at
the Purchase Price initially of $42.50 per one one-thousandth share (each such
one one-thousandth of a share being a “Unit”) of Series B Preferred
Stock, upon presentation and surrender of this Rights Certificate with the
Election to Purchase and related certificate duly executed.  The number of Rights evidenced by this Rights
Certificate as set forth above, the number of Units that may be purchased upon
exercise thereof as set forth above, and the Purchase Price per Unit as set
forth above shall be subject to adjustment in certain events as provided in the
Rights Agreement.  Terms defined in the
Rights Agreement are used herein with the same meaning unless otherwise defined
herein.

 

 

Upon the occurrence of a Section 11(a)(ii) Event
or Section 13 Event, if the Rights evidenced by this Rights Certificate
are beneficially owned by an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person or, under certain circumstances described in the
Rights Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate, such Rights shall become null and void and no holder hereof shall
have any right with respect to such Rights from and after the occurrence of
such Section 11(a)(ii) Event or Section 13 Event.

 

In certain circumstances described in the
Rights Agreement, the Rights evidenced hereby may entitle the registered holder
thereof to purchase capital stock of an entity other than the Company or
receive common stock, cash or other assets of an entity other than the Company,
all as provided in the Rights Agreement.

 

This Rights Certificate is subject to all of
the terms and conditions of the Rights Agreement applicable to a Right, which
terms 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
Rights Certificates.  Copies of the
Rights Agreement are on file at the principal office of the Company and are
available from the Company upon written request.

 

This Rights Certificate, with or without
other Rights Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. 
If this Rights Certificate shall be exercised in part, the registered
holder shall be entitled to receive, upon surrender hereof, another Rights
Certificate or Rights Certificates for the number of whole Rights not
exercised.

 

Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may be redeemed by the
Company under certain circumstances at its option at a redemption price of $0.0001
per Right, rounded up to the nearest whole cent, payable at the Company’s
option in cash or other securities or property of the Company, subject to
adjustment for certain events as provided in the Rights Agreement.

 

No fractional shares of Series B
Preferred Stock will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions that are integral multiples of one
one-thousandth of a share of Series B Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.

 

2

 

No holder of this Rights Certificate, as
such, shall be entitled to vote or receive dividends or be deemed for any
purpose the holder of Series B Preferred Stock or of any other securities
that may at any time be issuable upon the exercise 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 dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.

 

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

 

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

 

 

Dated as of                     .

 

	
   

  	
  TAKE-TWO
  INTERACTIVE SOFTWARE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  

 

Countersigned:

 

 

AMERICAN STOCK TRANSFER & TRUST COMPANY

  as Rights Agent

 

 

	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

3

 

[Reverse Side of Rights Certificate]

 

FORM OF ASSIGNMENT

 

(To be executed by the registered

holder if such holder desires

to transfer the Rights Certificate.)

 

FOR VALUE RECEIVED

hereby sells, assigns and transfers unto

 

	
   

  	
   

  
	
  (Please
  print name and address of transferee)

  	
   

  

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  	
  Signature

  

 

 

Signature Guaranteed:

 

 

CERTIFICATE

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1)           this
Rights Certificate [   ] is [   ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and

 

(2)           after
due inquiry and to the best knowledge of the undersigned, it [  ] did [ 
] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  
	
   

  

Signature Guaranteed:

 

 

NOTICE

 

The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.

 

Signatures must be guaranteed by an approved
eligible financial institution acceptable to the Rights Agent in its sole
discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange
Medallion Program.

 

In the event the certification set forth
above is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Rights
Certificates issued in exchange for this Rights Certificate.

 

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if the registered

holder desires to exercise

Rights represented by the Rights Certificate)

 

To:  TAKE-TWO INTERACTIVE
SOFTWARE, INC.

 

The undersigned hereby irrevocably elects to
exercise                               
Rights represented by this Rights Certificate to purchase the Units of Series B
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person or such other property as may
be issuable upon the exercise of the Rights) and requests that certificates for
such Units of Series B Preferred Stock (or such other securities of the
Company or of any other person or such other property as may be issuable upon
the exercise of the Rights) be issued in the name of and delivered to:

 

	
   

  	
   

  
	
  (Please
  print name and address

  	
   

  

 

 

Please insert social security

or other identifying number:

 

 

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

 

	
   

  	
   

  
	
  (Please
  print name and address)

  	
   

  

 

 

Please insert social security

or other identifying number:

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  	
  Signature

  

 

Signature Guaranteed:

 

 

CERTIFICATE

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1)           the
Rights evidenced by this Rights Certificate [  
] are [   ] are not beneficially
owned by an Acquiring Person or an Affiliate or an Associate thereof (as
defined in the Rights Agreement); and

 

(2)           after
due inquiry and to the best knowledge of the undersigned, the undersigned
[   ] did [   ] did not acquire the Rights evidenced by
this Rights Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  
	
   

  

Signature Guaranteed:

 

 

NOTICE

 

The signature in the foregoing Election to
Purchase and Certificate must conform to the name as written upon the face of
this Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.

 

Signatures must be guaranteed by an approved
eligible financial institution acceptable to the Rights Agent in its sole
discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange
Medallion Program.

 

In the event the certification set forth
above is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Rights
Certificates issued in exchange for this Rights Certificate.

 

 

EXHIBIT B

 

SUMMARY OF RIGHTS TO PURCHASE

SERIES B PREFERRED STOCK

 

On
March 24, 2008, the Board of Directors of Take-Two Interactive Software, Inc.
(the “Company”) declared a distribution of one right (a “Right”)
for each outstanding share of Common Stock, par value $0.01 per share (the “Common
Stock”), to stockholders of record at the close of business on April 7,
2008 (the “Record Date”) and for each share of Common Stock issued
(including shares distributed from Company’s treasury) by the Company thereafter
and prior to the Distribution Date (as defined below).  Each Right entitles the registered holder,
subject to the terms of the Rights Agreement (as defined below), to purchase
from the Company one one-thousandth of a share (a “Unit”) of Series B
Preferred Stock, par value $0.01 per share (the “Series B Preferred
Stock”), at a Purchase Price of $42.50 per Unit, subject to adjustment (the
“Purchase Price”).  The
description and terms of the Rights are set forth in a Rights Agreement between
the Company and American Stock Transfer & Trust Company, as Rights
Agent (the “Rights Agreement”). As described below, the Board has
committed to redeem the Rights 180 days after the date of the adoption of the
stockholders rights plan.

 

Copies
of the Rights Agreement and the Certificate of Designation for the Series B
Preferred Stock have been filed with the Securities and Exchange Commission as
exhibits to a Registration Statement on Form 8-A dated March 26, 2008
(the “Form 8-A”).  Copies of
the Rights Agreement and the Certificate of Designation are available free of
charge from the Company.  This summary
description of the Rights and Series B Preferred Stock does not purport to
be complete and is qualified in its entirety by reference to all the provisions
of the Rights Agreement and the Certificate of Designation, including the
definitions therein of certain terms, which Rights Agreement and Certificate of
Designation are incorporated herein by reference.  Capitalized terms herein and defined in the
Rights Agreement and not otherwise defined herein shall have the meaning set
forth in the Rights Agreement.

 

The
Rights Agreement

 

Initially,
the Rights will attach to all certificates representing shares of Common Stock
then outstanding, and no separate Rights Certificates will be distributed.  The Rights will separate from the Common
Stock and the “Distribution Date” will occur upon the earlier of  (i) ten business days following a public
announcement that a person or group of affiliated or associated persons has
become an “Acquiring Person,” or (ii) either (x) with respect to any
tender or exchange offer not pending on the date of the execution of the Rights
Agreement, ten business days (or such later date as may be determined by the
Board of Directors prior to such time as any person

 

 

becomes an Acquiring Person)
following the commencement of a tender or exchange offer that would result in a
person or group of affiliated and associated persons beneficially owning an
aggregate of 20% or more of the total voting power represented by all the then
outstanding shares of Common Stock and other voting securities of the Company
(the “Voting Securities”) or (y) with respect to any tender or
exchange offer pending on the date of the execution of the Rights Agreement,
simultaneously with the acceptance for payment of the shares tendered pursuant
to such tender offer, if upon consummation thereof such person would be the beneficial
owner of shares of Voting Securities representing 20% or more of the total Voting
Securities then outstanding.  Until the
Distribution Date, (i) the Rights will be evidenced by Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record
Date (including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender
for transfer of any certificates representing outstanding Common Stock will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.

 

An
“Acquiring Person” is a person or group of affiliated or associated
persons that has acquired, obtained the right to acquire, or otherwise obtained
beneficial ownership of an aggregate of 20% or more of the total voting power
represented by all the then outstanding shares of Voting Securities of the
Company.  The following, however, are not
considered Acquiring Persons:  (1) the
Company, its subsidiaries, any employee benefit plan of the Company or any of
its subsidiaries, or any entity holding shares of Voting Securities pursuant to
the terms of any such plan; (2) any person or group that becomes the
Beneficial Owner of 20% or more of the total voting power represented by all
the then outstanding Voting Securities of the Company solely as a result of the
acquisition of Voting Securities by the Company, unless such person or group
thereafter acquires beneficial ownership of additional Voting Securities; (3) subject
to certain conditions set forth in the Rights Agreement, a person or group that
otherwise would have become an Acquiring Person as a result of an inadvertent
acquisition of 20% or more of the total voting power represented by all the
then outstanding Voting Securities of the Company; and (4) subject to
certain conditions set forth in the Rights Agreement, any person or group that
would otherwise be deemed an Acquiring Person upon adoption of the Rights
Agreement (a “Grandfathered Stockholder”).  Except as provided in the Rights Agreement, a
person or group that is a Grandfathered Stockholder will cease to be a
Grandfathered Stockholder and will become an Acquiring Person if, after
adoption of the Rights Agreement, such Grandfathered Stockholder acquires
beneficial ownership of additional Voting Securities in excess of two percent
(2%) of the number of shares of Common Stock outstanding as of March 24,
2008.

 

The
Rights are not exercisable until the Distribution Date and will expire at the
Close of Business on the third anniversary of the Rights Agreement unless
earlier redeemed or exchanged by the Company as described below.

 

 

As
soon as practicable after the Distribution Date, Rights Certificates will be
mailed to holders of record of Common Stock as of the Close of Business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
represent the Rights.

 

If
a person or group of affiliated or associated persons becomes an Acquiring
Person, then each holder of a Right will thereafter have the right to receive,
upon exercise, shares of Common Stock (or, in certain circumstances, Units of Series B
Preferred Stock, other securities, cash, property, or a combination thereof)
having a value equal to two times the exercise price of the Right.  The exercise price is the Purchase Price
multiplied by the number of Units of Series B Preferred Stock issuable
upon exercise of a Right prior to the events described in this paragraph.

 

Notwithstanding
any of the foregoing, following the time any person or group becomes an
Acquiring Person, all Rights that are, or under certain circumstances specified
in the Rights Agreement were, beneficially owned by any Acquiring Person or its
Affiliates or Associates will be null and void.

 

In
the event that, at any time after a person or group becomes an “Acquiring
Person,” (i) the Company is acquired in a merger or other business
combination with another company and the Company is not the surviving
corporation, (ii) another company consolidates or merges with the Company
and all or part of the Common Stock is converted or exchanged for other
securities, cash, or property, or (iii) 50% or more of the consolidated
assets or earning power of the Company and its subsidiaries is sold or
transferred to another company, then each holder of a Right (except Rights that
previously have been voided as described above) shall thereafter have the right
to receive, upon exercise, common stock or other equity interest of the
ultimate parent of such other company having a value equal to two times the
exercise price of the Right.

 

The
Purchase Price payable, and the number of Units of Series B Preferred
Stock (or other securities, as applicable) issuable, upon exercise of the
Rights are 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 Series B Preferred Stock, (ii) if holders of
the Series B Preferred Stock are granted certain rights or warrants to
subscribe for Series B Preferred Stock or convertible securities at less
than the current market price of the Series B Preferred Stock, or (iii) upon
the distribution to the holders of the Series B Preferred Stock of
evidences of indebtedness, cash or assets (excluding regular quarterly cash
dividends or dividends payable in the Series B Preferred Stock) or of
subscription rights or warrants (other than those referred to above).

 

With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price.  The Company is not required to issue
fractional shares of Series B Preferred Stock (other than fractional
shares that are integral multiples of one one-thousandth of a share).  In lieu thereof, an 

 

 

adjustment in cash may be
made based on the market price of the Series B Preferred Stock prior to
the date of exercise.

 

At
any time prior to such time as any person or group or affiliated or associated
persons becomes an Acquiring Person, the Company’s Board of Directors may
redeem the Rights in whole, but not in part, at a price of $0.0001 per Right
(subject to adjustment in certain events) (the “Redemption Price”).  Immediately upon the action of the Company’s
Board of Directors ordering the redemption of the Rights, the Rights will
terminate and the only right of the holders of such Rights will be to receive
the Redemption Price for each Right held.

 

At
any time after any person or group of affiliated or associated persons becomes
an Acquiring Person and before any such Acquiring Person shall become the
beneficial owner of 50% or more of the total voting power of the aggregate of
all shares of Voting Securities then outstanding, the Board of Directors, at
its option, may exchange each Right (other than Rights that previously have
become void as described above) in whole or in part, at an exchange ratio of
one share of Common Stock (or under certain circumstances one Unit of Series B
Preferred Stock or equivalent preferred stock) per Right (subject to adjustment
in certain events).

 

Until
a Right is exercised, 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.  While the
distribution of the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Units of Series B
Preferred Stock (or other consideration).

 

Any
of the provisions of the Rights Agreement may be amended without the approval
of the holders of Rights in order to cure any ambiguity, defect, inconsistency
or to make any other changes that the Board may deem necessary or
desirable.  After any person or group of
affiliated or associated persons becomes an Acquiring Person, the provisions of
the Rights Agreement may not be amended in any manner that would adversely
affect the interests of the holders of Rights (excluding the interests of any
Acquiring Person).

 

Description
of Series B Preferred Stock

 

The
Units of Series B Preferred Stock that may be acquired upon exercise of
the Rights will not be redeemable and will rank junior to any other shares of
preferred stock that may be issued by the Company with respect to the payment
of dividends and as to distribution of assets in liquidation.

 

Each
share of Series B Preferred Stock will have a minimum preferential
quarterly dividend of the greater of $1.00 per share or one thousand (1,000)
times the 

 

 

aggregate per share amount
of any cash dividend declared on the Common Stock since the immediately
preceding quarterly dividend, subject to certain adjustments.

 

In
the event of liquidation, the holder of Series B Preferred Stock will be
entitled to receive a cash preferred liquidation payment per share equal to the
greater of $1.00 (plus accrued and unpaid dividends  thereon) or one thousand (1,000) times the
amount paid in respect of a share of Common Stock, subject to certain
adjustments.

 

Generally,
each share of Series B Preferred Stock will vote together with the Common
Stock and any other class or series of capital stock entitled to vote in such a
manner, and will be entitled to one thousand (1,000) votes per share, subject
to certain adjustments. The holders of the Series B Preferred Stock,
voting as a separate class, shall be entitled to elect two directors if
dividends on the Series B Preferred Stock are in arrears in an amount
equal to six quarterly dividends thereon.

 

In
the event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each Share of Series B Preferred Stock will be
entitled to receive one thousand (1,000) times the aggregate per share amount
of stock, securities, cash or other property paid in respect of each share of
Common Stock, subject to certain adjustments.

 

The
rights of holders of the Series B Preferred Stock to dividend, liquidation
and voting rights are protected by customary anti-dilution provisions.

 

Because
of the nature of the Series B Preferred Stock’s dividend, liquidation and
voting rights, the economic value of one Unit of Series B Preferred Stock
is expected to approximate the economic value of one share of Common Stock.

 

Amendment of Rights

 

The
terms of the Rights generally may be amended by the Board without the approval
of the holders of the Rights, except that from and after such time as the
Rights are distributed, no such amendment may adversely affect the interests of
the holders of Rights (excluding any interests of any Acquiring Person).

 

 

EXHIBIT C

 

CERTIFICATE
OF DESIGNATION

OF

SERIES
B PREFERRED STOCK

OF

TAKE-TWO
INTERACTIVE SOFTWARE, INC.

 

 

Pursuant to Section 151
of the

General
Corporation Law of

the State of
Delaware

 

 

Take-Two Interactive Software, Inc., a corporation duly organized
and existing under the General Corporation Law of the State of Delaware (the “Corporation”),
DOES HEREBY CERTIFY:

 

That, pursuant to authority conferred by the Corporation’s Restated
Certificate of Incorporation, as amended (the “Certificate”) and by the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation (the “Board”), at a duly
called meeting held on March 24, 2008, at which a quorum was present and
acted throughout, adopted the following resolutions, which resolutions remain
in full force and effect on the date hereof creating a series of 100,000 shares
of Preferred Stock having a par value of $0.01 per share, designated as Series B
Preferred Stock:

 

RESOLVED, that in accordance with the provisions of the Certificate,
the Board does hereby create, authorize and provide for the issuance of a
series of Preferred Stock, par value $0.01 per share, of the Corporation,
designated as “Series B Preferred Stock,” having the voting powers, designation,
relative, participating, optional and other special rights, preferences, and
qualifications, limitations and restrictions thereof that are set forth as
follows:

 

Section 1.  Designation
and Amount.  The shares of such class
shall be designated as “Series B Preferred Stock” (the “Series B
Preferred Stock”) and the number of shares constituting such class shall be 100,000.  Such number of shares may be increased or
decreased by resolution of the Board of Directors, provided that no such
decrease shall reduce the number of shares of the Series B Preferred Stock
to a number less than the number of shares then outstanding, plus the number
reserved for issuance upon the exercise of options, rights or warrants, or upon
conversion of any outstanding securities issued by the Corporation convertible
into Series B Preferred Stock.

 

 

Section 2.                                            Dividends
and Distributions.  (A) Subject
to the prior and superior rights of the holders of any shares of any other
class or series of Preferred Stock of the Corporation ranking prior and
superior to the shares of Series B Preferred Stock with respect to
dividends, each holder of a share (a “Share”) of Series B Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, (i) quarterly
dividends payable in cash on the last day of March, June, September, and December in
each year (each such date being a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of such Share of Series B Preferred Stock, in an amount per Share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provision for adjustment hereinafter set forth, one thousand (1,000) times
an amount equal to (x) the aggregate per share amount of all cash
dividends declared on shares of 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 a Share of Series B
Preferred Stock, minus (y) the amount in cash actually paid per share of
Common Stock pursuant to Section 2(B) below since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of a Share of Series B
Preferred Stock, and (ii) subject to the provision for adjustment
hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Share equal to one thousand
(1,000) times the aggregate per share amount 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 shares of 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 a Share of Series B
Preferred Stock.  In the event that the
Corporation shall at any time after March 24, 2008 (the “Rights
Declaration Date”) (i) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock or (iii) combine outstanding shares of Common Stock
into a smaller number of shares, then in each such case the amount to which the
holder of a Share of Series B Preferred Stock was entitled immediately
prior to such event pursuant to the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be 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 Shares of Series B
Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the shares of Common Stock (other than a
dividend or distribution payable in shares of Common Stock); provided, however,
that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Date, a dividend of $1.00 per Share on
the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

 

(C)                                Dividends
shall begin to accrue and shall be cumulative on each outstanding Share of Series B
Preferred Stock from the Quarterly Dividend Payment Date next 

 

2

 

preceding the
date of issuance of such Share of Series B Preferred Stock, unless the
date of issuance of such Share is prior to the record date for the first
Quarterly Dividend Payment Date, in which case, dividends on such Share shall
begin to accrue from the date of issuance of such Share, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of Shares of Series B 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 Shares of Series B
Preferred Stock in an amount less than the aggregate amount of all such
dividends at the time accrued and payable on such Shares shall be allocated pro
rata on a share-by-share basis among all Shares of Series B Preferred
Stock at the time outstanding.  The Board
of Directors may fix a record date for the determination of holders of Shares
of Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.

 

Section 3.  Voting Rights.  The holders of Shares of Series B
Preferred Stock shall have the following voting rights:

 

(A)                              Subject
to the provision for adjustment hereinafter set forth, each Share of Series B
Preferred Stock shall entitle the holder thereof to one thousand (1,000) votes
on all matters submitted to a vote of the holders of Common Stock of the
Corporation.  In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock or (iii) combine
the outstanding shares of Common Stock into a small number of shares, then in
each such case the number of votes per Share to which holders of Shares of Series B
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that
were outstanding immediately prior to such event.

 

(B)                                Except
as otherwise provided herein or in any other Certificate of Designation
creating a series of preferred stock, or any similar stock, or by law, the
holders of Shares of Series B Preferred Stock, the holders of shares of
Common Stock, and the holders of any other class or series of capital stock of
the Corporation entitled to vote generally, together with the Common Stock,
shall vote together as one class on all matters submitted to a vote of the
holders of such stock.

 

(C)                                (i) If
at any time dividends on any Shares of Series B Preferred Stock shall be
in arrears in an amount equal to six quarterly dividends thereon, then during
the period (a “default period”) from the occurrence of such event until
such time as all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all Shares of
Series B Preferred Stock then outstanding shall have been declared and
paid or set apart for payment, the holders of the outstanding Shares of Series B
Preferred Stock, together with the holders of outstanding shares of any one or
more other 

 

3

 

classes or
series of stock of the Corporation upon which like voting rights have been
conferred and are exercisable (voting together as a class), shall have the
right to elect two Directors to the Board of Directors of the Corporation at
the Corporation’s next annual meeting of stockholders, and so long as such
default period continues, shall have the right to elect a successor to each of
the two Directors so elected upon the expiration of their respective terms,
such right to be exercised at the subsequent annual meeting or meetings at
which the respective terms of such Directors expire.  Any Director who shall have been so elected
pursuant to this paragraph may be removed only for cause.  If the office of any Director elected by the
holders of Shares of Series B Preferred Stock pursuant to this paragraph becomes
vacant for any reason, the remaining Director elected pursuant to this
paragraph may choose a successor who shall hold office for the unexpired term
in respect of which such vacancy occurred, and if the offices of both such
Directors elected by the holders of Shares of Series B Preferred Stock
pursuant to this paragraph become vacant for any reason, such vacancies may be
filled for the unexpired term in respect of which such vacancy occurred only by
the affirmative vote of the holders of the outstanding Shares of Series B
Preferred Stock, together with the holders of the outstanding shares of any
other class or series of stock upon which like voting rights have been
conferred and are exercisable (voting together as a class).

 

(ii)                                  The
voting rights vested pursuant to paragraph (C)(i) hereof in the holders of
the outstanding Shares of Series B Preferred Stock, together with the
holders of outstanding shares of any one or more other classes or series of
stock of the Corporation upon which like voting rights have been conferred and
are exercisable (voting together as a class), may not be exercised at any
annual meeting unless one-third of the outstanding shares of stock of the
corporation upon which such voting rights have been conferred shall be present at
such meeting in person or by proxy.  The
absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Shares of Series B Preferred Stock of such
rights.  In connection with the election
of Directors pursuant to paragraph (C)(i) hereof, each holder of Shares of
Series B Preferred Stock shall be entitled to one vote for each one
one-thousandth of a Share held (the holders of shares of any other class or
series of preferred stock having like voting rights being entitled to such
number of votes, if any, for each share of such stock held as may be granted to
them).

 

(iii)                               During
any default period, the holders of shares of Common Stock, and Shares of Series B
Preferred Stock, and other classes or series of stock of the Corporation, if
applicable, shall continue to be entitled to elect (voting together as a class)
all the Directors other than the two Directors to be elected pursuant to
paragraph (C)(i) hereof by the holders of the outstanding shares of Series B
Preferred Stock, together with the holders of outstanding shares of any one or
more other classes or series of stock of the Corporation upon which like voting
rights have been conferred and are exercisable (voting together as a class).

 

(iv)                              Immediately
upon the expiration of a default period, (x) the right of the holders of
Shares of Series B Preferred Stock to elect Directors pursuant to
paragraph (C)(i) hereof shall cease (subject to re-vesting in the event of
each and every subsequent default of the character mentioned in paragraph (C)(i) above),
and (y) the term of any Directors elected by the holders of Shares of Series B
Preferred Stock pursuant to paragraph (C)(i) hereof shall terminate.

 

4

 

(D)                               Except
as set forth herein, holders of Shares of Series B Preferred Stock shall
have no special voting rights and their consents shall not be required (except
to the extent they are entitled to vote with holders of share of Common Stock
as set forth herein) for taking any corporate action.

 

Section 4.  Certain
Restrictions.  (A)  Whenever
quarterly dividends or other dividends or distributions payable on Shares of Series B
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 outstanding Shares of Series B Preferred Stock shall have
been paid in full, the Corporation shall not

 

(i)                                     declare
or pay dividends on, or make any other distributions on, any shares of Junior
Stock;

 

(ii)                                  declare
or pay dividends on or make any other distributions on any shares of Parity
Stock, except dividends paid ratably on Shares of Series B Preferred Stock
and shares of all such Parity Stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of such Shares
and all such shares are then entitled;

 

(iii)                               redeem
or purchase or otherwise acquire for consideration shares of any Junior Stock, provided,
however, that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such Junior Stock in exchange for shares of any
Junior Stock; provided, further, that the Corporation may
repurchase shares of Common Stock owned by terminated employees of, or
consultants to, the Corporation or its subsidiaries;

 

(iv)                              redeem
or purchase or otherwise acquire for consideration any Shares of Series B
Preferred Stock, or any Parity 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 such shares 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 an 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.

 

Section 5.  Reacquired
Shares.  Any Shares of Series B
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof.  All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock,
par value $.01 per 

 

5

 

share, and may
be reissued as part of a new series of Preferred Stock, subject to the
conditions and restrictions on issuance set forth herein, in the Certificate,
or in any other Certificate of Designation creating a series of Preferred
Stock, par value $.01 per share, or any similar stock, or as otherwise
restricted by law.

 

Section 6.  Liquidation,
Dissolution or Winding Up.  (A) 
Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation no distribution shall be made (i) to the holders of shares of
Junior Stock unless the holders of Shares of Series B Preferred Stock
shall have first received, subject to adjustment as hereinafter provided in
paragraph (B), an amount in cash equal to the greater of either (a) $1.00
per Share plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to the date of such
payment, or (b) the amount equal to one thousand (1,000) times the
aggregate per share amount to be distributed to holders of shares of Common
Stock, or (ii) to the holders of shares of Parity Stock, unless
simultaneously therewith distributions are made ratably on Shares of Series B
Preferred Stock and all other shares of such Parity Stock in proportion to the total
amounts to which the holders of Shares of Series B Preferred Stock are
entitled under clause (i)(a) of this sentence and to which the holders of
shares of such Parity Stock are entitled, in each case upon such liquidation,
dissolution or winding up.

 

(B)                                In
the event the Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then in
each such case the aggregate amount to which holders of Shares of Series B
Preferred Stock were entitled immediately prior to such event pursuant to
clause (i)(b) of paragraph (A) of this Section 6 shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

 

Section 7.  Consolidation,
Merger, etc.  In case the Corporation
shall enter into any consolidation, merger, combination, or other transaction
in which the shares of Common Stock are exchanged for or converted into other
stock, securities, cash, and/or any other property, then in any such case
Shares of Series B Preferred Stock shall at the same time be similarly
exchanged for or converted into an amount per Share (subject to the provision for
adjustment hereinafter set forth) equal to one thousand (1,000) times the
aggregate amount of stock, securities, cash, and/or other property (payable in
kind), as the case may be, into which or for which each share of Common Stock
is converted or exchanged.  In the event
the Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the immediately preceding sentence with respect to
the exchange or conversion of Shares of Series B Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event 

 

6

 

and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.

 

Section 8.  Conversion;
Redemption.  The Shares of Series B
Preferred Stock shall not be convertible into any other class or series of
capital stock of the Corporation, or redeemable.

 

Section 9.  Ranking.  Except as provided below, the Series B
Preferred Stock shall rank junior to all other series of Preferred Stock, par
value $.01 per share, and to any other class of preferred stock that hereafter
may be issued by the Corporation as to the payment of dividends and the
distribution of assets, unless the terms of any such series or class shall
provide otherwise.  The Series B
Preferred Stock shall rank prior, as to dividends and upon liquidation,
dissolution, or winding up, to the Common Stock.

 

Section 10.  Amendment.  Except as set forth in Section 1 hereof,
at any time that any Shares of Series B Preferred Stock are outstanding,
the Certificate, including, without limitation, this Certificate of Designation
shall not be amended, either directly or indirectly, or through merger or
consolidation with another corporation or otherwise, in any manner that would
alter or change the powers, preferences or special rights of the Series B
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 B
Preferred Stock, voting separately as a class.

 

Section 11. Fractional Shares.  The Series B Preferred Stock may be
issued in fractions of one one-thousandth of a Share or other fractions of a
share, which fractions 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 B
Preferred Stock.

 

Section 12.  Definitions.
All capitalized terms used herein have the meanings ascribed to them in the
Certificate, unless otherwise defined herein. 
In addition, for purposes hereof, the following terms shall have the
meanings set forth below:

 

(A)                              The
term “Common Stock” shall mean the class of stock designated as the
Common Stock, par value $.01 per share, of the Corporation at the date hereof
or any other class of stock resulting from successive changes or
reclassification of such Common Stock.

 

(B)                                The
term “Junior Stock” (i) as used in Section 4, shall mean the
Common Stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Series B Preferred Stock has
preference or priority as to the payment of dividends and (ii) as used in Section 6,
shall mean the Common Stock and any other class or series of capital stock of
the Corporation over which the Series B Preferred Stock has preference or
priority in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.

 

(C)                                The
term “Parity Stock” (i) as used in Section 4, shall mean any
class or series of stock of the Corporation hereafter authorized or issued
ranking pari  passu with the 

 

7

 

Series B
Preferred Stock as to the payment of dividends and (ii) as used in Section 6,
shall mean any class or series of stock of the Corporation hereinafter
authorized or issued and ranking pari  passu with the Series B
Preferred Stock as to the distribution of assets on any liquidation,
dissolution, or winding up of the Corporation.

 

[END OF
TEXT.  SIGNATURE PAGE FOLLOWS.]

 

8

 

IN WITNESS WHEREOF, Take-Two Interactive Software, Inc. has caused
this Certificate of Designation to be signed by its authorized officer this       
day of March, 2008.

 

	
   

  	
  TAKE-TWO INTERACTIVE

  
	
   

  	
  SOFTWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Daniel P. Emerson

  
	
   

  	
   

  	
  Vice President, Associate General

  
	
   

  	
   

  	
  Counsel and Secretary

  

 

9

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