FIRST AMENDMENT TO RIGHTS AGREEMENT
FIRST AMENDMENT dated as of October 7, 2003 (this "AMENDMENT") to that certain
Rights Agreement (the "AGREEMENT") dated as of September 3, 1998 between
Gadzooks, Inc., a Texas corporation (the "COMPANY"), and Mellon Investor
Services, LLC, as successor to ChaseMellon Shareholder Services, L.L.C., as
rights agent (the "RIGHTS AGENT"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in
the Agreement.
WHEREAS, the Company desires to issue and sell 5% Convertible
Subordinated Notes in a private placement with certain investors (the "PRIVATE
PLACEMENT"); and
WHEREAS, Liberty ▇▇▇▇▇▇ Asset Management, L.P. ("LIBERTY ▇▇▇▇▇▇"),
together with its affiliates, currently beneficially owns approximately 14.76%
of the outstanding shares of common stock, par value $0.01 per share of the
Company; and
WHEREAS, Liberty ▇▇▇▇▇▇ desires to participate in the Private
Placement, which would cause it to be an "Acquiring Person" under the Agreement;
and
WHEREAS, the Company deems this Amendment to the Agreement to be
necessary and desirable and in the best interests of the holders of the Rights
and has duly approved this Amendment; and
WHEREAS, no event has occurred that would cause any Person to be deemed
an Acquiring Person; and
WHEREAS, Section 27 of the Agreement permits the Company at any time
before any Person becomes an Acquiring Person to amend the Agreement in the
manner provided herein.
NOW, THEREFORE, the Agreement is hereby amended as follows:
Section 1. AMENDMENT OF SECTION 1. The definition of "Acquiring Person"
in Section 1(a) of the Agreement is hereby amended by inserting the following
sentence immediately after the second sentence of such definition:
"Notwithstanding the foregoing, neither the Liberty ▇▇▇▇▇▇
Group nor any member thereof shall be an Acquiring Person
unless and until the Liberty ▇▇▇▇▇▇ Group or any one or more
members thereof becomes the Beneficial Owner of 25% or more of
the Common Shares of the Company then outstanding. For
purposes hereof, "Liberty ▇▇▇▇▇▇ Group" means Liberty ▇▇▇▇▇▇
Asset Management, L.P., WAM Acquisition GP, Inc. and Liberty
Acorn Trust and their respective Affiliates and Associates."
Section 2. FULL FORCE AND EFFECT. Except as expressly amended hereby,
the Rights Agreement shall continue in full force and effect unamended and in
accordance with the provisions thereof on the date hereof. This Amendment and
the Agreement, as hereby amended, shall constitute one and the same instrument.
Section 3. GOVERNING LAW. This Amendment, the Agreement and each Rights
Certificate issued hereunder or thereunder shall be deemed to be a contract made
under the laws of the State of Texas and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
Section 4. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
GADZOOKS, INC.
Attest: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Controller Title: Vice President & CFO
MELLON INVESTOR SERVICES LLC
Attest: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Client Service Manager Title: Vice President