Exhibit 4.2
AMENDMENT NO. 2 TO THE
RIGHTS AGREEMENT
OF NOBEL LEARNING COMMUNITIES, INC.
This Amendment No. 2, dated as of August 5, 2002, amends the Rights
Agreement dated as of May 16, 2000 as amended by Amendment No. 1 dated as of
August 4, 2002 (as amended and in effect from time to time, the "Rights
Agreement"), between Nobel Learning Communities, Inc., a Delaware corporation
(the "Company"), and Stocktrans, Inc., as Rights Agent (the "Rights Agent").
Terms defined in the Rights Agreement and not otherwise defined herein are used
herein as so defined.
W I T N E S S E T H:
WHEREAS, on May 16, 2000, the Board of Directors of the Company authorized
the issuance of Rights to purchase, on the terms and subject to the provisions
of the Rights Agreement, shares of the Company's Preferred Stock;
WHEREAS, on May 16, 2000, the Board of Directors of the Company authorized
and declared a dividend distribution of one Right for every share of Common
Stock of the Company outstanding on the Record Date and authorized the issuance
of one Right (subject to certain adjustments) for each share of Common Stock of
the Company issued between the Record Date and the Distribution Date;
WHEREAS, on August 4, 2002 the Board of Directors of the Company approved
Amendment No. 1 to the Rights Agreement;
WHEREAS, the Distribution Date has not occurred; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Board of
Directors of the Company has approved an amendment of certain provisions of the
Rights Agreement as set forth below;
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. Amendments to Section 1 of the Rights Agreement.
(a) Additional Definitions. Section 1 of the Rights Agreement is
hereby amended by inserting the following subsections at the end of
such Section 1:
"(kk) "Merger" shall have the meaning set forth in the Merger
Agreement."
"(ll) "Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of August 5, 2002 by and between Socrates
Acquisition Corporation and the Company, as amended from time to
time."
"(mm) "Rollover Stockholders" shall have the meaning set forth in
the Merger Agreement."
(b) Amendments to definition of "Acquiring Person."
(i) Section 1(a)(i) is amended by restating it as follows:
"Acquiring Person" shall mean any Person or group, together with all
Affiliates and Associates of such Person or a Person that is a member
of such group, who or which acquires a number of shares of Common
Stock that is equal to (A) thirteen percent (13%) or more of the
shares of Common Stock then outstanding, in the case of a Person or
group that as of May 16, 2000 was a Beneficial Owner of ten percent
(10%) or less of the Common Stock outstanding as of May 16, 2000, (B)
an additional three percent (3%) of the Common Stock then outstanding,
in the case of a Person or group that as of May 16, 2000 was a
Beneficial Owner of greater than ten percent (10%), but less than
seventeen percent (17%), of the Common Stock outstanding as of May 16,
2000, (C) twenty percent (20%) or more of the Common Stock then
outstanding, in the case of a Person or group that as of May 16, 2000
was a Beneficial Owner of at least seventeen percent (17%), but no
greater than twenty percent (20%), of the Common Stock outstanding as
of May 16, 2000 or (D) a greater percentage of the Common Stock then
outstanding than is currently owned by such Person or group, in the
case of a person or group that as of May 16, 2000 was a Beneficial
Owner of twenty percent (20%) or more of the Common Stock outstanding
as of May 16, 2000."
(ii) Section 1(a)(ii) is amended by replacing the last
paragraph of Section 1(a)(ii) with the following:
"Prior to a Termination Event, none of (a) X. X. Xxxxx, Xxxx Xxxxx,
Xxxxxx Xxxxx, Xxxxx Xxxxx and their respective spouses, subsidiaries,
Associates and Affiliates (each an "Insider"), (b) Socrates
Acquisition Corporation, Xxxxxxx Investment Partners, Inc., Gryphon
Partners II, L.P. and their respective, subsidiaries, Associates and
Affiliates (each a "Sponsor"), (c) any lenders which participate with
any of the Sponsors (the "Other Lenders"), or (d) other Rollover
Stockholders (collectively with the Insiders, the Sponsors and the
Other Lenders, the "Exempted Persons") either individually,
collectively or in any combination shall be or be deemed to be an
Acquiring Person by virtue of or as a result of (i) actions taken in
furtherance of the formation of a group consisting solely of Exempted
Persons in connection with the Merger Agreement and the transactions
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contemplated thereby, (ii) the execution of the Merger Agreement,
(iii) the acquisition of any shares of capital stock of the Company
pursuant to the Merger Agreement or the consummation of the Merger, or
(iv) the consummation of the other transactions contemplated by the
Merger Agreement. A "Termination Event" shall be deemed to have
occurred immediately upon the termination of the Merger Agreement in
accordance with its terms."
2. Amendment to definition of "Beneficial Owner." Section 1(d) of the
Rights Agreement is hereby amended by replacing the last paragraph of such
Section 1(d) with the following:
"Notwithstanding anything in this Section 1(d) to the contrary, prior
to a Termination Event, none of the Exempted Persons, either
individually, collectively or in any combination, shall be deemed to
be a beneficial owner of or to beneficially own any securities
beneficially owned, directly or indirectly, by any other Exempted
Person regardless of any agreements, arrangements or understandings
among any Exempted Persons, by virtue of or as a result of (i) actions
taken in furtherance of the formation of a group consisting solely of
Exempted Persons in connection with the Merger Agreement and the
transactions contemplated thereby, (ii) the execution of the Merger
Agreement, (iii) the acquisition of any shares of capital stock of the
Company pursuant to the Merger Agreement or the consummation of the
Merger, or (iv) the consummation of the other transactions
contemplated by the Merger Agreement."
3. Amendment to Section 3(a). Section 3(a) of the Rights Agreement is
hereby amended by inserting the following sentence at the end of such Section
3(a):
"Notwithstanding anything in this Rights Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred solely by
virtue of (a) the execution of the Merger Agreement, (b) the
acquisition of any shares of capital stock of the Company pursuant to
the Merger Agreement or the consummation of the Merger or (c) the
consummation of the other transactions contemplated by the Merger
Agreement."
4. Amendment to Section 3(c). Section 3(c) of the Rights Agreement is
hereby amended by deleting the first sentence of the legend and replacing it
with the following:
"This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Nobel
Learning Communities, Inc. (the "Company") and Stocktrans, Inc. (the
"Rights Agent"), dated as of May 16, 2000, as amended from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company."
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5. Amendment to Section 7. Section 7(a) of the Rights Agreement is hereby
amended to read in its entirety as follows:
"(a) Subject to Section 7(e) hereof, at any time after, but not
before, the Distribution Date the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part 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 principal office or offices of
the Rights Agent designated for such purpose, together with payment of
the aggregate Purchase Price with respect to the total number of one
one-hundredths of a share (or other securities, cash or other assets,
as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) 5:00 P.M., New York
City time, on May 31, 2010, or such later date as may be established
by the Board of Directors prior to the expiration of the Rights (such
date, as it may be extended by the Board, the ("Final Expiration
Date"), (ii) the date on which a Merger is consummated or (iii) the
time at which the Rights are redeemed or exchanged as provided in
Section 23 and Section 24 hereof (the earlier of (i) (ii) and (iii)
being herein referred to as the "Expiration Date").
6. Amendment to Section 27. Section 27 of the Rights Agreement is hereby
amended by replacing the last sentence of such Section 27 with the following:
"Notwithstanding anything in this Section 27 to the contrary, the
Company shall not supplement or amend any of the provisions or
amendments contained in Amendment No. 2 to the Rights Agreement
without the prior written consent of the Sponsors, unless the Merger
Agreement shall have been terminated in accordance with its terms and
notice of such termination shall have been given to Socrates
Acquisition Corporation."
7. Effectiveness. This Amendment shall be deemed effective as of the date
first written above, as if executed on such date. Except as amended hereby, the
Rights Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
8. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws 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 without giving effect to the
principles of conflict of laws thereof. This Amendment may be executed in any
number of counterparts, 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. If any provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, illegal or unenforceable, the remainder of
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the terms, provisions, covenants and restrictions of this Amendment shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
[The Remainder of the Page has been Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
the Rights Agreement to be duly executed as of the day and year first above
written.
NOBEL LEARNING COMMUNITIES, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------
Title: Director
Attest:
By:/s/ Xxxx Xxxxx
-------------------------
STOCKTRANS, INC.
By: /s/ Xxxxxxxx Xxxxxx
-------------------------
Title: President
Attest:
By:_________________________
