THIRD AMENDMENT TO RIGHTS AGREEMENT
Exhibit
10.1
THIRD
AMENDMENT TO RIGHTS AGREEMENT
THIRD
AMENDMENT, dated as of September 22, 2006 (this "Amendment") to the Rights
Agreement dated as of August 19, 1999, and as amended as of September 19,
2001
and December 13, 2002 (as amended, the "Agreement") between Talk America
Holdings, Inc. (formerly Xxxx.xxx, Inc.), a Delaware corporation (the
"Company"), and Stocktrans, Inc.(the "Rights Agent") (as successor to First
City
Transfer Company, a Delaware corporation).
WHEREAS,
the parties hereto previously executed and delivered the Agreement;
WHEREAS,
the Company proposes to enter into an Agreement and Plan of Merger immediately
following the execution and delivery hereof (as amended from time to time,
the
"Merger Agreement") by and among Cavalier
Telephone Corporation, a Delaware corporation (“Buyer”), Cavalier Acquisition
Corp., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of
CavTel Holdings, LLC, a Delaware limited liability company of which Buyer
is the
sole member,
and the
Company, providing for the merger (the "Merger") of the Merger Sub with and
into
the Company, with the Company continuing as the surviving
corporation;
WHEREAS,
the Board of Directors of the Company has approved, authorized and adopted
the
Merger Agreement and the transactions contemplated thereby;
WHEREAS,
the Board of Directors of the Company has determined, in connection with
the
execution of the Merger Agreement, that it is desirable to amend the Agreement
to exempt the Merger Agreement, the execution thereof and the transactions
contemplated thereby, including, without limitation, the Merger, from the
application of the Agreement as set forth in this Amendment;
WHEREAS,
pursuant to the terms of the Agreement, the Company and the Rights Agent
may,
prior to the Distribution Date (as defined in the Agreement), if the Company
so
directs, supplement or amend any provision of the Agreement without the approval
of any holders of certificates representing shares of Common Stock of the
Company.
WHEREAS,
no Person has, to the knowledge of the Company, as of the time immediately
prior
to this Amendment become an Acquiring Person, the Distribution Date has not
yet
occurred, and the Company and the Rights Agent have agreed at the direction
of
the Company to amend the Agreement as set forth in this Amendment.
NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt
of
which are hereby acknowledged, the parties hereto agree as follows:
SECTION
1. CERTAIN DEFINITIONS. Capitalized terms used but not defined in this Amendment
are used with the meanings ascribed to such terms in the Agreement.
SECTION
2. AMENDMENTS TO AGREEMENT. The Agreement is hereby amended generally to
provide
that neither (A) the execution and delivery of that certain Agreement and
Plan
of Merger dated as of September 22, 2006 (as amended from time to time, the
"Merger Agreement") by and among Cavalier
Telephone Corporation, a Delaware corporation (“Buyer”), Cavalier Acquisition
Corp., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of
CavTel Holdings, LLC, a Delaware limited liability company of which Buyer
is the
sole member,
and the
Company nor (B) the consummation of the Merger (as defined herein) or any
of the
other transactions contemplated by the Merger Agreement shall give rise to
any
rights, or the issue of any Rights, under the Agreement, and without limitation
of the foregoing, the Agreement is hereby further amended as
follows:
(a)
The
definition of "Acquiring Person" in Section 1(a) of the Agreement is amended
to
insert the following as clause (i), and reorder the clauses following such
added
clause accordingly:
"(i)
(x)
any of Cavalier
Telephone Corporation,
a
Delaware corporation ("Buyer"), and Cavalier
Acquisition Corp.,
a
Delaware corporation and an indirect wholly owned subsidiary of Buyer ("Merger
Sub"), who, notwithstanding anything in this Agreement to the contrary, shall
be
deemed not to be an Acquiring Person or an Affiliate of any Acquiring Person,
either individually or collectively, solely as a result of either (A) the
execution and delivery of that certain Agreement and Plan of Merger, dated
as of
September 22, 2006 (as amended from time to time in accordance with its terms
with the approval of the Board of Directors of the Company, the "Merger
Agreement"), by and among Buyer, Merger Sub and the Company, or (B) the
consummation of the Merger contemplated by, and defined in, the Merger Agreement
or any of the other transactions contemplated by the Merger Agreement, and
only
until the earlier of the consummation of such Merger and the termination
of the
Merger Agreeement, and (y) any Affiliate of Associate of either Buyer or
Merger
Sub if and so long as such Buyer or Merger Sub, as the case may be, is deemed
not to be an Acquiring Person pursuant to subclause (x) of this clause
(y);".
(b)
The
definition of "Section 11(a)(ii) Event" in Section 1(x) (before giving effect
to
the reordering of section references as contemplated by Section 2(e) of this
Amendment) of the Agreement is amended to add the following at the end of
the
sentence prior to the period:
";
provided, however, that, notwithstanding anything in this Agreement to the
contrary, a Section 11(a)(ii) Event shall be deemed not to have occurred
solely
as a result of (x) the execution and delivery of the Merger Agreement or
(y) the
consummation of the Merger or any of the other transactions contemplated
by the
Merger Agreement".
(c)
The
definition of "Section 13 Event" in Section 1(z) (before giving effect to
the
reordering of section references as contemplated by Section 2(e) of this
Amendment) of the Agreement is amended to add the following at the end of
the
sentence prior to the period:
";
provided, however, that, notwithstanding anything in this Agreement to the
contrary, a Section 13 Event shall be deemed not to have occurred solely
as a
result of (x) the execution and delivery of the Merger Agreement or (y) the
consummation of the Merger or any of the other transactions contemplated
by the
Merger Agreement".
(d)
The
definition of "Stock Acquisition Date" in Section 1(bb) (before giving effect
to
the reordering of section references as contemplated by Section 2(e) of this
Amendment) of the Agreement is amended to add the following sentence at the
end
thereof:
"Notwithstanding
anything in this Agreement to the contrary, a Stock Acquisition Date shall
be
deemed not to have occurred solely as a result of (A) the execution and delivery
of the Merger Agreement or (B) the consummation of the Merger or any of the
other transactions contemplated by the Merger Agreement."
(e)
The
following definition is added to Section 1 of the Agreement and the definitions
following such added definition shall be deemed to be reordered
accordingly:
(s)
"Merger" shall mean the merger of Merger Sub with and into the Company in
accordance with the terms and conditions of the Merger Agreement."
(f)
Section 3(a) of the Agreement is amended to add the following sentence at
the
end thereof:
"Notwithstanding
anything in this Agreement to the contrary, a Distribution Date shall be
deemed
not to have occurred solely as the result of (i) the execution and delivery
of
the Merger Agreement or (ii) the consummation of the Merger or any of the
other
transactions contemplated by the Merger Agreement."
(g)
Section 7(a) of the Agreement is restated and amended in its entirety to
provide:
"(a)
Subject to Section 7(e) hereof, 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
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 with respect to the total number of one three-hundredths of
a
share of Preferred Stock (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) the time immediately prior to the Effective Time (as such
term is defined in the Merger Agreement, (ii) the Final Expiration Date,
or
(iii) the time at which the Rights are redeemed as provided in Section 23
hereof
(the earlier of (i), (ii) and (iii) being herein referred to as the "Expiration
Date")."
SECTION
3. INTERPRETATION. The term "Agreement" as used in the Agreement shall be
deemed
to refer to the Agreement as amended hereby.
SECTION
4. EFFECTIVENESS. This Amendment shall be deemed effective as of the date
first
written above. Except as expressly amended herein, all other terms and
conditions of the Agreement shall remain in full force and effect.
SECTION
5. GOVERNING LAW. This Amendment shall be deemed to be a contract made under
the
laws of the State of Delaware, and for all purposes of this Amendment shall
be
governed by and construed in accordance with the laws of such State applicable
to contracts made and to be performed entirely within such State without
giving
effect to the conflict or choice of law provisions thereof that would give
rise
to the application of the domestic substantive law of any other
jurisdiction.
SECTION
6. COUNTERPARTS. This Amendment may be executed in any number of counterparts,
each of which shall be an original and all of which shall constitute one
and the
same document.
IN
WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed
as of the day and year first above written.
TALK
AMERICA HOLDINGS, INC.
By:
/s/ Xxxxxxxx X. Lawn IV
Name:
Xxxxxxxx X. Lawn IV
Title: EVP
- General Counsel and Secretary
STOCKTRANS,
INC.
By:
/s/ Xxxxxx X. Xxxxxxxx
Name:
Xxxxxx X. Xxxxxxxx
Title: Vice
President
