EXECUTION COPY
Exhibit 4.6
AMENDMENT NO. 5 TO RIGHTS AGREEMENT
This Amendment No. 5 to Rights Agreement (this "Amendment"), dated as of
September 9, 2003, amends the Rights Agreement dated as of May 16, 2000 as
amended on August 4, 2002, August 5, 2002, March 12, 2003 and June 17, 2003 (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 Company and the Rights Agent entered into
Amendment No. 1 to the Rights Agreement;
WHEREAS, on August 5, 2002, the Company and the Rights Agent entered into
Amendment No. 2 to the Rights Agreement;
WHEREAS, on March 12, 2003, the Company and the Rights Agent entered into
Amendment No. 3 to the Rights Agreement;
WHEREAS, on June 17, 2003, the Company and the Rights Agent entered into
Amendment No. 4 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. Amendment to the second WHEREAS clause. The second WHEREAS clause is
amended by restating it as follows:
"WHEREAS, all references to the Common Stock herein shall also
reference the Series A Preferred Stock, par value $.001 per share,
Series C Preferred
Stock, par value $.001 per share, Series D Preferred Stock, par value
$.001 per share, Series E Preferred Stock, par value $.001 per share
(the "Series E Preferred Stock"), and Series F Preferred Stock, par
value $.001 (the "Series F Preferred Stock") (all such Series of
Preferred Stock, collectively, the "Designated Preferred"), of the
Company on an as-converted basis."
2. Amendment to Definition of "Acquiring Person". Section 1(a) is hereby
amended by restating it in its entirety as follows:
"(a)(i) "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 was owned by such Person or group on May 16, 2000, 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.
(a)(ii) An Acquiring Person shall not include (A) the Company, (B) any
Subsidiary of the Company, (C) any employee benefit plan of the
Company, or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to
the terms of any such plan, (D) any Person or group who falls within
the definition of an Acquiring Person pursuant to Section 1(a)(i), but
falls within such definition solely as a result of a reduction in the
number of shares of Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company unless and until such Person or
group, after becoming aware that such Person or group has become an
Acquiring Person as a result of such redemption or repurchase of
Common Stock by the Company, acquires beneficial ownership of any
additional shares of Common Stock, and (E) any Person or group who
qualifies as an Acquiring Person pursuant to Section 1(a)(i)
inadvertently, and who divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person or group would no
longer be an Acquiring Person pursuant to Section l(a)(i).
None of the KU Group or any member of the KU Group shall be considered
to be an Acquiring Person solely as a result of (A) the approval,
execution and delivery of the Board Agreement, (B) the appointment, by
members of the KU Group, of two directors on the Company's Board of
Directors at the annual meeting of the Company's Stockholders held on
April 2, 2003, pursuant to the terms of the Board
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Agreement, and (C) the issuance by the Company, to the persons
referenced in the foregoing clause (B) (in their respective capacities
as directors of the Company, for the term expiring in 2005), of
options to purchase Common Stock, or the exercise of such options
issued to such persons.
Camden shall not be considered to be an Acquiring Person solely as a
result of (A) the approval, execution and delivery of the Series E
Stock Purchase Agreement including, without limitation (i) the
issuance of the Series E Preferred Stock, (ii) the conversion of the
Series E Preferred Stock, (iii) the exercise of pre-emptive rights
described in Section 4.6 of the Series E Preferred Stock Purchase
Agreement, (iv) the issuance of and conversion of any additional
shares of Series E Preferred Stock received as a dividend pursuant to
the Certificate of Designation of the Series E Preferred; (B) being
the Beneficial Owner of shares of Common Stock held by Camden on June
17, 2003; and (C) the issuance by the Company, to any board
representative of the Series E Preferred Stock (in such person or
persons' capacity as a director of the Company), of options to
purchase Common Stock or the exercise of such options issued to such
person or persons.
None of the KU Group or any member of the KU Group, Camden or Allied
Capital (collectively, the "Series F Investors") shall be considered
to be an Acquiring Person solely as a result of (A) the approval,
execution and delivery of the Series F Stock Purchase Agreement
including, without limitation (i) the issuance of the Series F
Preferred Stock, (ii) the conversion of the Series F Preferred Stock,
(iii) the exercise of pre-emptive rights described in Section 4.4 of
the Series F Preferred Stock Purchase Agreement, (iv) the issuance of
and conversion of any additional shares of Series F Preferred Stock
received as a dividend pursuant to the Certificate of Designation of
the Series F Preferred; (B) being the Beneficial Owner of shares of
Common Stock held by such Person or group on September 9, 2003; and
(C) the issuance by the Company, to any board representative of the
Series F Preferred Stock (in such person or persons' capacity as a
director of the Company), of options to purchase Common Stock or the
exercise of such options issued to such person or persons.
None of the KU Group or any member of the KU Group shall be considered
to be an Acquiring Person solely as a result of the distribution, from
one member of the KU Group to another member of the KU Group, of
shares of Common Stock or Series F Preferred Stock held by such member
(A) as of September 9, 2003, or (B) pursuant to (i) the conversion of
the Series F Preferred Stock, (ii) the exercise of pre-emptive rights
described in Section 4.4 of the Series F Preferred Stock Purchase
Agreement, or (iii) the issuance of and conversion of any additional
shares of Series F Preferred Stock received as a dividend pursuant to
the Certificate of Designation of the Series F Preferred."
3. 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 paragraph:
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"Notwithstanding anything in this Section 1(d) to the contrary, none
of the Series F Investors, 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 Series F Investor regardless of any
agreements, arrangements or understandings among any Series F
Investors, solely by virtue of or as a result of (A) actions taken in
furtherance of the formation of a group consisting solely of Series F
Investors in connection with the Series F Preferred Stock Purchase
Agreement and the transactions contemplated thereby, or (B) the
execution of the Series F Preferred Stock Purchase Agreement;
provided, however, that each member of the KU Group shall be deemed to
be a beneficial owner of and to beneficially own any securities
beneficially owned, directly or indirectly, by each other member of
the KU Group."
4. Amendment to Section 3(a). The last sentence of Section 3(a) of the Rights
Agreement is hereby amended by restating it in its entirety as follows:
"Notwithstanding anything in this Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred solely by
virtue of (a) actions taken in furtherance of the formation of a group
consisting solely of members of the KU Group in connection with the
Board Agreement and the transactions contemplated thereby, (b) the
execution of the Board Agreement, or (c) the consummation of the other
transactions contemplated by the Board Agreement."
5. Amendment to Definition of Camden. Section 1(mm) of the Rights Agreement
is hereby amended by restating it in its entirety as follows:
"(mm) "Camden" shall mean, collectively, Camden Partners Strategic Fund II-A,
L.P., Camden Partners Strategic Fund II-B, L.P., Camden Partners Holdings,
LLC, Camden Partners, Inc., Camden Partners Equity Managers I, LLC, Camden
Partners Strategic II, LLC, Camden Partners Hedge Fund I, LLC and any of
their respective subsidiaries, Associates, Affiliates, designees,
successors and assigns to all or a substantial part of their respective
businesses of each of the foregoing, any distributes and transferees of
shares of Common Stock, Series E Preferred Stock or Series F Preferred
Stock held by any of the foregoing Persons, and each of their respective
partners, stockholders, members, officers, directors, employees and
agents."
6. Additional Definitions. Section 1 is hereby amended to include the
following definitions:
"(oo) "Certificate of Designation of the Series F Preferred" shall mean the
Certificate of Designation, Preferences, and Rights of Series F
Convertible Preferred Stock of Nobel Learning Communities, Inc. as filed
with the Secretary of the State of the State of Delaware on the date
hereof.
(pp) "Series F Stock Purchase Agreement" shall mean the Series F Convertible
Preferred Stock Purchase Agreement dated as of September 9, 2003 by and
among the Company and the Investors, as defined therein.
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(qq) "Allied Capital" shall mean, collectively, Allied Capital Corporation
and any of its subsidiaries, Associates, Affiliates, designees, successors
and assigns to all or a substantial part of their respective businesses of
each of the foregoing, any distributees and transferees of shares of
Common Stock, Series D Preferred Stock or Series F Preferred Stock held by
any of the foregoing Persons, and each of their respective partners,
stockholders, members, officers, directors, employees and agents.
(rr) "KU Group" shall mean, collectively, KU Learning, L.L.C., Knowledge
Universe Learning Group, L.L.C., Knowledge Universe II LLC, Mollusk
Holdings, L.L.C., Blesbok, LLC, Knowledge Universe, L.L.C., ET Holdings,
L.L.C., ET Consolidated, L.L.C., Hampstead Associates, L.L.C., Cephalopod
Corporation, Xxxxxxxx Investments, L.L.C., Xxxxxxxx X. Xxxxxxx, Ridgeview
Associates, LLC, Xxxxxxx X. Milken, Xxxxxx X. Milken and any of their
respective subsidiaries, Associates, Affiliates, designees, successors and
assigns to all or a substantial part of their respective businesses of
each of the foregoing, any distributees and transferees of shares of
Common Stock or Series F Preferred Stock held by any of the foregoing
Persons, and each of their respective partners, stockholders, members,
officers, directors, employees and agents. For the purposes of clarity,
from and after September 9, 2003, the KU Group shall be considered as a
"group" for the purposes of Section 1(a)."
7. Effectiveness. This Amendment shall be deemed effective as of the date
first written above, as if executed on such date. Except as expressly
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 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.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to
the Rights Agreement to be duly executed as of the day and year first above
written.
NOBEL LEARNING COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
By: /s/ D. Xxxxx Xxxxx
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Name: D. Xxxxx Xxxxx
Title: Vice Chairman, President and
Chief Operating Officer
Attest:
By: /s/Xxxxxx XxXxxxxx
------------------------------------
Name: Xxxxxx XxXxxxxx
Title: Secretary
STOCKTRANS, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
Attest:
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: Assistant Vice President
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