AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED RIGHTS AGREEMENT
THIS AMENDMENT NO. 2, dated as of October 24, 2001 (the "Amendment") to the
Amended and Restated Rights Agreement dated as of March 17, 1997, as amended on
June 4, 1997 (the "Amended and Restated Rights Agreement"), between MOTHERS
WORK, INC., a Delaware corporation (the "Company") and STOCKTRANS, INC. (the
"Rights Agent").
WHEREAS, reference is made to the Agreement and Plan of Merger dated
October 17, 2001 (the "Merger Agreement") by and among the Company, iMaternity
Acquisition Corp., a Delaware corporation, eSpecialty Brands, LLC, a Delaware
limited liability company, Maternity Holding Corporation, a Delaware Corporation
("MHC"), Xxxxx X. Xxxxxx, an individual ("JK"), Xxxxxxx X. Xxxxxx, an individual
("WK"), Xxxxxx X. Xxxxxx, as Trustee of the Xxxxxx X. Xxxxxx Trust dated October
8, 1986 ("DK"), Centre Capital Investors III, L.P. ("Centre Capital"), Centre
Capital Individual Investors III, L.P. ("Centre Individual"), Centre Capital
Offshore Investors III, L.P. ("Centre Offshore"), Centre Capital Tax-Exempt
Investors III, L.P. ("Centre Tax-Exempt") and Centre Partners Coinvestment III,
L.P. ("Centre Coinvestment"). Centre Coinvestment, Centre Capital, Centre
Individual, Centre Offshore, Centre Tax-Exempt and Centre Partners Management,
LLC are sometimes referred to herein as "Centre Partners"; and
WHEREAS, pursuant to the Merger Agreement, Centre Partners will be issued
(i) 170,708 shares (the "Series C Shares") of Series C Cumulative Preferred
Stock, par value $.01 per share, of the Company (the "Series C Preferred
Stock"), which are convertible into a specified number of shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), under
certain specified circumstances pursuant to the Certificate of Designation of
the Series C Preferred Stock (the "Conversion Right") and (ii) warrants (the
"Warrants") to purchase, in the aggregate, 175,000 shares of Common Stock (the
"Exercise Right"); and
WHEREAS, pursuant to the Merger Agreement Centre Partners may purchase up
to 400,000 shares of Common Stock in open market and private transactions within
2 years after closing (the "Purchase Right" and such 2 year period being called
the "Open Market Purchase Period"); and
WHEREAS, the Company and the Rights Agent desire to amend the Amended and
Restated Rights Agreement pursuant to the terms herein so that Centre Partners
may exercise its Exercise Right, Conversion Right and Purchase Right without
being deemed an "Acquiring Person" pursuant to the Amended and Restated Rights
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, intending to be legally bound hereby, the parties agree as
follows:
1. Section 1, paragraph (j) of the Amended and Restated Rights Agreement is
amended to read in its entirety as follows:
(j) "Exempt Person" means:
(i) the Company, any Subsidiary of the Company, any employee
benefit plan or employee stock plan of the Company or of any
Subsidiary of the Company, or any person or entity
organized, appointed, established or holding Company Common
Stock for or pursuant to the terms of any such plan;
(ii) any member of the Matthias Group, any member of the Meridian
Group, any member of the Mass Financial Group, or any member
of the Crown Group; provided, however, that all the members
of the Meridian Group, the Mass Financial Group or the Crown
Group, as applicable, shall immediately and thereafter cease
to be an Exempt Person if the members of such group shall
acquire, at any time after Rights Dividend Declaration Date,
additional shares resulting in an increase in such group's
aggregate beneficial ownership of Company Common Stock from
time to time outstanding by more than 46,833 shares of
Company Common Stock; and provided, further, that all
members of the Matthias Group shall immediately and
thereafter cease to be an Exempt Person if such group at any
time shall acquire additional shares resulting in an
increase in its aggregate beneficial ownership of Company
Common Stock from time to time outstanding, except for
increases resulting from the future issuance to such members
of options hereafter issued by the Company, or by
inheritance or laws of descent;
(iii) Xxxxxx Xxxxxxx Inc. ("Xxxxxxx"); provided, however, that
Xxxxxxx shall immediately and thereafter cease to be an
Exempt Person if it, individually or together with its
affiliates or associates, shall acquire, at any time after
May 22, 1997, additional shares resulting in an increase in
its aggregate beneficial ownership of Company Common Stock
from time to time outstanding by more than 46,833;
(iv) Centre Capital Investors III, L.P. ("Centre Capital"),
Centre Capital Individual Investors III, L.P. ("Centre
Individual"), Centre Capital Offshore Investors III, L.P.
("Centre Offshore"), Centre Capital Tax-Exempt Investors
III, L.P. ("Centre Tax-Exempt") and Centre Partners
Coinvestment III, L.P. ("Centre Coinvestment"
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and Centre Coinvestment, Centre Capital, Centre Individual,
Centre Offshore, Centre Tax-Exempt, Centre Partners
Management, LLC and their affiliates are sometimes
collectively referred to herein as "Centre Partners")
insofar as Centre Partners (or any of them) acquires the
Series C Shares, acquires up to 400,000 shares of Company
Common Stock pursuant to the Purchase Right during the Open
Market Purchase Period (the "Open Market Shares"), acquires
up to 175,000 shares of Company Common Stock upon exercise
of a certain Warrant(s) dated October 17, 2001 issued to
Centre Partners (the "Warrant Shares") and acquires up to
193,229 shares of Company Common Stock issued upon exercise
of the Conversion Right (the "Conversion Shares"); provided,
however, that Centre Partners and all of its officers,
directors, employees and affiliates shall immediately and
thereafter cease to be an Exempt Person if it, individually
or together with its affiliates or associates, shall
acquire, at any time hereafter, additional shares of Common
Stock other than the Series C Shares, the Open Market
Shares, the Warrant Shares and the Conversion Shares which
acquisition results in Centre Partners' aggregate beneficial
ownership of Company Common Stock then outstanding equaling
or exceeding 10%; and
(v) any Person who would otherwise become an Acquiring Person
solely by virtue of a reduction in the number of outstanding
shares of Company Common Stock; provided, however, that such
Person shall not be an Exempt Person if, subsequent to such
reduction, such Person shall become the Beneficial Owner of
any additional shares of Company Common Stock.
2. The terms "Agreement" and "Rights Agreement" as used in the Amended and
Restated Rights Agreement shall be deemed to refer to the Amended and Restated
Rights Agreement as amended hereby. This Amendment shall be effective as of the
date hereof and, except as set forth herein, the Amended and Restated Rights
Agreement shall remain in full force and effect and be otherwise unaffected
hereby.
3. This Amendment may be executed (including by facsimile) 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.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, all as of the date first above written.
ATTEST: MOTHERS WORK, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx
Assistant Secretary President
ATTEST: STOCKTRANS, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxxxxx Xxxxxx
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Xxxx Xxxxxx Xxxxxxxxx Xxxxxx
Vice President Executive Vice President
