EXHIBIT 4.1
AMENDMENT NO. 3 TO THE
RIGHTS AGREEMENT
OF NOBEL LEARNING COMMUNITIES, INC.
This Amendment No. 3, dated as of March 12, 2003, amends the Rights
Agreement dated as of May 16, 2000, as amended by Amendment No. 1 dated as of
August 4, 2002 and as further amended by Amendment No. 2 dated as of August 5,
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, the Board of Directors of the Company approved
Amendment No. 1 to the Rights Agreement;
WHEREAS, on August 5, the Board of Directors of the Company approved
Amendment No. 2 to the Rights Agreement;
WHEREAS, the Merger Agreement referenced in Amendment No. 2 has been
terminated by the Company;
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:
I. Exceptions to the Definition of "Acquiring Person." Section 1(a)(ii) of the
Rights Agreement is hereby amended by restating it in its entirety as follows:
"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 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, after becoming aware that such Person 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 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 would no longer be an Acquiring Person pursuant to Section
1(a)(i). None of KU Learning, L.L.C., Knowledge Universe Learning Group,
L.L.C., Knowledge Universe II LLC nor their respective subsidiaries,
Associates, Affiliates or designees (collectively, 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 Board Agreement and the
transactions contemplated thereby, (ii) the execution of the Board
Agreement, (iii) on or after the KU Loan Date (as that term is defined in
the Board Agreement), the acquisition of the Warrants (as that term is
defined in the Board Agreement) and/or the acquisition of any securities
issuable pursuant to the Warrants, (iv) on or after the KU Loan Date, after
giving effect to the issuance of the Warrants (and all securities issuable
pursuant to the Warrants), the acquisition of up to an additional ten
percent (10%) of the fully-diluted capital stock of the Company (calculated
in accordance with SFAS 128) outstanding from time to time after the KU
Loan Date; provided, that any such acquisition of capital stock pursuant to
the foregoing clause (iv) is made in one or more transactions through
purchases in the open market, or (v) the consummation of the other
transactions contemplated by the Board Agreement. Notwithstanding anything
in this Section 1(a)(ii) to the contrary, in the event that the Board
Agreement is terminated in accordance with the terms of Section 5.4
thereof, the foregoing clauses (iv) and (v) shall be deemed to be null and
void, and of no further force or effect."
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II. 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, 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 Board Agreement and the transactions contemplated thereby, (ii)
the execution of the Board Agreement, (iii) on or after the KU Loan
Date, the acquisition of the Warrants and/or the acquisition of any
securities issuable pursuant to the Warrants, (iv) on or after the KU
Loan Date, after giving effect to the issuance of the Warrants (and
all securities issuable pursuant to the Warrants), the acquisition of
up to an additional ten percent (10%) of the fully-diluted capital
stock of the Company (calculated in accordance with SFAS 128)
outstanding from time to time after the KU Loan Date; provided, that
any such acquisition of capital stock pursuant to the foregoing clause
(iv) is made in one or more transactions through purchases in the open
market, or (v) the consummation of the other transactions contemplated
by the Board Agreement. Notwithstanding anything in this Section 1(d)
to the contrary, in the event that the Board Agreement is terminated
in accordance with the terms of Section 5.4 thereof, the foregoing
clauses (iii) and (iv) shall be deemed to be null and void, and of no
further force or effect."
III. Deletion of Certain Definitions. Section 1 of the Rights Agreement is
hereby amended by deleting in their entirety subsections (kk), (ll) and (mm).
IV. Additional Definition. Section 1 of the Rights Agreement is hereby amended
by inserting the following subsections at the end of such Section 1:
"(kk) "Board Agreement" shall mean the Agreement Regarding Board of
Directors and Amendment of Rights Agreement dated as of March 12, 2003
by and among the Company, ▇.▇. ▇▇▇▇▇, KU Learning, L.L.C., Knowledge
Universe Learning Group, L.L.C., Knowledge Universe II L.L.C., ▇▇▇▇▇▇
▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, as amended from time to time."
V. Amendment to Section 3(a). Section 3(a) of the Rights Agreement is hereby
amended by replacing the last sentence of such Section 3(a) with the following:
"Notwithstanding anything in this Rights 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 Exempted Persons in connection with the Board
Agreement and the transactions
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contemplated thereby, (b) the execution of the Board Agreement, (c) on
or after the KU Loan Date, the acquisition of the Warrants and/or the
acquisition of any securities issuable pursuant to the Warrants, (d)
on or after the KU Loan Date, after giving effect to the issuance of
the Warrants (and all securities issuable pursuant to the Warrants),
the acquisition of up to an additional ten percent (10%) of the
fully-diluted capital stock of the Company (calculated in accordance
with SFAS 128) outstanding from time to time after the KU Loan Date;
provided, that any such acquisition of capital stock pursuant to the
foregoing clause (d) is made in one or more transactions through
purchases in the open market, or (e) the consummation of the other
transactions contemplated by the Board Agreement. Notwithstanding
anything in this Section 3(a) to the contrary, in the event that the
Board Agreement is terminated in accordance with the terms of Section
5.4 thereof, the foregoing clauses (c) and (d) shall be deemed to be
null and void, and of no further force or effect."
VI. 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"), or (ii) the time at which the Rights are redeemed or exchanged
as provided in Section 23 and Section 24 hereof (the earlier of (i)
and (ii) being herein referred to as the "Expiration Date")."
VII. Amendment to Section 26. Section 26 of the Rights Agreement is hereby
amended by replacing the address of the Company following the first paragraph of
such Section 26 with the following:
"Nobel Learning Communities, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel"
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VIII. Amendment to Section 27. Section 27 of the Rights Agreement is hereby
amended to read in its entirety as follows:
"27. Supplements and Amendments. Prior to the Distribution Date, and
subject to the penultimate sentence of this Section 27, the Company
and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock. From and
after the Distribution Date, and subject to the penultimate sentence
of this Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in clauses (i) or (ii) of the first
provision to Section 23(a) hereof, shall be effective only if there
are Continuing Directors and shall require the concurrence of a
majority of such Continuing Directors), or (iv) to change or
supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying
the rights of, and/or the benefits to, the holders of Rights. Upon the
delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right is
exercisable, and no supplement or amendment that changes the rights or
duties of the Rights Agent under this Agreement shall be effective
without the execution of such supplement or amendment by the Rights
Agent. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of
Common Stock."
IX. 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.
X. 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
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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.
[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.
3 to the Rights Agreement to be duly executed as of the day and year first above
written.
NOBEL LEARNING COMMUNITIES, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇
---------------------------
Title: Chairman and CEO
Attest:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Vice Chairman
STOCKTRANS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: President
Attest:
By: /s/ ▇▇▇▇ ▇▇▇ Klevence
-----------------------------------------
Title: Assistant Vice President Operations
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