EXHIBIT 5
AGREEMENT REGARDING BOARD OF DIRECTORS AND
AMENDMENT OF RIGHTS AGREEMENT ("AGREEMENT")
DATED AS OF MARCH 12, 2003 (THE "EFFECTIVE DATE")
PARTIES: The Company Parties (as defined below) and the KU Parties (as defined
below).
1. DEFINITIONS
"Annual Meeting" means the annual meeting of the Company's Stockholders
to be held on April 2, 2003, as such meeting may be rescheduled,
adjourned or postponed from time to time.
"Board Nominees" means each of the following individuals: ▇▇. ▇▇▇▇▇,
▇▇. ▇▇▇▇ and ▇▇. ▇▇▇▇▇.
"Bylaws" means the Company's Bylaws, as amended and restated prior to
the Effective Date.
"Certificate" means the Company's Amended and Restated Certificate of
Incorporation.
"Class III Director" means the Class III Directors of the Company as
defined in the Certificate.
"Company" means Nobel Learning Communities, Inc., a Delaware
corporation.
"Company Board" means the Company's Board of Directors.
"Company Parties" means (1) the Company, and (2) ▇▇. ▇▇▇▇▇.
"KU" means KU Learning, L.L.C., a Delaware limited liability company.
"KU Group" means KU, its sole member, Knowledge Universe Learning
Group, L.L.C., and Knowledge Universe II LLC, the sole member of
Knowledge Universe Learning Group, L.L.C., and its or their direct and
indirect subsidiaries.
"KU Loan Date" means the date on which all of the definitive documents
for the KU Loan have been executed.
"KU Parties" means (1) the KU Group, (2) ▇▇. ▇▇▇▇ and (3) ▇▇. ▇▇▇▇▇.
"▇▇. ▇▇▇▇▇" means ▇. ▇. ▇▇▇▇▇, an individual and the Chief Executive
Officer of the Company and Chairman of the Company Board.
"▇▇. ▇▇▇▇" means ▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual.
"▇▇. ▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇, an individual.
"Parties" means the Company Parties and the KU Parties, and "Party"
shall mean any one of them.
"Rights Agreement" means the Rights Agreement, dated as of May 16,
2000, between the Company and Stocktrans, Inc. (as Rights Agent), as
amended by Amendment No. 1 to Rights Agreement, dated as of August 4,
2002, and Amendment No. 2 to Rights Agreement, dated as of August 5,
2002.
2. AGREEMENT REGARDING NOMINATION EFFORTS
2.1. The KU Parties agree, subject to the Company Parties'
compliance with the provisions of this Agreement, not to
nominate or support the nomination of, as the case may be, any
nominees for election at the Annual Meeting other than the
Board Nominees or such persons as may be nominated for
election to the Company Board pursuant to Section 3.7.
2.2. The Company Parties agree, subject to the KU Parties'
compliance with the provisions of this Agreement, not to
nominate or support the nomination of, as the case may be, any
nominees for election at the Annual Meeting other than the
Board Nominees or such persons as may be nominated for
election to the Company Board pursuant to Section 3.7.
2.3. Subject to the Company Parties' compliance with the provisions
of this Agreement, the KU Group shall cause all shares of the
Company's Common Stock that the KU Group has the power to vote
(or cause to be voted) at the Annual Meeting to be present (in
person or by proxy) and voted in favor of the election of the
Board Nominees at the Annual Meeting, and agrees not to take
any action in breach of this Agreement.
3. AGREEMENT REGARDING THE BOARD NOMINEES
3.1. The Company represents, warrants and covenants that:
3.1.1. the Company has taken all action necessary to be
taken by it to cause each of the Board Nominees to
become a nominee of the Company Board for election to
the Company Board at the Annual Meeting;
3.1.2. each of the Board Nominees who is elected to the
Company Board at the Annual Meeting will be a Class
III Director, each with a term expiring at the
Company's annual meeting of stockholders to be held
in 2005; and
3.1.3. only 3 positions on the Company Board will be voted
upon at the Annual Meeting, and that prior to the
Annual Meeting, the Company will not take any action
to change the term or composition of Class III
Directors or the size of the Company Board without
the prior written consent of KU.
3.2. Subject to the Company Parties' compliance with the provisions
of this Agreement, each of the Board Nominees confirms his
consent to stand for
election as a Board Nominee at the Annual Meeting and to serve
as a member of the Company Board if elected; provided,
however, that nothing contained in this Agreement shall
restrict any Board Nominee from resigning from the Company
Board at any time.
3.3. Subject to the KU Parties' compliance with the provisions of
this Agreement, the Company agrees to nominate the Board
Nominees for election to the Company Board at the Annual
Meeting, and agrees not to take any action in breach of this
Agreement.
3.4. The Company agrees to use its best efforts to hold the Annual
Meeting on April 2, 2003, as scheduled and not to reschedule
the Annual Meeting without the prior written consent of KU
(which consent shall not be unreasonably withheld in the event
such rescheduling is attributable to circumstances beyond the
reasonable control of the Company).
3.5. Subject to the KU Parties' compliance with the provisions of
this Agreement, ▇▇. ▇▇▇▇▇ shall cause all shares of the
Company's capital stock that ▇▇. ▇▇▇▇▇ has the power to vote
(or cause to be voted) at the Annual Meeting to be present (in
person or by proxy) and voted in favor of the election of all
Board Nominees at the Annual Meeting.
3.6. The Company Parties shall cause all shares represented by
proxies to be voted at the Annual Meeting in accordance with
the instructions given or, as to any matter as to which no
instruction is given, and, subject to the KU Parties'
compliance with the provisions of this Agreement, to be voted
in favor of the election of all Board Nominees at the Annual
Meeting.
3.7. In the event any Board Nominee becomes unable or unwilling to
serve as a member of the Company Board before the vote is
taken at the Annual Meeting, (1) if such Board Nominee is ▇▇.
▇▇▇▇ or ▇▇. ▇▇▇▇▇, then KU shall select a replacement nominee,
and (2) if such Board Nominee is ▇▇. ▇▇▇▇▇, then the Company
Board shall select a replacement nominee; provided, however,
that any replacement nominee selected pursuant to the
foregoing clauses (1) or (2) shall first have been determined
by the Company Board to be qualified to serve, based upon the
Company's reasonable background and similar investigative
checks and shall, if required, possess the qualifications
required to serve on the Company's audit committee.
3.8. If they are elected, ▇▇. ▇▇▇▇ and ▇▇. ▇▇▇▇▇ will serve as
members of the Company Board for the same term as all other
Board Nominees elected to the Company Board at the Annual
Meeting, which term currently expires as provided in Article
Eighth of the Company's Amended and Restated Certificate of
Incorporation.
3.9. For so long as ▇▇. ▇▇▇▇ or ▇▇. ▇▇▇▇▇ serve as members of the
Company Board, each of them shall have all the same legal
rights as the other members of the
Company Board in respect of his service under the law of the
jurisdiction of incorporation of the Company, and under the
Company's Amended and Restated Articles of Incorporation and
Bylaws, as such jurisdiction of incorporation and/or documents
may be changed from time to time.
4. AMENDMENT OF THE RIGHTS AGREEMENT
4.1. The KU Group represents and warrants to the Company that its
collective beneficial ownership of the capital stock of the
Company as of the Effective Date consists of 1,883,500 shares
of Common Stock. The Company represents and warrants to the KU
Group that the Company has an aggregate of 7,516,365 shares of
capital stock outstanding on a fully-diluted basis as of the
Effective Date (utilizing the treasury method of calculation
in accordance with SFAS 128) consisting of 6,324,456 shares of
Common Stock issued (which excludes 230,510 treasury shares),
300,966 shares of Common Stock issuable upon conversion of
1,023,694 shares of Series A Preferred Stock, 624,985 shares
of Common Stock issuable upon conversion of 2,499,940 shares
of Series C Preferred Stock, 265,958 shares of Common Stock
issuable upon conversion of 1,063,830 shares of Series D
Preferred Stock, no shares of Common Stock issuable upon
exercise of Warrants, and no shares of Common Stock issuable
upon exercise of outstanding employee stock options. Based on
the foregoing, the Company represents and warrants to the KU
Group that the KU Group's beneficial ownership represents
approximately 25.1% of the fully-diluted capital stock of the
Company outstanding as of the Effective Date (utilizing the
treasury method of calculation in accordance with SFAS 128).
4.2. The Company represents and warrants to KU that the Rights
Agreement has been amended, by a certain Amendment No. 3 to
Rights Agreement, to (a) allow KU and/or its designees to
acquire (x) the Warrants (as defined in Section 5.2) on the KU
Loan Date, (y) all securities issuable pursuant to the
Warrants, and (z) following the KU Loan Date, after giving
effect to the issuance of the Warrants (and all securities
issuable pursuant to the Warrants), 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 (z) is made in one or more transactions through
purchases in the open market, and (b) allow the consummation
of the agreements and provisions of this Agreement. The
Company agrees to provide to KU upon request from time to time
an updated calculation of the Company's outstanding
fully-diluted capital stock (utilizing the treasury method of
calculation in accordance with SFAS 128). A complete and
accurate copy of such Amendment No. 3 to the Rights Agreement
is attached hereto as Exhibit A.
5. AGREEMENT REGARDING FINANCING AND RELATED WARRANT AGREEMENT
5.1. KU represents and warrants to the Company that on or before
May 1, 2003, KU and/or its designees shall provide a loan to
the Company (the "KU Loan"), subject to (a) the Company
Parties' compliance with the provisions of this Agreement, (b)
satisfactory completion of due diligence related to the
Company (to be completed on or before April 22, 2003 with the
cooperation of the Company and subject to execution of a
customary confidentiality agreement), and (c) execution of
definitive loan documents containing the following terms and
conditions:
5.1.1. aggregate loan amount not to exceed $5.0 million;
5.1.2. interest payable quarterly at the rate of eleven
percent (11%) per annum;
5.1.3. one (1) year maturity date;
5.1.4. debt represented by the KU Loan to be junior to the
Company's current bank debt and senior to all other
debt of the Company, including all debt outstanding
to Allied Capital (provided, that in the event that
the consent of the Company's senior lenders and
Allied Capital to the KU Loan on the terms as
contemplated by this Agreement shall not have been
obtained on or before April 25, 2003, KU shall have
no obligation under this Section 5, the Company shall
have no obligation under Section 5.2, and the Company
shall have the right to terminate this Agreement
pursuant to Section 5.4); and
5.1.5. such other customary terms and conditions to be
mutually agreed upon by the parties.
5.2. Upon the KU Loan Date, the Company agrees to issue and deliver
to KU and/or its designees warrants to purchase shares of
Common Stock of the Company (the "Warrants") with the
following terms and conditions:
5.2.1. exercisable for 250,000 shares of Common Stock of the
Company;
5.2.2. exercise price of $5.00 per share of Common Stock of
the Company;
5.2.3. exercisable from the date of issuance and for an
eight (8) year period thereafter; and
5.2.4. such other customary terms and conditions for
warrants issued by the Company in connection with
loans of the type described in this Section 5.
5.3. The Parties agree that the final terms of the KU Loan, the
Warrants and the definitive documentation related thereto will
be negotiated and agreed to promptly following the mailing to
stockholders of the Company of the Company's proxy statement
for the Annual Meeting.
5.4. In the event that the KU Loan Date does not occur on or before
May 1, 2003, the Company Parties may terminate this Agreement
by giving written notice of termination to KU, effective
immediately upon delivery of such notice.
6. MISCELLANEOUS PROVISIONS
6.1. The Company Parties represent and warrant to the KU Parties
that this Agreement has been approved by the Company Board,
that the Company has duly executed and delivered this
Agreement, and that this Agreement constitutes the legal,
valid and binding obligation of each of the Company Parties,
enforceable against each of them in accordance with its terms.
6.2. The KU Parties represent and warrant to the Company Parties
that this Agreement has been approved by all necessary limited
liability company action of each member of the KU Group, that
each member of the KU Group has duly executed and delivered
this Agreement, and that this Agreement constitutes the legal,
valid and binding obligation of each of the KU Parties,
enforceable against each of them in accordance with its terms.
6.3. This Agreement constitutes the entire agreement of the Parties
with respect to its subject matter and supersedes any and all
prior agreements or understandings, whether written or oral,
between or among them with regard to such subject matter.
6.4. This Agreement may be amended only by a written agreement duly
executed by the Parties.
6.5. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware including
its conflict of law principles.
6.6. This Agreement shall be binding upon, and inure to the benefit
of, the respective successors and assigns of the Parties.
6.7. This Agreement shall confer no rights or benefits upon any
person (natural or juridical) other than the Parties.
6.8. This Agreement may be executed in counterparts, each of which
shall constitute an original but all of which shall together
constitute a single instrument.
[signature page follows]
EXECUTION: This Agreement has been executed by each of the Parties as of the
date written above.
NOBEL LEARNING COMMUNITIES, INC., KU LEARNING, L.L.C.,
a Delaware corporation a Delaware limited liability company
By: _____________________________ By: _____________________________________
Name: Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Its: Assistant Secretary
_________________________________ KNOWLEDGE UNIVERSE LEARNING GROUP, L.L.C,
▇. ▇. ▇▇▇▇▇, an individual a Delaware limited liability company
By: _____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Assistant Secretary
KNOWLEDGE UNIVERSE II LLC,
a Delaware limited liability company
By: _____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Assistant Secretary
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual
_________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇, an individual
EXHIBIT A
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:
1. 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."
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, 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
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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."
3. Deletion of Certain Definitions. Section 1 of the Rights
Agreement is hereby amended by deleting in their entirety subsections (kk), (ll)
and (mm).
4. 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."
5. 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 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
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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."
6. 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")."
7. 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"
8. 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,
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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."
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9. 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.
10. 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.
[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: ________________________________
Title:
Attest:
By: ________________________________
Title:
STOCKTRANS, INC.
By: _______________________________
Title:
Attest:
By: ________________________________
Title:
