EXHIBIT 10.1
AMENDMENT TO THE RIGHTS AGREEMENT
AMENDMENT dated as of May 4, 2006 (this "Amendment") to the Rights
Agreement dated as of July 10, 2003 (as amended by amendments thereto dated as
of June 30, 2005 and March 14, 2005, the "Rights Agreement") between Mpower
Holding Corporation (the "Company") and Continental Stock Transfer & Trust
Company (the "Rights Agent"). Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Rights Agreement.
W I T N E S S E T H:
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 U.S. TelePacific Holdings
Corp., a Delaware corporation ("Parent"), TPMC Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Parent ("Merger Sub"), 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 Rights Agreement to exempt the Merger Agreement, the execution thereof
and the transactions contemplated thereby, including, without limitation, the
Merger, from the application of the Rights Agreement as set forth in this
Amendment;
WHEREAS, no Person has as of the time immediately prior to this
Amendment become an Acquiring Person and no Distribution Date has occurred;
WHEREAS, Section 26 of the Rights Agreement provides that, prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of the Rights Agreement without the
approval of any holders of certificates representing shares of Common Stock of
the Company (subject to certain exceptions);
WHEREAS, pursuant to Section 26 of the Rights Agreement, an appropriate
officer of the Company has delivered a certificate to the Rights Agent stating
that the proposed supplements or amendments to the Rights Agreement set forth in
this Amendment are in compliance with Section 26 of the Rights Agreement; and
WHEREAS, pursuant to the terms of the Rights Agreement and in
accordance with Section 26 thereof, the Board of Directors of the Company has
directed that the Rights Agreement should be amended and supplemented as set
forth in this Amendment prior to the execution of the Merger Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Amendments to Rights Agreement. The Rights Agreement is
hereby amended as follows:
(a) The definition of "Acquiring Person" in Section 1(a) of the Rights
Agreement is amended to delete the word "or" at the end of clause (i) of such
definition and add the following at the end of such definition prior to the
period:
", or (iii) any of Parent, Merger Sub or any Affiliate of either 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 (A) the
execution and delivery of that certain Agreement and Plan of Merger dated
as of May 4, 2006 (as amended from time to time, the "Merger Agreement")
among U.S. TelePacific Holdings Corp., a Delaware corporation ("Parent"),
TPMC Acquisition Corp., a Delaware corporation and wholly owned subsidiary
of Parent ("Merger Sub"), and the Company or (B) the consummation of the
Merger (as defined herein) or any of the other transactions contemplated by
the Merger Agreement".
(b) The definition of "Stock Acquisition Date" in current Section 1(nn)
of the Rights 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."
(c) The following definition is added to Section 1 of the Rights
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."
(d) Section 3(a) of the Rights 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."
(e) Section 7(a) of the Rights Agreement is modified, amended and
restated as follows:
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"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
Close of Business on the tenth anniversary hereof (the "Final Expiration
Date") and (iii) the time at which the Rights are redeemed as provided in
Section 23 (the earlier of (i), (ii) and (iii) being the "Expiration
Date"), the registered holder of any Rights Certificate may, subject to the
provisions of Sections 7(e) and 9(c), exercise the Rights evidenced thereby
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 (as hereinafter defined) for
the number of Units of Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) for which such
surrendered Rights are then exercisable."
(f) Section 11(a)(ii) of the Rights Agreement is amended to add the
following at the end thereof immediately 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".
(g) Section 13(a) of the Rights Agreement is amended to add the
following at the end thereof immediately 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".
SECTION 2. Interpretation. The term "Agreement" as used in the Rights
Agreement shall be deemed to refer to the Rights Agreement as amended hereby.
SECTION 3. 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 Rights Agreement shall remain in full force and
effect.
SECTION 4. 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.
SECTION 5. 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.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
MPOWER HOLDING CORPORATION
By: /s/ Russell I. Zuckerman
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Name: Russell I. Zuckerman
Title: Senior Vice President,
General Counsel and Secretary
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By: /s/ Michael G. Mullings
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Name: Michael G. Mullings
Title: Vice President