Document:

Exhibit 10.1

                                                                                Exhibit
      10.1

    
 

    
      

      THIRD
        AMENDMENT TO RIGHTS AGREEMENT

      

      THIRD
        AMENDMENT, dated as of September 22, 2006 (this "Amendment") to the Rights
        Agreement dated as of August 19, 1999, and as amended as of September 19,
        2001
        and December 13, 2002 (as amended, the "Agreement") between Talk America
        Holdings, Inc. (formerly Talk.com, Inc.), a Delaware corporation (the
        "Company"), and Stocktrans, Inc.(the "Rights Agent") (as successor to First
        City
        Transfer Company, a Delaware corporation). 

      

      WHEREAS,
        the parties hereto previously executed and delivered the Agreement;

      

      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 Cavalier
        Telephone Corporation, a Delaware corporation (“Buyer”), Cavalier Acquisition
        Corp., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of
        CavTel Holdings, LLC, a Delaware limited liability company of which Buyer
        is the
        sole member,
        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 Agreement
        to exempt the Merger Agreement, the execution thereof and the transactions
        contemplated thereby, including, without limitation, the Merger, from the
        application of the Agreement as set forth in this Amendment;

      

      WHEREAS,
        pursuant to the terms of the Agreement, the Company and the Rights Agent
        may,
        prior to the Distribution Date (as defined in the Agreement), if the Company
        so
        directs, supplement or amend any provision of the Agreement without the approval
        of any holders of certificates representing shares of Common Stock of the
        Company.

      

      WHEREAS,
        no Person has, to the knowledge of the Company, as of the time immediately
        prior
        to this Amendment become an Acquiring Person, the Distribution Date has not
        yet
        occurred, and the Company and the Rights Agent have agreed at the direction
        of
        the Company to amend the Agreement as set forth in this Amendment.

      

      NOW,
        THEREFORE, for good and valuable consideration, the sufficiency and receipt
        of
        which are hereby acknowledged, the parties hereto agree as follows:

      

      SECTION
        1. CERTAIN DEFINITIONS. Capitalized terms used but not defined in this Amendment
        are used with the meanings ascribed to such terms in the Agreement.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
        2. AMENDMENTS TO AGREEMENT. The Agreement is hereby amended generally to
        provide
        that neither (A) the execution and delivery of that certain Agreement and
        Plan
        of Merger dated as of September 22, 2006 (as amended from time to time, the
        "Merger Agreement") by and among Cavalier
        Telephone Corporation, a Delaware corporation (“Buyer”), Cavalier Acquisition
        Corp., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of
        CavTel Holdings, LLC, a Delaware limited liability company of which Buyer
        is the
        sole member,
        and the
        Company nor (B) the consummation of the Merger (as defined herein) or any
        of the
        other transactions contemplated by the Merger Agreement shall give rise to
        any
        rights, or the issue of any Rights, under the Agreement, and without limitation
        of the foregoing, the Agreement is hereby further amended as
        follows:

      

      (a)
        The
        definition of "Acquiring Person" in Section 1(a) of the Agreement is amended
        to
        insert the following as clause (i), and reorder the clauses following such
        added
        clause accordingly:

      

      "(i)
        (x)
        any of Cavalier
        Telephone Corporation,
        a
        Delaware corporation ("Buyer"), and Cavalier
        Acquisition Corp.,
        a
        Delaware corporation and an indirect wholly owned subsidiary of Buyer ("Merger
        Sub"), 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 either (A) the
        execution and delivery of that certain Agreement and Plan of Merger, dated
        as of
        September 22, 2006 (as amended from time to time in accordance with its terms
        with the approval of the Board of Directors of the Company, the "Merger
        Agreement"), by and among Buyer, Merger Sub and the Company, or (B) the
        consummation of the Merger contemplated by, and defined in, the Merger Agreement
        or any of the other transactions contemplated by the Merger Agreement, and
        only
        until the earlier of the consummation of such Merger and the termination
        of the
        Merger Agreeement, and (y) any Affiliate of Associate of either Buyer or
        Merger
        Sub if and so long as such Buyer or Merger Sub, as the case may be, is deemed
        not to be an Acquiring Person pursuant to subclause (x) of this clause
        (y);".

      

      (b)
        The
        definition of "Section 11(a)(ii) Event" in Section 1(x) (before giving effect
        to
        the reordering of section references as contemplated by Section 2(e) of this
        Amendment) of the Agreement is amended to add the following at the end of
        the
        sentence 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".

       

      (c)
        The
        definition of "Section 13 Event" in Section 1(z) (before giving effect to
        the
        reordering of section references as contemplated by Section 2(e) of this
        Amendment) of the Agreement is amended to add the following at the end of
        the
        sentence 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".

      

      (d)
        The
        definition of "Stock Acquisition Date" in Section 1(bb) (before giving effect
        to
        the reordering of section references as contemplated by Section 2(e) of this
        Amendment) of the 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."

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (e)
        The
        following definition is added to Section 1 of the 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."

      

      (f)
        Section 3(a) of the 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."

      

      (g)
        Section 7(a) of the Agreement is restated and amended in its entirety to
        provide:

      

      "(a)
        Subject to Section 7(e) hereof, 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
        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 with respect to the total number of one three-hundredths of
        a
        share of Preferred Stock (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) the time immediately prior to the Effective Time (as such
        term is defined in the Merger Agreement, (ii) the Final Expiration Date,
        or
        (iii) the time at which the Rights are redeemed as provided in Section 23
        hereof
        (the earlier of (i), (ii) and (iii) being herein referred to as the "Expiration
        Date")."

      

      SECTION
        3. INTERPRETATION. The term "Agreement" as used in the Agreement shall be
        deemed
        to refer to the Agreement as amended hereby. 

      

      SECTION
        4. 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 Agreement shall remain in full force and effect.

      

      SECTION
        5. 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 without
        giving
        effect to the conflict or choice of law provisions thereof that would give
        rise
        to the application of the domestic substantive law of any other
        jurisdiction.

      

      SECTION
        6. 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.

      
 

      IN
        WITNESS WHEREOF, the parties have caused this Amendment to be duly

      executed
        as of the day and year first above written.

      

      

      

      TALK
        AMERICA HOLDINGS, INC.

      
 

      By:
        /s/ Aloysius T. Lawn IV

      

      Name:
        Aloysius T. Lawn IV

      

      Title: EVP
        - General Counsel and Secretary 

      

      

      STOCKTRANS,
        INC.

      

      By:
        /s/ Robert J. Winterle

      

      Name:
        Robert J. Winterle

      

      Title: Vice
        PresidentEX-10.1

 

Exhibit 10.1

SALE AND PURCHASE AGREEMENT

     This SALE AND PURCHASE AGREEMENT (this “Agreement”), dated as of September 26, 2006,
is by and between STURM, RUGER & COMPANY, INC., a Delaware corporation, (the “Purchaser”)
and RUGER BUSINESS HOLDINGS, L.P., a Delaware limited partnership (the “Seller”).

W I T N E S S E T H :

     WHEREAS, the Seller desires to sell and deliver to the Purchaser 4,272,000 shares of the
common stock, $1.00 par value, of the Purchaser (the “Common Stock”) and the Purchaser
desires to purchase the same from the Seller, subject to the terms and conditions set forth herein.

     NOW THEREFORE, in consideration of the premises and mutual covenants and agreements set forth
herein, the parties hereto hereby agree as follows:

ARTICLE I

SALE AND PURCHASE

     1.1 Sale and Purchase of Common Stock. Subject to the terms and conditions hereof on
the Closing Date (as defined below), the Seller will sell the Common Stock to the Purchaser and the
Purchaser will purchase the Common Stock from the Seller for the aggregate purchase price of Twenty
Five Million Two Hundred Four Thousand Eight Hundred Dollars ($25,204,800) (the “Purchase
Price”).

     1.2 The Closing. The closing (the “Closing”) of the transactions contemplated
by this Agreement shall take place on the date hereof at the offices of the Purchaser, or at such
time or place as may be agreed upon in writing by the parties hereto. The date of the Closing is
herein referred to as the “Closing Date”.

     1.3 Closing Deliveries. At the Closing (i) the Seller shall deliver to the Purchaser
one or more certificate(s) representing the Common Stock registered in the name of the Seller,
having all requisite stock transfer stamps attached, duly endorsed for immediate transfer to the
Purchaser, or with stock powers attached duly endorsed for immediate transfer to Purchaser,
together with such other instruments and documents as may be reasonably necessary to transfer the
Common Stock to the Purchaser on the Closing Date and (ii) the Purchaser shall deliver to the
Seller the Purchase Price by wire transfer of immediately available funds to an account of the
Seller designated in writing by the Seller to the Purchaser. Upon payment of the Purchase Price by
the Seller, the Common Stock shall be free and clear of all liens, charges, security interests,
claims or other encumbrances.

 

 

ARTICLE II

SELLER’S REPRESENTATIONS AND WARRANTIES

     The Seller represents and warrants to the Purchaser as follows:

     2.1 Existence of Seller. The Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has full power and
authority under such laws to enter into and perform its obligations hereunder. The execution,
delivery and performance of this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby have been duly authorized by all necessary limited partnership
action on the part of the Seller.

     2.2 Execution and Enforceability. This Agreement has been duly organized and validly
executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application relating to or
affecting enforcement of creditors’ rights generally and general principles of equity.

     2.3 Consents. No consent, approval or authorization of, or exemption by, or
registration or filing with, any governmental or regulatory authority or other third party which
has not been obtained or made by the Seller on or before the date hereof is required in connection
with the execution and delivery by the Seller of this Agreement or the consummation by the Seller
of the transactions contemplated hereby.

     2.4 Ownership of Common Stock. The Seller is the legal and beneficial owner of the
Common Stock and has good and marketable title thereto, free and clear of any liens, charges,
security interest, claims or other encumbrances.

     2.5 Transfer. The Seller has legal right and power to transfer and deliver the Common
Stock to the Purchaser in the manner provided in this Agreement, and upon delivery of such Common
Stock pursuant to the terms of this Agreement, Purchaser will receive good and valid legal title
thereto and full beneficial ownership thereof, free and clear of all liens, charges, security
interest, claims or other encumbrances.

     2.6 Broker. Except for Stephens Inc., no broker, finder or other person is entitled
to any brokerage fees, commissions or finder’s fees from the Seller in connection with the
transactions contemplated hereby.

ARTICLE III

PURCHASER’S REPRESENTATIONS AND WARRANTIES

     The Purchaser represents and warrants to the Seller, as follows:

     3.1 Existence of Purchaser. The Purchaser is a corporation duly, validly existing and
in good standing under the laws of the State of Delaware and has full corporate power and authority
under such laws to enter into and perform its obligations hereunder. The

2

 

execution, delivery and performance of this Agreement by the Purchaser and the consummation by
the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Purchaser.

     3.2 Execution and Enforceability. This Agreement has been duly and validly executed
and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application relating to or
affecting enforcement of creditors’ rights generally and general principles of equity.

     3.3 Consents. No consent, approval or authorization of, or exemption by, or
registration or filing with, any governmental or regulatory authority or other third party which
has not been obtained or made by the Purchaser on or before the date hereof is required in
connection with the execution by the Purchaser of this Agreement or the consummation by the
Purchaser of the transactions contemplated hereby.

ARTICLE IV

MISCELLANEOUS

     4.1 Indemnification. The Seller agrees to indemnify and hold the Purchaser harmless
from and against all damages, losses or expenses (including, without limitation, reasonable
attorneys’ fees) suffered or paid, directly or indirectly, by the Purchaser arising out of the
failure of any representation or warranty made by the Seller in this Agreement to be true and
correct in all material respects as of the date of this Agreement or the material breach of any
covenant made by the Seller contained herein. The Purchaser agrees to indemnify and hold the
Seller harmless from and against all damages, losses or expenses (including, without limitation,
reasonable attorneys’ fees) suffered or paid, directly or indirectly, by the Seller arising out of
the failure of any representation or warranty made by the Purchaser in this Agreement to be true
and correct in all material respects on and as of the date of this Agreement or the material breach
of any covenant made by the Purchaser contained herein.

     4.2 Publicity. Each of the parties hereto agrees that they will not issue any press
release or make any statement to the general public with respect to this Agreement or the
transactions contemplated hereby without prior approval of the other party, except as required by
law or the requirements of the New York Stock Exchange.

     4.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior agreements between them,
whether written or oral, with respect to the subject matter hereof.

     4.4 Survival of Representations and Warranties. The respective representations and
warranties of the Seller and the Purchaser contained in this Agreement shall survive the purchase
and sale of the Common Stock contemplated hereby.

     4.5 Amendment and Waiver. This Agreement may not be amended nor may any of the
provisions hereof be waived orally. To be effective, any amendment to this Agreement shall be in
writing and signed by all of the parties hereto. To be effective, any waiver

3

 

of any of the provisions of this Agreement shall be in writing and signed by the party to be
charged and then such waiver shall be effective only to the extent specifically set forth in such
writing.

     4.6 Further Assurances. Each of the parties hereto shall take any and all such
further action and to execute, acknowledge and deliver such instruments, documents and agreements
as the other party may reasonably request to effectuate, consummate or confirm the transactions
contemplated hereby.

     4.7 Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, construed and enforced in accordance with the laws of the State of
New York without reference to the choice of law provisions thereof.

     4.8 Expenses. Each of the parties hereto shall bear its own costs and expenses
incurred in connection with the transactions contemplated hereby. The Seller shall be solely
responsible for all amounts payable to Stephens Inc. in connection with the transactions
contemplated hereby.

     4.9 No Assignment; Binding Effect. This Agreement and the rights and obligations of
the parties hereto may not be assigned without the prior written consent of the other party and any
assignment made without such consent shall be null and void. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective successors.

     4.10 Severability. If any provision of this Agreement is held to be prohibited by or
invalid under applicable law in any jurisdiction, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating any other provisions of this
Agreement.

     4.11 Counterparts. This Agreement may be executed in one or more counterparts, each
of which when so executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument.

     4.12 Headings. The headings in this Agreement are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	STURM, RUGER & COMPANY, INC.

 	 
	 	By:  	/s/
Stephen L. Sanetti
 	 
	 	 	Name:  	Stephen L. Sanetti 	 
	 	 	Title:  	Principal Financial Officer,

Treasurer and Chief Financial Officer 	 
	 
	 	RUGER BUSINESS HOLDINGS, L.P.

By Ruger Management, Inc., its General Partner

 	 
	 	By:  	/s/
William B. Ruger, Jr. 	 
	 	 	Name:  	William B. Ruger, Jr.	 
	 	 	Title:  	President of General Partnership 	 
	 
	 	 	 
	 	By:  	/s/
Carolyn Ruger Vogel	 
	 	 	Name:  	Carolyn Ruger Vogel	 
	 	 	Title:  	Secretary/Treasurer of General Partnership 	 
	 

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