AMENDMENT NO. 1 TO RIGHTS AGREEMENT
Amendment No. 1 to Rights Agreement dated as of June 13, 2002,
amending the Rights Agreement dated September 24, 1997 (the "Agreement";
capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Agreement) between Cotelligent, Inc. (formerly known as
Cotelligent Group, Inc.), a Delaware corporation (the "Company"), and
BankBoston, N.A. (the "Rights Agent").
WHEREAS, on September 24, 1997, the Company and the Rights Agent
entered into the Agreement;
WHEREAS, the Company amended its Certificate of Incorporation on
September 9, 1998 to change its name from Cotelligent Group, Inc. to
Cotelligent, Inc.;
WHEREAS, Section 26 of the Agreement provides that prior to the
Distribution Date, the Company may amend the Agreement without the approval of
any holders of Common Shares;
WHEREAS, the Rights Agent and the Company desire to amend the Agreement
to appoint EquiServe Trust Company, N.A. as the Rights Agent;
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company and its stockholders to amend the
Agreement to delete provisions of the Agreement relating to Continuing
Directors;
WHEREAS, on May 8, 2002, the Company's Board of Directors authorized
this Amendment; and
WHEREAS, the Company and the Rights Agent wish to amend the Agreement;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereby agree as follows:
I. Amendments Relating to the Company's Name Change
The Agreement is hereby amended to replace "Cotelligent Group, Inc."
wherever it appears with "Cotelligent, Inc.".
II. Amendments Relating to the Rights Agent
A. The Preamble to the Agreement is hereby amended by substituting
"EquiServe Trust Company, N.A." for "BankBoston" as Rights Agent.
B. The Legend which appears as an indented block paragraph in
Section 3(c) of the Agreement is hereby deleted in its entirety
and in lieu thereof the following is substituted:
"This certificate also evidences a beneficial interest in
and entitles the holder hereof to certain Rights as set
forth in the Rights Agreement between Cotelligent Group,
Inc. and BankBoston, N.A., dated as of September 24, 1997,
and as amended on June 13, 2002 by and between
Cotelligent, Inc. (the "Company") and EquiServe Trust
Company, N.A. (the "Rights Agent") and as the same may be
amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by
separate certificates and beneficial interests therein
will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy
of the Rights Agreement, as in effect on the date of
mailing, without charge, promptly after receipt of a
written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person
or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent
holder, may become null and void."
C. Section 21 of the Agreement is hereby deleted and in lieu thereof
the following is substituted:
"Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice
in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by
registered or certified mail and to the holders of the
Right Certificates by first-class mail. In the event the
Transfer Agency and Services Agreement, between the
Company and the Rights Agent, in its capacity as the
Company's transfer agent, terminates, the Rights Agent
will be deemed to resign automatically on the effective
date of such termination; and any required notice will be
sent by the Company. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice
in writing mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of
the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit such
holder's Rights Certificate for inspection by the
Company), then the registered holder of any Rights
Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation or
trust company organized and doing business under the laws
of the United States, in
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good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state
authority and which has individually or combined with an
affiliate at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million.
After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and
responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the
Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the
Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be."
D. Section 25 of the Agreement is hereby deleted and in lieu
thereof the following is substituted:
"Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed
in writing with the Rights Agent) as follows:
Cotelligent, Inc.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Rights Certificate to
or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the
Company) as follows:
EquiServe Trust Company, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: Client Administration
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the
Distribution Date to the holder of certificates
representing
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Common Shares) shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the
registry books of the Company."
E. The first sentence of Exhibit B to the Agreement entitled "Form
of Rights Certificate" after the legend is hereby amended by
substituting "EquiServe Trust Company, N.A." for "BankBoston,
N.A." as the Rights Agent.
F. The last sentence of the first paragraph of Exhibit C to the
Agreement entitled "Summary of Rights to Purchase Preferred
Shares" is hereby amended by substituting "EquiServe Trust
Company, N.A." for "BankBoston, N.A." as Rights Agent.
III. Amendments Relating to Continuing Directors
A. Section 1(a) of the Agreement is hereby amended to delete the
phrase "a majority of the Continuing Directors then in office"
and substituting in lieu thereof the phrase "the Board of
Directors".
B. Section 1(h) of the Agreement is hereby deleted in its entirety
and in lieu thereof the following is substituted:
"(h) Intentionally left blank."
C. Section 11(a)(ii)(B) of the Agreement is hereby amended to delete
the phrase "at least a majority of the Continuing Directors" and
substituting in lieu thereof the phrase "the Board of Directors".
D. Sections 11(a)(iii), 11(q) and 13(e) are hereby amended to delete
the phrase "a majority of the Continuing Directors in office at
the time" wherever it appears and substituting in lieu thereof
the phrase "the Board of Directors".
E. Section 23(a) of the Agreement is hereby deleted in its entirety
and in lieu thereof the following is substituted:
"(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close
of business on the tenth day following a Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred
prior to the Record Date, the close of business on the
tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right,
as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price")
and the Company may, at its option, pay the Redemption
Price either in Common Shares (based on the "current market
price", as defined in Section 11(d)(i) hereof, of the
Common Shares at the time of redemption) or cash; provided,
however, if, following the occurrence of a Stock
Acquisition Date and
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following the expiration of the right of redemption
hereunder but prior to any Triggering Event, (i) an
Acquiring Person shall have transferred or otherwise
disposed of a number of Common Shares in one transaction or
series of transactions, not directly or indirectly
involving the Company or any of its subsidiaries, which did
not result in the occurrence of a Triggering Event or the
Company shall have issued additional equity securities, in
either instance such that such Person is thereafter a
Beneficial Owner of 10% or less of the outstanding Common
Shares, and (ii) there is no other Acquiring Person
immediately following the occurrence of the event described
in clause (i), then the right of redemption shall be
reinstated and thereafter be subject to the provisions of
this Section 23. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired."
F. Section 26(a) of the Agreement is hereby deleted in its entirety
and in lieu thereof the following is substituted:
"(a) Prior to the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs,
supplement or amend any provisions of this Agreement
without the approval of any holders of certificates
representing Common Shares. From and after the Distribution
Date and subject to the penultimate sentence of this
Section 26, 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, or
(iv) to change or supplement the provisions hereunder in
any manner that the Company may deem necessary or desirable
and that shall not adversely affect the interests of the
holders of Rights Certificates; 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
that states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the
contrary, (i) no supplement or amendment shall be made that
changes the Redemption Price, the Final Expiration Date,
the Purchase Price or the number of Preferred Share
Fractions for which a Right is exercisable; and (ii) no
supplement or amendment that changes the rights and duties
of the Rights Agent under this Agreement shall be effective
without the consent of the Rights Agent. Prior to
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the Distribution Date, the interests of the beneficial
owners of Rights shall be deemed coincident with the
interests of the holders of Common Shares."
G. Section 28 is hereby amended to delete the parenthetical phrase
"(with, where specifically provided for herein, the concurrence
of the Continuing Directors)" wherever it appears. Section 28 is
hereby further amended to delete the phrase "or the Continuing
Directors" from clause (y) of such Section.
H. The sixth paragraph of Exhibit B to the Agreement entitled "Form
of Rights Certificate" is hereby amended to delete the following
sentence: "Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence
of a majority of the Continuing Directors."
I. The eleventh paragraph of Exhibit C to the Agreement entitled
"Summary of Rights to Purchase Preferred Shares" is hereby
amended to delete the following sentence: "Under certain
circumstances set forth in the Rights Agreement, the decision to
redeem will require the concurrence of a majority of the
Continuing Directors." The last sentence of the eleventh
paragraph of Exhibit C to the Agreement entitled "Summary of
Rights to Purchase Preferred Shares" is hereby amended to delete
the phrase "with, where required, the concurrence of the
Continuing Directors" as well as the commas that set off this
phrase.
J. The twelfth paragraph of Exhibit C to the Agreement entitled
"Summary of Rights to Purchase Preferred Shares" is hereby
deleted in its entirety.
K. The last sentence of the fourteenth paragraph of Exhibit C to the
Agreement entitled "Summary of Rights to Purchase Preferred
Shares" is hereby deleted in its entirety.
IV. Miscellaneous Provisions
A. This Amendment No. 1 to the Rights Agreement shall be governed by
and construed in accordance with the laws of the State of
Delaware and for all purposes shall be governed and construed in
accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
B. This Amendment No. 1 to the Rights Agreement may be executed in
any number of counterparts, each of which shall be an original,
and all such counterparts shall together constitute one and the
same instrument.
C. In all respects not inconsistent with the new terms and
provisions of this Amendment No. 1 to the Rights Agreement, the
Rights Agreement is hereby ratified, adopted, approved and
confirmed.
D. If any term, provision, covenant or restriction of this Amendment
No. 1 to the Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Amendment No. 1 to the Rights Agreement,
and
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of the Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to
Rights Agreement to be executed as of the date first written above.
COTELLIGENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & Chief Operating Officer
EQUISERVE TRUST COMPANY, N.A.
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Managing Director
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