Exhibit 1
SECOND AMENDMENT TO RIGHTS AGREEMENT
SECOND AMENDMENT (this "Amendment"), dated as of February 14, 2000,
to the Rights Agreement, dated as of December 18, 1996, as amended by the
First Amendment to Rights Agreement, dated as of March 12, 1998 (as
amended, the "Rights Agreement"), by and between Sterling Software, Inc., a
Delaware corporation (the "Company"), and BankBoston, N.A., a national
banking association formerly known as The First National Bank of Boston, as
Rights Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into the Rights
Agreement specifying the terms of the Rights (as defined therein); and
WHEREAS, the Company and the Rights Agent desire to amend the Rights
Agreement in accordance with Section 27 of the Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in the Rights Agreement and this Amendment, the
parties hereby agree as follows:
1. Section 1(a) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding the foregoing or any provision to the contrary
contained in this Agreement, none of Computer Associates
International, Inc., a Delaware corporation ("Parent"),
Silversmith Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Sub"), and their Affiliates
shall be deemed to be an Acquiring Person by reason of (I) the
execution of the Agreement and Plan of Merger, dated as of
February 14, 2000 (the "Merger Agreement," which term shall
include any amendments thereto) by and among the Company,
Parent and Sub, the public or other announcement of the merger
provided for in the Merger Agreement (the "Merger"), the public
or other announcement of the exchange offer provided for by the
Merger Agreement (the "Offer"), the commencement of the Offer,
the consummation of the Offer, the consummation of the Merger
or the consummation of any other transaction contemplated by
the Merger Agreement or (II) the execution of the Tender
Agreement, dated as of February 14, 2000, by and among certain
stockholders of the Company and Sub (the "Tender Agreement").
2. Section 1(c)(i) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding the foregoing or any provision to the contrary
contained in this Agreement, neither Parent, Sub nor any of
their Affiliates shall be deemed the "Beneficial Owner" or be
deemed to "beneficially own" any Common Shares acquired as a
result of the consummation of the Offer, the Merger or any
other transaction contemplated by the Merger Agreement or the
Tender Agreement."
3. Section 1(c)(ii) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding the foregoing or any provision to the contrary
contained in this Agreement, neither Parent, Sub nor any of
their Affiliates shall be deemed the "Beneficial Owner" or be
deemed to "beneficially own" any Common Shares acquired as a
result of the consummation of the Offer, the Merger or any
other transaction contemplated by the Merger Agreement or the
Tender Agreement."
4. Section 1(c)(iii) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding the foregoing or any provision to the contrary
contained in this Agreement, neither Parent, Sub nor any of
their Affiliates shall be deemed the "Beneficial Owner" or be
deemed to "beneficially own" any Common Shares acquired as a
result of the consummation of the Offer, the Merger or any
other transaction contemplated by the Merger Agreement or the
Tender Agreement."
5. Section 1(h) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding the foregoing or any provision to the contrary
contained in this Agreement, a Distribution Date shall not
occur by reason of the execution of the Merger Agreement, the
public or other announcement of the Merger, the public or other
announcement of the Offer, the commencement of the Offer, the
consummation of the Offer, the consummation of the Merger or
the consummation of any other transaction contemplated by the
Merger Agreement or the Tender Agreement."
6. Section 1(l) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding any provision to the contrary contained in
this Agreement, a Flipin Event shall not occur by reason of the
execution of the Merger Agreement, the public or other
announcement of the Merger, the public or other announcement of
the Offer, the commencement of the Offer, the consummation of
the Offer, the consummation of the Merger or the consummation
of any other transaction contemplated by the Merger Agreement
or the Tender Agreement."
7. Section 1(m) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding any provision to the contrary contained in
this Agreement, a Flipover Event shall not occur by reason of
the execution of the Merger Agreement, the public or other
announcement of the Merger, the public or other announcement of
the Offer, the commencement of the Offer, the consummation of
the Offer, the consummation of the Merger or the consummation
of any other transaction contemplated by the Merger Agreement
or the Tender Agreement."
8. Section 1(z) of the Rights Agreement is amended by addition the
following at the end of said Section:
"Notwithstanding the foregoing or any provision to the contrary
contained in this Agreement, a Share Acquisition Date shall not
occur by reason of the execution of the Merger Agreement, the
public or other announcement of the Merger, the public or other
announcement of the Offer, the commencement of the Offer, the
consummation of the Offer, the consummation of the Merger or
the consummation of any other transaction contemplated by the
Merger Agreement or the Tender Agreement."
9. Section 1(ac) of the Rights Agreement is amended by adding the
following at the end of said Section:
"Notwithstanding any provision to the contrary contained in
this Agreement, a Triggering Event shall not occur by reason of
the execution of the Merger Agreement, the public or other
announcement of the Merger, the public or other announcement of
the Offer, the consummation of the Offer, the commencement of the
Offer, the consummation of the Merger or the consummation of
any other transaction contemplated by the Merger Agreement or
the Tender Agreement."
10. Section 26(b) of the Rights Agreement is amended by deleting the
address of the Rights Agent and replacing such address with the following
language:
BankBoston, N.A.
c/o Equisene Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Services
11. The term "Agreement" as used in the Rights Agreement shall be
used to refer to the Rights Agreement as amended hereby.
12. The foregoing amendment shall be effective as of February 14,
2000, and except as set forth herein, the Rights Agreement shall remain in
full force and effect and shall be otherwise unaffected hereby.
13. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of this 14th day of February 2000.
STERLING SOFTWARE, INC.
By: /s/ Xxx X. XxXxxxxxx, Xx.
______________________________
Name: Xxx X. XxXxxxxxx, Xx.
Title: Senior Vice President and
General Counsel
BANKBOSTON, N.A.
By: /s/ Xxxxxxxxx Xxxxxxxx
______________________________
Name: Xxxxxxxxx Xxxxxxxx
Title: Managing Director
